Anthony v Tasmanian Alkaloids Pty Ltd (No 3)
[2005] TASSC 91
•21 September 2005
[2005] TASSC 91
CITATION: Anthony v Tasmanian Alkaloids Pty Ltd (No 3) [2005] TASSC 91
PARTIES: ANTHONY, Brendan John
v
TASMANIAN ALKALOIDS PTY LTD
TITLE OF COURT: SUPREME COURT OF TASMANIA
JURISDICTION: ORIGINAL
FILE NO/S: 77/2000
DELIVERED ON: 21 September 2005
DELIVERED AT: Hobart
HEARING DATE: 28 June, 6 July 2005
JUDGMENT OF: Tennent J
CATCHWORDS:
Procedure – Costs – Taxation - Review – Principles applicable – In general – Two counsel – Preparation time for a trial
Supreme Court Rules 2000 (Tas), r868.
Cachia v Westpac Financial Services Limited [2003] FCA 817; Kroehn v Kroehn (1912) 15 CLR 137; Stanley v Phillips (1966) 115 CLR 470; Peile v Nobel (Australasia) Pty Ltd [1966] VR 433; Willis v Edgar (1964) 80 WN(NSW) 1369; Australian Broadcasting Tribunal v Bond & Ors (1990) 170 CLR 312, referred to.
Aust Dig Procedure [648]
REPRESENTATION:
Counsel:
Plaintiff: M E O'Farrell
Defendant: H S Murray
Solicitors:
Plaintiff: Ben Lillas
Defendant: Hugh Murray
Judgment Number: [2005] TASSC 91
Number of paragraphs: 41
Serial No 91/2005
File No 77/2000
BRENDAN JOHN ANTHONY v TASMANIAN ALKALOIDS PTY LTD (NO 3)
REASONS FOR JUDGMENT TENNENT J
21 September 2005
This is an application by the defendant pursuant to the Supreme Court Rules 2000 ("the Rules"), r868, for a review of the taxation of the plaintiff's bill of costs filed 11 February 2005 and in respect of which an interim certificate was issued on 10 May 2005. The application for review as filed related to items 461, 466, 467 and 468 on that bill. At the hearing, counsel for the defendant abandoned its application insofar as it related to item 468.
Item 461
This item was an amount of $32,450 for costs for counsel, Mrs O McTaggart. It was claimed in an account dated 21 May 2004. Counsel sought payment for 7½ days' preparation for trial at $1,800 per day and 8 days appearing at the trial as counsel at $2,000 per day.
Item 466
This item was an amount of $29,700 for costs for counsel, Mr K Read. It was claimed in an account dated 20 May 2004. Counsel sought payment for one day's preparation for trial at $3,000 per day and eight days appearing at the trial as counsel at $3,000 per day.
Item 467
This item was an amount of $17,875 for costs for counsel, Mr Read. This amount was claimed in an account dated 10 May 2004. Counsel sought payment for 6½ days' preparation for trial at $2,500 per day.
History of taxations
The initial taxation of the plaintiff's bill of costs was concluded on 11 April 2005. In respect of item 461, the taxing officer allowed for the appearance as counsel, but reduced the allowance for preparation by 1½ days, that is, by an amount of $2,700. In respect of item 466, the taxing officer allowed for the appearance as counsel, but did not allow for the preparation time as it was during the trial. In respect of item 467, the taxing officer reduced the allowance for preparation by 1½ days, that is, by an amount of $3,750.
The solicitors for the plaintiff, pursuant to the Rules, r867, objected to the disallowance of the amounts in respect of items 461 and 467 on the basis that the items ought to have been allowed as reasonable preparation for an eight day trial.
The solicitors for the defendant also objected to the taxation. They objected to the allowances for items 461,466, 467 and 468 on three grounds, namely:
1 the case did not warrant the plaintiff employing the services of two counsel;
2.in the alternative, that the time claimed by counsel for trial preparation was in total excessive; and
3 that the total time claimed in respect of item 468 was excessive.
By a decision delivered in writing on 10 May 2005, the taxing officer disallowed both objections and issued an interim certificate. The solicitors for the plaintiff accepted that ruling. The solicitors for the defendant did not and filed the present application for review on 23 May 2005.
The Rules
The Rules relevantly provide:
Review of taxing officer's decision by judge
868 (1) A party who objects under rule 867 and who is dissatisfied with the certificate of the taxing officer as to any item or part of an item, may apply to a judge to review the taxation as to that item or part of an item.
(2) ...
(3) Unless the judge otherwise directs, the application is to be determined on the evidence which was before the taxing officer.
(4) On an application under subrule (1), the judge may make any order as may be just but the certificate of the taxing officer is final as to all matters which are not the subject of the application.
Considerations relevant to taxing officer's discretion
858 If a fee or allowance is discretionary, the taxing officer is to take into consideration the following:
(a) any other fee or allowance in respect of the work to which the fee or allowance relates;
(b) the nature and importance of, and the amount involved in, the proceedings;
(c) the interest of the parties;
(d) the person, estate or fund by whom or by which the costs are to be borne;
(e) the general conduct and costs of the proceedings;
(f) any other relevant circumstances.
Costs allowed or not allowed on taxation
859 Subject to the provisions of this Division, on taxation, the taxing officer –
(a) is to allow all costs, charges and expenses as were necessary or proper for the attainment of justice or for maintaining or defending the rights of any party; and
(b) is not to allow costs that were not so necessary or proper or that were incurred through over-caution, negligence or mistake.
Counsel
863 (1) Except in a case to which Part 2 of Schedule 1 applies, fees may be allowed to counsel as are reasonable in the circumstances.
(2) …
(3) ….
(4) The costs of employing 2 or more counsel may be allowed in a proper case even though none of those counsel is one of Her Majesty's counsel."
Role of judge on review of taxing officer's decision
In par 6.1070, Quick on Costs, vol3, the learned author says:
"The power to review a taxing officer's decision will only be exercised by the court where the officer has acted upon a wrong principle or failed to exercise discretion or exercised discretion in a manner which is manifestly wrong: Schweppes Ltd v Archer (1934) 34 SR (NSW) 178; … . An error in principle may be shown where the allowance was so low or so high that an error can be inferred … ."
In Cachia v Westpac Financial Services Limited [2003] FCA 817 at par21, Hely J said:
"Where the question is one of the exercise of discretion by the taxing officer, the Court is reluctant to interfere, but will do so in a proper case."
Hely J went on to say at par24:
"Not every decision made by a taxing officer is in the nature of a discretionary judgment. … However, where what is involved is the exercise of a discretion, or the formation of a value judgment, rather than some question of principle, then I would respectfully agree with Heerey J that the Court should proceed in accordance with the principles enunciated by Jordan CJ in Schweppes' and adopted by Kitto J in Australian Coal & Shale Employees' Federation."
The basis of review as sought by defendant
Counsel for the defendant submitted:
·that the taxing officer's discretion miscarried in allowing for two counsel, (he should have disallowed the costs of counsel Mrs McTaggart altogether in relation to her appearance at trial, that is $16,000); and
·in any event, his discretion miscarried in allowing for in all 11 days' preparation however many counsel there were.
Material before the taxing officer
It was common ground that the following material was before the taxing officer:
·Associate's minute book.
·Plaintiff's bill of costs filed 11 February 2005.
·Mr Read's submissions as to solicitor/client costs and "judges error" application.
·Materials sent by Mr McTaggart, including retainer letter and invoices from counsel.
·Court file.
·Transcript.
·Exhibit list.
·Decision of Blow J.
·Mr P Tree's bill.
·File entitled "Nelson South" including Mr Read's submission as to solicitor client costs/correcting (sic) his ruling re the meaning of the order as to costs.
Two counsel issue – defence counsel's submissions
Counsel referred the Court to Kroehn v Kroehn (1912) 15 CLR 137, where, at 141, Griffiths CJ said:
"A similar but somewhat less rigid rule may be applied in considering whether two counsel should be employed. I am disposed to state it thus: Would a prudent person not compelled by poverty come into Court in such a case without two counsel?
In answering that question regard must be had, inter alia, to the importance of the case, the probable duration of the trial, the probability of conflict of evidence entailing the necessity of careful cross-examination, and the general practice as to employing two counsel."
Counsel submitted that the test above has been accepted by the courts in Stanley v Phillips (1966) 115 CLR 470, Peile v Nobel (Australasia) Pty Ltd [1966] VR 433 and Willis v Edgar (1964) 80 WN(NSW) at 1369. However he also referred to certain passages in the judgment of Else-Mitchell J in Willis (supra) where her Honour commented upon changing times and made some observations about the test expounded by Griffiths CJ in Kroehn's case and said, at 1371:
"The importance of the case which the learned Chief Justice mentioned seems to me to denote an objective quality and not simply the importance of the case to one or other of the parties; that would entail a subjective element. Importance may be marked by amount but that is not invariably true as, for example, in cases where, by the very nature of the personal injuries sustained (or, in the case of death, the earnings of the deceased) the smallest amount of damages which could be awarded if a verdict were recovered would be very substantial. A case which raises a novel question of law as a basis of liability may well be important but one where liability depends upon a set of facts of common occurrence or in which the heads of damage and injuries present nothing out of the ordinary will hardly answer the description of 'important'. It is difficult in my view to envisage that most of the running down and industrial accident cases fall into such a category.
The relevance of the probable duration of the trial to the allowance of two counsel is self-evident; the efficient conduct of a case often requires counsel to be able to find at short notice particular passages in the evidence or a particular exhibit and in cases where the evidence is voluminous and exhibits are numerous this cannot be done by one counsel. And what is more important the presentation of evidence from many witnesses will often be beyond the burden which one counsel should personally have to bear. No general rule can be laid down about how long a case should endure before this becomes a critical element but, in view of the proportion of time in the hearing of a jury cause which is occupied by addresses, it is difficult in my opinion to regard any case of less than two days' duration as justifying on that ground the allowance of the fees of two counsel.
The next feature to which Griffith CJ referred is the probability of a conflict of evidence entailing the necessity for careful cross-examination. A mere conflict of evidence in a case, no matter how wide or sharp or critical, does not distinguish it from any other case, for every case which is litigated presumably comes to trial because there is a conflict of evidence which it is the duty of the judicial system to resolve. Nor is the fact of or necessity for long cross-examination of itself decisive of this matter because cross-examination is not always directed to the destruction of the witness' credit or of the whole or a substantial part of his evidence, but often is used for much the same purpose as is served by evidence in chief. Where, however, a conflict of evidence is such that success or failure of a party's case may be expected to depend upon the quality and effect of cross-examination the briefing of two counsel, and especially of a senior counsel with special capacity in that field, is well justified. The relevance of this feature will be clear in actions for slander or fraud where the spoken words are denied but, of course, the field of cases in which careful cross-examination is required to resolve a critical conflict of evidence is not limited to any special category of case. In actions for personal injury, however, the occasions for this are much less frequent and, indeed, it is not often that the sort of conflict arises in such actions which is likely to be resolved only by careful cross-examination of the adversary's witnesses."
Counsel referred to the decision of the taxing officer where, at 3, he set out his reasons for allowing for two counsel. He said:
"1 This was a lengthy case extending to 8 days. The certificate of readiness shows the parties estimated the hearing time at 5 days. In Cole v Allie 48/61 one of the factors which satisfied the Master that it was appropriate to allow two counsel in a “running down case” was the hearing lasted 3 whole days”.
2 This case was very important for the plaintiff. Aged 33 at the time of the trial, damages for future impairment of earning capacity was assessed on the basis the plaintiff had a retained earning capacity of only 25% (paragraph 83).
3 The reasons show the defendant argued contributory liability (paragraph 11), negligence (paragraph 39), a failure to mitigate (paragraph 61) and it is clear other events in the plaintiff’s personal life complicated the assessment of damages (paragraphs 61, 64)."
Counsel submitted the taxing officer erred in the application of the relevant principles in reaching these conclusions. He submitted that having regard to the comments of Else-Mitchell J in Willis, the present case was not "important".
Counsel further submitted that if one were to examine the judgment in this case, it revealed the case was no more complicated than numerous other cases. It did not fall out of the ordinary.
As to the issue of probable duration, counsel submitted that while the present case was certified to take five days, it in fact took eight, one of which was for a view. Just because a trial was long was not of itself justification for two counsel. A review of personal injuries cases in Tasmania showed that there was a 2:1 ratio of cases with one counsel only. Counsel referred to a number of factors in this trial which he said negated any suggestion that the mere length of the trial should carry particular weight. These were:
·there were only 6 witnesses;
·over half the time of the trial was taken up by defence cross-examination;
·the proof of the critical expert on liability was available to Mr Read of counsel some months before the trial;
·Mr Read had been involved in the matter since 2001 giving preliminary advice, seeing witnesses and advising on pleadings; and
·the significant input of Mr Read prior to trial was an indication of the knowledge he had about the matter, and the duration of the trial should be seen in that light and in light of the fact that very little overall time was taken with evidence-in-chief, opening address and re-examination.
As to the complexity of the case, counsel submitted that the defendant called no witnesses, it relied on cross-examination of the plaintiff's witnesses and the plaintiff knew that would be the case before trial. Further, some evidence went in by consent in the form of a statement.
Two counsel issue – plaintiff's submissions
There was little dispute about the principles the taxing officer had to apply. Counsel submitted, however, that:
·The emphasis was on obtaining adequate representation in a case to enable justice to be done.
·The test of whether two counsel were necessary must be applied from the point of view of the plaintiff prior to trial.
·Each case turns on its own merits. The question was not whether only one counsel had appeared in similar cases.
·This was not a straightforward industrial accident. There were complicated issues about engineering matters and a considerable knowledge of the mechanism that caused the plaintiff's injury was required.
·Decisions made about this trial were life decisions for a 33 year old man whose earning capacity had been significantly affected and where liability was in issue.
·A reading of the trial transcript makes it clear that defence counsel took a lot of points at trial both on the facts and on legal issues. This was not a case where the defence limited issues to be dealt with.
·Damages were ultimately assessed in the sum of $712,181, a figure dramatically above any amount offered by the defendant. The defendant failed to anticipate the worth of this trial, that coloured their approach to the trial (hence the inappropriateness of attempting to compare defence counsel's fees with those of the plaintiff) and it now colours their view of the need for two counsel.
Counsel conceded that the mere fact of an eight day trial was not necessarily relevant. It was the complexity of it which was.
In substance, what counsel submitted was that while reasonable minds might differ as to how to categorise a particular trial, the taxing officer in this case had available to him a great deal of material, he formed a particular view based on that material, he was an experienced taxing officer and in those circumstances a judge should not lightly override his view unless there was a demonstrable error of principle or error in the exercise of his discretion. No such error had been shown to exist and since the Court's role was not to simply re-tax the bill, I should not interfere with the taxing officer's ruling.
Conclusion
Subject perhaps to the impact of the length of the trial per se, the taxing officer correctly identified the factors he needed to take into account in determining whether it was appropriate for the plaintiff to have two counsel. That is apparent from the points at 3 of his decision. That is, he was alert to the fact that he needed to consider the importance of the trial to the plaintiff, the probable duration of the trial and its complexity.
Each case must be looked at on its merits and clearly this Court should not interfere with the taxing officer's ruling simply because it might have reached a different view. There must be a clear error shown in the application of principle or a demonstration that the result on the facts of this case was so far from what it should have been that it is clear the taxing officer's discretion miscarried.
In this case the plaintiff was a young man who's earning capacity was significantly affected. His future depended on the outcome of this trial and he was facing a corporate employer who did not admit liability. There were complex engineering issues to be dealt with and presented to the Court in the right way. Counsel needed to understand those issues so that any problem which arose during the trial was recognised and able to be dealt with. While senior counsel had a long pre-trial involvement such that he had ample opportunity to develop an understanding of these issues, it would no doubt have been important for him to be able to focus on them at trial.
A reading of the minute book shows there were numerous exhibits, a number of legal arguments and extensive examinations of witnesses. A reading of the judgment shows the number of issues which were dealt with. While many may have been common to a number of trials, the impact on the plaintiff of the outcome of consideration of those issues was significant.
That the taxing officer in this matter was experienced and that he had the opportunity to study extensive material before reaching his conclusions was not in dispute.
Taking these matters into account, I am not satisfied that the defendant has demonstrated that the taxing officer applied incorrect principles, failed to exercise his discretion or exercised his discretion in a way that was manifestly wrong.
Preparation time issue - defendant's submissions
Counsel argued that the biggest problem in relation to this issue was simply that the taxing officer had no evidence upon which he could reach a conclusion as to what was appropriate preparation time. He had counsel's accounts and he had the Court file and the other material referred to at par13. It was not evident from that material just what each counsel did. It could not be seen how the taxing officer could have reached the conclusion that he did.
Counsel argued that 11 days' preparation for this trial was manifestly excessive, that the Rules, r846, allowed the taxing officer to take any number of steps to obtain further information and that he took none of them. In so doing he erred, not just on the issue of quantum, but in principle.
Counsel further argued that the conclusions reached at 4 of the taxing officer's decision at points 2.1 and 2.2 were wrong. The taxing officer should have looked at the amount of time Mr Read spent all up in this case and that in failing to do so he applied the wrong principle. He said that looking at what had already been paid to Mr Read was an arbitrary approach. As to the fact that the plaintiff called six witnesses and the defendant none, that was an irrelevant consideration.
Counsel urged me to look at the defendant's counsel's bill as an indication only to gauge the amount of time which might be appropriate. Defence counsel claimed only four days' preparation.
Counsel further referred me to various items in the plaintiff's solicitor's bill which he said indicated counsel Mrs McTaggart did not come on board until about eight weeks before trial. By that time Mr Read had been heavily involved over a long period and therefore extensive preparation by Mrs McTaggart was simply not necessary.
Preparation time – plaintiff's submissions
Counsel submitted this was not a case where the defendant said that counsel did not actually work for the time claimed, simply that what they did do was not warranted having regard to the matter.
He further argued that the defendant did not raise the issue of lack of evidence before the taxing master and should not therefore now be allowed to raise it. I note there is no reference to this issue in the defendant's letter of objection dated 12 April 2005. Counsel conceded that in the context of judicial review it would be accepted that making a finding in the absence of evidence would constitute an error of law. (See statement of Mason CJ in Australian Broadcasting Tribunal v Bond & Ors (1990) 170 CLR 312 at 355 – 357.)
Counsel dealt with the issue of lack of evidence in any event. He submitted the taxing officer had ample evidence when combined with his extensive experience from which he could find or draw an inference that the preparation claimed was appropriate. The taxing officer had the transcript, the Court file which included all pleadings and exhibits, the judgment, counsel's invoices, the solicitor's bill for taxation and all the other documents referred to at par13. From this material he could easily discern the issues, the dates upon which counsel were directly involved and the complexity of the case.
In relation to the comparison between defence counsel's bill and those of the plaintiff's counsel, he submitted that this was not a relevant factor to consider. The defendant, obviously having regard to the offer and ultimate result, approached the case from a different perspective which, with hindsight, may not have been justified.
Conclusion – Preparation time issue
Counsel for the defendant conceded that if this argument were simply about quantum, then I should be loath to interfere with the taxing officer's discretion. The principal issue was, he argued, there was an error of law, in that the taxing officer made a ruling not based on evidence. I do not accept that submission.
The taxing officer did not have bills from the two counsel concerned which set out chapter and verse what each did by way of preparation and when. He did, however, have substantial other material from which he could discern their involvement in the case, the complexity of the case and the role at trial for which each had to prepare. There has been no dispute the taxing officer was experienced. It must be assumed he brought to bear his experience in considering this matter and took the view he had adequate material from which he could draw the inference that the time claimed which he allowed for was reasonable. It is clear he considered the question of reasonableness of time claimed in the context of other work done by counsel. It is illogical to suggest he considered it in that context only and not across the board.
As to the issue of quantum, there was no material put to me which could persuade me that the exercise by the taxing officer of his discretion as to quantum so miscarried that I should interfere. In those circumstances, having regard again to the experience of the taxing officer in these matters, it is not appropriate that I do so.
The application to review the taxing officer's decision in this matter is dismissed.
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