D and Z Constructions Pty Ltd v IHI Corporation
[2013] WASC 265 (S)
•14 AUGUST 2013
D & Z CONSTRUCTIONS PTY LTD -v- IHI CORPORATION [2013] WASC 265 (S)
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2013] WASC 265 (S) | |
| Case No: | ARB:15/2012 | ON THE PAPERS | |
| Coram: | MARTIN CJ | 14/08/13 | |
| 7 | Judgment Part: | 1 of 1 | |
| Result: | Applicant ordered to pay respondent's costs fixed in the amount of $46,712.30 | ||
| B | |||
| PDF Version |
| Parties: | D & Z CONSTRUCTIONS PTY LTD IHI CORPORATION |
Catchwords: | Practice and procedure Costs Consideration of whether judge should fix costs or whether they should be taxed by a taxing officer Turns on own facts |
Legislation: | Legal Practitioners (Supreme Court) (Contentious Business) Determination 2012 (WA) Rules of the Supreme Court 1971 (WA), O 1 r 4A, O 1 r 4B |
Case References: | Nil |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Applicant
AND
IHI CORPORATION
Respondent
Catchwords:
Practice and procedure - Costs - Consideration of whether judge should fix costs or whether they should be taxed by a taxing officer - Turns on own facts
Legislation:
Legal Practitioners (Supreme Court) (Contentious Business) Determination 2012 (WA)
Rules of the Supreme Court 1971 (WA), O 1 r 4A, O 1 r 4B
Result:
Applicant ordered to pay respondent's costs fixed in the amount of $46,712.30
Category: B
Representation:
Counsel:
Applicant : Mr P G Clifford & Mr R D Shaw
Respondent : Ms P E Cahill SC & Mr B Georgiou
Solicitors:
Applicant : Lavan Legal
Respondent : Jackson McDonald
Case(s) referred to in judgment(s):
Nil
1 MARTIN CJ: On 16 July 2013, I ordered that the application by D & Z Constructions Pty Ltd for leave to appeal from the decision of an arbitrator should be dismissed, and published my reasons for arriving at that conclusion. By consent, I also ordered that issues with respect to the costs of the application be determined on the papers. At the time those orders were made, the respondent had filed written submissions on the subject of costs, together with an affidavit of Ms Bree Duggan in support of the orders which it sought. Further written submissions have been exchanged pursuant to directions which I made. These are my reasons for concluding that the applicant should be ordered to pay the respondent's costs fixed in the amount of $46,712.30.
The affidavit of Ms Duggan
2 The affidavit of Ms Duggan attaches a draft bill of costs and identifies the time actually spent by the various legal practitioners involved in the preparation and presentation of the respondent's case in respect of each of the items identified in the draft bill, and the charges actually rendered to the respondent in respect of those items. The draft bill has been prepared with regard to the maximum applicable amounts allowable under the relevant cost determination.
The contentions of the parties
3 The respondent contended that it should have its costs in the amount claimed in the draft bill, or some lesser amount following consideration of the amounts claimed in that bill, or alternatively, that it should have its costs to be taxed by a taxing officer but without regard to any of the limits imposed by the relevant cost determination.
4 The applicant opposed the proposition that I should fix the costs and also opposed any order to the effect that costs should be taxed without regard to the maximum amount allowable under the relevant cost determination. It proposed that the respondent should be awarded its costs to be taxed in accordance with the relevant scale. However, detailed submissions were provided in respect of each item in the draft bill of costs attached to Ms Duggan's affidavit.
5 In summary, the applicant accepts that costs should follow the event, and that the respondent should have its costs of the application for leave to appeal. There are two matters in contention. First, should I fix the amount of the respondent's costs, and if so, what should that amount be? Second, should I direct that the respondent's costs be taxed, and if so, should I order that they be taxed without regard to the maximum limits applicable in the relevant cost determination?
Should I fix the amount of the respondent's costs?
6 The applicant's submissions in opposition to the proposition that I should fix the amount of the respondent's costs rely upon cases and principles dealing with an award of costs on a lump sum basis. In this context, 'lump sum' means a global assessment undertaken in the broad, without reference to specific items. However, that is not what the respondent proposes. The respondent has provided a draft bill of costs and the parties have exchanged written submissions with respect to each of the items within that bill. They have consented to the question of costs being determined by me on the papers. In these circumstances the question is whether I should fix the amount of the respondent's costs by reference to the draft bill of costs and the submissions which have been exchanged, or whether I should require the process to be undertaken before a taxing officer of the court.
7 With the exception of costs relating to interlocutory matters, it is the usual practice to direct that issues with respect to the quantum of costs be determined by a taxing officer following the process of taxation. There are a number of advantages in this practice. First, it avoids the deployment of the limited time of a judge upon a process of assessment which can, in some cases, be detailed and protracted. Second, taxing officers, by virtue of their experience, develop expertise in the assessment of the reasonable quantum of costs.
8 However, there are also disadvantages in this course. First, the taxing officer will not have the judge's familiarity with the issues involved in the case, and will not therefore have the same ability as the judge to assess the amount of time properly spent in the preparation and presentation of those issues. Second, the process of taxation necessarily requires a separate hearing, with appearances by both parties, thereby adding to the overall costs of the proceedings.
9 In assessing the extent to which these competing advantages and disadvantages suggest the course which should be followed in any particular case, account must be taken of the overriding principles contained in O 1 r 4A and r 4B of the Rules of the Supreme Court 1971 (WA). Those rules require that the practice and procedure of the court are to have as their goal the elimination of delay, and a number of other objectives, including the efficient disposal of the business of the court.
10 In the circumstances of this case, having regard to the relative simplicity of the draft bill of costs, the fact that the parties have exchanged written submissions with respect to each item in that draft bill, and the advantages to be derived from my familiarity with the issues in the case in assessing the amounts claimed, I have concluded that the appropriate course is for me to fix the amount of the respondent's costs.
11 As a result of this conclusion, there is no issue with respect to the maximum amounts allowable under the relevant cost determination, as the draft bill of costs has been prepared having regard to those maxima.
The draft bill of costs
12 I will briefly set out my reasons for concluding that the draft bill of costs should be allowed in full, by reference to each item in the bill. References to 'scale' items are to the Scale of Costs in the Legal Practitioners (Supreme Court) (Contentious Business) Determination 2012 (WA).
Item 1 - scale item 23(a)
13 The applicant asserts that the professional time actually spent on this item was excessive. However, the time actually spent has not been claimed. The only time claimed corresponds to one hour of professional time, which is reasonable. This item is allowed.
Item 2 - scale item 23(b)
14 The applicant again contends that the amount of time actually spent by the respondent's legal representatives on this item (82.7 hours) is unreasonable. However, the respondent does not claim for that time, but only for the maximum hours and corresponding amount applicable to this item under the scale - namely, 40 hours, which is a little under half the time actually spent. That claim is reasonable and is allowed.
Item 3 - scale item 23(d)
15 The applicant again asserts that the respondent claims an excessive amount of time spent in relation to this item. However, the time claimed (6.3 hours) is less than the maximum time allowable under the scale (8 hours) with the result that the costs claimed are less than the maximum allowable. The task performed involved the identification of the documents properly placed before the court at the time the application for leave to appeal was determined. The nature of the grounds of appeal, and the sometimes vexed question of whether a particular document can be said to be incorporated within the award made this a task of some complexity. The amount claimed is reasonable and is allowed.
Item 4 - scale item 23(e)
16 The respondent claims the maximum amount allowable under this item, although the actual costs incurred were almost double that amount. The work related to the issue of whether the question of leave to appeal should be determined at the same time as the substantive appeal (as the parties initially proposed), or whether, as I proposed, consistently with authority, the question of leave to appeal should be determined in advance of, and separately from, the appeal itself. That issue required the consideration of authority and its application to the circumstances of this particular case. The amount claimed is reasonable and is allowed.
Item 5 - scale item 23(f)
17 The respondent has claimed the maximum amount allowable under the scale for the preparation of the case for hearing. However, the time actually spent on that task, and the costs actually incurred, are vastly in excess (by a factor of almost 10) of the times and amounts allowable under the applicable scale item. The amount claimed is reasonable and is allowed.
Item 6 - scale item 23(g)
18 There is no objection to this item. It is allowed.
Item 7 - scale item 23(h)
19 The applicant does not contend that excessive time was spent by senior counsel for the respondent in preparing and attending the hearing. However, it contends that the time should be allowed at a reduced rate, being the rate by which the scale items have been determined, and that GST should be deducted from that rate, on the assumption that the respondent is registered for GST, and will therefore obtain an input credit in relation to GST paid on senior counsel's fees.
20 I have no evidence as to whether the respondent would in fact obtain an input credit in relation to GST, and note that the scale items are specified with reference to amounts that are GST inclusive. I further note that in this case the amount claimed is less than 20% of the maximum allowable, and seems to me to be eminently reasonable, indeed bordering on the miserly, irrespective of whether GST is included or not. In the swings and roundabouts which necessarily involve an assessment of costs of this kind, it does not appear to me to be appropriate to deduct GST in relation to this or any other item.
Items 8, 9, 11 and 13 - scale items 23(k), 30(a), 31 and disbursements
21 These items can be dealt with collectively. Items 10 and 12 are not included within the heading above, because no amount has been claimed in respect of those items. It is sufficient to say that the amounts claimed with respect to an instructing practitioner attending an appeal, drawing of the draft bill of costs, and for photocopying and disbursements are reasonable, and will be allowed.
22 For these reasons I will order that the applicant is to pay the respondent's costs fixed in the amount of $46,712.30.
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