B P M Pty Ltd v Douglas - [2000] WADC 61

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION: PERTH

CITATION: B P M PTY LTD -v- DOUGLAS [2000] WADC 61

CORAM: DEPUTY REGISTRAR HEWITT

HEARD: 15 FEBRUARY 2000

DELIVERED : 1 MARCH 2000

FILE NO/S: CIV 2130 of 1996
CIV 2131 of 1996
CIV 2132 of 1996

BETWEEN: B P M PTY LTD
Plaintiff
AND
GREGORY STEWART DOUGLAS
Defendant

Catchwords:

Objections on taxation

Legislation:

Nil

Result:

Objection allowed as to disbursements

Representation:

Counsel:

Plaintiff: Mr H I Touyz
Defendant: Mr D Garnsworthy

Solicitors:

Plaintiff: Hammond King Touyz
Defendant: Kott Gunning

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

Brown v Brambles Australia Limited, unreported; DCt of WA; Library No D980121; 12 May 1998
Stobbart v Mocnaj & Ors [1999] WASC 252

Case(s) also cited:

Nil

DEPUTY REGISTRAR HEWITT: On 9 November 1999 I taxed the plaintiff's Bill of Costs in these actions and on 24 November 1999 the defendant filed notice of objection to various items in the taxation.
The objections were listed for hearing before me in January on a date which was vacated due to the illness of another Registrar and ultimately came before me for hearing on 15 February 2000. The Bill of Costs comprised a conglomerate of three separate cases each proceeding between B P M Pty Ltd and respectively Messrs Douglas Chamberlain and Cross. The bill was presented in that form pursuant to an order of her Honour Judge Yeats.
The case involved an action by the plaintiff (which is the accounting entity Messrs Bird Cameron) against three of its former employees seeking to enforce a liquidated damages claim against each of them in respect of their departure from the firm and what was alleged to be the poaching of various clients of the firm. The case involved serious issues to be tried and a number of varied defences were raised by the defendants to the actions. Amongst those issues was an issue that the defendants had been subject to duress which induced them to enter the contracts the subject of the plaintiff's claim. There was additionally an allegation of a breach of the Trade Practices Act and a further argument that the plaintiff was disentitled to its claim for liquidated damages by virtue of the fact that it was unable to provide accounting services to the clients who had followed the defendants. Additionally there was an argument that the plaintiff was not an entity which had suffered loss by virtue of the breach of the contract and the case was therefore incompetent, and also an argument that as a consequence of its involvement in earlier litigation with a third party (allegedly) adverse findings against the plaintiff in that litigation had breached its contract of employment and it was thus disentitled to enforce its contract of employment against the various defendants. In addition to those issues there was the usual issue of whether or not the clause upon which the plaintiff relied in the action was an enforceable liquidated damages clause or whether it constituted a penalty and was therefore unenforceable. Further considerations involved the general common law concept of restraint of trade and whether that impacted upon the plaintiff's entitlement to relief.
My general impression of the case is that it represented one of the most legally complicated cases ever likely to proceed to trial in the District Court. Superimposed upon that I also formed the view that the evidence required to be called in the case was not straightforward and very detailed and careful preparation was required by the plaintiff in order to prosecute the claim.
I now turn from those general remarks to the objections that have been filed. The first of the objections refers to item 10 of the Bill "Getting Up Case for Trial." A total of $75,000 was claimed for that item from which I deducted $18,700 leaving a balance of $56,300. The objection effectively is that I have allowed the claim in full subject only to a deduction for a proportion of the work which was undertaken by a clerk and first year certificated practitioner. There is a slight overlap between the scales and without revisiting the point in any detail it appears to me to be accurate to describe the claim of $75,000 as a maximum. My determination was based upon the fact that this was a case in which approximately 100 hours of preparation by way of getting up case in each of the actions was appropriate. Given the complexity of the case it was also in my view appropriate that most of that preparation be undertaken by a senior practitioner. The materials before me however indicated that some of the work had been done by a clerk and a certificated first year practitioner. In those circumstances a deduction was called for and was made. I see nothing in the objections to cause me to flinch from my conclusion that this was a very complicated case and the burden cast upon the plaintiff's solicitors was considerable. In my opinion the case was prepared to a very high standard and this is a case in which a maximum, subject to a deduction for the proportion of the work which was undertaken by persons who should not command senior practitioner's rate, was warranted.
Objection B identifies as an error in the exercise of my discretion the fact that I have taken into account the standard of preparation of the case.
To my mind the standard of the preparation of the case is an essential matter to consider. The case was a complicated one and if it was to be prosecuted successfully needed significant efforts to prepare it properly. I have found that the case was prepared properly. To my mind that is simply another way of saying that in order to prepare the case properly it was necessary to spend the maximum of the hours contemplated by the scale.
Objection C refers to the case of Brown v Brambles Australia Limited, unreported; DCt of WA; Library No D980121; 12 May 1998 in which his Honour considered an appeal against a decision which I had made at taxation (case D980041). His Honour accepted the proposition that in fixing a figure upon a taxation for getting up case it was necessary to conduct (as I put it "… an analysis of what needed to be done, by whom it was appropriate that it be done, and the reasonable allowance for the work"). His Honour made a similar comment upon which the objector relies:
"In the preamble the Committee referred to the new scale as one that required costs to be calculated by reference to the time reasonably spent in the provision of legal services and by the application to that time of a reasonable hourly rate which varied according to the seniority and experience of the practitioner and the complexity of the work involved".
In my view the propositions embraced by these cases have been accepted and applied in the determination of an appropriate allowance of getting up case in the taxation in question.
A further point is made by the objector that the maximum should not apply. Since in the present case the maximum was not awarded and in fact the allowance fell some 20% less than the maximum which could have been awarded I do not find it necessary to further consider that proposition.
The next matter the subject of objection is item 11 on the Bill the allowance for Queen's Counsel. $14,000 was claimed for mastery of the brief and first day of trial and that amount has been allowed in full. The objector contends that in making an allowance I have breached the propositions which are contained in Browns v Brambles Australia Limited (supra) and that the maxima should be reserved for those cases of the most difficult types short of a special order as to costs. It is alleged that this case contained elements which would reduce it below that maxima. On that score I rely on what I have said earlier. In my view this was an extremely complicated case fully justifying the use of an eminent QC and fully justifying three days of preparation by him. Within the objection there is a further point made that senior counsel provided advice on evidence and undertook other matters during the course of the action. Senior counsel's account indicates that he undertook 2½ days of preparation immediately prior to the commencement of the trial and the contention by the objector is that it was inappropriate to allow a full allowance in the circumstances and that some recognition of the fact that counsel had gained an acquaintance with the brief at an earlier stage should be recognised.
In my view counsel spent at least three days acquiring the knowledge and information which was necessary for him to master his brief. I agree that in some respects that information was not obtained burning the midnight oil immediately prior to the trial. To the extent that he obtained some of that information at an earlier stage and that effort has not been embraced and absorbed in other items of claim in my view it should be recognised as a part of mastery of brief. I am satisfied that there remains half a day, and in my view probably more, of counsel's effort which should properly be regarded as mastery of brief even though it was undertaken earlier in the case, and therefore the involvement by counsel should be regarded as one in which the maximum effort was expended. It is suggested that I erred in taking into account the eminence of senior counsel. I take into account the eminence of senior counsel largely to determine whether the time spent in preparation was reasonable. When counsel is known to be economical and efficient in his use of time in preparation for cases and when I have evidence before me that approximately three days of preparation was undertaken it seems to me to be a logical conclusion that the time was reasonably spent, particularly when my own impression of the case is that it was one of unusual complexity and difficulty. The allowance for senior counsel is therefore based upon the proposition that mastery of brief and first day of trial took at least the maximum of three days preparation and one day presenting the case is one at the top end of the scale and for that reason a maximum should be awarded.
The next item the subject of objection is that of junior counsel for the first day of the trial and to a large extent I repeat my observations in regard to senior counsel. I had the advantage of perusing the accounts rendered by junior counsel and I am aware that a very significant amount of time was spent by her in the discharge of her duties. Certainly some of the time was spent in dealing with interlocutory matters in particular a question as to venue. But nonetheless a very significant amount of time was spent by junior counsel in preparing the case. I form the view that considerably more than three days of preparation was spent by junior counsel. Again there is an objection that I have had regard to the qualities of the person involved which is an irrelevancy in the assessment of the costs. I do not agree. It seems to me, as I said before, that some regard should be had to counsel engaged since that is a basis upon which some assessment can be made as to whether or not the time spent was reasonably expended. To have regard to the fact that junior counsel was, as I apparently put it "knocking on the door of senior counsel" is not a reason to allow a maximum but a factor to be considered when considering the reasonableness of the claim for preparation and presentation of the case. Whilst the objection identifies other points of contention it seems to me that is sufficient to dispose of the objections. Junior counsel in my view spent considerably more than three days of preparation in this matter. The case was a very complex one and one which in my view should command an allowance at the top of the scale. In regard to the comments concerning an indemnity it should be noted that I called for the accounts rendered by counsel to ensure that the amount claimed in the Bill did not exceed the amount paid by counsel.
In regard to the proposition that the indemnity given by an order for costs is not intended to be complete I think it to be a fairer comment on the decisions to say that it was never intended to be perfect but the basic objective of orders for costs was to provide an indemnity. Indeed if one examines the preamble to the recent scales issued by the Costs Committee there is a clear recognition within those statements that it is undesirable that the actual charges of solicitors should be out of kilter with the scale and that the new scales promulgated in their most recent form are intended to provide a more perfect indemnity between the costs to be borne by the client and that recoverable party.
The next objection relates to my allowance for refresher fees and refers to the arguments with which I have dealt earlier. Those claims are rejected for the same reasons as indicated earlier.
The next item under objection is "Solicitor's Attendance at Trial." In regard to that item I allowed the full of amount of the claim at the senior practitioner's rate of $270 per hour.
In this case in my view it was essential for counsel to be supported by a senior practitioner having a thorough understanding of the case, a thorough understanding of the witnesses to be called both by the plaintiff and the defendant and it was appropriate in this case to allow a maximum.
The next objection relates to photocopying. I have allowed $1,000 for photocopying and I accept that the case of Stobbart v Mocnaj & Ors [1999] WASC 252 is authority for the proposition that I was in error in doing so. The sum of $1,000 will therefore be deducted from the Bill and that figure, together with the taxing fee which I have allowed on it, shall be deducted pro rata from the three certificates.
Save for photocopying in my view the objections give no basis upon which I should review my earlier decisions and I shall therefore sign my certificates subject to the variation concerning photocopying.
I now turn to the question of the costs of the objections. This matter was heard before me at a hearing which lasted probably an hour or so. The plaintiff has claimed costs based on a total of eight hours work relating to the objections of which five hours is claimed at a senior practitioner's level and three hours at a junior practitioner's level. Both senior and junior practitioners attended the hearing.
In my view it is not appropriate to allow for two solicitors to prepare for and attend the hearing and therefore I shall only consider the amount claimed by the senior practitioner. The argument in relation to the photocopying occupied a relatively short proportion of the total hearing and whilst the costs for that portion of the hearing should be notionally attributed to the objecting party the balance in my view should go to the plaintiff. Setting the two claims against each other I allow costs of the objections of $1,000 to the plaintiff. That figure shall be added pro rata to the sums in the certificates. I shall sign my certificates upon the issue of these reasons for decision and I allow the objecting party a further 21 days in which to appeal.