City of Belmont v Saldanha [No 2]
[2018] WASC 278
•6 SEPTEMBER 2018
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: CITY OF BELMONT -v- SALDANHA [NO 2] [2018] WASC 278
CORAM: VAUGHAN J
HEARD: ON THE PAPERS
DELIVERED : 6 SEPTEMBER 2018
FILE NO/S: CIV 2755 of 2014
BETWEEN: CITY OF BELMONT
Plaintiff
AND
MARINA ANN ELIZABETH SALDANHA
SEAN JEREMIAH CHIA
First Defendants
REGISTRAR OF TITLES
Second Defendant
Catchwords:
Costs - Review of taxation - Turns on own facts
Legislation:
Rules of the Supreme Court 1971 (WA), O 66 r 53, O 66 r 54, O 66 r 55, O 66 r 56
Result:
Application dismissed
Category: B
Representation:
Counsel:
| Plaintiff | : | No appearance |
| First Defendants | : | No appearance |
| Second Defendant | : | No appearance |
Solicitors:
| Plaintiff | : | McLeods |
| First Defendants | : | In person |
| Second Defendant | : | No appearance |
Case(s) referred to in decision(s):
Australian Coal & Shale Employees' Federation v The Commonwealth [1953] HCA 25; (1953) 94 CLR 621
City of Belmont v Saldanha [2016] WASC 37
Forbes v Frigger [2009] WASC 77
Miller v Taylor [2018] WASC 75
Mossensons v Coastline Associates (Unreported, WASC, Library No 970661, 2 December 1997)
Rankilor v Circuit Travel Pty Ltd [2012] WASCA 155
Re Gibson's Settlement Trusts; Mellors v Gibson [1981] Ch 179
Saldanha v City of Belmont [2018] HCASL 228
Saldanha v City of Belmont [2018] WASCA 7
Sheehan v Corr [2015] IEHC 99
Sheehan v Corr [2017] IESC 44
Soia v Bennett [2014] WASCA 204
The Australasian Lawyers Group Pty Ltd t/as Butlers Barristers & Solicitors v Morgan [2018] WASC 69
Titan v Babic [1995] FCA 1591
W & A Gilbey Ltd v Continental Liqueurs Pty Ltd [1964] NSWR 527
WJ Green & Co (1984) Pty Ltd v Tace Pty Ltd [No 4] [2010] WASC 363
ZGTeek v Michael Lurie & Associates [2012] WASC 419
VAUGHAN J:
Overview
The first defendants[1] have applied for various relief following taxation of a bill of costs by a registrar acting as a taxing officer. The parties have agreed that the application is to be determined on the papers. These are my reasons for determination on the application.
There were two parts to the application.
First, the defendants sought a review in relation to the taxation pursuant to O 66 r 55 of the Rules of the Supreme Court 1971 (WA). As to the review, I do not consider the taxing officer made any error in principle. Accordingly, that part of the application must fail.
Second, the defendants sought a stay of enforcement proceedings in relation to the taxed amount pending a decision by the High Court of Australia on a special leave application. As will be seen, that part of the application has fallen away. Accordingly, that part of the application also fails.
[1] I will otherwise refer to the first defendants as the 'defendants'. The second defendant, the Registrar of Titles, took no part in the proceedings before me.
Background facts
The action between the parties was tried before Allanson J over three days in November 2015 (although it appears that the third day occupied only one hour of court time).[2] His Honour delivered reasons on 11 February 2016.[3] The plaintiff succeeded in the action. Costs orders were made in its favour. The defendants were ordered to pay the plaintiff's costs of the action, including reserved costs, to be taxed if not agreed. However, the costs were not to include the plaintiff's costs of its action under s 129C(1) of the Transfer of Land Act 1893 (WA).
[2] ts 288.
[3] City of Belmont v Saldanha [2016] WASC 37.
An appeal by the defendants was unsuccessful.[4] The defendants then sought special leave to appeal in the High Court of Australia.
[4] Saldanha v City of Belmont [2018] WASCA 7.
In the meantime, on 26 August 2016, the plaintiff filed a bill of costs. The bill sought $159,386.90. The bill was not taxed until 18 April 2018. At the taxation hearing, and before the allocator was signed, the registrar made orders providing for programming directions should any party object and seek review under O 66 r 53 and r 54 of the Rules of the Supreme Court 1971 (WA).[5] The registrar also provided the defendants, as self-represented litigants, with a succinct summary of the type of matter that might constitute an error in principle which could found an objection and review.[6]
Both parties filed objections pursuant to O 66 r 53. The defendants' objections were dated 2 May 2018. The registrar sought the parties' submissions on one aspect of the objections and then conducted the reviews under O 66 r 54 on the papers.
On 15 May 2018 the registrar delivered written reasons following her review. The registrar determined that no error of principle was disclosed on either party's request for a review. Accordingly, the amount as taxed stood. The registrar allowed the plaintiff a small additional amount ($484) in respect of dealing with the defendants' application for review. Adding that to the amount otherwise allowed, the registrar assessed the bill of costs in an amount of $102,571.93 and signed the certificate of taxation.
It was in those circumstances that the defendants' present application was filed on 29 May 2018.
The parties agreed that the application should be determined on the papers. Programming orders were made for the filing of submissions and affidavit material (affidavit material being potentially relevant to the stay application). Those steps were completed on 30 July 2018, although subsequent to 30 July 2018 objections to an affidavit were filed without leave.
On 15 August 2018 the High Court of Australia refused the defendants' application for special leave to appeal.[7]
[5] ts 307.
[6] ts 307.
[7] Saldanha v City of Belmont [2018] HCASL 228.
The application to stay enforcement of the costs judgment
The defendants sought an order suspending enforcement of the costs judgment pending determination of their application for special leave to appeal. That part of the application was supported by the affidavits of the first-named defendant affirmed 29 May 2018 and 25 June 2018 together with pars 26 - 29 (and associated attachments) of an affidavit affirmed 30 July 2018.
The application to suspend enforcement has been overtaken by events. The application for special leave to appeal was refused on 15 August 2018. Accordingly, the basis of the application for an order staying enforcement of the costs judgment has fallen away. That part of the application must be dismissed. However, given the manner in which that part of the application has become redundant it is inappropriate that any costs consequences should result from dismissal of the application to suspend enforcement.
For the avoidance of doubt I would have received the affidavit evidence that was relevant to the application to stay enforcement of the costs judgment. However, given the refusal of the special leave application, it is unnecessary to do so.
The application for review of the taxation
The application for review of the taxation was in two parts.
First, the defendants sought a review of the entire taxed amount. It was contended that there should be an 'own costs' order[8] (ie the taxed amount should be reduced to nothing). Alternatively it was contended that the costs should be reduced to $25,000.[9] In each case the reason for the contention was said to be the nature of the matter and the difference in the parties' financial positions. The defendants otherwise made reference to what was contended before the registrar on review and sought to emphasise some additional matters. I will expand on the defendants' contentions in these respects when I address the disposition of the application.
[8] Defendants' Reply Submissions dated 30 July 2018 par 14.
[9] Defendants' Application dated 29 May 2018 par 1(a).
The $25,000 figure was derived from an amount that had apparently been raised by way of settlement at a mediation. (While ordinarily what is said at mediation is confidential and inadmissible, the reference to the offer appears to have been made before the registrar without objection.[10] The amount of the offer was, however, put as being either $50,000 or $ 20,000.)[11]
[10] ts 304.
[11] ts 304.
Second, the defendants sought a review of specific items as allowed: items 5, 10, 26 and 32. To these the defendants added GST and court fees.[12] As to GST, it was said that any GST included in the amounts allowed should be deducted as this would have been claimed back. As to court fees, the defendants requested a refund of the difference between the court fees paid by a corporation and the court fees payable by an individual (the defendants being natural persons).
[12] Defendants' Application dated 29 May 2018 par 1(b) - (g).
The issues as to GST and a refund of court fees were not before the registrar on review. However, the issues as to items 5, 10, 26 and 32 were before the registrar.
There were other matters before the registrar on the defendants' review that were not further agitated in the application for review before me. In particular, in the review before the registrar the defendants also raised objections to items 12, 17, 30, 34 and 48 as taxed. Following the registrar's review each of those items stood as taxed. But the defendants did not seek further review as to those items.
Initially, the defendants did not seek to adduce any affidavit evidence on the application for review of the taxation (as distinct from materials going to the application for an order staying enforcement). It appears that, in so doing, the defendants had in mind the provisions of O 66 r 56 of the Rules of the Supreme Court 1971 (WA):
An application under rule 55 to a judge to review the taxation shall be heard and determined by the judge upon the evidence which has been brought in before the taxing officer, and further evidence shall not be received upon the hearing of the application unless the judge otherwise directs. (emphasis added)
The defendants referred to O 66 r 56 in their reply submissions.[13]
However, despite there being no direction otherwise in terms of O 66 r 56, the plaintiff filed affidavit evidence apparently directed at the application to review the taxation.[14] There were orders that permitted the filing of affidavit material. But that was because it might have been necessary for the plaintiff to respond insofar as the defendants sought a stay of enforcement and had filed an affidavit in support of that aspect of the application. The programming orders could not reasonably be read as providing for leave under O 66 r 56.
The plaintiff having filed such affidavit material, the defendants - not unreasonably - retaliated with affidavit evidence of their own.[15] The defendants noted, however, that approval was necessary for the further evidentiary material to be considered on the review of the taxation. The defendants requested approval if I deemed it appropriate. At the same time the defendants objected to the plaintiff's affidavit material as having been filed without leave and on various other grounds.[16]
In due course the plaintiff also objected to the defendants' affidavit material[17] and the defendants then objected to the plaintiff's objections.[18]
I have reviewed the additional affidavit material. In my view it is not of assistance in determining whether, in the respects contended for by the defendants, the registrar acting as taxing officer made an 'error of principle' as alleged in the application for review. Accordingly, with one exception I do not propose to receive that evidence.
The exception is attachment 'PLW-6' to Mr Wittkuhn's affidavit sworn 29 June 2018. These are copies of emails which were handed to the registrar, and apparently returned, at the taxation on 18 April 2018. I have read the transcript of the hearing of the taxation on 18 April 2018. There is reference to the emails being before the registrar; they were received as Exhibit 1 on the taxation.[19] As the emails were before the registrar I will receive them. Otherwise the portion of the plaintiff's affidavit that deals with the taxation[20] addresses matters that are better considered by reference to the transcript.
The application will be determined on the materials before the registrar; and, in particular, the matters addressed by the registrar in the reasons of 15 May 2018 on the review of the defendants' objections. Otherwise, as I have noted, I have considered the 107 page transcript of the taxation. It is evident from the transcript[21] that a number of affidavits were before the registrar on the taxation.[22] I have also read and taken into account those three short affidavits so far as they are relied on in the defendants' submissions on review.[23]
[13] Defendants' Reply Submissions dated 30 July 2018 par 3.
[14] Affidavit of Peter Lance Wittkuhn sworn 29 June 2018. (Although pars 16 - 18 and the attachments referred to therein are directed to the stay application.)
[15] Affidavit of Marina Saldanha sworn 30 July 2018. (Although pars 26 - 29 and the attachments referred to thein are directed to the stay application.)
[16] Defendants' Objection dated 30 July 2018 to the Plaintiff's Affidavit filed 29 June 2018. See also Defendants' Reply Submissions dated 30 July 2018 par 3.
[17] Plaintiff's solicitors' letter dated 8 August 2018.
[18] First-named defendant's email dated 8 August 2018.
[19] ts 213 - 216.
[20] Affidavit of Peter Lance Wittkuhn sworn 29 June 2018 pars 13 - 15.
[21] ts 205.
[22] Affidavit of Marina Saldanha sworn 1 August 2017; Affidavit of Laurie Kelly sworn 29 June 2017; Affidavit of Laurie Kelly sworn 7 July 2017.
[23] Defendants' Reply Submissions dated 30 July 2018 pars 3, 5, 7.
Principles on application for judicial review as to a taxation
Under s 37 of the Supreme Court Act 1935 (WA), subject to the provisions of the Act and rules of court, the costs of and incidental to all proceedings in this court are in the discretion of the court, having full power to determine by whom and to what extent such costs are to be paid.
Order 66 of the Rules of the Supreme Court 1971 (WA) sets out the applicable rules as to costs. Order 66 r 11(3) clarifies that costs determinations made under the Legal Profession Act 2008 (WA) apply as between party and party. Order 66 r 19 deals with disbursements allowable on taxation. Order 66 r 32 sets out the rules concerning taxation of costs. It provides that where bills of costs are to be taxed, the bill is to be taxed, allowed and certified by the taxing officer. Order 66 r 43 provides that the decision of the taxing officer on all questions of fact is final. Order 66 also includes various other rules concerning taxation of costs including how a bill is to be prepared (r 42) and the powers of a taxing officer (r 44).
Under O 66 r 53 a party who contends that the taxing officer has made an error in principle in allowing or disallowing any item or part of an item in a bill of costs may apply to the taxing officer for a review of the taxation. The party must make a written objection specifying the items or parts of items objected to and the grounds and reasons for the objections. Order 66 r 54 requires the taxing officer to then reconsider and review his or her taxation in relation to the objections; and, if so required, state the ground and reason of his or her decision on the objections.
The taxing officer's reasons need not be lengthy and detailed expositions. But they must fairly reveal the process of reasoning whereby the objection was allowed or disallowed together with, where necessary, the matters that were taken into account or disregarded in the process.[24] The necessity for adequate reasons is obvious. The effectiveness of the review process depends on the sufficiency of the reasons given.[25]
[24] Re Gibson's Settlement Trusts; Mellors v Gibson [1981] Ch 179, 192.
[25] Titan v Babic [1995] FCA 1591 [41]; The Australasian Lawyers Group Pty Ltd t/as Butlers Barristers & Solicitors v Morgan [2018] WASC 69 [53].
I should immediately record that the defendants did not challenge the adequacy of the registrar's reasons. The registrar gave succinct reasons for the objection determination. The registrar's reasons squarely addressed, in a seriatum fashion, the various contentions made in the defendants' objections. I am able to identify the registrar's process of reasoning and the matters that were, and were not, taken into account. So too were the defendants. At various points in the defendants' materials on the review before me the defendants identify alleged errors said to be evident in the registrar's review reasons.[26]
[26] Defendants' Application dated 29 May 2018 p 3 -7 (general review), p 7 (item 5), p 7 (item 26) and p 8 (item 32); Defendants' Reply Submissions dated 30 July 2018 pars 4, 5.
If a party is dissatisfied with the certificate of the taxing officer upon review, by O 66 r 55 the party may apply to a judge in chambers for an order to review the taxation as to particular items or parts of items. On an application under O 66 r 55 only items covered by the objections carried in before the initial review by the taxing officer may be considered.[27] In that way the making of an objection under r 53 is the foundation for the existence of a judge's power under r 55; if there is no objection to an item or part of an item under r 53 there can be no application under r 55.[28] The certificate of the taxing officer is otherwise final and conclusive as to all matters which have not been objected to in accordance with the rules (O 66 r 55(3)).
[27] Australian Coal & Shale Employees' Federation v The Commonwealth [1953] HCA 25; (1953) 94 CLR 621, 625 - 626; Rankilor v Circuit Travel Pty Ltd [2012] WASCA 155 [74].
[28] Soia v Bennett [2014] WASCA 204 [17].
Under O 66 r 55(2) the judge, if of the opinion that the taxing officer has made an 'error in principle', may make any order to rectify the error that he or she thinks just.
The applicant for review (here the defendants) bears the onus of satisfying the court that the decision reached by the taxing officer is wrong.[29] For a decision to be 'wrong' it must be shown that there is an error in principle.
[29] Australian Coal & Shale Employees' Federation v The Commonwealth (627).
The review of a taxing officer's decision attracts the usual principles that apply where appellate jurisdiction is exercised in respect of decisions involving a discretionary judgment. There is a strong presumption in favour of the correctness of the decision. The decision will be affirmed unless the court is satisfied that it is clearly wrong.[30]
Errors in principle may be made both in determining whether an item should be allowed and in determining the amount that should be allowed for an item.[31] However, it is unusual for an error in principle to be made as to quantum. An 'error in principle' on such a basis can only be established if it is shown that no taxing officer, acting reasonably, could ever have taxed the item at that amount.[32] The amount allowed must be so extraordinary as to be demonstrable of an error in principle.[33] Thus, a decision of a taxing officer as to quantum is generally final except in an exceptional case.[34]
This is the position because a taxing officer has a wide discretion. A judge will not usually be as familiar with the taxing process as a taxing officer and therefore will not be as competent to say what is the proper amount to be allowed.[35] As Kenneth Martin J has recognised:
… taxing officers hold expertise in taxations about costs determinations. They deal in the day-to-day nitty-gritty of assessing the costs in litigation, by reference to scales and allowances at a level of detail that judges do not. That is one reason why any further review opportunity window that is allowed under O 66 r 55 to a judge is an extremely limited one.[36]
There is an error in principle where a taxing officer acts on a wrong principle. The court will review the decision for the purpose of determining the principle that should be applied.[37]
An error in principle may be inferred from a decision of the taxing officer if it appears that the taxing officer's discretion has not been exercised at all or has been exercised in a manner that is manifestly wrong.[38] It may be that the exact nature of the error is not discoverable; if so, it is sufficient that the result is so unreasonable or plainly unjust that the court may infer that there has been a failure to properly exercise the taxing officer's discretion.[39]
There may also be an error in principle in giving weight to extraneous or irrelevant matters or in failing to give weight or sufficient weight to relevant considerations.[40] There is also an obiter suggestion in Australian Coal & Shale Employees' Federation v The Commonwealth to the effect that there might be an error in principle in making a mistake as to the facts.[41] No such error of principle is asserted in the defendants' application for review. Accordingly, it is unnecessary to determine whether a mistake as to the facts may constitute an error in principle. It suffices to observe that there may be a difficulty in such an argument so far as O 66 r 43 provides that the taxing officer's decision on all questions of fact is final.
[30] Australian Coal & Shale Employees' Federation v The Commonwealth (627).
[31] Australian Coal & Shale Employees' Federation v The Commonwealth (628); Rankilor v Circuit Travel Pty Ltd [76].
[32] Rankilor v Circuit Travel Pty Ltd [78]; ZGTeek v Michael Lurie & Associates [2012] WASC 419 [54]; Mossensons v Coastline Associates (Unreported, WASC, Library No 970661, 2 December 1997) 9 - 10.
[33] ZGTeek v Michael Lurie & Associates [52].
[34] Australian Coal & Shale Employees' Federation v The Commonwealth (628).
[35] Forbes v Frigger [2009] WASC 77 [38].
[36] WJ Green & Co (1984) Pty Ltd v Tace Pty Ltd [No 4] [2010] WASC 363 [23].
[37] Australian Coal & Shale Employees' Federation v The Commonwealth (627), (628).
[38] Australian Coal & Shale Employees' Federation v The Commonwealth (628 - 629); Rankilor v Circuit Travel Pty Ltd [77].
[39] Australian Coal & Shale Employees' Federation v The Commonwealth (627).
[40] Australian Coal & Shale Employees' Federation v The Commonwealth (627).
[41] Australian Coal & Shale Employees' Federation v The Commonwealth (627).
Disposition
The defendants' application under O 66 r 55, like the objection before the registrar, was in two discrete parts. The first part was referred to as a 'global' review[42] and addressed the totality of the bill of costs and the amount allowed. The second part was as to specific items. It is convenient to consider the application before me in the same manner.
[42] Defendants' Reply Submissions dated 30 July 2018 par 2.
General review
There are two immediate problems with the global review sought as to the entire taxed amount.
First, a general review is unavailable. The Rulesof the Supreme Court 1971 (WA) contemplate that the objection and review before the registrar is as to particular items and parts of items in the bill of costs (O 66 r 53(1)). So too the further review by a judge is as to particular items or parts of an item - with the added requirement that the item or part of an item for review before the judge must also have been objected to under r 53 (O 66 r 55(1)).
There may be a rare case where each item is objected to. For example, it may be contended that the taxing officer adopted an erroneous approach which affected the whole of the assessment.[43] But that is not the case here. Indeed, at the hearing of the taxation there were numerous items that were essentially unopposed or where the plaintiff accepted the amount the defendants were prepared to concede.[44] In the context of the matter before me a global review is one that seeks to disturb items which were not objected to - or indeed were accepted - before the registrar. That is not permitted under O 66 r 55.
[43] See eg The Australasian Lawyers Group Pty Ltd t/as Butlers Barristers & Solicitors v Morgan [74] ‑ [78].
[44] The transcript of the taxation suggests that there was no opposition, or alternatively agreement, to items including item 1 (ts 208), item 2 (ts 210), item 8 (ts 246 - 247), item 18 (ts 266), item 24 (ts 272), item 25 (ts 272) and item 29 (ts 281). There was also no real opposition to various disbursements as charged.
Second, it is evident that what the defendants seek is not truly a review of the taxation as to the amounts allowed on an item or part of an item. Instead the defendants seek to challenge the costs order made by Allanson J as trial judge with a view to an alternate costs order ‑ either an 'own costs' type order or a lump sum costs order in a relatively low amount.
That appears clearly from what is stated at page 5 of the defendants' application dated 29 May 2018:
Being self-represented, the Defendants were not aware that they could make a request/submission to the learned trial judge, when the Decision was handed down, to apply a wide discretion regarding costs as allowed by the Act/Rules because the:
(a)proceedings raise an issue of general importance;
(b)the Plaintiff has substantially greater financial resources than the Defendants.
The Defendants request the learned Judge to apply a wider discretion than the learned Registrar did regarding costs and reduce the taxed costs to a token amount.
A similar entreaty was made to the registrar in the defendants' objections and request to review the taxation dated 2 May 2018. There the defendants expressly sought that the court make an 'own cost [sic] order as allowed by the Act/Rules' because of those two matters (page 4). The plea is then repeated in the defendants' reply submissions dated 30 July 2018 (page 4).
It appears that the defendants have in mind O 66 r 25 of the Rules of the Supreme Court 1971 (WA). I infer as much given that the language employed by the defendants echoes that in O 66 r 25(2)(a) and (b). The defendants' reliance on that rule in the present context is misconceived. First, these proceedings did not involve a claim within the scope of O 66 r 25; there was no 'claim' within O 66 r 25(1). Second, the task before me concerns a review of the taxation. The taxation has been conducted in accordance with the costs orders made following trial. This review of the taxation is not the occasion to revisit the costs orders made by Allanson J as trial judge.
Similar sorts of arguments, raising matters concerning s 129C(8) of the Transfer of Land Act 1893 (WA), O 1 r 4B(e) and (f) of the Rules of the Supreme Court 1971 (WA) and PD 4.1.2 (pars 8, 11, 16, 17 and 18) of the Consolidated Practice Directions, were advanced in the objections and review before the registrar.[45] That was noted in the application before me,[46] but not apparently advanced as demonstrating any independent error in principle. I was requested to conduct a review 'limited to [the registrar's] findings' on the review request.[47] That is what I intend to do. But, in any case, so far as those matters were referred to, they do not permit me on a review under O 66 r 55 to set aside the costs order made by the trial judge and substitute a different order as the defendants now wish.
[45] Defendants' Objections and Request to Review the Taxation dated 2 May 2018 p 2 - 3.
[46] Defendants' Application dated 29 May 2018 p 3.
[47] Defendants' Application dated 29 May 2018 par 1. See also p 3 where the application is described as being for review of specified 'findings/decisions' of the registrar.
Accordingly, the general review sought as to the entire taxed amount is misplaced. It is not open under O 66 r 55 for the two reasons I have explained.
Ignoring those two difficulties, had a 'global' or 'general' review been available the matters that the defendants sought to raise do not, in my view, amount to any error in principle on the part of the registrar as taxing officer.
The defendants requested that there be review of three aspects of the registrar's findings on the O 66 r 54 review:[48]
[48] Defendants' Application dated 29 May 2018 p 3 - 7.
•The finding that certain costs principles applicable in the Federal Court of Australia have no application in this court.[49]
[49] Registrar's Reasons dated 15 May 2018 p 4.
•The finding that there was no error in principle in proceeding with the taxation hearing despite the filing of the defendants' application for special leave to appeal.[50]
[50] Registrar's Reasons dated 15 May 2018 p 4 (par 2).
•The finding that there was no error in principle in failing to take account of a downturn in the economy and a fall in house prices.[51]
[51] Registrar's Reasons dated 15 May 2018 p 4 (par 3).
Although the application commenced by seeking a review of the second matter, the defendants' application dated 29 May 2018 went on to state that the defendants did not claim an error in principle regarding this point.[52] It appears, instead, that this matter was raised in the context of the application to stay enforcement of the costs judgment. As that part of the application has fallen away the second matter need not be further considered.
[52] Defendants' Application dated 29 May 2018 p 6.
The third matter may be disposed of simply. Relying on an Irish case, Sheehan v Corr,[53] the defendants contended there was authority that a downturn in the economy could be considered in a taxation and the registrar had made an error in principle in not doing so. The defendants' endeavour in locating this decision is commendable. However, that case concerned a different jurisdiction where costs assessment could involve, and in that case did involve, comparators, ie the costs allowed in comparable cases. Given a downturn in the economy it was said that historic comparators will be of limited value (the applicable fees for professional services having reduced due to economic conditions).
[53] Sheehan v Corr [2015] IEHC 99. A final appeal from that decision has now been determined: Sheehan v Corr [2017] IESC 44. As to that appeal see [114] - [116] as to the taking into account of economic conditions.
The authority is of no value as a precedent in Western Australia where the applicable rates and allowances are established by costs determination made by the Legal Costs Committee under the Legal Profession Act 2008 (WA). In this State the taxing officers do not have regard to 'comparators' in the same way as appears to be the position in Ireland. There is no obligation, in conducting a taxation, for the taxing officer to have regard to any downturn in the economy. The registrar committed no error in principle in omitting to do so.
As to the defendants' first complaint as to the registrar's findings on the 'general' review matters, in the defendants' objections and request to review the taxation dated 2 May 2018 reference is made to the Costs Practice Note (GPN-Costs) as published by the Federal Court of Australia. In particular the defendants requested that the registrar review the taxed amount in the context of:
General Costs Principles
3.13 The purpose of a costs order is to compensate a successful party rather than punish an unsuccessful party. However, the Court will consider the appropriateness of the making of a special costs order in circumstances which may warrant it, including where parties have failed to comply with their pre-litigation 'genuine steps' obligations, where the 'overarching purpose' duty has not been met, where parties engage in an abuse of process, raise unmeritorious arguments before the Court or otherwise conduct themselves inappropriately in the litigation.
3.14 A party should never embark on a costs-related process within this Court as a strategic device to gain advantage in the litigation, such as to delay the litigation process.
3.15 Parties should be realistic in their claims for costs and not seek to misuse or misapply the Federal Court Scale of Costs (Scale). It is inappropriate to make a claim which contains unrealistic, unmeritorious or ambit claims.
3.16 Equally, a party should never seek to obtain a windfall from any costs process. A fundamental principle of the law relating to costs is that the amount of costs recovered by a party in whose favour the costs order is made must not exceed the amount of costs for which the Costs Applicant is liable (otherwise generally known as the 'indemnity principle'). To this end, a lawyer or costs consultant (with a practicing certificate) must verify, among other things, the accuracy of the claim for costs and compliance with the indemnity principle. If the Costs Applicant is unrepresented, the Costs Applicant must make the verification (contained in the example bill of costs on the Court's website).
3.17 Subject to any special costs-related order that may be made by the Court (such as one involving costs arising from multiple related proceedings), parties should not make claims for costs that are unconnected or tenuously connected to the subject matter and conduct of the litigation or the ambit of the costs order. (citations omitted)
In the same way the defendants also relied on O 1 r 4B(e) and (f) of the Rules of the Supreme Court 1971 (WA) and par 8 of PD 4.1.2 of the Consolidated Practice Directions.[54] As already mentioned, the defendants' application before me does not expressly challenge the registrar's findings on those matters. Rather what is sought is review of the registrar's finding that the Federal Court's costs principles have no application in this court.
[54] Defendants' objections and request to review the taxation dated 2 May 2018 p 2 - 3.
The registrar was unquestionably correct to state that the Federal Court's general costs principles as evinced in its Costs Practice Note (GPN-Costs) have no application in this court. This court is not bound by a practice direction issued by the Federal Court; and nor do this court's Consolidated Practice Directions bind the Federal Court. The finding of the registrar does not constitute an error of principle.
It should, however, be acknowledged that this court's practice as to costs is informed by the same principles as ground pars 3.13 - 3.17 of the Federal Court's Costs Practice Note (GPN-Costs).
That said, I am unable to identify how any of the paragraphs relied on by the defendants could infect the registrar's determination in allowing at taxation any item or part of an item in the plaintiff's bill of costs, let alone infect the whole of the amount taxed. Paragraph 3.13 is concerned with the costs orders that a court may make rather than proper allowances on taxation. Paragraph 3.16 is concerned with the indemnity principle. There is no suggestion in the evidence that this has been infringed. Paragraphs 3.14, 3.15 and 3.17 are concerned with the conduct of parties in relation to costs rather than the court's approach to determination of the appropriate allowance on taxation.
Accordingly, to the extent that pars 3.13 - 3.17 of the Federal Court's Costs Practice Note (GPN-Costs) are mirrored in this court's practice as to costs, there was no error in principle in the registrar's approach to determination of the appropriate allowances on taxation.
In her reasons on the review determination the registrar specifically addressed the principle that had been applied on the taxation. It was said that the allowances 'were determined on the principle of what was reasonable, in the circumstances of the subject litigation, for the paying party to pay under the relevant costs order'.[55] On a review of the transcript of the hearing of the taxation that was the approach that the registrar undertook.[56] The registrar also referred to the principle of proportionality.[57] In that regard I reject the defendants' submission that the principle of proportionality was not applied to the costs determination.[58]
[55] Registrar's Reasons dated 15 May 2018 p 4 (par 1).
[56] See eg ts 213, 244, 251 - 252, 255 - 256, 265, 272, 276 - 277, 281, 282, 287 - 288, 300.
[57] ts 277.
[58] Cf Defendants' Application dated 29 May 2018 p 3.
The registrar's approach to the determination of allowances for the various items was conventional and in accordance with well-established principles. As was stated in W & A Gilbey Ltd v Continental Liqueurs Pty Ltd:
… a taxing officer in a party and party taxation should allow a successful litigant, in whose favour an order for costs has been made, a just and reasonable amount in respect of each item claimed in such litigant's bill of costs where such item was, in fact, incurred on behalf of the litigant by his solicitor in respect of some step or matter in the litigation which either (1) was necessarily taken or performed for the attainment of justice or the maintaining or defending of the litigant's rights in the circumstances of the particular case, or, (2) although not necessarily taken or performed for such purposes, would reasonably have been taken or performed for any of those purposes by a solicitor acting at the time when it was taken or performed without extravagance in conformity with the then situation of the case and not in conflict with the statutes and rules, the practice of the court, and the usages of the legal profession appertaining to such a case. [59]
[59] W & A Gilbey Ltd v Continental Liqueurs Pty Ltd [1964] NSWR 527, 534. The passage is now reproduced in M Gething et al, Civil Procedure: Western Australia [66.11.1].
I am satisfied that the general approach to the taxation by the registrar did not evince any error in principle. To the contrary, the registrar assessed what amount was just and reasonable, forming a considered view on what work was properly undertaken by the plaintiff's solicitors, but not permitting extravagance. As to the latter, the registrar, with respect correctly, reminded herself that a 'Rolls‑Royce' service was not something that it was reasonable for the defendants to have to pay on a party and party basis.[60]
[60] ts 287. See also Registrar's Reasons dated 15 May 2018 p 4 (par 1).
The defendants also made reference to professional misconduct cases and the general principles applied in determining whether a practitioner has engaged in excessive or unreasonable overcharging.[61] Those authorities need not be considered. They are concerned with a different issue altogether. What is of significance on this review of the taxation is that the registrar correctly directed herself to the applicable principle. So too the defendants' reliance on s 301(3) of the Legal Profession Act 2008 (WA) is misplaced.[62] The taxation before the registrar was not a costs assessment within Div 8 of Pt 10 of the Legal Profession Act 2008 (WA).
[61] Defendants' Application dated 29 May 2018 p 4.
[62] Defendants' Application dated 29 May 2018 p 5.
Review of specific items
I turn then to the specific items raised by the defendants' application for review under O 66 r 65.
Item 5: Interlocutory injunction application
Item 5 made a claim in respect of an interlocutory injunction application made by chamber summons dated 22 December 2014. The amount claimed was $11,550. At taxation, after considering individual components of the work as schedulised and having heard from the parties and reviewing materials as filed on the application,[63] the registrar allowed $7,000.
[63] ts 217 - 244.
In the application before me the defendants asserted:
The learned Registrar's assessment only considered 'reasonable costs for the work done' and not the other costs assessment criteria stipulated in the Legal Practitioners Act 2008. If the objectives of Case Management and associated reduced court costs are to be achieved, the courts must penalise legal practitioners when they do not abide with the spirit encapsulated within 0 59 r 9. The costs of $7000 should not be allowed for this item.[64]
[64] Defendants' Application dated 29 May 2018 p 7.
In the objection and review before the registrar the error of principle asserted was non-compliance with pars 3.13 and 3.14 of the Federal Court's Costs Practice Note (GPN-Costs). Otherwise the defendants asserted non-compliance with the conferral requirements under O 59 r 9 of the Rules of the Supreme Court 1971 (WA). The defendants also attacked the quantum as assessed by the registrar by reference to the amounts provided for under PD 4.7.1.1 of the Consolidated Practice Directions.
The latter point as to quantum was answered comprehensively in the registrar's reasons on review.[65] As can be seen from par 70 above, that part of the objection has not been reproduced in the application before me. There are in any case two reasons why this aspect could not be upheld on review before me. First, the reasons given by the registrar on this aspect of the defendants' objection are cogent and do not bespeak any error in principle in the allowance. Second, the amount allowed, being $7,000 on an interlocutory injunction application, is not so high that it can be concluded that no taxing officer, acting reasonably, could ever have taxed the item at that amount.
[65] Registrar's Reasons dated 15 May 2018 p 5 (pars 4 - 10).
The registrar assessed the costs to be allowed for item 5 in accordance with her general approach to determining the allowances on taxation. There was no error in principle in doing so. So far as the defendants complain that the registrar only considered the reasonable costs for the work done that is not a proper characterisation of the registrar's approach. I am satisfied that the registrar also considered whether work was properly done and whether it was just and reasonable that it be chargeable to the defendants on a party and party basis.[66]
[66] See eg ts 222 - 223, 224, 230, 232 - 233, 233 - 234, 239 - 240, 242.
Indeed, if anything, the way the registrar approached the final assessment on the item was overly generous to the defendants. While $11,550 was claimed, a schedule was provided which suggested that the total time charges were $17,292.28. The registrar proceeded to tax off an amount of $8,024.76. Rather than allow $9,267.52 - which by inference would be the amount the registrar had provisionally determined was reasonable and properly allowable - the registrar applied an approximate percentage reduction to the $11,550 based on the proportion that the $8,024.76 bore to the $17,292.28 and then rounded to $7,000.[67]
[67] ts 242 - 244.
Insofar as the defendants assert that the registrar did not consider the costs assessment criteria stipulated in the Legal Profession Act 2008 (WA) the defendants do not identify the particular criteria that were not considered. In any case this was a taxation under O 66 rather than a costs assessment pursuant to Div 8 of Pt 10 of the Act. For the reasons I have given, the registrar approached the task of determining allowances on taxation in accordance with established principle.
On the question of non-compliance with the conferral obligation under O 59 r 9 the registrar heard submissions and took into account what occurred by way of conferral (this being the subject of item 4).[68]
[68] ts 213 - 217.
It appears, however, that the gravamen of the defendants' complaint is there was inadequate conferral and that, if there had been proper conferral, the application for an interlocutory injunction would have been unnecessary. Hence the references to the objectives of case management and the earlier references to pars 3.13 and 3.14 of the Federal Court's Costs Practice Note (GPN-Costs). As with the defendants' appeal for a 'global' review, the true complaint is as to the effect of the order of the trial judge in permitting the plaintiff to recover its taxed costs for the interlocutory injunction application.
That was not something for the registrar on taxation. Nor can failure to have regard to such considerations (if indeed they were supported by the facts - as to which I make no findings) amount to an error in principle on the part of the registrar in making an allowance for item 5. The registrar, as was her duty, proceeded to tax the plaintiff's bill in accordance with the trial judge's order.
If the defendants wished to challenge the plaintiff's entitlement to costs for the interlocutory injunction - based on alleged non-compliance with the obligations under O 59 r 9 - that was something that ought to have been raised before Allanson J when his Honour made costs orders in favour of the plaintiff. It is not something that can be raised now, as a sidewind, in the context of a review of the taxation under O 66 r 55.
The registrar as taxing officer made no error in principle as alleged by the defendants in allowing item 5 in the amount of $7,000.
Item 10: Mediation
Item 10 made a claim in respect of a mediation. The costs claimed were $10,000 based on a schedule which referred to the work done as attracting a charge of $16,404.49. The registrar determined what was considered to be a reasonable amount for the mediation based, in part, on the time at mediation,[69] and allowed the item in an amount of $6,414.
[69] ts 249 - 256.
In the application before me the defendants say that 'the terms of the settlement offer [at mediation] were so unfair that it was impossible for the Defendants to accept'. They go on to say:
Being self-represented the Defendants were not aware that they needed to seek an order from the Judge for each party to bear their own costs in the mediation. The defendants seek an order that costs of $6414 should not be allowed for this item and each party should bear their own costs.[70]
[70] Defendants' Application dated 29 May 2018 p 7.
In the objection and review before the registrar the error of principle asserted was again non-compliance with pars 3.13 and 3.14 of the Federal Court's Costs Practice Note (GPN-Costs). In submissions in support of that alleged error it was said that the settlement option presented at the mediation was unfair and costs incurred on mediation included costs conferring with certain non-parties. It was also asserted that the plaintiff used the mediation as a strategic device and the plaintiff and its solicitors engaged in intimidatory behaviour. Among other things, the defendants sought that the parties should bear their own costs of the mediation.
The defendants' complaint is again one concerned with the scope of the costs orders - in permitting the plaintiff to recover such costs by taxation - rather than any alleged error of principle on the part of the registrar in allowing the plaintiff costs for the mediation in the amount of $6,414.
For the reasons I have given earlier that is not a complaint that may be advanced in the context of this review under O 66 r 55. It was not open to the registrar to substitute her own view as to whether costs should be allowed for mediation in place of the trial judge's orders as to costs. There was no error in principle on the part of the registrar acting as taxing officer as alleged in the application for review.
Item 26: Preparation of case for trial
Item 26 made a claim for preparation of the case for trial. An amount of $49,665 was claimed by reference to a schedule. Insofar as the item was objected to the registrar noted that the amount contended for by the defendants was $24,832.50.[71] In assessing the claim the registrar undertook a similar process as with item 5.[72] The registrar allowed an amount of $28,094.
[71] ts 272.
[72] ts 272 - 278.
It was in connection with this item that the affidavit materials as filed for the purpose of taxation, as were before the registrar, were relevant. The plaintiff's schedule attributed a particular time to interviewing Mr Kelly. There was an issue as to whether that occurred and, if so, how long the interview took.[73] Ultimately the registrar put that issue to one side in determining what amount was reasonable by way of preparation for a case of this nature.[74]
[73] ts 274.
[74] ts 277.
At the taxation hearing the registrar expressly noted that:
… I have to have regard to proportionality in relation to what the maximum allowance of scale is, and I also have to have regard for what was reasonably necessary to conduct a trial of this nature.[75]
[75] ts 277.
In the application before me the defendants state:
The learned Registrar's assessment only considered 'reasonable costs for the work done' and not the other costs assessment criteria stipulated in the Legal Practitioners Act 2008.
The Defendants request the learned judge to review their submissions of 02/05/2018 under this section, in the context of all the cost assessment criteria stipulated in the Legal Practitioners Act of 2008 and the amounts already allowed for 'preparation' under items 33 and 34. The costs of $28000 should not be allowed for this item.[76]
[76] Defendants' Application dated 29 May 2018 p 7 - 8.
In the objection and review before the registrar the error of principle asserted was non-compliance with pars 3.13 - 3.17 of the Federal Court's Costs Practice Note (GPN-Costs).
A series of submissions were then presented in support of that alleged error in principle. Given the terms in which the review before me is raised (incorporating the submissions on the review to the registrar) I will summarise the substance of those submissions. The following matters were asserted over some four pages:
•The work for preparing an entry for trial was in part not required and otherwise minimal (par 1).
•There was double counting in the schedule that detailed the work (par 2).
•The proceedings were unnecessarily protracted (par 3).
•Issue was taken with matters raised at a strategic conference held immediately prior to trial (par 4).
•An amendment was said to be pointless (par 5).
•Reference was made to authorities in which the presumption that costs follow the event was not followed (par 6).
•It was said that the plaintiff's solicitors' behaviour had caused unnecessary anxiety, trouble and expense (par 7).
•It was said that the plaintiff's solicitors had not followed the WA Bar Association's Best Practice Guide 01/2009 (par 8).
•The plaintiff's affidavits had included unnecessary material (par 9).
•The trial bundle included unnecessary documents (par 10).
•There was no strategic conference held until after mediation and a number of the matters usually addressed at a strategic conference were not addressed (par 11).
•The plaintiff's argument at trial would not have succeeded but for the trial judge identifying an additional source of power (par 12).
The defendants observed that $15,368 was allowed for items 33 and 34 (counsel fee for preparation and hearing). It was said that this was more than adequate for the case.
The registrar's determination of the allowance for item 26 was made in accordance with the approach adopted generally throughout the taxation, an approach I have described earlier in these reasons (see pars 65 - 68 and 74 above). There was no error in principle in that approach. The registrar did not come to a conclusion on whether in fact the plaintiff's solicitors spent a particular time interviewing Mr Kelly. The registrar did not need to do so because she assessed, having regard to the concept of proportionality, what work was reasonably necessary by way of preparation to conduct a trial of the nature of that in these proceedings - eventually calculating an allowance based on 40 hours for a senior practitioner, 25 hours of support from a junior practitioner and five hours from a paralegal.[77] That approach was in accordance with, and did not constitute an error in, principle.
[77] ts 277.
No error in principle arises by virtue of the registrar not having regard to costs assessment criteria said to be stipulated in the Legal Profession Act 2008 (WA). The registrar was conducting a taxation under O 66 and applied the principles required on such a taxation. Insofar as, on the review before the registrar, the defendants relied on pars 3.13 - 3.17 of the Federal Court's Costs Practice Note (GPN‑Costs), I repeat what I have said at pars 61 - 64 above.
Otherwise the substance of the defendants' complaint goes to the quantum as assessed for the item. In that regard I have considered the list of matters referred to in the defendants' submissions on the review before the registrar. I have also noted the separate allowance provided for preparation for counsel. (The allowance for counsel at hearing does not, in my view, impact on the amount that ought be assessed for preparation for hearing.) In all the circumstances the amount awarded ‑ $28,094 - is not so high that it can be concluded that no taxing officer, acting reasonably, could ever have taxed the item at that amount. Accordingly, I do not infer any error in principle based on quantum alone.
In relation to the allegation of an error in principle based on the amount as allowed it is, I consider, material that in answer to the plaintiff's bill of costs the defendants proposed that $24,832.50 be allowed in relation to item 26.[78] The amount allowed of $28,094 is in no way 'extraordinary' having regard to the fact that pre-taxation the defendants suggested an allowance of $24,832.50.
[78] This appears in an undated document headed 'Bill of Costs' prepared by the defendants in answer to the plaintiff's bill of costs.
Item 32: Attendance of instructing solicitor at trial
Item 32 concerned the attendance of an instructing solicitor at trial. An amount of $4,400 was claimed the whole of which was allowed. The registrar considered the item out of turn, wishing first to assess the allowance for counsel fees.[79] The defendants contended that an instructing solicitor was unnecessary.[80] However, the registrar ruled that:
[79] ts 282.
[80] ts 292.
It is accepted practice that an instructing solicitor attends at trial and it's a cost that the court anticipates that the paying party will pay on a taxation of a bill.[81]
[81] ts 293.
In the application before me the defendants asserted:
The learned Registrar's assessment only considered the principle of 'reasonableness' and not all the other cost assessment criteria, particularly the fact that Counsel was the Senior Partner, Mr Wittkuhn who was handling the case all along and the 'instructing' solicitor was a junior partner in the firm who was only involved at the trial and not the mediation or other interactions with the court as evidenced by the e‑mails that the Defendants were copied into. The experienced Senior Partner did not need to be instructed by a junior partner. The costs of $4400 should not be allowed.[82]
[82] Defendants' Application dated 29 May 2018 p 8.
In the objection and review before the registrar the error of principle asserted was non-compliance with O 1 r 4B(e) and (f) of the Rules of the Supreme Court 1971 (WA). It was said that there was no need for an instructing solicitor at trial.
The trial of these proceedings involved a number of factual and legal issues. Witnesses were called and the defendants cross-examined. The trial process itself presented challenges insofar as the defendants were self-represented. The nature of the trial was such that, in my opinion, it was open to the registrar acting as a taxing officer to conclude - as the registrar essentially did - that it was just and reasonable that an instructing solicitor be in court to assist counsel and that costs were assessable accordingly.[83] No error in principle arose in the registrar making an allowance for item 32.
[83] Cf Miller v Taylor [2018] WASC 75 [426].
GST and court fees
At the hearing of the taxation the first-named defendant raised whether the defendants, as natural persons, had to pay the court fees based on the corporation rate as had been paid by the plaintiff. The registrar said that was the position.[84]
[84] ts 295.
However, the allowances as to court fees were not raised by way of objection under O 66 r 53 of the Rules of the Supreme Court 1971 (WA) on completion of the taxation hearing. Nor were any objections made in relation to a GST component on the amounts allowed.
This is not a review de novo. It is confined to a consideration of whether the reconsidered decision of the registrar as taxing officer contains an error of principle. A review under O 66 r 55 is no place for new points of challenge to emerge or for points not raised or inadequately argued before the taxing officer to be re-ventilated afresh.[85]
The challenges as to GST and court fees were not agitated by way of objection before the registrar. Accordingly, they are not properly raised on this review of the taxation under O 66 r 55. This aspect of the application must fail.
On the court fees, it appears that the defendants may not be seeking to have these allowances set aside as against the plaintiffs. The suggestion is that it would be appropriate - in the interests of justice - to make an order that the court refund the differential between the court fees payable as a corporation and the court fees payable as an individual.[86] No such order is permitted under O 66 r 55. The foundation for an order under O 66 r 55 is identification of an error in principle on the part of the taxing officer. The order that may be made under O 66 r 55(2) is an order to rectify the error as considered just. There is no articulated error in principle on the part of the registrar in allowing the various items as represented by fees paid to the court. So O 66 r 55 does not empower me to make an order of the type sought by the defendants.
The defendants may have in mind the provisions of reg 8C(1) of the Supreme Court (Fees) Regulations 2002 (WA):
A judicial officer or legally qualified registrar presiding in a proceeding may order the refund of the difference between the amount of a fee paid by a person in respect of the proceeding and the amount of the fee that the person was entitled to be charged under these regulations in respect of the proceedings.
I consider reg 8C(1) not to be applicable. The defendants have not paid any fee to the court in respect of the proceedings; nor, relevantly, is there an amount that the defendants were to be charged under the regulations in respect of the proceedings. The defendants are to make a payment to the plaintiff of the taxed amount following taxation of the bill of costs. I appreciate that part of the taxed amount represents indemnification as to the fees paid by the plaintiff to the court. But such reimbursement stands outside the operation of reg 8C(1) - the power to order a 'refund' under reg 8C(1) is necessarily confined to the court paying back money to the person who made payment of a fee to the court.
[85] WJ Green & Co (1984) Pty Ltd v Tace Pty Ltd [No 4] [23].
[86] Defendants' Reply Submissions dated 30 July 2018 par 13.
Conclusion
The defendants' application dated 29 May 2018 will be dismissed.
I will hear from the parties as to the costs of the application. I intend to fix the amount to be allowed by way of costs. In fixing that allowance I will have regard to the conclusions I have reached as to whether I should receive the plaintiff's affidavit material.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
CC
ASSOCIATE TO THE HONOURABLE JUSTICE VAUGHAN6 SEPTEMBER 2018
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