EROM Pty Ltd v Croft

[2006] WADC 67

JURISDICTION     :   DISTRICT COURT OF WESTERN AUSTRALIA

IN CHAMBERS

LOCATION:   PERTH

CITATION:   EROM PTY LTD -v- CROFT [2006] WADC 67

CORAM:   DEPUTY REGISTRAR HEWITT

HEARD:   20 APRIL 2006

DELIVERED          :   9 MAY 2006

FILE NO/S:   CIV 1225 of 2003

BETWEEN:   EROM PTY LTD (ACN 008 918 876)

Plaintiff

AND

JOHN CROFT
Defendant

LAURENCE LAMBRO ANTHONY ZIATAS
Third Party

Catchwords:

Practice - Western Australia - Taxation - Indemnity costs order - Onus on paying party

Legislation:

Nil

Result:

Paying party held not to have discharged onus

Representation:

Counsel:

Defendant (Taxing Party)            :   Ms M L Coulson

Paying Party (Andrew Maughan)  :   Mr P Sheavyn

Solicitors:

Defendant (Taxing Party)            :   Williams & Hughes

Paying Party (Andrew Maughan)  :   Mallesons Stephen Jacques

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

Nil

Case(s) also cited:

Adsett as trustee of the Property of Berlouis & Ors (bankrupts) v Berlouis and Winhall trading as "Hervey Bay Kitchens" (a firm) & Anor, unreported; SCt of Qld; BC9304014; 15 January 1993

Ballato & Ors v Co-Operative Bulk Handling Ltd, unreported, SCt of WA; Library No 8036; 30 January 1990

EMI Records Ltd v Ian Cameron Wallace Ltd & Another [1982] 2 All ER 980

Stobbart v Mocnaj & Ors [1999] WASC 252

1. DEPUTY REGISTRAR HEWITT:  In this matter a judgment was entered against a defendant through non-compliance with a springing order due to the neglect of his solicitor.

2. As a consequence of that chain of events an order was made requiring the solicitor to pay the defendant's costs in bringing an application to set aside the judgment on an indemnity basis except so far as they are of an unreasonable amount or have been unreasonably incurred.

3. Following a succession of appearances on the taxation as a consequence of which the paying party was afforded the opportunity to inspect the records maintained by the defendant's solicitor, the matter was again listed before me on 20 April 2006.  On that occasion the paying party accepted that the work for which charges had been raised by the defendant's solicitor had in fact been undertaken and that the charges for that work were properly calculated in accordance with its costs agreement.  The proposition advanced by the paying party was that the amounts claimed by the defendant for the tasks which were undertaken were so large that I was entitled to conclude the claims for the various items in the bill were excessive and to reduce them accordingly.  The matter was adjourned at the request of the defendant to enable it to provide me with written submissions concerning the matter.

4. To some extent the order is framed in a way which recognises the relevant law, namely that an indemnity costs order allows a paying party the opportunity to establish that costs claimed are of unreasonable amount or unreasonably incurred.  The cases also establish that the onus lies upon the paying party to demonstrate that to be the case and in the absence of material to demonstrate the charges to be unreasonably incurred or of unreasonable amount, the claim should be allowed.  The cases clearly establish that the onus rests on the paying party throughout this process and it is not a requirement of the taxing party to demonstrate that its charges are reasonable for work reasonably undertaken.  As I understand it those propositions are not contested by the paying party.

5. Translating those general principles into the present context there is firstly no dispute that the work for which claim is made was undertaken and that the calculation of the charges for that work is correct.  Distilling the matter to its essence the complaint raised by the paying party is that the process took too long and generated charges of such a magnitude that I ought, in the proper exercise of my discretion, regard them as unreasonable and order a reduction.

6. The difficulty which I have in dealing with such a submission is the fact that there is no yardstick which I can use to determine whether the charges are reasonable or otherwise.  This case was unique in my experience in the intensity with which it was fought and the effort poured in by both sides during the course of the application.

7. I am invited by the paying party to adopt the view that the charges must be unreasonable because they are so high.  If such an objection is to be countenanced then in every taxation in which indemnity costs have been ordered it would be open for the defendant to simply complain that the charges were of such a magnitude as to be unreasonable and thereby throw the burden on the taxing party to displace that proposition.  I do not think that the process of taxing a bill on an indemnity basis lends itself to objections of the kind which have been raised by the defendant.  In my view the objection must be specific and must identify some task which the paying party contends was unnecessarily undertaken or point to some duplication or want of efficiency within the manner in which the taxing party conducted the task at hand.

8. I agree that the charges are high but having had some involvement in this case myself that comes as no surprise.  A very substantial sum, in my view, could be properly charged by the defendant's solicitors for the task which they undertook on behalf of their client in bringing and arguing the relevant application.  On what basis then am I to characterise the charges as "too high"?  Given the nature of the application it was inevitable that the charge would be a very substantial one.  No doubt there is some point at which it would be possible for a taxing officer, having as I do some knowledge of the application in question, to appreciate that the total charges were beyond anything which could be reasonably expected for conducting the task at hand.  I do not think this is such a case.  The charges are high.  I expected them to be high given the nature of the application.  It must be said that the charges are somewhat higher than I anticipated possibly in the order of 25 per cent to 30 per cent.  I do not regard such a margin as demonstrating without more that the charges are unreasonable.  In those circumstances I consider that the paying party has not discharged the onus on it to demonstrate the charges to be of unreasonable amount or unreasonably incurred and as a consequence I reject the submissions advanced on behalf of the paying party.  In those circumstances it remains to complete the taxation of the bill and I leave the matter in the hands of the defendant's solicitor to arrange for the matter to come back before me on a further occasion.