Abbotts Pty Ltd v Gel Group Pty Ltd
[2007] WADC 92
•5 JUNE 2007
ABBOTTS PTY LTD -v- GEL GROUP PTY LTD [2007] WADC 92
| DISTRICT COURT OF WESTERN AUSTRALIA | Citation No: | [2007] WADC 92 | |
| Case No: | CIV:2755/2003 | ||
| Coram: | DEPUTY REGISTRAR HARMAN | 5/06/07 | |
| PERTH | |||
| 11 | Judgment Part: | 1 of 1 | |
| Result: | Objections not sustained | ||
| PDF Version |
| Parties: | ABBOTTS PTY LTD GEL GROUP PTY LTD |
Catchwords: | Practice Western Australia Practice under the Rules of the Supreme Court of Western Australia Review of taxation Availability of jurisdiction to review quantum Scope of O 66 r 53(1) Test of recovery Under the usual order for costs Observations in relation to significance of Tenbohmer v Eden |
Legislation: | Nil |
Case References: | Coleman v McDougall; unreported; DCt of WA; No 3072 of 1994; 3 May 1995 Gallagher v CSR Limited & Ors; unreported; SCt of WA; Library No 940165; 31 March 1994 Grigoletto v Myer Properties WA Ltd; unreported; DCt of WA; Library No 3667; 31 March 1993 Roadwest Transport Equipment & Sales Pty Ltd v Cullerton [2001] WADC 240 Roblett v Pieroni [2005] WADC 215 Schmidt v Gilmour [1988] WAR 219 Smith v Buller (1875) Eq 473 Uta Pty Ltd v Albany Star Pty Ltd & Anor [2007] WADC 39 |
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
GEL GROUP PTY LTD
Defendant
Catchwords:
Practice - Western Australia - Practice under the Rules of the Supreme Court of Western Australia - Review of taxation - Availability of jurisdiction to review quantum - Scope of O 66 r 53(1) - Test of recovery - Under the usual order for costs - Observations in relation to significance of Tenbohmer v Eden
Legislation:
Nil
Result:
Objections not sustained
(Page 2)
Representation:
Counsel:
Plaintiff : NA
Defendant : NA
Solicitors:
Plaintiff : Stewart Forbes
Defendant : Mullins Handcock
Case(s) referred to in judgment(s):
Coleman v McDougall; unreported; DCt of WA; No 3072 of 1994; 3 May 1995
Gallagher v CSR Limited & Ors; unreported; SCt of WA; Library No 940165; 31 March 1994
Grigoletto v Myer Properties WA Ltd; unreported; DCt of WA; Library No 3667; 31 March 1993
Roadwest Transport Equipment & Sales Pty Ltd v Cullerton [2001] WADC 240
Roblett v Pieroni [2005] WADC 215
Schmidt v Gilmour [1988] WAR 219
Smith v Buller (1875) Eq 473
Tenbohmer v Eden (1992) 6 WAR 366
Uta Pty Ltd v Albany Star Pty Ltd & Anor [2007] WADC 39
(Page 3)
1 DEPUTY REGISTRAR HARMAN: The defendant succeeded in the action and has taxed its costs. The plaintiff has now filed a notice of objection to particular determinations made in the course of taxation. Before dealing with its objections I will make some observations in relation to the following passage which the plaintiff describes as a "general principle".
"It is a well established principle that a successful litigant is entitled to recover the costs reasonably incurred: Tenbohmer v Eden(1992) 6 WAR 366."
2 The defendant's entitlement to costs was established by what is commonly described as the usual order, under which a beneficial party would recover the reasonable cost of services necessarily provided to it for the purposes of an action. I do not believe the second of the limbs of that test to be applied would be likely to generate much controversy. As to the first, Smith v Buller (1875) Eq 473 is time honoured but sometimes overlooked authority for the proposition that necessity is the test for allowance of a service. It portrays that datum as the balance struck between the interests of parties affected by such an order. I am not aware of any case that squarely addresses that test and dissents from it.
3 In the case cited by the plaintiff in support of the proposition the court was addressing the following grounds of appeal: -
"That the learned judge erred in law in that:
(a) having referred to Schmidt v Gilmour [1988] WAR 219, he then failed to apply the principle therein stated by the majority that the amount of work involved in getting up a case for trial may of itself constitute good and sufficient reason to order an increase in the scale allowance in the fourth schedule;
(b) having determined that the case was not of an unusual complexity or importance he failed to give consideration to the substantial amount of work involved in the preparation of the case as being 'good and sufficient reason' to increase the scale allowance in the fourth schedule;
(c) having resolved that the provision of the appellant's (plaintiff's) solicitor of counselling the appellant (plaintiff) for his mental condition did not constitute good
- and sufficient reason he failed to consider whether this might be shown by factors such as the appellant's (plaintiff's) solicitors obtaining medical reports; including 101 pieces of correspondence and being employed for 470 hours in preparation work such as consultations, telephone calls and correspondence."
4 The case on which the appeal was brought had been an application under r 12(1) which provided:
"Where the Court is of the opinion that a Special Order as to costs should be made by reason of the unusual complexity or impotence of the case or for any other good or sufficient reason the Court may order that any particular allowances in any relevant scale be raised or a limit removed and in giving any such direction the Court may fix a limit within which the Taxing Officer may allow such costs."
5 As par (a) of the grounds of appeal suggests, the application in Schmidt v Gilmour [1988] WAR 219 had also been made under r 12 (1). In each case the court had been addressing the scope of recovery provided by the scale not the test of recovery that applies at taxation. The proposition put by the plaintiff would appear to be drawn from the following passage at p 370:
"It must be borne in mind that it is implicit in O 66 that a successful plaintiff should recover all costs reasonably incurred. This is clear from such provisions as O 66, r 1(2). If the court is of the opinion that the conduct of a party, either before or after the commencement of the litigation, or that a claim by a party for an unreasonably excessive amount has resulted in costs being unnecessarily or unreasonably incurred, then the court may deprive a party of those costs. It follows that costs which are necessarily and reasonably incurred should be covered by any order for costs in favour of a party."
6 In the context of taxation the material in the balance of the passage would not support the proposition in the first sentence. Order 66 r 1(2) speaks of costs in the sense that a court would make an order for costs; it has nothing to say in relation to say in relation to the application of the test of recovery at taxation. I would struggle with the proposition that necessity and reasonableness would be established by the absence of findings to the contrary. Under the usual order it is the beneficial party
(Page 5)
- that carries the onus. As I indicated in Uta Pty Ltd v Albany Star Pty Ltd & Anor [2007] WADC 39 there is text in many recent decisions that provides ground to consider that there has been a departure from what is expressed in Smith v Buller (supra). In my opinion Tenbohmer v Eden (1992) 6 WAR 366 neither stands for the proposition which the plaintiff suggests nor has anything useful to say in relation to the test of recovery that applies at taxation.
7 The first determination the subject of objection relates to item 7 of the bill under which the defendant claimed for getting up case for trial. The grounds of objection are as follows:
"(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 in 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 other witness but did not prefer or call her at the trial (sic);
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 MacDougall DCL 4914
- and Gallagher v CSR Ltd and Ors (per Ipp J), unreported; SCL 940165).
- (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 in the bill for the services against the objective assessment (including an assessment of the reasonable time spent in providing the services) in order to determine whether or not the amount claimed was reasonable."
9 I accept that in the process of recording the determinations I expressed myself along the lines indicated at par 5.2; 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
(Page 7)
- 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 considered that it was for the beneficial party to establish that it is entitled to recover more than a nominal amount.
10 As to par 5.4, although it follows upon the reference to disproportion in par 5.3, I take from the case references that the plaintiff would contend that there ought to be some measure of proportion between the extent of recovery and the value of the subject matter of a case. The authority cited by the plaintiff in support of that proposition bears some analysis.
11 In Roadwest Transport Equipment & Sales Pty Ltd v Cullerton [2001] WADC 240 a claim in the order of $2000.00 had been tried and had proceeded to appeal. In sending the claim back to the Local Court for trial before another magistrate Macknay J recorded that he did so notwithstanding the very modest amount of money involved. In my opinion the case has nothing to say on what I have taken to be the plaintiff’s proposition. To the contrary, his Honour recognised that the case would be dealt with in an appropriate manner and acted accordingly.
12 As was the case in Tenbohmer v Eden (supra), in Gallagher v CSR Limited & Ors; unreported; SCt of WA; Library No 940165; 31 March 1994; the court had before it an application under r 12(1). I have no difficulty with the prospect that in assessing whether to raise the limit of the discretion of the taxing officer the court may appropriately consider whether to maintain the proportion between costs and the value of the subject matter of an action either as provided by the scale or by way of a proportionate increase. In Coleman v McDougall; unreported; DCt of WA; No 3072 of 1994; 3 May 1995Imade the same observation in response to an objection that sought to draw from Gallagher (supra)much the same proposition as that for which the plaintiff contends. I note that I concluded that:
"In my opinion, there is nothing to justify the conclusion that a taxing officer in exercising discretion should consider a discount for the cost of services on the basis of the quantum of the judgment. In my opinion to do so would be to err in principle."
13 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
(Page 8)
- the application of the first of the limbs of recovery 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 a claim in an action than it would be to provide for greater recovery simply because the value of a claim was significant.
14 As to the balance of the grounds of the objection to item 7, the significant consideration is that as there had been no contest in relation to the services for which the claim was made, the only determination called for was under the second limb of the test of recovery; what was reasonable for the service. Rule 53(1) provides as follows:
"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 … -
(a) Deliver to the other party interested in the allowance or disallowance … an objection in writing to the allowance or disallowance …."
(Page 9)
16 As to par 6 of the notice, the only real dispute that I would have with the plaintiff is in relation to pars 6.2 and 6.4. As to the former, I have already recorded that there was no contest raised at taxation in relation to the services that constituted the claim but only to quantum. I have also already recorded the test of reasonableness relates to quantum not to the question of recovery for services. As to the latter, the only reference required to be had to the quantum of the fee expressed in a bill is for the purpose of recording the determination made.
17 The objections taken in relation to the determination made at item 8 for counsel's fee on brief and to those made at items 9 and 10, for the second and third days of trial respectively are expressed in grounds that are along the same lines as those that I have already canvassed and I have nothing to add.
18 The next determination objected to is that made in relation to item 11 for the solicitor attending trial. I disagree with the figure cited by the plaintiff as "allowed". The quantum was assessed as being $3040.00 and was recorded by taxing off $375.50. I do not understand that there is any objection expressed at par 17, it simply expresses what may have been the calculation that I had made.
19 The other grounds of objection are as follows: -
"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 only three witnesses;
(Page 10)
- 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."
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 and 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 WA 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.
22 The final objection relates to item 21 of the bill which was for taxation. The objection is as follows: -
"The taxing officer erred in making any allowance at all for the attendance at taxation on 26 July 2006 in the absence of any evidence of supervision of the work done by someone other than a certificated practitioner."
23 In my opinion the plaintiff has considered the concept of supervision in too narrow a sense. Regardless whether a person is a practitioner once they have acquired a degree of competence in the provision of particular services it is a matter of judgment for their supervisor to determine how their responsibility would be discharged. I accept that the defendant
(Page 11)
- carried the onus of persuasion in relation to the issue, however, I was satisfied that the service provider was as competent as a senior practitioner undertaking the same task. I might add that it is unlikely that any other taxing officer would have arrived at any different conclusion.
24 It follows that on none of the objections raised by the plaintiff has it being successful.
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