Fat-Sel Pty Ltd v Brambles Holdings Ltd

[1985] FCA 204

Re: FAT-SEL PTY. LIMITED
And: BRAMBLES HOLDINGS LIMITED (1985) 2 FCR 440
No. G16 of 1985
Costs - High Court and Federal Judiciary

COURT

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES REGISTRY
GENERAL DIVISION
Beaumont J.(1)

CATCHWORDS

Costs - Federal Court Rules 0.62R.12 and R.19 - costs for perusing documents prima facie "unreasonable" - taxing officer has no discretion to reduce amount allowed Second Schedule for such item.

Price v. Clinton (1906) 2 Ch. 487 - con.

High Court and Federal Judiciary - Federal Court of Australia - Costs - Taxation - Discretion to allow amounts at other than scale - Costs of perusing documents - Unreasonable amounts - Federal Court Rules 1979 (Cth), O 62, rr 12, 19, second Schedule, Items 17, 18.

HEADNOTE

Held: That subject to the possible operation of the Federal Court Rules O 62, r 19, where an item falls within the Second Schedule items 17 or 18 the taxing officer is bound to allow costs on the basis there specified and at no lower rate. Price v. Clinton (1906) 2 Ch 487, applied.

HEARING

Sydney, 1985, April 18, 23; May 20-21, 29. #DATE 29:5:1985
REFERENCE

Reference from a taxing officer as to the application of the Federal Court Rules, Second Schedule, items 17 and 18.

G A Moore, for the applicant.

L P Robberds QC and S D Robb, for the respondent.

Cur adv vult

Solicitors for the applicant: N G Cassim & Co.

Solicitors for respondent: Stephen Jaques Stone James.

BAG

ORDER

1. Answer the questions referred as follows:
   Question: Notwithstanding the provisions of Order 62 Rule 12 of the Federal Court Rules, does the taxing officer have a discretion to allow items at other than the scale, measurement or fee contained in the Second Schedule to the Federal Court Rules?
   Answer: Subject to the operation, if any, of Order 62 Rule 19, no. Question: In particular, does Rule 19 operate to qualify Rule 12?
   Answer: Yes.

2. Make no order as to costs.
   
   Note: Settlement and entry of orders is dealt with in
   

Order 36 of the Federal Court Rules.

Orders accordingly

JUDGE1

(ON REFERENCE FROM A TAXING OFFICER)

1. In the context of an application for security for costs, I ordered that the respondent's costs for work done in this proceeding up to 22 March 1985 be taxed. A bill of costs having been filed, pursuant to Order 62 Rule 39(3), the taxing officer has referred to the Court the following questions:
   
   

"1. Notwithstanding the provisions of Order 62 Rule 12 of the Federal Court Rules, does the Taxing Officer have a discretion to allow items at other than the scale, measurement or fee contained in the Second Schedule to the Federal Court Rules? In particular,, does Rule 19 operate to qualify Rule 12?"

1. The facts, as stated by the taxing officer, are as follows:
   
   

"Throughout the Respondent's Bill of Costs charges are made in respect of the following items in the Second Schedule:-

17. Perusal of any document (when necessary) including special letter, telegram or telex

If 3 Folios or less ...... 10.00

Or per Folio ........ ..... 2.00

18. Where it is not necessary to peruse but it is necessary to scan a document per page ........ ........ ....... 3.00

(item 50 inter alia, a folio comprises 72 words; there are generally 3 folios to each page)

The Bill of Costs includes the following charges in respect of items 17 and 18 in the Second Schedule:-

Page No. No. of item 2nd Schedule Charge

8 58 17 $ 6,000.00 8 59 18 10,500.00 10 80 17 444.00 10 81 18 1,500.00 13 118 17 120.00 15 137 17 576.00 20 184 17 84.00 20 185 17 700.00 20 186 18 3,000.00 43 416 17 270.00 46 447 17 124.00 47 455 17 400.00 50 480 17 900.00 50 481 18 600.00

$25,218.00 _________"

1. The taxing officer offered the following comments on the facts:
   
   

"These 14 separate charges represent the perusal of 4779 folios and the scanning of 5200 pages. In my view if the measurement and fee (charge) in the Second Schedule is applied, the fees that would be allowed appear prima facie unreasonable.

However, if a measurement on an hourly basis were applied (i.e. $90.00 - $95.00 per hour (item 37)), the fees that would be allowed would more properly and reasonably reflect the actual work engaged in. It would appear appropriate in this Bill of costs that items 17 and 18 be allowed on an hourly basis."

1. Reference should first be made to the terms of the relevant rules. By Order 62 Rule 12, except as otherwise ordered, in all proceedings commenced after the relevant date, solicitors are, subject to the Rules, entitled to charge and be allowed the fees set forth in the Second Schedule in respect of the matters referred to in that Schedule, and higher fees are not to be allowed in any case except such as are otherwise provided for by that Order. By Order 62 Rule 19, on every taxation the taxing officer shall allow all such costs, charges and expenses as appear to him to have been necessary or proper for the attainment of justice or for maintaining or defending the rights of a party, but, except as against the party who incurred them, costs shall not be allowed which appear to the taxing officer to have been incurred or increased:
   
   (a) through over-caution, negligence or misconduct;
   (b) by payment of special fees to counsel or special charges or expenses to witnesses or other persons; or
   (c) by other unusual expenses.

2. The provisions of the Second Schedule need not be detailed. Items 17 and 18, which are applicable here, have already been mentioned. It will suffice for present purposes to note that although the Second Schedule provides in many instances for a fixed sum (items 17 and 18 are examples), in the case of a limited number of items, the taxing officer is given a discretion as to the fee to be allowed (see, e.g. items 6, 7 and 23).

3. On behalf of the respondent it is submitted that, subject to the application of Order 62 Rule 19 where appropriate (and that question does not arise on this reference although it may well arise at a later stage), the taxing officer has no discretion to allow an amount less than that specified in items 17 and 18 of the Second Schedule. The applicant, in its submissions, appears to have accepted this general position and directed its arguments to the different issue, yet to be determined, of whether the costs claimed should be disallowed by virtue of Order 62 Rule 19. It is not appropriate that I express any view on this aspect of the matter at this stage.

4. The question now asked is, of course, one of construction of the Rules and it is clear that the operation of Order 62 Rule 12, being expressed to be "subject to these Rules", is subject to the operation, if any, of Order 62 Rule 19. Further, in my view, the language and structure of the Second Schedule indicate that where an item falls within items 17 or 18, the taxing officer is bound to allow costs on the basis there specified and at no lower rate, subject to the possible operation of Order 62 Rule 19. In short, Rule 19 apart, in my opinion the taxing officer is given no relevant discretion on the taxation of these items. In this respect, the contrast between these items and items such as item 23, where a discretion is conferred, is significant.

5. Such a construction is supported by authority. Price v. Clinton (1906) 2 Ch 487 is directly in point. It was there held that under the English rules the taxing officer had no jurisdiction to reduce the amounts allowed under scale costs. Numerous actions having been brought by different plaintiffs against one defendant in respect of the same subject matter, the defendant's solicitor entered an appearance in all the actions at one and the same time. It was held that he was entitled on taxation to the full fee allowed by the rules on each action. Joyce, J. said (at p.490):
   
   

"Rule 8 of Order LXV. provides that solicitors shall be entitled to charge and be allowed the fees set forth in Appendix N; and Appendix N prescribes the amounts to be allowed. Now what the taxing Master has done is this: He considered that, notwithstanding Appendix N, he had a discretion as to the amount to be allowed, and that by virtue of Order LXV, r.27, sub-r.29, and under the peculiar circumstances of this case, he was entitled to allow, and did allow, a smaller sum than the amount specified in the appendix. But it appears to me that whether this sub-rule enables the taxing Master to allow more than the specified amount, or whatever the authority may be which it confers upon him, it does not entitle him to allow a smaller sum than the amount specified in the appendix. ... Now, according, to r.8 and Appendix N, the sum to be allowed for entering any appearance is 6s. 8d.; and if entered at one time for more than one person, for every defendant beyond the first sum of ls. There is no provision in the rules or appendix for such a case as the present, where there are several actions against the same defendant, and all the plaintiffs are represented by the same solicitor, nor is there anything at all like it. If any special provision is to be made to meet a case like the present, where there are many actions, that provision must be made by a new rule or an alteration of the appendix. In the meantime, as the appendix stands, 6s. 8d. is to be allowed for any appearance. Therefore, in my opinion, 6s. 8d. must be allowed for each appearance in this case."

1. (See also Russo v. Russo (1953) VLR 57 at p 63; cf., in the case of an increase of the allowed costs, Re Ermen (1903) 2 Ch 156; see further Halsbury's Laws of England, 4th Ed. Vol. 37 at p 579; Butterworths Costs, 4th Ed. Vol. 1 at para.A184).

2. It is true, as Halsbury (op. cit.) points out, that notwithstanding what was decided in Price v. Clinton, a judge may in his discretion modify the scale of costs when ordering that a party receive costs (see Neaves v. Spooner (1887) 36 WR 257, CA). That is a different question although it may be a material matter to be taken into account in the application for security for costs on the issue of the amount of the security to be provided, for in ordering security for costs, the Court does not set out to give a complete and certain indemnity for costs incurred (see Brundza v. Robbie & Co. (No. 2) (1953) 88 CLR 171 at p 175).

3. It follows, in my opinion, that subject to the application of Order 62 Rule 19 where appropriate (and I express no view on that matter) the taxing officer is bound to allow costs in the amounts specified in items 17 and 18 of the Second Schedule. Specifically, in my view, where Order 62 Rule 19 is not applicable, the taxing officer has no jurisdiction to reduce those amounts merely because it is considered that an "unreasonable" result is thereby achieved. (It should be noted that the Rules of Court have recently been amended so as to give the taxing officer a discretion in a matter such as the present but the amendment has not yet come into operation.)

4. In the result, I answer the questions referred as follows:
   
   Question: Notwithstanding the provisions of Order 62 Rule 12 of the Federal Court Rules, does the taxing officer have a discretion to allow items at other than the scale, measurement or fee contained in the Second Schedule to the Federal Court Rules?
   Answer: Subject to the operation, if any, of Order 62 Rule 19, no.
   Question: In particular, does Rule 19 operate to qualify Rule 12?
   Answer: Yes.

5. Since there was much common ground in the respective contentions of the parties on these questions, I propose to make no order for the costs of the reference.