CGU Workers Compensation (Vic) Ltd v Rees
[2003] VSCA 18
•6 March 2003
SUPREME COURT OF VICTORIA
COURT OF APPEAL
No. 3763 of 2002
| CGU WORKERS COMPENSATION (VIC) LTD | |
| Appellant | |
| v. | |
| THELMA GRACE REES | Respondent |
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JUDGES: | WINNEKE, P., PHILLIPS and BATT, JJ.A. | |
WHERE HELD: | WARRNAMBOOL | |
DATE OF HEARING: | 5 March 2003 | |
DATE OF JUDGMENT: | 6 March 2003 | |
MEDIUM NEUTRAL CITATION: | [2003] VSCA 18 | |
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Costs –As between party and party – Travelling expenses – Of plaintiff in driving to attend medical experts in preparation of then intended case – Calculated at rate per kilometre – Not disbursement nor otherwise allowable “costs”, “disbursements” - County Court Rules, Ch.I, rr.33.05, 63A.29, 63A.66, 63A.77.
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| APPEARANCES: | Counsel | Solicitors |
| For the Appellant | Mr J. Ruskin, Q.C. and Mr M. Fleming | Wisewoulds |
| For the Respondent | Mr T.P. Tobin, S.C. and Mr T.P. Keely | Tait Leishman Taylor |
WINNEKE, P.:
In this matter I will invite Batt, J.A. to deliver the first judgment.
BATT, J.A.:
On 1 April 1999, the respondent, Thelma Grace Rees, who lives at Ellerslie near Mortlake, as plaintiff filed in the County Court at Warrnambool a writ with annexed statement of claim against the appellant, CGU Workers Compensation (Victoria) Ltd (“CGU”), as defendant, seeking, principally, an order that lump sum compensation for permanent disability pursuant to s.98A of the Accident Compensation Act 1985 be paid in respect of injury sustained by her while acting in the course of her employment with a Mrs Mary Salmon. At all material times CGU was the latter’s accident compensation insurer.
In or about October 1999, the County Court proceeding was compromised. On or about 7 October 1999, consent orders were made in the County Court proceeding in accordance with minutes of consent orders filed on 6 October. The orders were:
1. The defendant pay the plaintiff’s costs on County Court Scale D.
2. Otherwise the proceeding be struck out.
It should be recorded in passing that neither party suggested here, or in the earlier hearings in the County Court referred to later, that s.50(2A) of the Accident Compensation Act precluded the making of such an order or that there were facts making s.50(4) of that Act applicable.
On or about 30 April 2002 the plaintiff (as it is convenient to call her) served a bill of costs on the defendant (as it is likewise convenient to call it). In the bill the plaintiff claimed items 61 to 64 as “travel expenses” under a sub-heading reading “To disbursements”. The four items were in chronological order, referred to four different medical practitioners, and totalled $551. Item 61 may be taken as typical. It reads:
“61. 19/1/98 - P. Scott
Ellerslie to Melbourne and return
480 km @ 50c/km $240.00.”
The dates, destinations, distances and money amounts differed in each item. The latest date was 3 July 1998. By these items in the bill the plaintiff was claiming a total of $551 for the “travelling expenses” of her attending four medico-legal examinations arranged on her behalf by her solicitors. The calculation of the claimed expenses, as particularised in the items, involved multiplication of the total of the kilometres travelled in the round trip between the plaintiff’s residence and the doctors’ respective rooms by a rate of 50 cents a kilometre, which, the County Court judge said, was “the public service rate”. It seems that his Honour was told, and it may be assumed for present purposes, that the plaintiff used her own car in travelling to and from the four doctors. By its notice of objections dated 26 July 2002, the defendant objected to items 61-64 as follows:
“Not recoverable as a party and party disbursement. Production of accounts and receipts for payment is required. Alternatively not costs incurred in this action. Alternatively not costs incurred entirely for the purpose of this action.”
A taxation of the bill of costs ultimately took place before the Taxing Registrar (“the Registrar”) on 7 August 2002. On the taxation, he disallowed the defendant’s objection to items 61-64 and allowed those items, albeit not as party and party disbursements but as “party and party costs”. By order made pursuant to r.63A.56 of Ch.I of the County Court Rules, the Registrar taxed and allowed the costs in the sum of $5,067.28. In answer to a later request made by the defendant in accordance with r.63A.57(6), the Registrar gave written reasons for his decision in connection with the disputed items. In them he expressed the view that it was logical that the principle embodied in r.33.05, which relates to examination of a plaintiff at the request of the defendant, as I shall discuss later, should apply when the plaintiff attends his own examination. He acknowledged that there was no allowance in the scale of costs in Appendix A of the County Court Rules, but believed it was at his discretion and was a necessary and proper expense for the attainment of justice.
The defendant subsequently gave notice, pursuant to r. 63A.57, of application to review the order of the Registrar disallowing its objection to items 61-64. In the notice, which was filed on 21 August 2002, the defendant particularised the grounds of its objection, in accordance with r. 63A.57(4), as follows:
“Objection is made to the allowance of the items, being the notional travelling expenses of the plaintiff attending medical examinations arranged on her behalf by her solicitors.
(i)The items in their nature are not allowable as party and party costs.
(ii)The items are not allowable in accordance with the scale of costs set out in Appendix A to the County Court Rules of Procedure in Civil Proceedings 1999.
(iii)The items, though claimed as disbursements, do not constitute or represent a sum of money paid or payable by the plaintiff (or on her behalf) to another.”
Those particulars are different from, and somewhat narrower than, the defendant’s original objections.
The review was heard by the County Court Practice Court judge on 26 September 2002. His Honour delivered judgment in writing on 22 October. He ordered that the application be dismissed, effectively disallowing the defendant’s objection to the disputed items. In his reasons, after a review of certain rules and cases, he upheld items 61-64 as falling under “the umbrella of professional legal services as part of the necessary preparation of the case”. True it was that the plaintiff had not paid the amounts claimed, but the taxing officer had exercised his discretion in allowing a rate of 50 cents per kilometre for the plaintiff’s travel in her own car and there was no point in remitting that question to the Registrar.
On 4 November 2002 the defendant gave notice of its intention to appeal from his Honour’s decision in accordance with s.52 of the Accident Compensation Act, and, having obtained the leave of the Court of Appeal on 6 December 2002, does now appeal by notice of appeal dated 18 December 2002. Section 52 of the Accident Compensation Act applies because the plaintiff’s proceeding had invoked the County Court’s exclusive jurisdiction conferred by s.39(1)(a). Accordingly, s.74 of the County Court Act 1958 was excluded by s.52(9) of the Accident Compensation Act. The grounds of appeal in the two last mentioned notices are the same as the grounds of objection set out earlier from the notice of application to review the Registrar’s order, with the additions that his Honour erred in law in holding that the items were recoverable as party and party costs or disbursements, and in holding that they fell under the umbrella of professional legal services as part of the necessary preparation of the case. Although the notice of appeal does not, as required by r.4.17(b)(iv) of Ch.II of the Rules of the Supreme Court, vouchsafe a statement of the questions of law on which, under s.52 abovementioned, the appeal is brought, it is tolerably clear that the appeal is on questions of law, to which indeed such an appeal is limited by that section.
The discretionary power to award costs in a proceeding, which was invoked by the consent order of 7 October 1999, is conferred on the County Court by s.78A of the County Court Act 1958, and s.78(1)(a) of the same Act confers power on the judges of that court to make rules regulating any matter relating to costs of proceedings in the court. Order 63A of Ch.I of the County Court Rules is the principal exercise of that power. By r.63A.01(3), that Order applies, so far as material, to costs payable or to be taxed under the Rules or any order of the County Court. In the Order, the word “costs”, by r.63A.01(1), includes disbursements. Rule 63A.34(1)(a)(i) provides:
“Subject to the provisions of these Rules, all costs taxed by the Registrar shall be taxed as follows -
(i)as to all business done on or after the commencement of these Rules, according to the Scale of Costs contained in Appendix A as in force at the time the costs were incurred.”
The plaintiff relied in this appeal, and before the judge, on one or other of two rules of general application. First, r.63A.29, which is to be found in Part 3 of the Order headed “Costs of party in a proceeding”, provides:
“On a taxation on a party and party basis all costs necessary or proper for the attainment of justice or for enforcing or defending the rights of the party whose costs are being taxed shall be allowed.”
Secondly, r.63A.69, which is found in Part 7 of the Order headed “Allowances on taxation generally”, provides:
“All costs shall be allowed as are necessary or proper for the attainment of justice or for enforcing or defending the rights of any party.”
The defendant contends that the Practice Court judge erred in principle in upholding the Registrar’s decision to allow items 61-64 at all. The question thus raised, which is one of law, is as to the Registrar’s powers, which in turn depends on the proper construction of the Rules and in particular Order 63A.
In my opinion, the defendant succeeds in its contention. A party’s actual travel expenses, save in the capacity of a witness, are not claimable as party and party costs. That is all the more so with a party’s notional travel expenses. The reason is that the “costs” provided for in the Rules, and in particular in r.63A.29 and r.63A.69, which pivot on the word “costs”, are confined to money paid or liabilities incurred for professional legal services. They are reimbursement for work done or expenses incurred by a practitioner or a practitioner’s employee. They are awarded by way of partial indemnity for professional legal costs actually incurred in the conduct of litigation and were never intended to be comprehensive compensation for any loss suffered by a litigant, including loss suffered in preparation of a case. All this is explained in the majority judgment in Cachia v. Hanes[1]. Although that case concerned the claim of a litigant in person, their Honours made it clear[2] that the principles summarised above applied to a represented litigant such as the plaintiff here. See also Kowal v. Zoccoli[3]. Specifically, in Cachia[4] the majority justices held that out of pocket travelling expenses associated with the preparation of the case of a litigant, whether legally represented or unrepresented, were not allowable as party and party costs. Sholl, J. had earlier held of a represented party that she was not entitled to her travelling expenses except in the capacity of a witness, actual or potential: Russo v. Russo[5]. Indeed, more than three centuries before that, Sir Edward Coke had stated that the costs that might be awarded to a litigant did not extend “to the costs and expences of his travell and losse of time”[6]. Contrary to the plaintiff’s submission, that passage has not been overtaken by time: it was cited with approval in Cachia[7].
[1](1994) 179 C.L.R. 403 esp. at 409, 410 and 414.
[2]At 414-5.
[3][2002] VSCA 100 at [7], [8] and [10].
[4]At 408, 411 and 417.
[5][1953] V.L.R.57 at 67.
[6]Coke, Second Part of the Institutes of the Laws of England (1797 edn), 288..
[7]At 411.
In this case it may be accepted for present purposes, and Mr Ruskin for the defendant did not dispute, that it was necessary or proper for the plaintiff to attend upon the doctors in question for the preparation of her case, to do so at the places where she in fact attended, and to go there and back by car. But she did not attend court as a witness, actual or potential, for her proceeding was compromised early, nor was a sum “actually paid” within the portion of Appendix A relating to witnesses. So the claimed items cannot be sustained as witness expenses. Further, although the solicitors would seem entitled to charge for arranging appointments with the doctors, the amounts claimed in the disputed items are not amounts paid or incurred for legal services. Rather, they relate to the preparation of the plaintiff’s then intended case. His Honour’s conclusion that the sums claimed were travelling expenses falling under the umbrella of professional legal services as part of the necessary preparation of the case, and allowable as such, seems, in my respectful opinion, to fly in the face of the majority judgment in Cachia, of which his reasons show he was aware.
The challenged items were claimed in the bill of costs as “disbursements” and it is therefore necessary to determine whether they can be justified under that branch of the concept of costs. It is sufficient to say, however, that, disregarding what has already been said, a “disbursement” in this area of discourse is “money which [the party] has actually had to pay out to other people” (Buckland v. Watts[8]), whereas here the amounts claimed were not paid to anyone, but represent, as already mentioned, notional expenses of the plaintiff (and probably even a non-expense portion in the form of depreciation) in using her car. Such amounts could not satisfy even the expansive r.63A.43, which permits a disbursement, though not paid at the time the bill was prepared, to be allowed if paid before taxation, or if a satisfactory undertaking to pay it within a specified time is given to the court. It may well also be that, even if an actual payment had been proved, it would not qualify by reason of not being what might be called a professional service disbursement.
[8][1970] 1 Q.B. 27 at 37.
The plaintiff also sought to uphold the judge’s decision on two specific, though subsidiary, rules. On one of them the judge expressly refrained from relying, and the other he did not mention, so that strictly a notice of contention to advance the arguments was required, but I would dispense the plaintiff from complying with that requirement. The first such rule is r.63A.77, which provides:
“(1) Reasonable charges and expenses properly incurred in procuring evidence, and the attendance of witnesses, shall be allowed.
(2) For the purpose of paragraph (1) the attendance of a witness includes attendance at a conference with counsel before trial, and in the case of an expert witness, includes qualifying to give evidence as an expert.”
It was submitted for the plaintiff that her attendances upon the four doctors were necessary to qualify them. The Court heard a wide-ranging argument as to the meaning and operation of this rule, and especially paragraph (2) of it, in which Mr Tobin for the plaintiff accepted that “charges and expenses” in the rule had to be “costs” within r.63A.69, that is, that the latter rule was the leading provision of Part 7 and r.63A.77 was an elaboration of it. It is unnecessary for me to explore other possible constructional difficulties in the way of the plaintiff’s reliance on r.63A.77, as a sufficient answer to the plaintiff’s submission is that, in travelling to attend the doctors, no “charge” or “expense” was “incurred”, that is, run into or encountered. (Compare Nilsen Development Laboratories Pty Ltd v. Federal Commissioner of Taxation[9].) The real point to be made about r.63A.77 is that it covers the field of allowable expenses for procuring evidence, and the plaintiff’s claim is outside that field.
[9](1987) 144 C.L.R. 616.
Secondly, reliance was placed on r.33.05. It provides:
“(1) The costs of and incidental to the examination shall be costs in the proceeding.
(2) Without limiting paragraph (1), the defendant shall, on request by the plaintiff whether before or after the plaintiff is examined, pay to the plaintiff a reasonable sum to meet his travelling and other expenses of and incidental to the examination.”
It was initially submitted that there was no reason to read paragraph (1) as limited to an examination commissioned by the defendant. But there is; for “the examination” in that paragraph is one for which r.33.04(1) makes provision. It reads:
“(1) The defendant may request the plaintiff in writing to submit to appropriate examinations by a medical expert or experts at specified times and places.”
Quite apart from that, the suggested reading of r.33.05 leads to a quite inappropriate entitlement in a plaintiff to request advance payment by the defendant for the plaintiff’s expenses of attending her own doctor. For its part, the defendant relied on the rule for an expressio unius argument. It is unnecessary to consider that argument. But at any rate it can be said that it is not possible to proceed by analogy from r.33.05 as the Registrar did. I would also add that r.33.05, which is later in origin than the progenitors of Order 63A and was made for a very special purpose, cannot be used to extend the meaning of “costs” in Order 63A.
I record that no point was made of the fact that the travelling predated the litigation.
For the foregoing reasons, I would allow the appeal and set aside the order below. The judge was empowered by r.63A.57(9) to -
“(a)exercise all the powers and discretions of the Registrar with respect to the subject matter of the review;
(b)set aside or vary the order of the Registrar;
(c) remit any item in the bill to the Registrar;
(d) make such other order as the case requires”;
and this Court’s powers on appeal are to be found in s.51 of the Accident Compensation Act. The appropriate order to have been made by the judge and now to be substituted by this Court is that the application for review be allowed, that items 61-64 inclusive in the plaintiff’s bill of costs be wholly disallowed, and that the Registrar’s order made on 7 August 2002 be varied by substituting the sum of $4,516.28 for the sum of $5,067.28 as the sum at which the plaintiff’s costs are taxed and allowed.
Mr Ruskin, in view of the small amount but important principle from his client’s point of view (though not the plaintiff’s) at issue in this case, and on instructions, accepted that the burden of costs in the County Court before the judge and the Registrar should not be disturbed and that the appellant should pay the costs of the appeal.
WINNEKE, P.:
For the reasons given by Batt, J.A., I agree that the appeal should be allowed. I also note that, because this litigation has been conducted over a significant period but in respect of an insignificant sum of money, it would have been unfair to make the respondent bear the expense of that litigation, the purpose of which is of interest only to the appellant. Accordingly, the appellant has very fairly agreed to bear the respondent’s costs of the proceedings and that agreement is to be reflected in the orders which this Court will make.
PHILLIPS, J.A.:
I, too, agree.
WINNEKE, P.:
The formal orders of the Court are as follows:
1. The appeal is allowed.
2.Set aside the order made by his Honour Judge F.B. Lewis in the County Court on 22 October 2002 and in lieu thereof order that:-
(a)the application for review made by the defendant by notice filed
21 August 2002 be allowed;
(b)items 61-64 inclusive (totalling $551) in the plaintiff’s bill of costs taxed by the Taxing Registrar on 7 August 2002 be wholly disallowed and the order of the Taxing Registrar made on 7 August 2002 be varied by substituting the sum of $4,516.28 for the sum of $5,067.28; and
(c)by consent the defendant pay the plaintiff’s costs of the application fixed at $1,330.
3.By consent the appellant pay the respondent’s costs of the appeal, which will include the costs of the application for leave granted on 6 December 2002.
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