Baronglow Pty Ltd v Willing & Thomas - [2006] SASC 291

SUPREME COURT OF SOUTH AUSTRALIA
(Civil: Miscellaneous Appeal)
BARONGLOW PTY LTD v WILLING & THOMAS
[2006] SASC 291
Judgment of The Honourable Justice Perry
21 September 2006
PROCEDURE - COSTS - RECOVERY OF COSTS
The appellant appealed against the refusal by a Master to set aside a default allocatur issued with respect to a long form bill of costs, except on terms as to payment into court of the amount of the bill and an estimate of certain further costs - the appellant had failed to file a notice of dispute with respect to the bill, but now wished to dispute various items - held that no error on the part of the Master had been demonstrated - the order for payment into court was reasonable in the circumstances - observations as to the court's reluctance to interfere on appeal in matters of practice and procedure - appeal dismissed.
Supreme Court Rules 1987 s 101A.02, r 101.01, r 101.07 and r 101.09, referred to.

BARONGLOW PTY LTD v WILLING & THOMAS
[2006] SASC 291
Master’s Appeal

PERRY J. This is an appeal against an order made by a Master who declined to set aside a default allocatur with respect to a long form bill of costs.
The matter has a long history, starting in the District Court.
The appellant Baronglow Pty Ltd (“Baronglow”) is the plaintiff in a District Court action which initially had been instituted by Neville Jordan, a former solicitor. Mr Jordan brought the action against the defendant, Ronald Howard Willing, for alleged unpaid fees for work performed by Mr Jordan as a legal practitioner. During the course of the District Court proceedings Mr Jordan became bankrupt, and his trustee-in-bankruptcy assigned his interest in the action to Baronglow, which was substituted as plaintiff. Baronglow is controlled by Mr Jordan.
Mr Jordan had engaged the respondent to this appeal, David Graham Thomas, to perform solicitor’s work with respect to the District Court proceedings.
Mr Willing paid $60,000 into the suitors fund of the District Court to abide the result of the action. Mr Thomas then sought and obtained a charging order over the funds in court with respect to the costs which he alleged were due to him.
An order was made in the District Court that $12,000 be retained in the suitors fund to abide the outcome of the claim by Mr Thomas.
Eventually, Baronglow obtained a judgment by consent in the action. It then applied to a District Court Master for an order setting aside the charging order. The Master refused the application.
Baronglow appealed to a Judge of the District Court against the order of the Master refusing the application to set aside the charging order.
The appeal to the District Court Judge was dismissed.
Baronglow then applied to the Supreme Court for leave to appeal against the decision of the District Court Judge. The decision of the District Court Judge was interlocutory in nature, and no appeal could be brought to this Court without leave.
The application for leave to appeal came before Vanstone J on 2 April 2004. She dismissed the application, and ordered that Baronglow pay to Mr Thomas the costs of the application.
Baronglow then renewed its application for leave to appeal before the Full Court. On 19 August 2004, the Full Court dismissed the application and refused leave.
That left as the sole remaining issue in the Supreme Court proceedings the question of costs ordered by Vanstone J to be paid by Baronglow to Mr Thomas.
The sole issue on this appeal is as to the taxation of those costs.
In accordance with SCR r 101A.02, on 25 July 2005 Mr Thomas served a short form bill of costs on Baronglow.
Baronglow filed and served a reply to the short form bill disputing its liability for various items in the bill, and disputing that any costs were then due and payable under the order of Vanstone J.
The short form bill filed at that stage did not include counsel fees. After the bill had been served, Mr C. McCarthy, counsel who had been engaged by Mr Thomas on the hearing before Vanstone J, rendered an account to Mr Thomas.
On 31 August 2005, Mr Thomas wrote to Baronglow withdrawing the earlier short form bill and at the same time serving on Baronglow a further short form bill in the same terms, except that it included Mr McCarthy’s counsel fee of $1,375. This brought the amount in the further short form bill to a total of $2,760.
By letter of 14 September 2005 addressed to Mr Thomas, Baronglow disputed that there was any right to withdraw the earlier short form bill, and reiterated its challenge to its liability for any costs and for the counsel fee of Mr McCarthy.
Mr Thomas replied by joining issue with the assertions made by Baronglow. He stated in the letter:
I will expect to be served with your response to my Short Form Bill, complying with the Rules, within the time allowed by the Rules, otherwise I will proceed without further notice.
Baronglow did not reply to that letter or otherwise respond to the further short form bill.
After unsuccessfully attempting to have the Registrar issue a default allocatur based on the short form bill, pursuant to SCR r 101.09, Mr Thomas lodged a long form bill of costs on 3 November 2005. The long form bill of costs carried the endorsement required by SCR r 101.09(4)(b), namely:
Take Notice that under R 101.09(7) you are required within 14 days of the service of this Bill upon you to file and serve a Notice of Dispute setting out each of the items which you contest. If you fail to do so, you may be deemed to have admitted liability for any item upon which you have not given such Notice of Dispute.
Baronglow did not respond to the service of the long form bill, and did not file any notice of dispute.
The Registrar proceeded to tax the bill provisionally in default of a notice of dispute. Following payment of the taxing fee on 13 February 2006, the Registrar issued an allocatur for $3,077.70.
By notice for specific directions filed on 24 February 2006, Baronglow applied for an order, inter alia:
That the allocatur provided by the court to the intervener [Thomas] be recalled or struck out.
That application came on for hearing before Judge Lunn.
After reserving his decision, on 15 May 2006 he made the following orders:
1.That the default allocatur of 13 February 2006 be set aside only upon condition that the plaintiff pays into Court to the credit of this action the sum of $4,077 within 21 days, and failing such payment into Court that the application [FDN 10] be dismissed.
2.The plaintiff is to pay to the intervener his costs of FDN 10 as agreed or taxed.
3.…
The notice of appeal is a lengthy document, but basically the appellant takes three points.
They are that Judge Lunn erred in law in finding that the order of Vanstone J was a final order rather than an interlocutory order; that Mr Thomas had deceived the registry in his dealings with the registry over the short and long form bills; and that the imposition of the condition for payment into court was not justified.
Was the order of Vanstone J final or interlocutory?
The significance of this ground of appeal lies in the terms of SCR r 101.01(7):
An order for costs of an interlocutory proceeding shall not, unless the court otherwise orders, entitle a party to have a bill of costs taxed until the principal proceeding in which the interlocutory order was made is concluded or further order.
Judge Lunn dealt with this aspect of the matter in the following passage from his reasons:
[5]… Mr Jordan submitted that as the order which was the subject of the leave was only an interlocutory order of the District Court, and as the District Court action was still proceeding, R 101.01(7) postponed any taxation until the conclusion of the District Court proceedings. I do not accept that submission. In its context “proceeding” in subr (7) is confined to a proceeding in the Supreme Court and does not extend to a proceeding in any other Court. This Supreme Court action, 272/04, is separate and distinct from the District Court action, 107/95. There was no transfer of the District Court action into the Supreme Court action to be continued in this proceeding. This proceeding was confined to seeking leave to appeal against what was an interlocutory order in the context of the District Court action. However, once leave to appeal had been refused there was no other relief sought in this action which had to be disposed of by this Court, except the ancillary matter of taxing the costs. The right of the plaintiff to appeal against the order of Vanstone J was not an interlocutory, but a final, order: see the authorities in Civil Procedure SA para [R 94.01.15(2)]. Hence R 101.01(7) does not bar the costs ordered being taxed and payable immediately.
Mr Jordan repeated the same argument before me as he had put to Judge Lunn. He put the additional argument that the court file records the order made as:
Outcome type – judgment ex tempore [not finalising].
Clearly, the description of an order in the computerised record of the court as final or not final can have no bearing upon the characterisation of the order for other purposes, such as whether it answers the description of an interlocutory order within the meaning of r 101.01(7).
I agree with the reasoning of Judge Lunn and with the conclusion he reached on this issue. The Supreme Court action is in no way an extension of the District Court proceedings. It was a discrete proceeding instituted in this Court seeking leave to appeal against what Judge Lunn correctly describes as an interlocutory order “in the context of the District Court action”.
The refusal of leave to appeal by this Court effectively brought the proceedings in this Court to an end, save for the question of taxation of costs. The order made in this Court was not an interlocutory order.
Rule 101.01(7) has no application to it.
Conduct of Mr Thomas
Mr Jordan contended that with respect to the short form bill, Mr Thomas “deceived” the registry by attempting to have a default allocatur signed when he was aware that items in the bill were disputed.
He argued further that the so-called deception carried over to the procedures associated with the long form bill. He submitted that Mr Thomas acted irregularly in obtaining a default allocatur when he was aware that items in it were disputed.
It is a very serious allegation to make to suggest that a solicitor has deceived the court or an officer of the court.
I have considered the sequence of the events and the terms of the correspondence between the parties which preceded the request for a default allocatur for both the short and long forms of bills. Mr Thomas flatly denies any impropriety, and I am unable to find any evidence to support Mr Jordan’s allegations.
Judge Lunn reached a similar conclusion. He held that he did not accept that Mr Thomas was in breach of the rules or in any way mislead the Registrar.
As Judge Lunn points out, if Baronglow did not think that Mr Thomas was entitled to lodge the long form bill, in that there had been some irregularity associated with the short form bill, he could have taken the point and raised an objection with the court. He did not do so.
Mr Thomas was entitled to lodge the long form bill. The terms of the long form bill clearly put Baronglow on notice that if it failed to file and serve a notice of dispute in accordance with the rules, it would be deemed to have admitted liability for all items with respect to which he had failed to give such a notice.
Instead of complying with the procedure to file a notice of dispute, Baronglow wrote to Mr Thomas by letter dated 10 January 2006 which reads in part:
… We expect you will be looking to proceed for a default allocator (sic) on these costs regardless of the shortcomings of your conduct. You have not complied with the rules and we dispute your entitlement to make application in the circumstances for an allocator (sic). We further dispute your entitlement to file and serve a Long Form Bill given the deficiencies of your conduct in relation to your obligations regarding the Short Form Bill. You set out in your letter of the 20^th December that an application for allocator (sic) is an ex parte step. That is the case where there is no response. In this case the position is different. Your conduct in relation to the Short Form Bill is defective and you are not in the position to proceed with a Long Form Bill.
Provide an express indication of your intentions. If you intend to make application for an allocator (sic), we will make an application to the Court for directions regarding the deficiencies in the steps taken by you in the Short Form Bill process and in relation to this taxation at large. In the event that you misinform the Court as to the circumstances, we will rely on this and other correspondence and instances to seek to reverse any step you take. We are not prepared to respond to your Long Form Bill, thereby abandoning our contentions regarding the inadequacy of your conduct regarding the 2 Short Form Bills filed by you. (my emphasis)
The words which I have emphasised make it plain that Baronglow did not propose to answer to the requirement in the long form bill for a notice of dispute to be filed. In doing so, as Judge Lunn observed in his reasons, Baronglow acted at its peril. Mr Thomas was then perfectly entitled to proceed to seek a default allocatur.
Mr Jordan also contended in argument that Mr Thomas had failed to give a proper explanation for what are suggested by Mr Jordan to be irregularities in the process by which Mr McCarthy of counsel rendered accounts for his work. He suggests that the same work was billed in different amounts at two different times.
There is nothing in the point so far as the appeal is concerned. The question of what may properly be allowed for Mr McCarthy’s work as counsel is entirely a matter for the taxing officer, if the matter should proceed to taxation.
Condition requiring payment into court
The amount of $4,077 ordered by Judge Lunn to be paid into court as a condition of setting aside the default allocatur, includes $1,000 over and above the amount for which the allocatur was issued. The $1,000 allows for the costs awarded against Baronglow on the dismissal of its application to set aside the allocatur.
In making the order for payment into court, Judge Lunn gave the following reasons:
[9]… The further costs which have been incurred are out of all proportion to what is at stake, which is a fund of $12,000 in the District Court. There is a strong indication in the papers before me that neither the allocatur of 13 February 2006 nor the costs of this present application can be met out of the moneys held in the District Court. For these reasons, I consider this is one of the rare cases where there are sufficient special circumstances which justify that an order that the allocatur should only set aside upon payment into Court of its amount plus an amount of $1,000 on account of the costs of the plaintiff’s application (FDN 10): Pezzano v Perre;[1] Edwards v Wallace.[2] There are only limited issues which could be the subject of genuine dispute. The plaintiff deliberately took the unjustified position which it did not to file a notice of dispute, and has thus delayed the intervener [Mr Thomas] in recovering his costs and put him to considerably more expense. If these moneys are paid into Court, I will then consider payment out of a substantial portion of them to the intervener and only retaining in Court an amount appropriate to represent the items which could properly be disputed on a taxation.
[1] (1980) 32 SASR 336.
[2] (1986) 42 SASR 308.
The order for payment into court was fully justified. Indeed, in my opinion, Baronglow was fortunate to obtain an order on any terms that it be entitled to have the default allocatur set aside and have the long form bill taxed.
The order made by Judge Lunn gave to Baronglow every opportunity to pursue its grievances concerning the long form bill on a taxation.
In any event, the orders made by Judge Lunn, including the order for payment into court, were orders as to matters of practice and procedure, as to which appeals are only rarely allowed, and then only if clear error is demonstrated.
I would dismiss the appeal, but extend the time for payment into court pursuant to the order of Judge Lunn to 14 days from the date of the order of dismissal.
Baronglow must pay the costs of Mr Thomas of and incidental to the appeal, to be taxed.
I so order.