Carmichael v Fletcher
[2019] VSC 413
•25 June 2019
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COSTS COURT
S CI 2017 04964
| JEANETTE MARGARET CARMICHAEL, as Executor of the Estate of Mayoh Bruce Thomson, deceased | Applicant |
| v | |
| JOHN FLETCHER | Respondent |
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JUDICIAL REGISTRAR: | Gourlay JR |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 25 February 2019 |
DATE OF JUDGMENT: | 25 June 2019 |
CASE MAY BE CITED AS: | Carmichael v Fletcher |
MEDIUM NEUTRAL CITATION: | [2019] VSC 413 |
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COSTS COURT – Review of decision of Costs Registrar Order 63.56(2) Supreme Court (Civil Procedure) Rules 2015 – Failure to comply with Order 63.47 – Failure to pay hearing fee – Failure to consider affidavit filed for application not heard – Submissions from a non-lawyer in addition to solicitor for applicant – Refusal to grant leave to amend bill on late application – Taxation of items in bill not objected to.
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APPEARANCES: | Counsel | Solicitors |
| For the Applicant | Ms S Cherry | Taylor Stratmann Lawyers |
| The Respondent appeared in person |
JUDICIAL REGISTRAR:
On 13 November 2018, the order of the costs registrar stated in Other Matters that:
The Respondent filed itemized bills totalling $46,847.34 and on review, the Respondent’s costs were taxed and allowed in the amount of $22,819.65. On a review of the cash account filed by the Respondent, the parties agreed that a total of $36,08.03 had to(sic) been paid to the Respondent. On a settling of the cash account, the Respondent is to repay $13,790.03 to the Applicant.
As the Respondent’s filed itemized bills were reduced by 15% or more on review, I determined that the Applicant was entitled to her reasonable and proportionate costs of the application for review.
Orders were then made for repayment of the sum of $13,790.03 to the applicant and, to allow for an assessment in chambers of the costs of the application, for the applicant to file and serve submissions on the quantum of costs of the application which were ordered to be paid by the respondent. The respondent was ordered to file and serve a submission in reply and the matter was adjourned to a telephone mention. After these orders were made the respondent applied to review rulings made on the taxation of costs. The Notice of Review does not seek a review of the costs order made other than the order to repay monies overpaid.
For the reasons that follow I will dismiss the application to review the taxation of costs and pursuant to r 63.56(6)(b) confirm the orders made on 13 November 2018.
The applicant is the Executor of the Estate of Mayoh Bruce Thomson deceased. She applied to review the legal costs of the Respondent pursuant to s 198(1)(a) of the Legal Profession Uniform Law (Vic) (‘LPUL’). She retained the respondent to act on behalf of the Estate shortly after the death of Mr Thomson on 24 April 2017. The retainer was terminated on 22 August 2017. During that period of time the respondent undertook work to investigate the assets in the Estate, he perused previous wills of the deceased, perused a number of Trust Deeds of a self-managed superannuation fund of the deceased and undertook work related to disposal of livestock and administration of the Estate (‘the administration work’). The respondent also prepared and filed an application for a Grant of Probate which was granted on 24 July 2017 (‘the Probate work’). During the retainer the respondent delivered three lump sum bills of costs which include disbursements on 12 May 2017, on 29 June 2017 and on 15 August 2017 totalling $35,980.38. He received payment of an amount of $36,708.68 in respect of those invoices.[1] On 22 August 2017, when the applicant terminated the retainer, she requested delivery of itemised bills of costs. As the respondent failed to comply with that request the Summons for Taxation of Costs was issued in December 2017.
[1]The reason why he was paid more than the invoiced amount is not clear from the filed material.
The respondent subsequently filed and served three itemised bills of costs totalling $46,847.34, an increase of $10,866.96 on the lump sum bills. After a failed mediation the taxation of costs was heard by a costs registrar on 23 July 2018, 8 October 2018 and 13 November 2018. The result of the taxation of the fair and reasonable costs of the respondent acting for the Estate was to allow the sum of $22,918.68. As $36,708.68 had been paid on settling the cash account an order was made for repayment of $13,709.03.[2]
[2]This order is currently stayed pending the outcome of this costs review.
At the conclusion of the taxation on 26 November 2018 the quantum of the costs of the taxation remained to be quantified and as the respondent filed the Notice to Review of the Taxation this issue still remains outstanding. The Review Application was made pursuant to r 63.91 of the Supreme Court (General Civil Procedure) Rules 2015. This rule commenced on 1 October 2018 and only applies to proceedings commenced on or after that date.[3] As the Summons for Taxation was filed before that date I ruled that the review was to be conducted pursuant to r 63.56.2, the rule in operation during the taxation which states that:
[3]Rule 63.109 of Part 9 Transition provisions.
(2) If any party interested objects to an order of the Costs Court constituted by a Costs Registrar (who is not a judicial registrar) or by a Deputy Costs Registrar—
(a) allowing or disallowing, wholly or in part, any item in a bill; or
(b) allowing some amount in respect of any item—
the Costs Court constituted by a judicial registrar, on the application of that party, may review the order.
(3) …
(4) The notice under paragraph (3) shall—
(a)state by a list each item in the bill in respect of which the party objects to the order of the Costs Court constituted by a costs registrar ...; and
(b)state specifically and concisely the grounds of objection to that order and the order sought in its place.
(5) …
(6) Upon the application, the Costs Court constituted by a judicial registrar—
(a)shall reconsider or review the taxation upon the objections stated in the notice;
(b)shall make an order confirming, setting aside or varying the taxation or make such further or other order as may be necessary; and
(c) may make any other order the case requires.
(7) For the purposes of the reconsideration or review, the Costs Court constituted by a judicial registrar may receive further evidence in respect of any objection.
In addition, the Notice of Review also relies on s 17H(1) of the Supreme Court Act which states:
Subject to the Rules, a party who objects to a determination made by a costs registrar in accordance with this Division may apply to the Costs Court constituted by a judicial registrar for a review of that determination.
A review conducted pursuant to r 63.56.2(2) and s 17H(1) requires the same application of the principles and approach of the Courts to any appeal from an exercise of discretion by a taxing officer. For the respondent to succeed on the review he must establish an error on the part of the costs registrar. Justices Dixon, Evatt and McTiernan JJ in House v The King state at pages 504 and 505 of the decision:[4]
The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.
The onus lies on the person seeking to impeach the rulings to satisfy the court that the decision appealed from is wrong. In general, the court will interfere with rulings only where the discretion appears not to have been exercised at all, or to have been exercised in a manner which is manifestly wrong. A party seeking to review decisions made on taxation must show that the taxing officer made an error of a material fact, or gave weight to irrelevant considerations or failed to give weight or sufficient weight to a relevant consideration before any item challenged will be reconsidered.
[4](1936) 55 CLR 499.
In the course of the taxation the parties agreed that to determine the ‘fair and reasonable costs’[5] of the administrative work the Practitioners Remuneration Order (the PRO) was the appropriate scale to apply and that the Supreme Court (Administration and Probate) Rules 2014 (the Probate Scale) should apply to the application for a Grant of Probate. The respondent’s costs agreement and costs disclosure applied these scales as the basis of charge and the respondent’s itemised bills of costs were drawn pursuant to these scales therefore the taxation proceeded on this basis without any application to set aside the costs agreement.
[5]Section 199(2)(b) of the LPUL.
No evidence of the rulings of the costs registrar other than the record of items taxed off or reduced in the bills of costs on the Court file was relied on by the parties. It appears that, following the parties agreement of the appropriate scales of costs to be applied to the bills of costs, the applicant abandoned the preliminary issues of the respondent’s failures to give required costs disclosures which had been raised in the Notice of Objections. The effect of this concession was that the taxation was able to proceed on the basis of the costs agreement and no ruling was made as to its validity. In support of the initial general objections of failure to give required costs disclosures the applicant had filed and served affidavits as to the conduct of the respondent in the matter.[6]
[6]See paragraph 15 below for details of these affidavits.
During the hearing of the review the respondent submitted, and the applicant did not disagree, that the parties proceeded with the taxation of the basis of the itemised bills of costs filed which were drawn on the appropriate scales of costs. These bills claimed an additional loading for care, skill and attention of 25 per cent of the amount billed and GST as provided for in the costs agreement.
The respondent’s Notice of Review relies on six errors that he submits were made by the costs registrar to impugn many of the rulings made and to submit that rulings should be set aside in their entirety and the taxation should be reheard. [7] These errors are:
[7]I have not referred to the individual item numbers detailed in the Notice of Review as items were not considered on an item by item basis in the review.
(a) The Notice of Objection failed to comply with rule 63.47 in respect of many items in the bills. The respondent submitted that the objections to items that state the item is ‘excessive’ or simply requests ‘produce’ should be disregarded and the items allowed as claimed as the objection does not comply with r 63.47. The respondent submits that the objection to identified items I the Notice of review fail to state specifically and concisely the objection made and that these meaningless objections prevented the respondent from preparing meaningful responses to answer the objections.
(b) Failure to pay a Hearing fee on Day 2 of the taxation. On 8 October 2018 the hearing proceeded without the applicant paying a hearing fee as was mandated by the Supreme Court (Fees) Regulations 2018. The respondent submitted that the hearing that day was unfair and he sought orders that the assessment should be struck out. He submitted that the costs registrar did not advise the parties that a hearing fee was payable before the hearing commenced and did not require the applicant to pay the fee. Further, at the conclusion of the hearing that day the costs registrar warned the applicant that a hearing fee would be payable before the next hearing date. The respondent submitted that all rulings made that day were void and that it the hearing was unfair and a denial of natural justice which made the total taxation void as a consequence.
(c) Consideration of the respondent’s affidavit. The respondent submitted that the costs registrar refused to consider the contents of his affidavit sworn on 20 August 2018 in relation to his submissions as to the reasonableness of his costs. This affidavit was filed to reply to affidavits of the applicant and her current accountant which, he submitted, were prejudicial to him and contained unfair allegations about the respondent and his conduct of the matter. The respondent submitted that the costs registrar’s failure to consider the respondent’s affidavit resulted in allowances of costs that were unfair and/or unreasonable. The affidavit details the deceased’s instructions to the respondent in respect of his previous wills and is loss of faith in his then solicitors that resulted in the terms of the Will made on 21 May 2015 and which influenced the respondents actions when acting for the Estate. The respondent submitted the cost registrar’s failure to take account of the affidavit resulted in a failure to consider the express wishes of the deceased in respect of the Grant of Probate and administration of the Estate. As a result of this failure items were reduced or taxed off entirely and the rulings made were unfair and unreasonable.
(d) Submissions by an unqualified person during the taxation. During the taxation the costs registrar allowed an unqualified person to ‘enter the fray’, to comment on the bills of costs, the conduct of the respondent and to give evidence from the Bar Table concerning the Probate law and procedures required to administer an Estate. That person was permitted to play an active part in making submissions on the applicant’s behalf. These submissions were made despite the applicant also being represented by a competent costs lawyer instructed by the solicitor currently acting for the Estate. The applicant did not attend the taxation to give instructions.
(e) Applications to amend the bill of costs. The respondent applied to amend his bill on the third hearing day by withdrawing items he had claimed in error. This application was denied. The items related to claims for sending emails and copying emails contrary to the PRO. The costs registrar had previously ruled that these charges were included in the scale item for correspondence and they were taxed off to the detriment of the respondent.
(f) Taxation of items no 405 to 442 without objections. The applicant failed to include these items in the Notice of Objections in error. The costs registrar allowed oral objections to the items in the course of the taxation despite the respondent being unprepared to respond to the oral objections. The respondent submitted that he had placed the applicant’s solicitor, the costs lawyer retained and the unqualified person (who had initially held himself out as acting for the applicant) on notice of the failure to object to those items and each of these persons failed to respond or advise him that these items were objected to. He submitted that any amount taxed off on these items should be allowed.
The respondent sought orders that:
(i) all objections that failed to comply with r 63.47 should be disallowed[8];
[8]A list of item numbers is included in the Notice of review but not reproduced in these reasons.
(ii) all items taxed off on 8 October 2018 should be allowed[9];
[9]A list of item numbers is included in the Notice of review but not reproduced in these reasons.
(iii) the fair and reasonable costs of matters raised in the affidavit of the respondent detailing the complexity of the administration of the Estate and wishes of the deceased in relation to the administration of his Estate should be allowed[10];
[10]A list of item numbers is included in the Notice of review but not reproduced in these reasons.
(iv)leave should be to granted to withdraw those items included in error[11]; and
(v) items 405 to 422 should be allowed due to the applicant’s failure to object to them in the written Notice of Objections.
[11]A list of item numbers is included in the Notice of review but not reproduced in these reasons.
Prior to the hearing of the review both parties filed outlines of submissions and both parties made oral submissions to expand their outlines at the hearing on 25 February 2019.
Background of the costs dispute and Estate
Both the applicant and her present accountant, Lawrence Raymond Cogger, filed affidavits in the proceeding. The purpose of these affidavits was to support argument contained in the Notice of Objections that the respondent had failed to make proper costs disclosure and that the costs agreement was void as a consequence. To respond to that proposed application the respondent filed his affidavit sworn on 20 August 2018. It is apparent that the applicant was a long term employee of the deceased[12] and an experienced farm hand with proficiency in cattle breeding, farming and farm management[13]. She swears that: ‘Until Mayoh died, I had never had any contact with the law, legal profession, wills, executorship or the like. I had no experience or knowledge of the roles of executors, solicitors or scales of costs’.[14]Since the death of Mr Thomson she has relied on Laurie Cogger for financial advice, assistance and information as he was the long-time accountant of the deceased.[15] The applicant’s affidavit contains allegations that the respondent acted without instructions to undertake legal work in relation to the Estate, was unduly demanding when seeking instructions and acted without instructions at times possibly due to her lack of experience in dealing with the executorship of the Estate.[16] In so acting the respondent increased the costs charged to the Estate.
[12]Paragraphs 1 and 2.
[13]Paragraph 13.
[14]Paragraph 3.
[15]Paragraph 4 and paragraph 2-3 of the Cogger affidavit.
[16]Paragraph 17.
The inventory of the Estate,[17] prepared for the application for the Grant of Probate, discloses a substantial estate including a farming property owned in the deceased’s own name, called ‘The House Block’ and farming properties owned by the deceased’s Self-Managed Superannuation Fund (‘the Retirement Fund’) called ‘Learmonth’ and the smaller adjoining parcel of land. These properties were estimated to have a total value of $2,496,200.00. The estate also included farm plant, equipment and livestock valued at $1,013,550.00. The deceased held bank accounts, shares, term deposits and the like in his own name valued at $1,152,553.60. The Retirement Fund held bank accounts, shares and the like valued at $963,711.61. The Estate was the Retirement Fund’s nominated beneficiary therefore the total value of the estate for Probate purposes was $5,646,582.21.
[17]Exhibit ‘LRC-B’ to the Cogger affidavit.
The respondent’s affidavit details his receipt of instructions to prepare a new will on 6 May 2015. These were the first instructions he had ever received from Mr Thomson. Further, the respondent swears that Mr Thomson instructed him that he wished to simplify the provisions of his previous will and associated codicils. The previous will and codicils established a testamentary trust to hold the residuary estate, to manage the assets of the estate and make payments at the trustees discretion. At the time the respondent received instructions the named trustees were Alex Montrose McCulloch and Craig Pertzel.[18] The earlier wills and codicils allowed the trustees to retain the assets of the estate in the trust and pay all professional and other charges plus Trustee commission of 2% on the gross capital and income of the estate to the two trustees[19] before making any payments at the trustees discretion to charities selected by the trustees.
[18]Paragraph 18 of the affidavit of the respondent. The trustees had varied from earlier wills.
[19]Paragraph 18 of the affidavit of the respondent.
The probated will was signed on 21 May 2015 and provided that after payment of all debts, legal costs, tax and like expenses and the payment of several pecuniary bequests the residuary estate was to be paid directly to the Royal Children’s Hospital.[20]
[20]Affidavit of the respondent sworn on 20 August 2018.
As I have said above, the respondent’s affidavit was prepared in response to the Cogger and applicant’s affidavits and to defend the proposed submission that the costs agreement was void. The respondent submitted that the costs registrar decided not to consider the contents of his affidavit as a result of the applicant not proceeding with the submissions and proceeded with the taxation on the basis of the basis of charge provided for in the costs agreement. The respondent submitted that the costs registrar stated during the taxation that the affidavit was relevant only for the proposed application and not the taxation therefore he would not consider its contents. The respondent submits that the affidavit was relevant to rulings made on specific items of the bills as it details the background of his instructions from Mr Thomson, the complexity of administering the Estate and gives an insight into his conduct of the Probate application and the estate file. It is clear that the Estate had a large monetary value, that additional costs were incurred in the continued running of the farms, payment of wages, the sale of livestock and farm equipment, the sale of shares and meeting the technical requirements to wind up the Superannuation Fund and attend to the payment of income and taxes from the Estate funds.
The Notice of Objections does not comply with Rule 63.47
The respondent submitted Practice Note SC Gen 11 Costs Court at paragraph 7.5 states that Objections in the nature of “excessive” or “production” do not comply with the Supreme Court Rules and will be disregarded. This update to the Practice Note was made on 1 October 2018 after the filing of the Notice of Objections and the first day of the taxation. The respondent’s Notice of Review identified a large number of objections to items that state ‘excessive’ or ‘produce’ and do not state specifically and concisely the grounds of objection to each item. The respondent submits that due to the general nature of the objections he was unable to know or understand the basis of the applicant’s objections to those items. He submits that allowing the applicant to proceed on the basis of these objections resulted in procedural unfairness and that the failure of the applicant to properly state the basis of objection amounted to no objection being made at all to those items by the applicant. As such, any ruling made by the costs registrar on items identified by him as failing to comply to the Rule should be reversed and all amounts taxed off or reduced should be allowed.
In response the applicant submitted that the use of these general objections is common and appropriate where the party objecting to a file that has not been inspected before the preparation of the Notice of Objections. The applicant’s counsel submitted that the Practice Note relied on was amended after the Notice of Objection was prepared and that the rules allow the Costs Court to tax items on the basis of fuller oral objections made during the taxation.
The respondent was clearly in unfamiliar territory in appearing in the Costs Court and it appears to have little or no experience of the taxation of bills of costs. He has sworn that at the time of the events in dispute his practice included litigation, family law and wills and probate matters including Part IV disputes. He swears that he is a legal practitioner of long standing, with a generalist practice based mainly in the country, including in areas of drafting wills, obtaining probate and administration of estates. It appears that he struggled during the taxation and the review hearing with the degree of informality in the conduct of hearings, in making objections and the expectation that he would attend with his file prepared for taxation.[21]
[21]There is a general expectation in the Costs Court that the file being taxed will have each item objected to marked or notated so as to allow the taxation to proceed quickly and efficiently. Any electronic items should be suitable marked and easily accessible. At the review the respondent advised the Court that his file was in his car and his computer was slow and documents on it would be difficult to find.
Rule 63.49 states that:
Where no objection to a bill is made in accordance with Rule 63.47, the Costs Court may allow or disallow the amount of the costs in the bill in whole or in part.
This Rule requires the Costs Court to tax items in a bill whether proper objections have been made or not and taxing officers can exercise their discretion to tax items in the bill whether an objection has been made to the item or not. In addition s 7D(3) of the Supreme Court Act requires the Costs Court to act with as little formality and technicality, and with as much expedition, as the requirements of this Act, the Rules and proper consideration of the matters before the Court permit.
Nothing argument made by the respondent on the review points to error being made by the costs registrar in the exercise of his discretion to hear oral objections to items where no proper objection was made once document in support of the item in the bill are produced during the taxation. Ground No. 1 is a technical ground that must be rejected as the costs registrar has a wide discretion in the conduct of the taxation and can proceed with taxation of items despite the imprecise nature of the objections. The objection to items being ‘excessive’ is sufficient as the objection if it relates to folios claimed as meaning too many folios are claimed or if it relates to time is means the time claimed is excessive for the work claimed to have been undertaken. The onus remains for the respondent to prove the claims in the bills. Allowing the applicant to proceed with imprecise objections or rely on objections which technically do not comply with r 63.47 does not mean that the costs registrar failed to exercise his discretion impartially in respect of the items. The costs registrar has not made errors of material facts, gave weight to irrelevant considerations or failed to give weight or sufficient weight to a relevant considerations. This Ground is not made out by the respondent.
Failure to pay hearing fees for 8 October 2018.
The Notice of Review states that the Respondent was not afforded procedural fairness to make submissions and the assessment ought to be struck out. Additionally, determinations made on 8 October 2018 disallowing Items ought to be set aside and allowed.
At the second day of the taxation, on 8 October 2018, items numbered 265-270 were taxed before the matter was stood down to allow for discussions between the parties in response to the applicant’s costs lawyer’s complaint that the respondent was not sufficiently prepared to proceed with the taxation that day. A short time later the costs registrar adjourned the hearing to another day. At the review hearing the respondent submitted that when adjourning the matter that the costs registrar commented to the parties that a hearing fee would be payable by the applicant prior to the commencement of the next hearing date as new fee regulations had commenced in late September. In response to an enquiry the Principal Registry advised that a fee notice had not sent to the applicant prior to the 8 October 2018 hearing and that no fee had been paid.[22] The items taxed and disallowed that day were item 265 which was reduced by $6.80, item 268 which was reduced by $13.50 and item 269 which was reduced by $2.60, a total reduction of these items of $22.90. All the other items were allowed in full. The respondent submitted that as the taxation that day proceeded without the payment of hearing fees the entire taxation should have been struck out.
[22]It appears that no fee notice has been sent for this day.
The Supreme Court (Fees) Regulations 2018 commenced on 30 September 2018. The regulations require the Supreme Court Registry to issue fee notices to parties for payment of hearing fees and to collect fees paid as a consequence. As the first day of taxation was heard on 23 July 2018, and this matter was listed that day to resume on 8 October 2018, prior to the commencement of the fee regulations it seems that no fee notice was ever sent. The issuing of a fee notice creates a debt payable to the Court by the applicant. If no fee notice is generated by the Registry then it is likely that no fee is payable. Failure to pay a hearing fee does not make the hearing unfair or invalidate rulings made in the course of the hearing. Comments made by the costs registrar, at the conclusion of the 8 October 2018 hearing, seem to be little more than an indication to the parties that hearing fees were then payable for the next hearing day. The payment of hearing fees was new to Costs Court hearings in matters brought pursuant to the Legal Profession Act 2004 and the Uniform Law. The absence of payment of a hearing fee does not amount to a mistake of the facts nor is it a material consideration that would make rulings made or the taxation as a whole void. The respondent has failed to establish this ground.
Fair and reasonable costs should have been allowed.
The respondent submits that in conducting the taxation the costs registrar should have had regard to the circumstances surrounding the work he carried out for the probate and estate administration of the Estate as detailed in his affidavit sworn on 20 August 2018. The costs registrar’s refusal to read and consider his affidavit, which had been filed to rebut the applicant’s allegations of acting without instructions and increasing costs on the basis of unnecessary and unreasonable actions, amounted to unfairness and resulted in unfair and unreasonable reductions of costs. The respondent’s affidavit contains, as I have said, detailed background of him receiving instructions to prepare the deceased’s Will and the work the respondent undertook that resulted in the bills of costs. The respondent also submitted that he was hampered in defending the proceeding by the applicant withholding documents he had perused as part of the administration of the Estate. He was unable to produce documents during the taxation as they were in the control of the applicant or her lawyers to demonstrate to the costs registrar the complexity of the administration of the Estate and his difficulty in acting for the Estate.
This ground seeks a review of items 56, 57, 61, 62, 67, 69, 72, 75, 77, 92, 97, 98, 99 100, 101, 108, 109, 115, 116, 117, 122, 130, 178, 183, 188, 192, 206, 136, 242 and 309 of the bills. The respondent submitted that the work in these items was undertaken by him on the basis of clause 4(g) of the will which stated that:
MY TRUSTEES shall not be liable for any act or omission done or made in accordance with counsel’s written opinion upon any question of construction whatsoever including questions in connection with the administration of the trusts hereof.
The respondent submits[23] that this clause was material and relevant for the assessment of fair and reasonable costs for advising, taking instructions and briefing Counsel. This work included administrative work undertaken to secure payment of Counsels fees from the assets of the estate in order to brief counsel for advice separate from advices from the accountants for the estate as to the administration of the estate including any claims on the estate and redemption of assets and tax liabilities[24].
[23]The respondent’s notice of review at paragraph 3.4 and 3.5.
[24]The respondent was concerned that the applicant and her daughter may have a Part IV claim, which the applicant denied.
The respondent submitted that the costs registrar’s refusal to read his affidavit detailing Mr Thomson’s loss of trust of his former advisers including Mr Thomson’s refusal to give a power of attorney requested by his former lawyer and his instructions not to release his will to his accountant resulted in unfair reductions to items in the bills of costs. It appeared that, if the respondent’s affidavit is accepted, the deceased had lost confidence in his usual legal and accounting advisers at the time he instructed the respondent. As such, based on these instructions, the respondent proceeded with caution in dealing with the applicant and the accountants.
The items included by the respondent that relate to this issue are:
Item
Description
Amount claimed
Amount taxed off
Amount allowed
56 ASIC search of MB Thomson Pty Ltd- 1 hour 154.00 77.00 77.00 57 Perusal of documents from search 258.00 58.00 200.00 60 Attendance at Mayoh’s – peruse records – 3 hours 1,156.80 1,156.80 61 Perusal of records not retained in filing cabinets – scan 100 folios 680.00 650.00 30.00 62 Scan records retained for file 340.00 340.00 Nil 67 29-04-17 further attendance to search records 5.5 hours 2,180.80 1,005.80 1,175.00 69 Advice to you re Burnadette, previous Wills 144.00 44.00 100.00 72 Scanning financial records 150 fols 1,020.00 248.80 771.20 75 Peruse email, old will, 2012 net wealth 90.30 90.20 92 Receive 6 emails from you and NAB 81.00 31.40 49.60 97 Receive 4 emails from you and NAB 54.00 7.30 46.70 98 Scan emails -2 folios 27.20 27.20 Nil 99 Receive emails from A Oakley 5 pages 23.90 23.90 100 Scan 250 folios 1,700.00 1,700.00 Nil 101 Scan -Variation of Trust Deed, report and valuation – 335 folios - 4 hours allowed for 100 and 101 2,019.60 2,019.60 108 Drawing letter to A Oakley requesting copy of Retirement Fund Deed 20.80 20.80 109 Typewriting same 12.90 12.90 115 Scan Trust Deed, Deed of retirement and Appointment, 190 folios 1,292.00 646.00 646.00 116 Drawing letter to T Wright 20.80 20.80 Nil 117 Typewriting same 12.90 12.90 Nil 122 Drawing letter to Cogger Gurry 20.80 20.80 130 Drawing letter to you 20.80 20.80 178 Letter to NAB with copy of account for payment-detailing work undertaken 96.40 47.90 48.60 183 Letter to NAB with as to need to brief Counsel for advice on finances of Estate 13 folios 622.70 422.70 200.00 192 Attending to collate instructions as to relationship with Mayoh – possible part 4 claim 192.80 192.80 Nil 206 Letter to NAB as to assets, tax account, advice of Counsel and anticipated expenses 10 folios 479.00 291.40 187.60 236 Letter to NAB advice and request for funds - 4 folios 191.60 142.00 49.60 242 Reply Letter to NAB - 5 folios 239.50 239.50 Nil 309 Drawing and engrossing brief to Counsel 3 folios 143.70 143.70 Nil
However, there is no reason to infer that the allowances made on taxation in respect of this issue were unreasonable or amounted to unreasonable allowances of costs. Whilst consideration of the Fletcher affidavit may have provided background and rationale for the respondent’s actions it also demonstrates that the respondent’s actions may have been unreasonable and unnecessary work as undertaken on the basis of instructions of Mr Thomson and with reference to instructions from his client Mrs Carmichael as executor of the Estate. The respondent’s submissions do not support his contention that the costs registrar failed to consider any material matters or that it would be proper to interfere with the exercise of his discretion in respect of these items.
Appearance by a person without an entitlement to appear in court.
The Notice of Review at paragraph 4.5 states that:
Justin Scott notwithstanding that the Costs Registrar indicated a number of times that he was not recognised by the Costs Court entered into the fray throughout the costs assessment on 23 July 2018, 8 October 2018 and 13 November 2018.
The Notice goes on to make multiple complaints that both the applicant’s costs lawyer and Justin Scott made submissions to the Court that the actions of the respondent did not accord with Probate Law and Practice and whether costs billed were reasonable and fair. The respondent submitted that as neither Mr Wood (the costs lawyer who appeared for the applicant) nor Mr Scott demonstrated to the Court that they had expertise in obtaining probate and/or administration of a probate file their submission were not reasonably made.
The respondent submitted that Mr Scott initially held himself out as acting in the matter[25] and attended the mediation convened on 4 June 2018 together with Mr Wood, Mr Roberts, the solicitor who instructed Mr Wood and the applicant. Mr Scott attended each hearing day and addressed the costs registrar, in addition to Mr Wood. In addition, Mr Scott wrote directly to the Court and the respondent to serve the Notice of Objections. He later wrote to the Court to advise, quite inappropriately it was submitted, that the applicant had made offers to settle the matter.[26] At no time did Mr Scott file and serve a letter with the required disclosures pursuant to Practice Note SC GEN 11 that:
13.2.1 Whether they are a disqualified person or have been found guilty of a relevant offence under Legal Profession Legislation;
13.4.2 If so whether the solicitor on the record (if any) for the party they seek to appear for has been informed of this fact and whether the Legal Services Board has given approval under Legal Profession Legislation.
13.4.3 Any legal practitioner who engages a person to appear before the Costs Court who requires the leave of Court to appear shall satisfy themselves that the person is suitable to appear on behalf of their client. They must also inform their client in circumstances where the costs of that appearance will not be able to be claimed on taxation (See Mietto v G4S Custodial Services Pty Ltd [2010] VSC 304).
[25]Including by corresponding with the respondent and Associate Justice Wood’s associate on 16 May 2018 serving the applicant’s Notice of Objections.
[26]A letter dated 8 November 2018 addressed to the costs registrar and cc’d to Mr Wood, Taylor Stratmann and the respondent.
The items identified by the respondent where rulings were made as a result of Mr Scott’s submissions are:
(a) The submission on the usual practice in obtaining Probate and administration of the estate including items 56, 57, 61, 65, 67, 72, 73, 97, 100, 115, 119, 178, 182, 183, 188, 193, 206, 236, 242, 262, 309, 324, 336, 369, 409, 412, 463, 515, 529, 579, 596, 597, and 613.
(b) Submissions as to a reasonable allowance for hours claimed and allowed including items 60, 67, 141, 160, 231, and 235.
(c) Submissions as to a reasonable claim for the word counts of documents including items 56, 57, 61, 62, 99, 1115, 142, 187, 183, 188, 193, 206, 223, 242, 262, and 267.
However, although the conduct of Mr Wood and Mr Scott complained off may have overwhelmed the respondent, who is not experienced in Costs Court appearances, it does not appear that these rulings are mistaken, made based on extraneous or irrelevant matters or that the Mr Scott’s submissions were wrong or irrelevant. There does not appear to be:
some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so.[27]
[27]Australian Coal and Shale Employees' Federation v The Commonwealth[1953] HCA 25; (1953) 94 CLR 621.
Section 17D(3) of the Supreme Court Act 1958 provides that the Costs Court must exercise its jurisdiction with as little formality and technicality, and with as much expedition, as the requirements of this Act, the Rules and the proper consideration of the matters before the Court permit. Any rulings made, after hearing submissions from an unqualified person, are not invalid per se, if the submissions made are relevant and material to the issue to be decided. In this matter the costs registrar must have regard to the total of the submissions being made rather that it was being made by two people. No basis was identified by the respondent to set aside the identified individual rulings other than he stated that Mr Scott made a submission in respect of each item. No evidence was adduced that the submissions made, in addition to submissions of the costs lawyer, were erroneous and this ground must be dismissed.
Amendment
The respondent identified about 220 items that he had applied to withdraw from the itemised bills on the final day of taxation which he conceded were claimed in error due to his mistaken application of the items in the PRO. These items claimed duplicated fees charged by the Respondent against the Applicant for sending emails and copies.[28] At the time of applying to amend the bills of costs many of the items had been considered and disallowed in accordance with rulings made on the first day of taxation. The costs registrar refused the application on the basis that the concession that the items should not have been claimed in the bills was made too late in the hearing. Had the application been allowed then the items withdrawn from the bills would have substantially reduced the total claimed. This would have an impact on the question of reduction of the bills of costs by 15 per cent or more and it is possible that the application of s 204(2)(c) in respect of orders being made that the respondent pay the costs of the taxation. That section states that the law practice must pay the costs of the taxation if the bill of costs is reduced by 15 per cent or more unless the costs registrar considers that it is fair and reasonable to rule otherwise.
[28]Applicant’s Submissions, page 6 para 33.
Rule 63.45 gives the taxing officer a discretion to allow amendment of bills of costs during a taxation any late application will be considered less favourably and nothing submitted by the respondent persuades me that the costs registrar was in error in refusing to allow the bills of costs to be amended, particularly as there are no written reasons available to me to consider and none were requested from the costs registrar.
Taxation of page 2 of the Bill dated 15 August 2017.
The applicant failed to object to all the items on page 2 of the 15 August 2018 bill of costs. The respondent submitted that the applicant’s failure to object to these items should have resulted in the items being allowed in full and not taxed during the running of the taxation as he was prevented from preparing for taxation of the items. The items he identified are numbered 405 to 422 of the bills.[29] The respondent submitted that he had notified both the Court and the applicant that no objections to the items were made and as the applicant failed respond to the that notice by applying to amend her notice of objections he had reasonably assumed the items were conceded. The total taxed off the items is $955.60. Some reductions made arise from the respondent’s concession that emailing and copying letters in addition to the scale allowance are not recoverable. Other reductions are claims by the respondent of obtaining payment of disbursements and liaising with the NAB to arrange payments of accounts. In respect those items it is clear that a lawyer can only charge for the legal services provided not for recovery of payment of his costs. These items are not proper claims as the work undertaken is for the benefit of the respondent and not for the provision of legal services.
[29]The applicant’s solicitor or costs consultant numbered the bills of costs in the course of preparing the notice of objections.
In drawing the itemised bills of costs the respondent failed to number the items as required by r 63.42. To assist with the preparation of the notice of objections and the conduct of the taxation the applicant was required to number all the items. Although the applicant was on notice that the notice of objections had omitted objections to the items on page 2 the costs registrar exercised his discretion by hearing oral objections to items in the bill of costs. A failure to consider these objections could have an impact on the costs ordered to be paid.[30] Rule 63.49 provides that the Costs Court may allow or disallow the amount of the costs in the bill in whole or in part and at all times the costs registrar must assess the costs that are no more than fair and reasonable amounts for the legal costs.[31] Section 199(2)(b) of the LPUL states that:
On a costs assessment, the costs assessor must—
(b)determine whether legal costs are fair and reasonable and, to the extent they are not fair and reasonable, determine the amount of legal costs (if any) that are to be payable.
[30]It is the practice of the Costs Court to allow reasonable objections to a bill of costs as a refusal might increase the amounts payable particularly where the party concerned is participating the taxation. See Oliver, L. L. The Law of Costs, Law Book Co. Melbourne. 1960 p. 159.
[31]S169 (b) LPUL and s172(1) LPUL.
Again the respondent has not succeeded in demonstrating that the cost registrar was in error in allowing oral objections to the items on page 2 of the bill of costs in light of the fact that the respondent had failed to comply with r 63.42 in drawing the itemised bills of costs and he should not be able to benefit from this failure.
Conclusion
The respondent has failed to demonstrate that the costs registrar made any errors in the exercise of his discretion in the taxation. The taxation by the costs registrar has yet to be concluded as the respondent filed the notice of review prior to final orders being made. The costs registrar determined that the respondent should pay the applicant’s reasonable and proportionate costs of the review as the bills of costs were reduced by 15 per cent or more. Orders will be made that the costs registrar conclude the taxation of costs by extending the time for submission that had previously been ordered.
I will dismiss the review for the reasons stated above and order that the review costs must follow the event. I will confirm the order made on 13 November 2018 as to payment of the overpaid sum by the respondent to the applicant and the orders for submissions in respect of the quantum of those costs. The following orders will be made:
1. Order numbered 1 of the order made by the costs registrar on 13 November 2018 is confirmed and the Respondent pay the Applicant the sum of $13,790.03.
2. The Respondent pay the Applicant’s costs of the Review.
IN RESPECT OF THE COSTS OF THE NOTICE OF REVIEW:
3. By 17 July 2019 the applicant file and serve short written submissions on the quantum of costs of the review to be paid by the respondent.
4. By 1 August 2019 the respondent file and serve any submission in reply.
5. A determination of the costs of the review will be made on the papers.
IN RESPECT OF THE COSTS OF THE SUMMONS FOR TAXATION:
6. The time for the applicant to file and serve submissions on the costs of the taxation is extended to 17 July 2019.
7. The time for the respondent to file and serve submissions in reply is extended to 1 August 2019.
8. The determination of the quantum of the costs of the taxation is referred back to the costs registrar.
9. Liberty to apply.
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