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SUPREME COURT OF WESTERN AUSTRALIA
SIAM STEEL INTERNATIONAL PLC
COMPASS GROUP (AUSTRALIA) PTY LTD
CORAM: Martin CJ
DATE OF HEARING: 24 May 2017
DELIVERED: 24 May 2017
FILE NO: ARB 8 of 2016
CATCHWORDS: Costs of arbitration proceedings – Where arbitrator ordered costs to be taxed if not agreed – Whether court has jurisdiction to make special costs orders – Consideration of O 66 Rules of the Supreme Court 1971 (WA)
1 The claimant in these proceedings, Siam Steel International PLC (Siam), was also the claimant in arbitral proceedings commenced against Compass Group (Australia) Pty Ltd (Compass) which is also the respondent to these proceedings. The dispute the subject of the arbitral proceedings was settled by agreement and the parties to those proceedings consented to the arbitrator making what was described as a ‘Final Award’ in which the arbitrator dismissed the arbitral proceedings and ordered Compass to pay Siam’s costs of those proceedings, including the counterclaim by Compass, ‘to be taxed if not agreed’.
2 Subsequent to that award, Siam commenced proceedings in this court seeking an order that the costs which the arbitrator ordered Compass to pay be assessed without reference to the limits provided in respect of certain specified items in the scale apparently presumed to be applicable to the taxation of those costs – namely, the Legal Profession (Supreme Court) (Contentious Business) Determination 2014 (WA) and Legal Profession (Supreme Court) (Contentious Business) Determination 2016 (WA). After the proceedings were referred to me for case management, I became concerned with respect to the source of the court’s jurisdiction to make the orders sought, given that the order awarding costs in favour of Siam and directing that those costs be taxed if not agreed had been made by an arbitrator and not the court. With the concurrence of the parties, I made directions for the exchange of affidavits and submissions limited to the question of whether the court had jurisdiction to make the orders sought by Siam. The parties have exchanged submissions and affidavits in accordance with those directions and have further agreed that the question of jurisdiction should be determined by me on the basis of those affidavits and submissions and without an oral hearing.
3 For the reasons which follow, I have concluded that none of the sources of jurisdiction identified by Siam in the course of its submissions provide the court with jurisdiction to make the orders sought by Siam in these proceedings. However, again for the reasons which follow, I will invite Siam to advise the court and Compass whether reliance is placed upon s 280(2) of the Legal Profession Act 2008 (WA) (the LPA). If so, I would invite Siam to provide submissions in support of that proposition and to also address the question of whether, if that section does provide the court with jurisdiction to make the orders sought, the court has a discretion with respect to the exercise of that power and, if so, as to the manner in which that discretion should be exercised generally in cases in which an order for costs has been made by an arbitrator and in the particular circumstances of this case.
4 These proceedings were commenced by originating summons filed on 1 December 2016. The summons was supported by a substantial affidavit sworn by the solicitor responsible for the conduct of the arbitral proceedings on behalf of Siam, which was also filed on 1 December 2016. That affidavit addresses the contract between Siam and Compass by which Siam was engaged by Compass to design, manufacture and deliver 1139 double storey accommodation modules in South Hedland and which gave rise to the dispute the subject of the arbitral proceedings. The affidavit also addresses briefly the course of those proceedings, including the fact that the matter was listed for a hearing which was to commence on 31 August 2016 and to occupy up to five weeks. The affidavit establishes that, approximately two weeks before the hearing was due to commence, the parties agreed to settle their dispute and, on 1 November 2016, the arbitrator, with the consent of the parties, made the orders to which I have referred – namely, dismissing the arbitral proceedings and ordering Compass to pay Siam’s costs of those proceedings, including the counterclaim, to be taxed if not agreed. A copy of that document, headed ‘Final Award’, is annexed to the affidavit.
5 The remainder of the affidavit is concerned with the work performed by the solicitors and counsel engaged by Siam in the arbitral proceedings and the costs charged by those solicitors and counsel to Siam in respect of the work performed. That portion of the affidavit is directed to the substantive merits of the orders sought by Siam in these proceedings and is not appropriately considered in any detail unless and until Siam has established that the court has jurisdiction to make the orders sought.
6 The parties have also exchanged affidavits with respect to the events and communications which preceded the award of the arbitrator. Although, for reasons which I will explain, those matters are not relevant to the jurisdictional issue as presently formulated, they are relevant to the consideration of submissions advanced by Siam in support of its jurisdictional argument. Those matters might also be of considerable relevance if Siam seeks to rely upon a source of jurisdiction which is discretionary in character.
7 The evidence establishes that the dispute the subject of the arbitral proceedings was settled by the exchange of correspondence between the solicitors for the parties, including a letter from Siam’s solicitors dated 11 August 2016 in which Siam offered to settle the dispute on terms which included a provision that Compass pay Siam’s costs of the arbitral proceedings to be taxed if not agreed. That offer was accepted by Compass by an email sent by its solicitors on 17 August 2016.
8 On 22 August 2016 the solicitors for Siam sent to the solicitors for Compass a draft Deed of Settlement and Release and a draft minute of consent orders substantially in the terms of the award ultimately made. On 12 September 2016, the solicitors for Siam wrote to the solicitors for Compass recording the fact that their clients had been unable to reach agreement with respect to the amount payable by Compass to Siam in respect of Siam’s costs of the arbitral proceedings and proposing that the minute of consent orders include a provision for ‘an uplift’ in the scale items which generally correspond to the items specified in the orders sought in these proceedings. On 20 September 2016 the solicitors for Compass responded to that proposal by letter in which it was asserted that the dispute had been settled on terms which required Compass to pay Siam’s taxed costs without any special costs orders and opposing any order uplifting any item in the relevantly applicable scale of costs.
9 On 29 September 2016 Siam’s solicitors sent a letter to the solicitors for Compass enclosing an amended minute of consent orders which included an order giving Siam liberty to apply for an uplift on the limit of costs fixed by the relevantly applicable scales pursuant to s 280(2) of the LPA. On 4 October 2016 the solicitors for Compass responded to that letter reiterating their assertion that the dispute had been settled on terms reflected in the first version of the minute of consent orders and rejecting any proposal to consent to orders in anything other than those terms.
10 On 5 October 2016 the solicitors for Siam sent the Deed of Settlement and a minute of consent orders in the terms initially proposed to the solicitors for Compass for execution by their client. In that letter the solicitors for Siam asserted that neither the terms of the settlement agreement nor the applicable law relevant to costs prevented their client from subsequently applying for any special costs orders considered appropriate and purported to reserve their client’s rights in that regard.
11 A minute of consent orders in the terms initially proposed at the time the dispute was settled was executed by the parties and sent to the arbitrator by the solicitors for Compass on 17 October 2016. By email dated 28 October 2016 to the arbitrator the solicitors for Siam requested the arbitrator make a further order to the effect that Siam have liberty to apply to either the arbitrator or to the Supreme Court of Western Australia for any special costs orders. On the same day (28 October 2016) the solicitors for Compass sent an email to the arbitrator opposing the additional order sought on the ground previously enunciated – namely, that the dispute had been settled on terms agreed by the parties and that it was not now open to Siam to attempt to unilaterally vary the terms upon which the matter was settled.
12 On 31 October 2016 the solicitors for Compass sent an email to the arbitrator reiterating that Siam was not proposing that the arbitrator amend the limits applicable to any particular item in any applicable costs determination, but merely that Siam have liberty to apply for such an order as part of the process for determining what the taxed costs should be.
13 By email of the same date to the parties, the arbitrator expressed the view that he was being asked to make an award by consent, and if there was disagreement as to the basis upon which costs should be taxed, then the parties must return to the negotiating table. He further expressed the view that he could not assume that Compass intended to settle the substantive matters in issue and agreed to pay Siam’s costs while leaving the basis on which the costs were to be calculated still to be argued.
14 In that email the arbitrator also raised a question as to the power and capacity of the court to make an order to the effect that costs be taxed on a special basis. He expressed no concluded view on the point but observed that it was sufficient for him to conclude that an award giving Siam liberty to apply for a special costs order would be inconsistent with the terms of settlement as communicated to him, stating that if the solicitors for Siam were correct in their submissions with respect to the power of the court, the order sought would not add anything to the final award.
15 On 1 November 2006 the arbitrator signed and issued a document under the heading ‘Final Award’ in the following terms:
With the consent of the parties I make the following award:
(1) the arbitral proceedings are dismissed; and
(2) the respondent is to pay the claimant’s costs of the arbitral proceedings, including the counterclaim, to be taxed if not agreed.
16 In previous proceedings between these parties Siam contended that the International Arbitration Act 1974 (Cth) did not apply to govern the arbitral proceedings because the contract between the parties expressly provided that it was to be governed and construed by reference to the laws for the time being in force in Western Australia and that any arbitration should be effected in accordance with the rules for the conduct of commercial arbitration under the Commercial Arbitration Act 1985 (WA). However, that submission was rejected and it was held that the International Arbitration Act applied and governed the arbitral proceedings.
17 Section 27 of the International Arbitration Act provides:
(1) The costs of an arbitration (including the fees and expenses of the arbitrator or arbitrators) shall be in the discretion of the arbitral tribunal.
(2) An arbitral tribunal may in making an award:
(a) direct to whom, by whom, and in what manner, the whole or any part of the costs that it awards shall be paid;
(b) tax or settle the amount of costs to be so paid or any part of those costs; and
(c) award costs to be taxed or settled as between party and party or as between solicitor and client; and
(d) limit the amount of costs that a party is to pay to a specified amount.
(2A) An arbitral tribunal must, if it intends to make a direction under paragraph (2)(d), give the parties to the arbitration agreement notice of that intention sufficiently in advance of the incurring of costs to which it relates, or the taking of any steps in the arbitral proceedings which may be affected by it, for the limit to be taken into account.
(3) Any costs of an arbitration (other than the fees or expenses of an arbitrator) that are directed to be paid by an award are, to the extent that they have not been taxed or settled by the arbitral tribunal, taxable in the Court having jurisdiction under Article 34 of the Model Law to hear applications for setting aside the award.
(4) If no provision is made by an award with respect to the costs of the arbitration, a party to the arbitration agreement may, within 14 days after receiving the award, apply to the arbitral tribunal for directions as to the payment of those costs, and thereupon the tribunal shall, after hearing any party who wishes to be heard, amend the award by adding to it such directions as the tribunal thinks proper with respect to the payment of the costs of the arbitration.
18 In this case, the costs that were directed to be paid by the award have not been taxed or settled by the arbitrator, nor does it ever appear to have been contemplated by either the parties or the arbitrator that he would tax those costs.
19 Accordingly, s 27(3) applies to render the costs taxable in the court which would have jurisdiction under Article 34 of the UNCITRAL Model Law on International Commercial Arbitration (Model Law) to hear applications for setting aside the award.
20 Article 34 of the Model Law provides that an award may be set aside by the court specified in Article 6 of the Model Law. Article 6 in turn refers to a court to be specified by each State enacting the Model Law. In the case of Australia, that specification is contained in s 18 of the International Arbitration Act which provides that, in relation to the power to set aside an award to which reference is made in Article 34 of the Model Law, if the place of arbitration is, or is to be, in a State, the Supreme Court of that State is specified and in any case the Federal Court of Australia is also specified. As the place of arbitration was to be in Western Australia, pursuant to s 27(3) of the International Arbitration Act, the costs which the arbitrator ordered Compass to pay to Siam can be taxed in either the Supreme Court of Western Australia or the Federal Court of Australia.
21 The evidence does not suggest that any proceedings for the taxation of the costs ordered to be paid by the arbitrator in this case have been commenced in the Federal Court of Australia. In the Supreme Court of Western Australia, rule 25 of the Supreme Court (Arbitration) Rules 2016 (WA) provides that if the court is required to tax or assess the costs of an arbitration (other than the fees or expenses of an arbitrator), O 66 of the Rules of the Supreme Court 1971 (WA) applies ‘with any necessary changes’.
22 Order 66 governs the taxation of costs in this court. As I have noted, the Order is to be applied ‘with any necessary changes’ when the court is required to determine the costs payable pursuant to the award of an arbitrator. Proceedings for taxation of such costs are commenced by the lodgement of a bill of costs in accordance with Div 2 of O 66. Although the affidavit filed in support of these proceedings refers to and annexes a draft bill of costs, no bill of costs has yet been filed with the court pursuant to the provisions of O 66. If and when such a bill is lodged for taxation, O 66 r 11 will come into play. That rule relevantly provides:
(1) For the purposes of this Order –
any relevant scale means any costs determination, as defined in the Legal Profession Act 2008 section 252, that relates to the costs that may be charged by law practices in respect of business before the Court carried out by practitioners.
(2) Except when otherwise ordered, solicitors are, subject to these rules, entitled to charge and be allowed the fees set forth in any relevant scale in respect of the matters referred to in that scale and higher fees shall not be allowed in any case, except such as are by this Order otherwise provided for.
(3) Subject to the provisions of the Legal Profession Act 2008 permitting legal practices to make costs agreements with their clients, and to the provisions of these rules, the fees allowed under any relevant scale shall apply both as between party and party, and solicitor and client; but where additional costs (including expenses and counsel fees) have been incurred which in the opinion of the taxing officer are not properly recoverable against the party liable under the judgment or order to pay costs, but have nevertheless been properly incurred, or where costs have been incurred at the special request of the client, or in contesting and reducing a claim, those costs shall be recoverable from the client; and the taxing officer is hereby authorised to fix such sum as he thinks reasonable to cover the additional costs.
23 These proceedings have been commenced and continued on the implicit assumption that the Legal Profession (Supreme Court) (Contentious Business) Determination is a ‘relevant scale’ for the purposes of O 66 r 11. Each of the determinations in respect of that scale said to be applicable, namely the 2014 and 2016 determinations, is stipulated to apply in respect of contentious business carried out by legal practitioners in or for the purpose of proceedings before the Supreme Court and the District Court. Accordingly, both O 66 r 11 and the relevant determinations assumed to be applicable to the arbitral proceedings expressly provide that they apply only to ‘business before the court’ and therefore do not, by their express terms, apply to the work performed by Siam’s legal representatives in connection with the arbitral proceedings. It would appear to follow that the assumption upon which these proceedings are based, and which has not been challenged by either party, must depend upon r 25 of the Supreme Court (Arbitration) Rules having the effect that O 66 must necessarily be changed so as to incorporate and apply to its provisions the most analogous scale of costs determined pursuant to the provisions of the LPA, being, in this case, the Legal Profession (Supreme Court) (Contentious Business) Determination. As that view of r 25 is clearly open, and as the assumption upon which these proceedings depend has not been challenged by either party, it is appropriate to proceed upon the assumption that r 25 has that effect.
24 Alternatively, it may be that the assumption derives from reasoning analogous to the views expressed by Parker J in Fletcher Constructions Australia Ltd v Newman as Trustee of the Property of Edward Alexander Littlejohn and Jennifer Lillian Littlejohn. In that case, after concluding that a provision in the determinations made by the Legal Costs Committee (constituted by the then applicable Legal Practitioners Act 1893 (WA)) which purported to apply the scale of costs applicable to work done in the Supreme Court to work done in connection with arbitral proceedings went beyond the powers conferred by the legislation and was therefore invalid, Parker J expressed the following view:
The consequence of this invalidity for the taxation of costs in an arbitration pursuant to the Commercial Arbitration Act by a taxing officer of this Court, would appear to be that, as there is no binding scale, the costs to be allowed are in the discretion of the taxing officer. Accordingly, on a party and party taxation, the taxing officer will no doubt allow what the taxing officer considers to be reasonable charges in respect of work reasonably undertaken, subject of course to any particular directions of the arbitrator. On such a taxation the taxing officer in the exercise of discretion may well find it convenient in respect of some or all items in the bill of costs to tax by way of analogy with a scale such as the Supreme Court Scale of Costs.
25 If this is the basis for the parties’ assumptions with respect to the applicable scales, it might support the proposition that the orders sought in these proceedings are unnecessary, because the costs are to be taxed in the general discretion of the taxing officer. However, any such proposition would appear to be inconsistent with the view expressed earlier in the reasons of Parker J to the effect that it was entirely consistent with the legislative scheme then in place (and which is analogous to the current legal framework) that the arbitrator may give specific directions in the award as to the manner by which a taxation of costs is to proceed, which directions may go so far as to direct taxation on a basis other than the scale of costs which would normally be applicable under the Rules of Court or by giving directions specifically varying the application of the ordinary scale. In this case the arbitrator has expressly declined to make any order which would vary the upper limits in the scale which the parties assumed would govern any taxation of Siam’s costs.
26 Other rules within O 66 cover a circumstance in which there is no relevant scale of costs, in which case the court may direct the taxing officer to tax or allow costs by analogy to a scale, and for the circumstance in which no provision is made for an item within a relevant scale. As I have noted, neither party contends that either circumstance applies to this case. To the contrary, these proceedings have been conducted on the common assumption that there is a relevant scale with relevantly applicable items, the upper limit of some of which Siam seeks to have lifted by order of the court.
27 As Siam places reliance upon r 23 and r 51 of O 66, it is appropriate to set those rules out in full:
If it is shown to the satisfaction of the taxing officer that by reason of special circumstances, a fee in any relevant scale which includes the drawing or settling of a pleading or other document is inadequate, the taxing officer may allow such additional sum as he thinks proper, whether the pleading or document has been drawn or settled by counsel or by the solicitor.
(1) Where in any action or matter taxation of costs is not ordered, or any special costs are by these rules or by any order reserved for the consideration of the Court at trial, the Court may fix the amount of costs payable, or the amount of such special costs, and in every judgment or order of the Court where the question of costs is not specifically dealt with there shall be deemed to be reserved to any party interested liberty to apply within 30 days.
(2) Where under these rules a party is required to obtain some special certificate for costs, there shall be deemed to be reserved to such party liberty to apply within 30 days.
28 In its initial submissions Siam places principal reliance upon O 66 r 51. As these proceedings were commenced within 30 days of the final award, Siam submits that they fall within the liberty ‘deemed to be reserved’ to a party pursuant to that rule. In that context Siam draws attention to observations made by EM Heenan J in Geneva Finance Ltd (Receiver and Manager Appointed) v Resource and Industry Ltd to the effect that O 66 r 51 provides a remedy for injustice which can arise because:
It is not at all uncommon that the need for special orders is sometimes overlooked when judgment is entered.
In that context Siam submits that ‘at the time of the Final Award, the need for special costs orders was not in contemplation’. Plainly that submission is not correct. To the contrary, Siam’s desire to have the capacity to raise the limits applicable under certain items in the scales of costs assumed to be applicable was recognised by Siam’s solicitors and canvassed in the correspondence with the solicitors for Compass and the arbitrator to which I have referred.
29 The initial submissions provided by Siam also make assertions with respect to the legal framework governing the taxation of costs in which reference is made to Rules of Court now repealed. It is unnecessary to deal with those submissions as clearly they have no current application or relevance. It is perhaps sufficient to observe that there is nothing in Siam’s submissions that is specifically inconsistent with the legal framework which I have set out above.
30 Siam’s submissions do not descend to an explanation of why either provision of O 66 r 51 is said to apply to the circumstances of the present case. Clearly par (1) of the rule can have no application because an order for costs was made by the arbitrator. Although par (2) of the rule applies where ‘under these rules a party is required to obtain some special certificate for costs’, Siam’s submissions do not identify any rule which requires a party to obtain a special certificate for costs which applies to the circumstances of this case. Nor have I been able to identify any such rule.
31 That may well be the consequence of the changes in the legal regime relating to costs implemented when the Legal Practice Act 2003 (WA), the predecessor to the LPA came into force. Section 215 of that Act was in substantially similar terms to s 280 of the LPA, which provides:
(1) Subject to any costs agreement made in accordance with Division 6 or the corresponding provision of a corresponding law, section 306 and the Legal Aid Commission Act 1976 section 14 –
(a) the taxation of bills of law practices; and
(b) any other aspect of the costs charged by law practices,
is regulated by an applicable costs determination.
(2) Despite subsection (1), if a court or judicial officer is of the opinion that the amount of costs allowable in respect of a matter under a costs determination is inadequate because of the unusual difficulty, complexity or importance of the matter, the court or officer may do all or any of the following –
(a) order the payment of costs above those fixed by the determination;
(b) fix higher limits of costs than those fixed in the determination;
(c) remove limits on costs fixed in the determination;
(d) make any order or give any direction for the purposes of enabling costs above those in the determination to be ordered or assessed.
(3) Nothing in subsection (1) is to be construed as limiting the power of a court, a judicial officer or a taxing officer of a court to determine in any particular case before that court or judicial officer the amount of costs allowed.
(4) If a costs determination is in force in respect of any business referred to in section 275(1), any other subsidiary legislation fixing or purporting to regulate the remuneration of law practices in respect of that kind of business is of no force or effect.
32 So, since the Legal Practice Act 2003 (WA) came into force, one legal mechanism by which a party might obtain an award of costs in excess of any relevantly applicable scale has been by way of an application under that Act, and its successor, the LPA, rather than by way of an application under O 66. Consistently with that regime, O 66 r 12, which previously authorised the making of orders lifting the maximum amount of an applicable item, was removed from the Rules of Court. Further, given the abandonment of any procedure for certifying for second counsel in more recent costs determinations, and the scope of s 280 of the LPA, it seems reasonable to infer that the second paragraph of O 66 r 51 may well be a relic of a bygone costs era with little or no current application.
33 Siam submits that O 66 r 12 was repealed and replaced with O 66 r 11. However, that submission is plainly not correct. There is nothing in O 66 r 11 relating to the making of special orders for costs. To the contrary, as I have already noted, the effect of that rule is to require taxation to be undertaken pursuant to the scale provided in any relevant costs determination. Paragraph (3) of r 11 is not concerned with any order for special costs, but is only concerned with the difference between party and party costs on the one hand, and solicitor and client costs on the other. To the extent that Siam’s submission might be construed as a submission to the effect that O 66 r 11 provides a source of jurisdiction for the orders which it seeks in these proceedings, that submission must be rejected.
34 However, if, contrary to the view I have expressed, O 66 r 51 does apply to the circumstances of this case, the question which Siam would then have to address is whether the liberty to apply which is deemed to have been reserved is a liberty to apply to the arbitrator or to the court. That question has to be addressed in a context in which the rule has no direct application to arbitral proceedings, but only applies by virtue of r 25 of the Supreme Court (Arbitration) Rules, and then only with ‘any necessary changes’.
35 In its application to substantive proceedings in the court, the effect of O 66 r 51 is to reserve liberty to apply, within the time specified, to the court seized of jurisdiction to make the relevant costs order. In my view it inevitably follows that if the rule is to be applied to costs awarded in arbitral proceedings, it must be applied in such a way that the liberty to apply which it confers is a liberty to apply to the entity seized with jurisdiction to make the relevant order for costs, which is the arbitral tribunal. That view follows clearly from the observations made by Parker J in Fletcher Constructions. In that case Parker J observed that the provision of the then Rules which rendered O 66 applicable to the taxation of costs incurred in arbitral proceedings ‘with such modifications as are necessary’ required that the powers which the court has in respect of proceedings before the court must be exercised by the arbitrator in respect of proceedings before the arbitrator, including any power to make special costs orders.
36 Although the particular provisions of O 66 considered by his Honour in that case did not include r 51, and O 66 was rendered applicable by provisions of the Commercial Arbitration Act 1985 (WA) rather than by s 27 of the International Arbitration Act read with the Supreme Court (Arbitration) Rules, the structure considered by his Honour in that case is directly analogous to the legal framework which I have set out above. Accordingly, I can see no reason why I should depart from the clear effect of his Honour’s earlier ruling.
37 This conclusion is also supported by the decision of the High Court of Australia in Minister for Home and Territories v Teesdale Smith in which Isaacs ACJ and Starke J considered that the court acted, in effect, as the delegate of the arbitrator in assessing the quantum of the costs which the arbitrator had ordered to be paid, and it was therefore for the arbitrator to determine the rules and principles which were to be applied in the assessment of those costs. In H.G. Perkins Ltd v Best-Shaw Kerr J took the same approach, describing the taxing master as ‘merely the delegate of the arbitrator’.
38 For these reasons, Siam’s reliance upon O 66 r 51 is misplaced. That rule does not apply to this case, and even if it did, any powers conferred by the rule would be conferred on the arbitrator, not the court.
39 However, these reasons also point to the possibility that such a source of jurisdiction may be found in s 280 of the LPA. I should make it abundantly clear that I say nothing more than there is some prospect that the section might provide a source of jurisdiction if its terms can be found to apply to the circumstances of the present case. I have an entirely open mind on that question, which has not been addressed by either party in the course of their submissions. As foreshadowed, however, I will provide Siam with the opportunity to present further submissions on that question. If Siam wishes to take advantage of that opportunity it should also address the question of whether any jurisdiction conferred upon the court by that section is discretionary in character and, if so, whether that discretion should be exercised by the court in circumstances in which an order for costs has been made by an arbitrator either generally, or in the particular circumstances of this case, having regard to the facts established by the evidence to which I have referred.
40 In the passage above I have expressed the view that if, contrary to my view, O 66 r 51 has any application to the present circumstances, the liberty to apply which it would confer upon Siam would be a liberty to apply to the arbitral tribunal. That tentative view must be read subject to the qualification that the arbitrator’s power to make any further order for costs would depend upon the arbitrator not having completely exhausted the powers and functions conferred upon him or upon the existence of some relevantly applicable equivalent to the ‘slip rule’ in either the arbitration agreement or the law governing the arbitration. As none of those questions have been addressed by the parties in their submissions, I express no view upon them. I would, however, observe that they are important considerations in a case such as this where an arbitrator has issued a document described as a ‘Final Award’.
41 In Siam’s submissions in response to the initial submissions of Compass, reliance is placed upon O 66 r 23 which I have set out above. Siam asserts that the rule ‘provides the court with the jurisdiction to increase the fee in any relevant scale, if it is necessary in the circumstances’. That submission must be rejected for two reasons. First, O 66 r 23 is only concerned with an item in a relevant scale which includes the drawing or settling of a pleading or other document. Although the items in the relevant scales in respect of which Siam seeks orders include items of that kind, they also go well beyond items of that kind and include, for example, the item relating to getting up a case for hearing. Further, O 66 r 23 only applies if a taxing officer is satisfied of certain matters in the course of conducting a taxation. As I have already observed, no taxation proceedings have yet been commenced. It follows that O 66 r 23 cannot provide the court with jurisdiction to make the orders now sought by Siam.
42 Also in its written submissions in reply to the submissions of Compass, Siam submits that if the court determines that it lacks jurisdiction to make the orders sought by Siam, the court should remit the matter to the arbitrator to allow him to determine the issue of special costs. However, in that submission Siam does not identify any source of power for the court to ‘remit’ proceedings commenced in the court to the arbitrator. Nor does Siam address the question of whether the arbitrator retains any powers or functions with respect to the arbitral proceedings which would provide him with a source of jurisdiction to make such an order – an issue to which I have already referred. If the arbitrator does retain such functions and powers, there is nothing to prevent Siam requesting that the arbitrator exercise those powers and functions and it does not need a remitter from the court to enable it to do so.
43 Although the views I have expressed in relation to the submissions made by Siam are sufficient to sustain the conclusion that Siam has not presently established any basis upon which the court could exercise jurisdiction to make the orders which it seeks, it is desirable to deal briefly with some submissions advanced on behalf of Compass, for the sake of completeness.
44 Compass submits that the proceedings commenced by Siam are ‘a nullity and of no effect’. I must confess that it is not at all clear what that submission is meant to convey. Doing the best I can to comprehend the submission, it appears to proceed on the assumption that there must be some other proceeding to which the current proceedings can ‘attach’ before the court has jurisdiction to entertain these proceedings, and there are no such proceedings on foot, because no proceedings for taxation of Siam’s costs have been commenced.
45 If I correctly understand the submission, it does not appear to me to correspond with the legal framework which I have set out above. Pursuant to that framework, the Supreme Court (Arbitration) Rules apply the provisions of O 66 to the costs of arbitral proceedings ‘with any necessary changes’. In that framework, the only questions are whether the orders sought come within the jurisdiction conferred upon the court pursuant to O 66 ‘with any necessary changes’, or whether there is some other source of jurisdiction to make the orders sought. In my respectful view, the proposition that these proceedings must ‘attach’ to some other proceedings or that they are ‘only a bare proceeding, and therefore a nullity’ does not assist in the consideration of the jurisdictional question.
46 Next, Compass submits that O 66 r 51 has no application to this case. It will be apparent for the reasons I have already given that I accept that submission. Further, Compass submits that if there is any jurisdiction to make special orders with respect to costs, that jurisdiction rests with the arbitral tribunal, not the court. It will also be apparent from the reasons I have already given that I accept that submission.
47 Compass also submits that the settlement agreement has extinguished any right to apply for a special costs order, in the alternative to its submissions with respect to jurisdiction. In my view that submission goes to the exercise of the court’s jurisdiction rather than its existence. It is not therefore a matter appropriately considered at this stage of the proceedings. That is the reason why the evidence adduced with respect to the settlement agreement and the issue of the final award is not directly relevant to the jurisdictional issues addressed in these reasons.
48 For the reasons I have given, Siam has failed to establish that the court has jurisdiction to make the orders sought in these proceedings. However, as foreshadowed, I will provide Siam with the opportunity to make submissions with respect to the possible application of s 280 of the LPA. If Siam wishes to take advantage of that opportunity, any submissions and evidence dealing with the matters I have identified must be filed and served within 21 days of the date of publication of these reasons. If Siam takes that course, Compass will have 21 days from the date of service of Siam’s submissions and evidence within which to file and serve any submissions and evidence in response. Siam will then have 10 days within which to file and serve any submissions or evidence in reply to the submissions and evidence filed by Compass. I will then proceed to determine the issues raised on the papers unless either party notifies me that an oral hearing is required.