Abbotts Pty Ltd v Gel Group Pty Ltd
[2007] WADC 151
•30 AUGUST 2007
ABBOTTS PTY LTD -v- GEL GROUP PTY LTD [2007] WADC 151
| DISTRICT COURT OF WESTERN AUSTRALIA | Citation No: | [2007] WADC 151 | |
| Case No: | CIV:2755/2003 | 10 AUGUST 2007 | |
| Coram: | WAGER DCJ | 30/08/07 | |
| PERTH | |||
| 13 | Judgment Part: | 1 of 1 | |
| Result: | Items 7 to 10 and 12 to 18 remitted to Registrar for review | ||
| PDF Version |
| Parties: | ABBOTTS PTY LTD GEL GROUP PTY LTD |
Catchwords: | Costs Allowance on taxation Review by Judge Whether error in principle by taxing officer Rules of the Supreme Court O 66 r 55 and O 66 r 53(1) Delegation of attendance at taxation to clerk instructed by a certified legal practitioner |
Legislation: | Legal Practice Act 2003 s 123, s 124 Rules of the Supreme Court O 66 r 53(1), O 66 r 55(1), (2) |
Case References: | Griffiths v Delron Cleaning Pty Ltd [2003] WADC 123 Joyce v Hutchinson (2000) 23 SR(WA) 248 Mossensons (A Firm) v Coastline Associates, unreported; FCt SCt of WA; Library No 970661; 2 December 1997 Roblett and Pieroni [2005] WADC 215 |
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
GEL GROUP PTY LTD
Defendant
Catchwords:
Costs - Allowance on taxation - Review by Judge - Whether error in principle by taxing officer - Rules of the Supreme Court O 66 r 55 and O 66 r 53(1) - Delegation of attendance at taxation to clerk instructed by a certified legal practitioner
Legislation:
Legal Practice Act 2003 s 123, s 124
Rules of the Supreme Court O 66 r 53(1), O 66 r 55(1), (2)
(Page 2)
Result:
Items 7 to 10 and 12 to 18 remitted to Registrar for review
Representation:
Counsel:
Plaintiff : Mr Stewart Vivyan Forbes
Defendant : Mr David John Garnsworthy
Solicitors:
Plaintiff : Stewart Forbes
Defendant : Jackson McDonald
Case(s) referred to in judgment(s):
Griffiths v Delron Cleaning Pty Ltd [2003] WADC 123
Joyce v Hutchinson (2000) 23 SR(WA) 248
Mossensons (A Firm) v Coastline Associates, unreported; FCt SCt of WA; Library No 970661; 2 December 1997
Roblett and Pieroni [2005] WADC 215
(Page 3)
1 WAGER DCJ: The plaintiff applies for a review of a taxation of costs pursuant to O 66 r 55 of the Rules of the Supreme Court.
2 In this action the plaintiffs, a company of chartered accountants, claimed for damages of $7,694.28 for breach of contract, negligent misstatement and misleading or deceptive conduct arising out of the introduction of an accountant to their firm by the defendants, a staff recruitment company.
3 The plaintiff's claim was dismissed following a 3 day trial held on 14 to 16 September 2005 before His Honour Judge Martino.
4 On 26 July 2006 the defendant's bill of costs was taxed by Deputy Registrar Harman. On 5 June 2007 Deputy Registrar Harman disallowed the plaintiff's objections to specified items allowed in the taxation. The specified items are the subject of this review.
5 Order 66 r 55(2) of the Supreme Court Rules states:
"(2) The Judge, if of opinion that the taxing officer has made an error in principle, may thereupon make such order to rectify the error as the Judge thinks just."
6 In Mossensons (A Firm) v Coastline Associates, unreported; FCt SCt of WA; Library No 970661; 2 December 1997 Ipp J considered the operation of O 66 r 55 and said:
"The point is that there must be an 'error in principle' before a judge will carry out a review under O66, r55. Although it is possible for an error in principle to be made in regard to the quantum allowed in respect of a particular item, that is generally regarded as unusual. In my opinion an error in principle on this basis could only be established if it is shown that no taxing officer, acting reasonably, could ever have taxed the particular item in the amount in question. This is an adaption of 'unreasonableness' in the sense described in Associated Providential Picture Houses Limited v Wenesbury Corporation (1948) 1 KB 223 at 230 (per Lord Green MR). The prospects of an applicant succeeding on such basis when the amounts involved are to be measured in hundreds of dollars are remote, if not fanciful."
(Page 4)
7 (Joyce v Hutchinson (2000) 23 SR(WA) 248 and Griffiths v Delron Cleaning Pty Ltd [2003] WADC 123).
8 The specified items the subject of objection are:
Item No | Date | Description | Scale Item | Amount Allowed |
7 |
| 16 | 12,633.40 | |
8 |
|
| 19(a) | 9,000.00 |
9 |
|
| 19(b) | 2,400.00 |
10 |
|
| 19(b) | 1,210.00 |
11 |
|
| 19(c) | 3,040.50 |
17 |
|
| 2,100.00 | |
18 |
|
| 10(a) | 4,200.00 |
21 |
| 29(b) | 200.00 |
9 The specific grounds of objection to this item are:
"(5) The plaintiff contends that the learned taxing officer erred in relation to the taxation of this item in the following respects:
5.1 an error of law or an error of discretion in that determining the amount allowed the taxing officer failed to have any, alternatively, sufficient regard to the fact that the amount of time claimed to have been spent was manifestly excessive and overstated particularly given that the defendant called only one witness, obtained a proof of evidence from one further witness who was not called and could never have given any useful
- evidence and conferred with one further witness but did not prefer to call her at the trial;
- 5.2 allowed the item in the amount in question on the basis that the taxing officer saw no reason to reduce the amount claimed, whereas the onus of persuasion to the extent of that claim was on the defendant (see Mellos v Sheppard [2005] WADC 14 at par 2);
5.3 the amount allowed is so grossly disproportionate to the amount that should have been allowed as to demonstrate an error in principle;
5.4 by failing to take into account the matter of 'proportionality'. (See Roadwest Transport Equipment Sales Pty Ltd v Cullerton [2001] WADA 240; Coleman v McDougall DCL 4914 and Gallagher v CSR Ltdand Ors (per Ipp J), unreported; SCL 940165)."
10 In reviewing this item on 5 June 2007 Deputy Registrar Harman said at p 6 par 8:
"The ground expressed at par 5.2 recurs in the balance of the determinations to which the plaintiff objects. In each case, prior to determining the quantum of the fee I had been provided with information and submissions from the parties of the extent to which relevant services had been provided and features of the context in which they had been provided. In the process of assessing quantum I reflected upon the information and the submissions. I then determined the point within the range provided by each relevant scale item at which recovery the service or services that comprised the claim would be reasonable. In accordance with taxation practice each determination was recorded by reference to the datum expressed by the claim."
11 It is submitted on behalf of the plaintiff that the statement that each determination was recorded by reference to the datum expressed by the claim indicates that Deputy Registrar Harman had accepted the figure supplied by the defendant and failed to place the onus of persuasion on the defendant when considering the reasonableness of the claim.
(Page 6)
12 The Shorter Oxford English Dictionary defines datum as:
"(noun singular) a thing given or granted; a thing known or assumed as a fact, and made the basis of reasoning or calculation; a fixed starting point for a series of measurements etc"
13 I find the Deputy Registrar's comments difficult to understand however par 8 needs to be read in conjunction with par 9.
14 At p 6 par 9 Deputy Registrar Harman states:
"I accept that in the process of recording the determinations I express myself along the lines indicated at par 5.2 (disregarding the onus of persuasion); although by reference to the claim, not to the item. In expressing myself as I did I was stating that my determination had not provided a basis for the reduction of the fee claimed. I recall that I also indicated that but for the quantum of the fees claimed and the practice I would not have recorded my determinations by the same figures by which they were recorded. By those comments I did not intend to convey either that the adverse party carried the onus or that the fee claimed was the datum for assessing what was reasonable. I am surprised that they have been misinterpreted. In reaching my determinations I had accepted that under the usual order for costs the onus of persuasion was on the taxing party. In assessing quantum I consider that it was for the beneficial party to have established that it is entitled to recover more than a nominal amount."
15 I accept the defendant's submission that in light of this explanation the Registrar did consider the onus of persuasion in reaching his determination and did not work backwards in determining that fee allowed.
16 The plaintiff also submits that the Deputy Registrar failed to take into account the proportionality between the costs allowed and the original quantum of the claim.
17 The quantum of the claim is one of many factors to be considered in determining the appropriate sum to be allowed for an item however it is not the sole consideration. Deputy Registrar Harman in par 13 said:
"The proposition suggested by the terms of the objection is not founded upon any principle. The plaintiff does not indicate how the mechanism that it proposes would operate. If it operated at the point of the application of the first of the limbs of recovery
(Page 7)
- to be applied then it may have a bearing upon whether a service or part of a service would pass the test of necessity. I imagine that prospect would not accord with the plaintiff's intention in raising the issue as at taxation it did not contest the allowance of the item the subject of the claim or any of its parts and does not do so in the objection. If it would operate at the point of determining the fee for the services then I would suggest that it would be no more appropriate to lower what would otherwise be an appropriate determination because of the value of the claim in an action than it would be to provide for greater recovery simply because the value of a claim was significant."
18 The Deputy Registrar was not in error in determining that where the value of the claim is low proportionality does not inevitably lead to a reduction in the sum allowed.
19 Deputy Registrar Harman also refers to r 53(1). Rule 53(1) provides:
"A party who contends that the taxing officer has made an error in principle in allowing or disallowing any item or part of an item in a bill of costs taxed by him may, at any time before a certificate of taxation dealing finally with that item is signed and …
(a) delivered to the other party interested in the allowance or disallowance … an objection in writing to the allowance or disallowance …"
20 In the present review Deputy Registrar Harman reiterated his view expressed in Roblett and Pieroni [2005] WADC 215 that r 53(1) does not provide the taxing officer with jurisdiction to review a determination other than that by which an item or part of an item; that is, a service or part of a service is allowed or disallowed.
21 I consider that his interpretation of r 53(1) is unnecessarily restrictive and is an inappropriate way to approach the question of review. In Joyce v Hutchinson (supra), which was also a judicial review in respect of allowance on taxation dealing with the interpretation of r 53(1) his Honour Groves DCJ said at p 250 par 7:
"7. The first matter for consideration is whether or not the Deputy Registrar erred in principle by finding that he did not have jurisdiction to review his decision on quantum before signing the allocatur, and limiting his jurisdiction
- to review of the allowance or disallowance items or their component parts, but not otherwise.
- 8. In Grigoletto v Myer Properties (WA) Ltd, unreported; DCt of WA, Heenan CJDC, Library No 3667; 31 March 1993, addressed this issue. In particular reference was made to Cameron v Bennett, unreported; DCt of WA, Barlow DCJ; Library No 2678; 19 January 1990 and Brandon Valley Pty Ltd v Brinklow, unreported; SCt of WA; Registrar Watt; (Action No 1906 of 1983) 24 July 1987. Both of those decisions would support the Deputy Registrar's finding that he was restricted to review the allowance or disallowance of an item or part of an item and not empowered to review simply quantum of an item. In Grigoletto Heenan CJDC concluded that although the logic of the interpretation adopted in those cases was clear it was his opinion that their conclusion was wrong. His Honour had no hesitation in concluding that a taxing officer's decision as to quantum was still open to review if it had resulted from an error in principle. Subsequently in Foreman v E & L Metcalfe Pty Ltd, unreported; DCt of WA; Barlow DCJ; Library No 3935; 14 February 1994 his Honour after considering Grigoletto and the authorities referred to therein concluded that his earlier decision in Cameron v Bennett could not be supported. He accepted (p 17):
'… that a taxing officer's decision on quantum is subject to review, if it can be demonstrated the taxing officer has made an error of principle in determining how much should be allowed.'
9. Having regard to the authorities the Deputy Registrar was clearly in error in finding that his jurisdiction to review did not extend to quantum alone."
22 The weight of authority supports that the Deputy Registrar should have reviewed the quantum set for getting up for trial and for each specified item of objection raised at the hearing on 5 June 2007.
(Page 9)
Determination of allowances Items 7 to 18
23 The plaintiff submits that:
"6. The item in question should have been assessed by:
6.1 having regard to costs taxed and allowed in similar cases (see Joyce v Hutchinson and Anor [2000] WADC 42 at par 22);
6.2 identifying what services were reasonable;
6.3 objectively assessing a reasonable allowance for such services by applying the rules, the determination and the underlying principles thereof;
6.4 measuring the amount claimed and the bill for the services against the objective assessment (including an assessment of the reasonable times spent in providing the services) in order to determine whether or not the amount claimed was reasonable."
"It is my view that following the 1996 Determination in determining an allowance on a taxation for work done by a practitioner or paralegal it is necessary for the taxing officer to have regard to the times spent on the item, whether the work was done by a practitioner or a paralegal and, it done by a practitioner, the level of seniority of that practitioner and the hourly rate charged by the practitioner or the paralegal. Once that information is known the taxing officer should have regard to any other matters that may be relevant to determine whether the charge is a reasonable charge. Other matters that might be relevant in a particular case could include the complexity of the case and of the work done, the urgency with which the work was required to be done and the importance of the case."
(Page 10)
25 It is conceded by the plaintiff that all of the items allowed that are now the subject of objection were well within the relevant scale of costs. The issue is how the figure allowed came to be determined.
26 Deputy Registrar Harman has specifically dealt with grounds of objection raised by the plaintiff in relation to item 11 (solicitor attending trial). The plaintiff's grounds for objection to item 11 are:
"18. It is contended by the plaintiff that in making the allowance the taxing officer erred in principle in one or more of the following respects:
18.1 by making any allowance at all for the solicitor's attendance given that:
(a) counsel for the defendant was fully briefed and also had prior knowledge of the matter;
(b) the issues were not complex;
(c) there were few documents used at the trial;
(d) the defendant called only one witness;
(e) the plaintiff called on 3 witnesses.
18.3 If any allowance for a solicitor attending was justified then it should have been of attendance by a junior practitioner and no more."
27 The Deputy Registrar stated at par 20:
"20 As I have indicated, the test of recovery by the beneficial party under an order for costs is to the extent of the reasonable cost of services necessarily provided. I accept that there is authority the name of which I do not recall which is along the lines that it is appropriate for a taxing officer to undertake the sort of analysis suggested in par 18.1. In my opinion the flaw in the proposition that there ought to be an analysis of the part played by the solicitor at trial is that whilst it may reveal that the solicitor had absolutely nothing to do, the justification for
- allowance is that the solicitor would be available to take an give instructions should the need arise. There is no proper basis to consider that the defendant should accept a 'standard' set by practitioners who chose not to attend trial. In Grigoletto v Myer Properties Pty Ltd; unreported; DCt of WA; Library No 3667; 31 March 1993 Heenan CJ was considering a case in which the taxing officer had limited the scope of recovery for a solicitor attending trial by reducing the fee by a proportion of the length of the trial. His Honour considered passages that he cited from what I take to have been the objecting party's grounds of objection and stated:
- 'Those passages point up the desirability of ensuring, if it can reasonably be achieved, that the solicitor who has had the conduct of the matter prior to trial will be present at trial.'
- 21. As to par 18.3, in my opinion it would be inappropriate for the taxing officer to determine that the solicitor who attended at trial ought to have been other than the solicitor for the beneficial party or the solicitor who has had the conduct of the file."
28 The Deputy Registrar has made no error in principle in relation to the allowance for item 11 because his conclusion that it is appropriate for a solicitor familiar with the matter to be present at trial is, in the circumstances, not unreasonable.
29 In relation to items 7 to 10 and items 12 to 18 the Deputy Registrar gave no indication as to why he considered the quantum of the items the subject of objection to be reasonable. For each of these items the plaintiff has submitted that the time taken was excessive, the issues were not complex, the defendant called only one witness at trial and the plaintiff called only three witnesses and, in relation to the interlocutory matters, the application was short and very simple and resulted in one uncontested hearing.
30 Deputy Registrar Harman's reasons do not address whether the factors set out by Martino DCJ in Griffiths v Delron Cleaning Pty Ltd were considered by him at all in reaching his initial determination of quantum in respect of these items. He does not address quantum in his review on 5 June 2007. I therefore cannot conclude whether his
(Page 12)
- assessment of the items was or was not unreasonable or unusual because the basis of the assessment is not apparent.
31 Items 7 to 10 and items 12 to 18 should be reviewed by a Registrar having regard to all relevant matters. A determination should be made as to whether or not the sum claimed for each item is reasonable.
Item 21 attending taxation including preparation
32 The plaintiff submits that the taxing officer erred in making any allowance at all for the attendance of a clerk at taxation on 26 July 2006 in the absence of any evidence of supervision of the work done by someone other than a certified practitioner.
33 It was not disputed that the clerk who attended was experienced and competent. The clerk was instructed to appear by a certified legal practitioner.
34 Part 9 of the Legal Practice Act 2003 governs unqualified and prohibited practice. Section 123 states:
"123. Prohibition on unqualified legal practice
(1) A person must not engage in legal practice unless the person is a certificated practitioner.
Penalty: $10 000.
…"
35 Section 124 sets out:
"124. No liability in certain cases
…
(2) Nothing in section 123 is to be construed as affecting -
…
(b) a person doing work -
(i) under the supervision of a certificated practitioner, as a paid employee of a certificated practitioner, a firm of legal practitioners, an incorporated legal
- practice or a multi-disciplinary partnership;
- …"
36 I accept that on the information before me for the purpose of the review of the taxation of costs the Deputy Registrar had been advised that the clerk was instructed by a certified legal practitioner. I also accept that if the clerk had acted contrary to his instructions or in a negligent way then the certified practitioner would have been liable given that he was the clerk's supervising practitioner pursuant to s 124 of the Legal Practice Act 2003. It was appropriate for a competent clerk following the instructions of a certified practitioner to appear at the taxation and the allowance of $300 for preparation and appearance is, in the circumstances, not unreasonable. There is no reason why the item should be reviewed. The objection is disallowed.
37 Items 7 to 10 and items 12 to 18 are remitted back to the Registrar for review in light of these reasons.
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