Blake v Norris [Solicitor Costs]

[2003] NSWSC 199

CITATION:	BLAKE v NORRIS [SOLICITOR COSTS] [2003] NSWSC 199 revised - 13/05/2003
HEARING DATE(S):	3.7.97; 19.8.98
JUDGMENT DATE:	28 March 2003
JUDGMENT OF:	Hulme J at 1
DECISION:	See paragraph 35
PARTIES :	Paul Jonathan Blake Walter Thomas Norris
FILE NUMBER(S):	SC 12242 of 1989
COUNSEL:
SOLICITORS:	Mr TD Kelly TD Kelly & Co

- 5 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

HULME J

Friday, 28 March 2003

12242 of 1989

Paul Jonathan BLAKE by his Tutor Brian Edward PORTER

v Walter Thomas Patmore NORRIS

JUDGMENT

1 HULME J: In these proceedings I delivered my principal reasons as long ago as 5 December 1995. In them I expressed some tentative views on the question of whether some of the costs incurred on the Plaintiff’s side of the record were properly incurred or should be paid by the Plaintiff’s legal advisers. These reasons return to that topic.

2 On 11 December 1995 I made formal orders, recorded in a document entitled “Draft Judgment” to give effect to the principal conclusions at which I had arrived. My orders included the following:-

“5 Order that the Plaintiff pay the Defendant’s costs in relation to the issue of whether damages for future economic loss and future losses should be assessed by the adoption of a discount rate of other than 3%.
6 Order that each party pay its own costs of the hearing on 8 and 11 December 1995.
7 Subject to the preceding orders order that the Defendant pay the Plaintiff’s costs, other than the costs incurred by the Plaintiff of and incidental to:-
7.1 Obtaining evidence of South Australian law.
7.2 His claim for the provision of a motor vehicle and for the expenses relating to the cost of running a motor vehicle.
7.3 His claim for the provision of housing.
7.4 The preparation of the document comprising pages 300A to V of Exhibit J, and the preparation of the report which became exhibit AW.
7.5 So much of the cost of the reports from Dial-An-Angel dated 15 November 1989, 1 December 1993 and 22 June 1994 as related to the consideration by Mrs Blackman of the comprehensive volume of medical reports, the updated Statement of Particulars and the report of Ms Julie Wilson, and to the provision of such documents to Mrs Blackman.”

3 On 11 December 1995, expanding somewhat on the remarks I had published on 5 December, I also recorded my reasons for the orders just quoted and stood over the question of “who should finally bear the costs of the matters referred to in paragraphs 7.1, 7.3, and 7.5”.

4 On 3 July 1997, I returned to the matter in more detail. In respect of the topic which I may refer to as South Australian Law, I observed that there had been in the trial issues in respect of which South Australian law was potentially relevant, I repeated observations previously made to the effect that the relevant parts of that law could have been stated in a one or two page document rather than the 5 centimetres thick bundle of paper which was prepared, remarked that $375 charged by a South Australian practitioner for preparation and certification of that bundle did not seem excessive but that there were likely to be costs consequential on the creation of that vast bulk of material.

5 The issues incidental to the topic of the claim for housing costs (paragraph 7.3) fell within a relatively small compass and, in light of how I dealt with that topic on 19 August 1998 (detailed below), I need not canvass it further.

6 On the matters referred to in order 7.5, I concluded that the solicitor should bear the costs associated with, and occasioned by, the furnishing to Mrs Blackman (of Dial-an-Angel) with the solicitor’s letter of 1 September 1993 of a large number of medical reports. At least inferentially, I indicated that these costs would be likely to include some portion of a charge of $648 Dial-an-Angel made for its report of 2 November 1993.

7 On 19 August 1998, I again dealt with the matter, observing that it had been re-listed to afford the solicitor an opportunity to indicate whether he would place before me evidence or information which might enable me to make some assessment of the costs involved rather than have the matters referred to a taxing officer for report, no doubt at additional trouble and expense. The solicitor declined to avail himself of the opportunity. I then ordered:-

1. As between the Plaintiff, Paul Jonathan Blake, by his tutor Brian Edward Porter and T D Kelly and Co, Solicitors, I disallow the sum of $1,400 costs charged in respect of the report of Mr J J Newlin-Mazaraki of Bryant, Mazaraki Murphy Pty Limited, dated 24 August 1994.

2. Pursuant to Part 52A Rule 43 I refer to the registrar for inquiry and report the following matters:-

(i) the costs incurred or likely to have been incurred on the Plaintiff’s side of the record,
(a) in consideration, whether by the solicitor, counsel or otherwise, of so much of the Certificate (and attached legislation) of Darryl Sydney Wilson, being Exhibit BN in the proceedings, as exceeds pages of the legislation numbered 614-623 and a 2 page certificate.
(b) in copying and providing copies of so much of that report as exceeds pages of the legislation numbered 614-623 and a 2 page certificate, to the Defendant or his legal advisers, the Plaintiff’s counsel, the Court and any other persons to whom copies of such report were provided, and
(c) otherwise in connection with the report.
(ii) the costs likely to have been incurred on the Plaintiff’s side of the record, in all of the respects referred to in sub-paragraph (i), (identifying costs within separate sub-paragraphs if possible) had the certificate been of only 2 pages and the attached legislation consisted of only pages 614-623

(iii) the extent to which the costs payable or paid by the Defendant to the Plaintiff were, or were likely to have been, reduced by reason of each of the exceptions contained in clauses 7.1 and 7.5 of the document entitled “Draft Judgment” initialled by me, dated 11 December 1995, and the terms of which were included in orders made on that day, and,

(iv) the costs incurred or likely to have been incurred on the Plaintiff’s side of the record in -

(a) the consideration by Mrs Blackman of the comprehensive volume of (copies of) medical reports referred to in her report of 1 November 1993, (being part of Exhibit J in the proceedings) and
(b) the preparation and forwarding to Mrs Blackman of that volume of reports (but not including the obtaining of the originals of those reports).

8 (Exhibit BN was the 5 cm. thick bundle of papers certified as representing South Australian law. It contained approximately 450 sheets of paper, a substantial number of which were printed on both sides. The “comprehensive volume of (copies of) medical reports” referred to in paragraph (iv)(a) just quoted included some 16 reports extending to some 34 pages.)

9 On 29 January 2002, Registrar Irwin made an interim report and on 12 July 2002 provided a final report. In the interim report, the costs assessed in respect of sub-paragraphs (i)-(iv) of paragraph 2 of the orders of 19 August 1998, so far as is presently relevant, were:-

(i)(a)	Consideration by counsel – estimated	$300.00
Consideration by solicitor of -
(i) the balance of the certificate 4 folios @ $5 ea	$20.00
(ii) perusing attached legislation 539 pages say	$200.00
(i)(b)	Copying 4 additional pages of certificate and 539 pages of legislation x 4	$2,156.00
(i)(c)	(The report was silent)
(ii)	Counsel’s fees DS Wilson – consideration of legislation and certificate of foreign law 1/9/94.	$275.00
Solicitor’s costs – perusing 4 folios at $5 ea and scanning 10 pages @ $3 ea	$54.00
Copying 22 pages @ $1 each x 3	$66.00
Counsel’s fees – (The report was silent)
(iii)	7.1 Obtaining evidence of SA law:
1 letter of 3 folios $51.00 2 letters short $34.00 Drawing cheque $4.00 Brief (inclusion in) to counsel and copy 2 folios $75.00 Copy for file and brief Lee & Partners solicitors inclusive of Disbursements $1,500.00	$1,695.00
7.2 …
7.3 …
7.4 …
7.5 So much of the costs of Dial-An-Angel dated 15 November 1989, 1 November 1993 and 22 June 1994 as related to the consideration by Mrs Blackman of the comprehensive volume of medical reports the updated Statement of Particulars and the report of Miss Julie Wilson, and the provision of such documents to Ms Blackman.
Consideration of medical reports and Ms Wilson’s report say $100.00 167 pages of reports $167.00 Updated Statement of Particulars 41 pgs $41.00 1 letter $17.00	$325.00
(iv)	(The report was silent)

10 So far as seems to me relevant, in the course of his final report the Registrar advised:-

(i) That the interim report was prepared without the bill (of costs), the assessment of party/party costs or the accounts rendered by the Solicitor to the Protective Commissioner.
(ii) That he had been informed that no single solicitor and client bill had been delivered and the solicitor’s correspondence could not be found.
(iii) “The (interim) report was based of necessity almost entirely on conjecture but I have attached it to this report because it responds to some of the matters I have been directed to report upon. It must not be regarded as providing any indication of what costs were claimed by the Plaintiff’s Solicitor, what were paid to him or what were allowed in the party costs bill.”

(iv) “Neither the defendant nor the Protective Commissioner were prepared to assist me in preparing the report and they did not wish to be represented.”

(v) “The amount claimed in the (party and party) bill seems to have been $1,505,793.35 of which $874,952.18 was allowed by the assessor. It is not a useful in determining how much of the costs and disbursements claimed in the bill that come within the categories in the specified in the referral were allowed. (sic) Nor is it a guide to how much the client paid.”
(vi) “Parts of the following items in the bill concern the categories specified in the referral and the figures in brackets are the amounts that I think equate to the specified costs. The paragraph numbers refer to the orders in the Judgment of 11 December 1995 … .
Para 7.5
“Item 632 – 1.9.93 letter to Dial-An-Angel with copy of earlier report and listing matter to be included in updated report 2 fols ($34)”
“(vii) “In determining what costs have been charged to the Defendant the above items must be substituted for the items in those paragraphs of the draft Bill except for para 7.3. In that paragraph the account of Bryant Mazaraki Murphy in the sum of $4465.10 should remain.”
(viii) “I refer to the document “Plaintiff’s submissions – re the personal costs orders of Hulme J 19.8.98” attached. Those submissions confirm that the amounts of $4465.10 and $375 (paid to the South Australian Agent) were paid by the client.”
(ix) “Because I do not know to what extent the amounts disallowed by the assessor pertain to the identified items in the party/party bill, I am unable to say that any amounts were recovered from the Defendant that come within relevant categories. It seems likely, however, that the two amounts that are known to have been recovered from the client were allowed by the assessor. Apart from the admissions made in the submissions I am unable to say if any other amounts were recovered from the client. However because the client would have been able obtain (sic) a copy of the party/party bill it seems unlikely that the solicitor would have recovered any amounts within the categories in the referral other than the two admitted to have been received. The party/party bill appears to have been drafted with the orders of 5.12.95 in mind.”
(x) “Without the co-operation of the interested persons I believe I can provide no more information.”

11 In a memorandum attached to his report the Registrar observed:-

“Without the co-operation of the persons concerned, the task has proved to be difficult and the result unsatisfactory. It seems that the Plaintiff’s solicitor was mindful of your orders and charged accordingly except for sums withdrawn from the trust account to pay disbursements before your orders were made.”

12 Submissions apparently by the solicitor were attached to the Registrar’s final report. So far as is relevant they assert:-

2. With respect to the Dial-an-Angel report dated 1 November 1993. The fee for this account was $648.00 and was paid by a TD Kelly & Co office cheque drawn on 2 November 1993. TD Kelly & Co was not ever reimbursed for this fee.
The preparation of the report required Miss Blackman to read 41 pages of material from the Updated Statement of Particulars filed on 2 June 1993 by way of background and medicals.
I have been advised by Dial-an-Angel that they charge at a rate of $200.00 per hour but they were not able to break it up into the time involved reading.
3. With respect to the Certificate of Foreign Law I have been unable to locate the annexures “DSW1” and “DSW2” to this certificate. The fee charged by the South Australian Agent was $375.00 for consideration of the legislation.

13 While modern methods of data storage and retrieval may sometimes justify, on grounds of efficiency, the reproduction of large numbers of pages prior to any selection process being undertaken, there can be no room for doubt that delaying the selection process, particularly when multiple copies have to be prepared or separately considered, is commonly calculated to waste resources and costs. I doubt whether the procedure followed by the South Australian practitioner was the most efficient but, given his charge was only $375, I am not disposed to make any special order in relation to it. Even if it were that the charge by the South Australian lawyers was the $1695 to which the Registrar referred in his interim report, there is nothing I have seen which would make it appropriate to order that that sum be paid by the solicitor.

14 However, there can be no doubt that the vast bulk of paper there prepared caused or contributed to waste in the subsequent consideration of or the dealing with documents purporting to record, South Australian law. Furthermore reasonable or even the minimum of attention to efficiency in the use of resources would have led to the solicitor in the case, prior to any other use of the bundle of papers, attending one way or another to the selection of what was relevant rather than, as apparently occurred, photocopying the bundle a number of times and leaving all who saw the copies to attend separately to that task.

15 It is not necessary that I repeat here the terms of the statute, rules and authorities and the considerations recorded in my reasons of 3 July 1997 which led me to the conclusion that orders for costs should be made against the solicitor. I have no doubt that the solicitor’s actions or inaction in relation to the certificate and attached bundle of documents said to reflect South Australian law may fairly be described as:-

leading “to the incurring of costs which would not otherwise have been incurred” and to “the wasting of costs which would not otherwise have been wasted” – see Leicester v Walton (Court of Appeal, 22 November 1995, unreported) referred to in Knaggs v JA Westerway & Sons Pty Ltd (1996) 40 NSWLR 482 at 484, and
causing “costs to be incurred improperly or without reasonable cause (and) “wasted by … other misconduct or default” – see Part 52 rule 66.

16 I would also characterise the actions or inaction as negligence in the solicitor’s approach to his client’s interests – see the passage from Myers v Elman (1940) AC 282 quoted by me in my Reasons of 3 July 1997 - and as providing a ground for exercising the court’s discretion under Section 76 of the Suprme Court Act against the solicitor.

17 I take the same view in relation to the furnishing of reports to Dial-An-Angel with the solicitor’s letter of 1 September 1993.

18 In light of these conclusions it is appropriate that the court exercise its discretion under both Section 76(1) and Rule 66 to ensure that, so far as is practical, the solicitor and not his client bears the costs unnecessarily incurred.

19 One possible way of dealing with the matter is simply to make an order along the lines that the Solicitor pay in whole or some defined part the costs on the plaintiff’s side of the record of and incidental to,

(i) the copying and consideration of the document which became Exhibit BN in the proceedings or some portion thereof, and
(ii) the furnishing to Mrs Blackman (of Dial-an-Angel) with the solicitor’s letter of 1 September 1993 of copies of medical reports and of Mrs Blackman’s consideration of those reports.

20 However given the extent of the passage of time since December 1995 simply leaving the matter there is somewhat unsatisfactory. Having had to address the matter again myself after the passage of years I am very conscious of the disadvantages that the passage of time imposes. Given that, under Section 76, I have power to determine “by whom and to what extent” costs are to be paid, there is a deal to be said for the view that, if I am able to, I should also fix the amount of costs payable by the solicitor. The solicitor’s disinclination to assist the making of an assessment in August 1998 argues for that course. So does the disinclination of the Protective Commissioner (appointed some years ago because of the Plaintiff’s inability to manage his own affairs) to assist the Registrar. If by fixing the amount I deal with one further issue, I remove another impediment to the Plaintiff receiving the benefit to which he is entitled.

21 On the other hand, the absence of records of the solicitor made apparent by the Registrar’s statement that his correspondence could not be found and neither could the solicitor find a copy of the party/party bill (albeit the Registrar did) means that I may do injustice to one side or another. The solicitor may have charged more or less for the matters for which he should bear the costs than any assessment I make.

22 However, despite those risks, on balance, I believe I should go on, if I can, to make an assessment. If doing so results in any injustice in quantification, it largely lies in the disinclination of the solicitor and the Protective Commissioner when opportunities have been presented to them in the past to assist.

23 One of the difficulties which arises where events such as those involving the South Australian law occur is in determining with any accuracy, their impact. Quite reasonably, people commonly do not keep records of how long is spent in either sorting through, or considering, individual pieces or bundles of paper or documents. However in other areas the courts have taken the view that mere difficulty in assessing damages is not a reason why the court should not do the best it can whatever lack of precision is necessarily involved – see Commonwealth v Amman Avistion Pty Ltd (1991) 174 CLR 64 and the other cases cited by Einfield J in SVI Systems Pty Ltd v Best and Less Pty Ltd [2001]FCA 279 at [126 – 130]. There is no reason why this approach should not apply in the exercise of powers under Section 76(1) and Rule 66. Indeed the importance of the court’s supervision of the conduct of its officers and in ensuring that justice is done between them and their clients argues strongly in favour of the court using its powers, procedures and knowledge to the utmost. And in that regard it is appropriate to bear in mind that the vast majority of the judges of the Court have substantial prior experience in litigation and in many of the issues liable to arise in any dispute as to costs.

24 A convenient method of approaching the assessment of amounts is by reference to the component elements of the Registrar’s assessment in the interim report. None are inappropriate.

25 In arriving at figures, I also regard it as appropriate to place some reliance on the interim report of Registrar Irwin. In doing so I do not ignore the fact that in his final report he said, inter alia, that that report was based “almost entirely on conjecture” and “must not be regarded as providing any indication of what costs were claimed by the Plaintiff’s solicitor”. However, the Registrar had substantial experience in the taxation of costs and in context, it seems to me that what he was saying was that the figures at which he arrived were his assessment of a reasonable charge for the tasks described, irrespective of the time actually taken or of the costs actually charged.

26 But I have also taken account of other matters, both independently and by comparing the Registrar’s assessment against them. Included in these other matters were the rates charged in the solicitor’s party and party bill of costs in the Court records and my own assessment at times.

27 In the interim report the Registrar assessed under paragraph (i) fees for consideration by counsel and solicitor as $520. Under paragraph (ii) the assessment for consideration and perusal was $329. Given the task under the latter paragraph involved only about 12 pages and the task under the former paragraph involved consideration of over 500, even if many were easily or very easily disposed of, I do not regard the difference of about $200 as adequate. I should have thought that the difference in time required for the work involved in sub-paragraph (i) as compared with that involved in sub-paragraph (ii) would have been at the very least 2 hours, a view which derives some support from the statement by the Defendant’s counsel mentioned by me at page 19 of my reasons of 3 July 1997 that it took him some hours to compare a copy of the exhibit containing the South Australian legislation served with a consolidated Act. $250 per hour was a rate commonly charged by junior counsel and one of the solicitors engaged on the Plaintiff’s behalf and accordingly I would include the sum of $500 in the costs the solicitor should have to pay.

28 If 4 copies of the legislation which formed part of the exhibit were made, the figure of $2,156 also seems a reasonable assessment if one assumes the accuracy, as I am prepared to do, of the Registrar’s assessment or count that there were 539 pages. $1 per page was the solicitor’s usual photocopying fee. Four does not seem an excessive number of copies. Presumably the original prepared in South Australia could be used by the solicitor, leaving a need for one for the Court, one for the Defendant’s legal representatives and one for each of the Plaintiff’s senior and junior counsel. During the course of the hearing I did not have the impression that there was any shortage of copies of documents.

29 In my view a fair assessment of the costs likely to have been incurred by the Plaintiffs arising from the inappropriate actions or inaction of the solicitor in connection with South Australian law is $500 plus $2,156, viz. $2656.

30 Turning to the issue of the reports annexed to the letter of 1 September 1993 to Dial-an-Angel and to that organisation’s consideration of them, I would again adopt the figure of $1 per page for copying. There were 34 pages of medical reports and it is only those which, ultimately, I concluded the solicitor should pay for. In item 7.5 the Registrar’s figure of 41 may, and the figure of 167 must, include other documents.

31 The Registrar assessed for “consideration of medical reports and Ms Wilson’s report” a sum of $100. Against the fee of $648 for the whole report and the $200 per hour charged by Dial-an Angel, it seems to me that $100 for consideration of the medical reports alone is more appropriate.

32 Accordingly a fair assessment of the costs likely to have been incurred by the Plaintiffs arising from the inappropriate actions of the solicitor in sending the medical reports to Dial-an-Angel is $134.

33 I should not however ignore the statement in the submissions to the Registrar made by the solicitor to the effect that he was never reimbursed for the fee of $648 paid to Dial-an-Angel. There is no reason why I should not accept that statement and accordingly it is not appropriate to include the $100 component of Dial-an-Angel’s fee in the amount of the order I propose to make. Knowing nothing more about the circumstances which led to the lack of reimbursement, I do not regard that fact as otherwise relevant to the issues with which I am presently concerned.

34 Finally, I would add this. On one view the smallness of the amounts involved argues strongly against the expenditure of the time and effort which has been involved in the topic with which these Reasons are concerned. On the other hand, simply ignoring the issue is calculated to encourage solicitors generally and Mr Kelly in particular, who said, as recorded in my Reasons of 19 August 1998, that he would prepare the case the same way again, to indulge in unnecessary waste of their clients’ money. Mr Kelly is obviously at risk in the future, should he choose to ignore the principles upon which my decision is based, of orders more serious than ones dealing only with money.

35 It follows from what I have said above and in earlier Reasons dealing with these topics that the appropriate order is:-

That TD Kelly and Co pay the Plaintiff’s costs of and incidental to,
(i) the copying and consideration of the document which became Exhibit BN in the proceedings, in the sum of $2,656, and
(ii) the furnishing to Mrs Blackman (of Dial-an-Angel) with the solicitor’s letter of 1 September 1993 of copies of medical reports, in the sum of $34.

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Last Modified: 05/14/2003