Acetime Pty Ltd v Homestyle Pty Ltd - [2007] WADC 15

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS

LOCATION: PERTH

CITATION: ACETIME PTY LTD -v- HOMESTYLE PTY LTD [2007] WADC 15

CORAM: DEPUTY REGISTRAR HARMAN

HEARD: NOT APPLICABLE

DELIVERED : 23 FEBRUARY 2007

FILE NO/S: CIV 2168 of 2004

BETWEEN: ACETIME PTY LTD
Plaintiff
AND
HOMESTYLE PTY LTD
Defendant

Catchwords:

Practice - Western Australia - Practice under the Rules of the Supreme Court 1971 - Review of taxation - Scope for review provided by O 66 r 53(1)

Legislation:

Nil

Result:

Review not available

Representation:

Counsel:

Plaintiff: No appearance
Defendant: No appearance

Solicitors:

Plaintiff: A J Lloyd
Defendant: Corrs Chambers Westgarth

Case(s) referred to in judgment(s):

Nil

Case(s) also cited:

Nil

DEPUTY REGISTRAR HARMAN: The defendant's entitlement to costs was established by the order of 20 April 2006 according to which it has the costs of an application to strike out the action to be taxed on an indemnity basis.
The defendant filed a bill in which claims expressed under items 10 and 32 of the scale took the form of Sch 1 and Sch 2 attached to the bill. The bill was taxed and the plaintiff now objects as follows:
"The plaintiff objects to the taxation and the bill of costs (and particularly the allowance of costs contained in schedules 1 and 2 to the bill of costs) as follows:
1.The costs agreements relied upon by the Defendant do not comply with section 221 of the Legal Practice Act 2003 as the agreement is not in 'writing' by virtue of the Defendant not having signed the same:
Dissidomino v Mossensons (unreported, Supreme Court WA, Parker J, 22 January 1999, SCL 990019) at pages 4, 5 and 10
Jovetic v Stoddart & Co (1992) 7 WAR 208 at 218
2.The costs orders made do not enable the Defendant to recover from the Plaintiff costs upon the basis that whatever the Defendant has paid to its own solicitors is recoverable irrespective of whether the Defendant has entered into a valid and binding cost agreement with its solicitors.
3.The burden of proof upon the Defendant as receiving party was not discharged by the statement that the Defendant had paid to its solicitors the amount of costs as claimed in the bill of costs for taxation.
4.The Defendant did not discharge the onus upon it as receiving party by submitting schedules summarising the costs claimed which did not relate to the individual items charged for, the time/unit method of charges under the applicable cost agreement, and by merely indicating that those costs covered what was included in files produced without any other proof or the production of the itemisation of those costs as set out in the bills and accounts received by the Defendant from its solicitors. The receiving party did not lead evidence to establish that items of work had been done, or that those items of work related to the relevant application and fell within the ambit of the costs order under taxation.
5.The quantum of fees claimed in respect of the application resulting in the costs order the subject of the bill of costs and taxation is of itself evidence of and demonstrates that those costs should have been disallowed in part as being unnecessarily incurred and as being unreasonable in amount."
The fundamental issue presented by the objection is whether it is sufficient for the purposes of providing jurisdiction to review a decision made at taxation. Rule 53(1) provides limited scope for review, it is 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 … (a) … carry in before the Taxing Officer … an objection in writing to the allowance or disallowance specifying … the items or parts of items objected to and the grounds and reasons for the objections."
The plaintiff's objection does not assert any error in the allowance of any item in the bill or any part or parts of those items expressed in the schedules. It follows that there is no jurisdiction to review.
Be that as it may, in the event that the plaintiff is able to persuade the court that there is some scope for review, it may be useful to provide my observations in relation to the particular paragraphs of the objection in order to give my assessment of what transpired at taxation.
The case law that supports the proposition at par 1 of the objection relates to a context in which s 221 of the Act would have a bearing upon the enforceability of an agreement between solicitor and client. No such issue had been raised by the defendant at taxation.
As to par 2 of the objection, at taxation I accepted that the costs recovered by the defendant's solicitor from the defendant had been accounted for on the basis of a cost agreement. My acceptance of that fact validated the proposition advanced by the defendant that if the extent of its recovery under the order was to be measured, then the appropriate datum was the agreement.
To the extent that the balance of par 2 would be open for consideration, the order for the defendant's costs opened up the prospect that it would recover from the plaintiff what it had paid to its solicitor. The extent to which it would recover that expenditure would depend upon the extent to which the plaintiff discharged the onus upon it.
As to par 3, I have no difficulty with the proposition that it would be for a beneficial party to establish that any claim made in a bill falls within the scope of the indemnity provided by an order for costs. Although r 44 provides for a process by which a determination of a taxing officer would be founded upon evidence, recourse is rarely had to it because the limbs of the test of recovery can be conveniently applied to a claim without the need for definitive findings of fact. In the case of the first limb ‑ whether a service or part of a service had necessary been provided ‑ the result is usually patent once that test has been articulated and the context in which the service was provided has been canvassed. In the case of the second, there are so many considerations that would have a different bearing upon what would be a reasonable fee for a service that to bring limited evidence would serve no useful purpose and to address the features of a case in a comprehensive manner would be an onerous if not an overwhelming undertaking. As a matter of practice, the taxation of claims proceeds on the basis of information received from a source upon which a taxing officer can properly rely.
My recollection of what transpired at taxation is that the plaintiff had asked the defendant whether it had paid its solicitors the amount of costs claimed. After the defendant's solicitor responded, the plaintiff then enquired whether I accepted that response. I accept that so doing amounted to a determination; however in my opinion, it is significant that it was called for upon that response.
The context in which the statement was made was one in which there is provision for evidence to be received but as a matter of practice, unless evidence is sought, it is accepted that taxation would be undertaken on the basis of such statements. The plaintiff had not called for any response of the defendant to be on oath and accordingly it had been my appreciation that the plaintiff had simply sought reassurance that the claims made had been properly put. On hearing the question I did not consider that there had been any cause for my intervention along the lines: because there is a prospect that I would be called upon to make a definitive finding of fact, the answer ought to be on oath.
Whilst I would accept that the plaintiff's question raised a fundamental issue and one that would not fall into the scope of the categories of issues upon which the taxation procedure that I have described is founded, prior to receiving the objection I had not considered that the circumstances had called for a definitive determination of fact but simply whether as taxing officer I would accept what I had been told by a practitioner. Returning for a moment to the terms of the objection, the significant omission from the terms in which it is expressed is that what was accepted was the statement of a practitioner.
Although at no point had the plaintiff sought an adjournment for the purpose of receiving evidence, because the proposition that I ought to have adjourned to receive evidence prior to making a determination may have some residual appeal, I might take the opportunity to canvass other features of the taxing procedure and what had previously transpired in the taxation process.
There was a time when bills under orders for indemnity costs and as between solicitor and client were listed for preliminary hearings. That procedure was followed because unlike other bills, their taxation usually called for considerably more time than was available in the usual listings procedure. It enabled issues to be identified, directions to be made that would facilitate their efficient determination and for an assessment to be made of the likely period of time that would be devoted to the exercise of taxing the bill. Although in a formal sense that process has been abandoned, taxing officers continue to follow the course of regarding the first listing of such a bill as being a useful opportunity for such discussions. The date on it was taxed was the third occasion that the defendant's bill had been listed. On the first, I had enquired whether the taxation would proceed under a costs agreement and whether any directions would be sought. I was told that there was an agreement and that no directions were then required. As the only outstanding issue was whether the plaintiff would be permitted to have access to the relevant materials held by the defendant's solicitors, the taxation was adjourned to enable the defendant's representative to obtain instructions. By the time of the second listing of the taxation that issue had been resolved. I recall that the plaintiff had not then completed the exercise of reviewing the defendant's solicitor's file and the taxation was adjourned to allow that exercise to be completed.
In my opinion prior to the date of the third listing the plaintiff had had sufficient opportunity to consider what would be in issue at the taxation and to obtain a direction that evidence of payment by the defendant be provided.
For what it is worth I would observe that the defendant's representative is experienced and had evidently prepared for the taxation without adopting the precaution of obtaining such evidence. I would suggest that had he done so the issue of the necessity of so doing would have been open in light of the history of the taxation, the lack of any direction and the fact that the defendant's solicitor attended at the taxation.
If to this point I have misinterpreted the objection then I would add that I would be surprised if the terms of any accounting to the defendant by its solicitor were reflected in the terms in which the claims were expressed in the bill. The bill was prepared for the taxation, not so the account.
As to par 4 of the objection, the same considerations apply as I have articulated in response to pars 2 and 3. I was satisfied at the taxation access to the defendant's solicitor's file had been made available to the plaintiff's solicitor and that he had had the opportunity to be satisfied as to how the defendant's claims were generated. In my opinion, beyond producing the bill, stating that its solicitors had charged it pursuant to an agreement and that it had paid an amount equal to or greater than the sum of the defendant's claims, it was not necessary for the defendant to contribute further to the taxation. I make that assessment as in discharging the onus upon it the plaintiff had sought no further information in relation to the services provided and made no significant submissions in relation to the work done.
At par 5 of the objection, one of the plaintiff's propositions is that the level at which the quantum of the fee claimed is pitched reveals that it is unreasonable. Implicitly the plaintiff contends that the taxing officer erred in determining what was reasonable. The plaintiff misses the fundamental point which is that it carried the onus at taxation. It was for the plaintiff to satisfy the taxing officer that the claim was unreasonable by the datum established by the cost agreement. I do not presently have the benefit of access to it but if I was to judge the claim of $5,871.59 by reference to the scale which was in operation at the relevant time, I note that the maximum recoverable would have been $8,679. Even if taxation had been conducted under the usual order for costs, prima facie the quantum claimed would not be revealed as inherently unreasonable. In my opinion that illustration is not an inappropriate response to the objection as in my experience, at their foundation, cost agreements tend to provide for above-scale recovery.
The other proposition is that the quantum of the fee expressed in the claim would speak to the prospect that some unspecified service had been unnecessarily provided. Under the usual order for costs the exercise of taxation is relatively straightforward. The adverse party is asked if there is any issue with a particular claim. If so, the beneficial party is put to the task of establishing the necessity for the provision of the service or the reasonableness of the fee claimed or both. The significant point is that the tasks set for the party carrying the onus are clear and distinguishable. From the perspective of the taxing officer a determination would be made under the separate limbs of the test of recovery: first as to the necessity of the provision of the service as a whole or in its parts and then as to the reasonable cost of what was found to be necessary. In the event of disallowance of the service or any part of it, such disallowance would be expressed separately from any determination made in relation to quantum. In the taxation of the defendant's bill, in default of the plaintiff discharging the onus the defendant would recover to the extent of each claim. On that analysis there is no reason to consider that the quantum claimed for a particular item revealed anything about the extent to which services had necessarily been provided. In my opinion par 5 of the objection outlines the failure of the plaintiff to take any issue with the defendant's bill in the sense of discharging the onus upon it at the taxation.
In my opinion had there been jurisdiction to review none of the grounds of objection would have been made out.