Cork v GEMCO Rail Pty Ltd - [2004] WADC 146

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS

LOCATION: PERTH

CITATION: CORK -v- GEMCO RAIL PTY LTD & ANOR [2004] WADC 146

CORAM: DEPUTY REGISTRAR HARMAN

HEARD: NOT APPLICABLE

DELIVERED : 21 JULY 2004

FILE NO/S: CIV 2614 of 2001

BETWEEN: ERIC JAMES CORK
Plaintiff
AND
GEMCO RAIL PTY LTD (ACN 079 764 444)
Defendant
WESTAFF (AUSTRALIA) PTY LTD
Third Party

Catchwords:

Practice - Western Australia - Practice under the Rules of the Supreme Court of Western Australia - Review of taxation - Jurisdiction to review quantum - Claims of discovery - Getting up case for trial - Application to chambers - Time costing

Legislation:

Nil

Result:

Objection not sustained

Representation:

Counsel:

Plaintiff:     No appearance
Defendant:     No appearance
Third Party                   :     No appearance

Solicitors:

Plaintiff:     Friedman Lurie Singh & D'Angelo
Defendant:     Srdarov Richards Burton
Third Party                   :     Jackson McDonald

Case(s) referred to in judgment(s):

Bray v Ryan [1999] WADC 66
May v Vincent Smith as Administrator for Cole Engineering Pty Ltd (Under Administration) & Anor [2001] WASC 352
Smith v Buller [1875] LR 19Eq 473

Case(s) also cited:

Nil

DEPUTY REGISTRAR HARMAN: Part of the agreement by which the third party proceedings in the action were discontinued was that the defendant would pay the third party's costs. Although no order has been extracted, the appropriate interpretation given to the term "the third party's costs" in the agreement is that the third party is entitled to its costs of the third party proceedings. In accordance with Smith v Buller [1875] LR 19Eq 473, its entitlement is limited to the reasonable cost of services necessarily provided to it in the third party proceedings. Those costs were taxed and the third party now takes objection to determinations made in relation to particular claims.
The first is to the valuation of the service "giving discovery". The terms of objection are as follows:
1.   The amount claimed was $585.00. The amount allowed was $280.00.
2.   The third party's informal list of documents ("the list"):
(a) consists of some 126 items; and,
(b)was prepared by a law clerk and settled by a senior practitioner.
3.   The preparation of the list involved:
(i)   more than 3.0 hours of work by a law clerk; and,
(ii) 18 minutes work by a senior practitioner.
4.   The amount allowed for preparing discovery is:
(a) manifestly inadequate; and,
(b)disproportionate to the amount of actual work that was reasonably required by way of discovery."
The jurisdiction provided for review by taxing officers is expressed only at r 53. It provides for review of determinations made in relation to the allowance or disallowance of items or their constituent parts: that is, for determinations made in relation to the services rendered, for which the test of recovery is the necessity of provision. In the rule there is no reference to review of determinations of quantum. Had it been intended that all determinations of the taxing officer would be amenable to review the rule would have provided for that result. In my opinion, the on-going failure of those responsible for the formulation of the rules to provide for review as to quantum could not be explained as oversight. There is no jurisdiction to review the determination the subject of the objection.
Be that as it may the third party is entitled to reasons for the determination that I will provide by reference to the objection.
At par 4 (b) implicitly the third party constitutes the work that was undertaken and thereby the constitution of the claim made as the focus of consideration at the taxation. Although every assessment of quantum conducted in every taxation is informed by a consideration of work actually performed, under the usual order the valuation to be undertaken is of the service provided. In addition to the work, such a valuation is informed by the context in which the service was provided and the features of the process that speak of complexity. In the case of a claim for discovery, consideration should be given to the form, length and content of the document and whether privilege was a significant consideration.
In this case the issues in the third party proceedings revolved around an oral contract alleged by the defendant between itself and the third party relating to the provision of personnel to the defendant for its business. The defendant alleged the contract and a particular term, referred to the plaintiff's claim and alleged a duty of care owed to the defendant or alternatively an indemnity as a result of the third party's alleged failure to provide suitably skilled or experienced tradesman.
The third party's defence admitted the relationship between the parties to the extent that the third party would supply to the defendant suitably skilled, competent and experienced tradesman but otherwise denied the pleading that related expressly to the plaintiff and the existence of a contractual indemnity. It otherwise admitted the provision of the plaintiff, the capacity in which he was provided, the existence of the plaintiff's claim and its terms. Otherwise the defendant's allegations were denied.
The scope of discovery as defined by the pleadings was relatively narrow. A significant amount of the material related to the subject of the plaintiff's claim. All documents would have been checked to determine relevance and if assessed as such, put in some useful order and listed. There was no suggestion of any consideration having been given to any claim to privilege.
In undertaking the task the third party's solicitor had chosen to delegate the work to a clerk. I was not and am not informed as to the experience of the law clerk. The "more than 3.9 hours" consumed by that person in undertaking the task suggests a lack of experience. Once completed the task was reviewed by a senior practitioner.
The manner in which the practitioner chose to provide the service highlights the significant consideration in applying the test of recovery for quantum. But for the prospect that efficient delegation will produce a cost saving to the client and thus ultimately the adverse party, the reasonable cost of provision of the service will be the same regardless of regardless of the work practices of or decisions made by the solicitor engaged by the beneficial party. The fact that the solicitor with the conduct of the file may have chosen to delegate the task would only be relevant where any saving to the client should be passed on to the adverse party.
The only comment that I will make in relation to the decision of the third party's solicitor to delegate is that any potential benefit for the third party did not materialise. In assessing what is a reasonable level of recovery a useful guide may be the amount of time that a competent practitioner would have taken to efficiently undertake the task.
In assessing the reasonable cost for the provision of the service, I considered the issues on the close of pleadings and the document generated by the third party. It revealed 124 documents or categories of documents. It was not sworn. There was nothing in the document or the submissions to suggest that the discovery provided engaged any unusual considerations at any point of the exercise. It was apparent that the amount claimed reflected a value of the service that was far in excess of what was warranted.
In my opinion the service provided to the third party did not warrant more than $280. I accept that in coming to that conclusion I may be portrayed as having engaged in a notional reallocation of the work to an efficient and competent practitioner. The significant consideration is that I applied the test of recovery: the adverse party is liable for the reasonable cost of the provision of the service.
The difference between the amount claimed and the amount assessed as reasonable probably accounts for the difference between the methodology of assessment adopted by the third party in presenting the claim and the assessment of what was reasonable for the service. The third party was not entitled to recover on the basis of unlimited recorded utilised time. To the extent that the third party made a claim for the actual cost of the service provided it has overlooked the fact that it had no such entitlement.
The second determination the subject of objection raised by the third party in the notice was that made in relation to quantum for "getting up case for trial", the terms of the objections are expressed as follows:
"Getting up case for trial –
5.   The amount originally claimed was $3,620. Added to this item was $1,099, which had been claimed for inspection and giving inspection of documents (item 6 to 11 inclusive of the bill), but which the Deputy Registrar considered should form part of "getting up case for trial". The amended total sum claimed for this item was therefore $4,719. The amount allowed was $800.
6.   The plaintiff in the action claimed damages for personal injuries against the occupier ("the defendant"). In March 2002, the defendant commenced third party proceedings against the plaintiff's employer ("the third party") claiming damages and/or a contribution or in the alternative a contractual indemnity.
7.   After receipt of the third party notice, a senior practitioner:
(a)Reviewed the contractual documents and arrangements between the third party and the defendant;
(b)perused and considered the:
(i)third party notice;
(iii)defendant's statement of claim in the third party proceedings;
(iii)defendant's answers to third party's request for further and better particulars of its statement of claim;
(iv)plaintiff's schedule of special damages; and,
(v)defendant's amended defence.
(c)made enquiries with the third party about the formation of the contract between the defendant and the third party;
(d)wrote to the defendant's solicitors about the Hewitt v Benale decision and a trial of preliminary issues;
(e)considered letters from the solicitors for the defendant about proposed amendments to its defence to the plaintiff's claim; and
(f)liased with the defendant's solicitors about reaching a settlement.
8.   A clerk:
(a)reviewed the plaintiff and the defendant's lists of documents to determine what documents the third party did not have;
(b)wrote to the plaintiff and defendant's solicitors to request copies of their discovered documents;
(c)perused and considered a bundle of discoverable documents received from the plaintiff's solicitors. Those documents had not previously been provided to the third party and included:
(i)eight medical reports;
(ii)seventeen medical certificates; and,
(iii)correspondence between:
A.the plaintiff and the defendant's solicitors;
B.HIH Insurance and the plaintiff's solicitors; and,
C.the plaintiff's solicitors and the defendant's solicitors.
(d)made various enquiries with the third party about discovery and the existence of further relevant documents, including wage history reports.
(e)provided the:
(i)plaintiff's solicitors with copies of some 46 documents from the third party's list; and,
(ii)defendant's solicitors with 124 documents from the third party's list.
9.   All of the work referred to in paragraph 8 above was supervised by a senior practitioner.
10. It was reasonable and necessary for the third party to consider the quantum of the plaintiff's claim in order to determine the extent of its potential liability to the defendant.
11. On 6 November 2002 (some 19 months after the third party proceedings were commenced), the defendant's claim against the third party was discontinued.
12. The schedule of the above work comprising "getting up case for trial" was attached to the bill of costs that was filed in the Court. All of the above work was essential for preparing the case for trial and achieving the end result, which was that the defendant discontinued the proceedings against the third party.
13. The amount allowed for getting up is:
(a)manifestly inadequate;
(b)grossly disproportionate to the amount of actual work that was reasonably required by way of getting up case for trial; and,
(c)places an unreasonable burden on the third party in respect of its solicitor/clients costs.
14. The Deputy Registrar erred by failing to apply the methodology approved by Commissioner Reynolds in Bray v Ryan [1999] WADC 66, in that he did not:
(i)identify what services were necessary in this case;
(ii)objectively assess the reasonable allowance for such services by applying the Rules, the Determination, and the underlying principles; and/or,
(iii)measure the amount actually claimed in the bill for the services against the objective assessment in order to determine whether or not the amount claimed was reasonable."
At pars 13 and 14 (ii) and (iii) the third party contends for error in the process of assessing quantum. I apprehend that in putting its case in those terms it has failed to appreciate that the greater proportion of the claim made for activity undertaken on its behalf was disallowed. That disallowance had a direct and significant impact on the determination of what was a reasonable amount for "getting up the case for trial".
Although there is no case put against that disallowance I might observe that there is a popular misconception that the expression "getting up case for trial" embraces all work undertaken in the course of litigation that is not otherwise claimable. As is the case with every other item in the scale, "getting up case for trial" is a process. In May v Vincent Smithas Administrator for Cole Engineering Pty Ltd (Under Administration) & Anor [2001] WASC 352, Templeman J recorded at par 20 that " ... item 13 relates not to the general preparation of the case, but to getting up a case for trial".
As to par 14(i) the third party expresses the proper test of recovery for services as being the necessity of their provision however it fails to identify how any failure to apply the test was manifested in the form of error. Accordingly, I am left with what amounts to a statement with which I agree, but nothing more. That said, I suspect that the reference to par (i) was simply to introduce (ii) and (iii) in context.
As I recall, in providing for recovery at $800 rather than the amount claimed I expressed that I was concerned that I might still be being generous at the defendant's expense. Time and the opportunity to reflect have increased my apprehension that such was the case.
The third determination identified by the third party's objection is that relating to the quantum for the claim made for the chambers application identified as having been determined on 8 November 2002.
That application was actually a summons for directions issued by the Court to the parties in relation to the failure of the parties to enter the action for trial.
The third party's objections are as follows:
"Getting up for and attending chambers
15. The amount claimed was $182. The amount allowed was $80.
16. This item relates to a directions hearing on 8 November 2002.
17. Preparation for the attendance at the directions hearing involved over an hour and a quarter of an articled clerk's time.
18. It was reasonable and necessary for the third party to prepare for and attend this count-initiated directions hearing, irrespective of the fact that the third party:
(a)was not in breach of the relevant 'milestone'; and,
(b)did not specifically seek an extension or reduction of the time for compliance with the relevant "milestone".
19. The amount allowed for getting up for and attending chambers is:
(a)manifestly inadequate;
(b)disproportionate to the amount of actual work that was reasonably required by way of getting up for and attending chambers; and,
(c)places an unreasonable burden on the third party in respect of its solicitor/client costs."
In my opinion the issue raised by the third party goes only to quantum. I accept the extent to which it is claimed that services were provided by the solicitor to the third party. In assessing what was reasonable for the cost of those services, I took into account the submissions made along the lines now presented by the third party. The valuation of the service provided to the third party was what I considered to be reasonable taking into account the case presented by the action and the matter then before the Court. I fear that to spend further time on the subject in the course of giving my reasons would amount to a disproportional response to the significance of the issue both put in relation to the quantum of the claim and by way of objection.
Be that as it may I will address par 19(c). In determining what is recoverable inter partes under the usual order for costs it is irrelevant that there may be some greater burden on a party vis-à-vis its solicitor. Recovery for costs actually incurred is available only to the extent that such cost falls within the scope of that party's entitlement expressed in the order for costs.