Frigger as trustee for the Frigger Super Fund v Massey - [2024] WASC 398

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION:   FRIGGER as trustee for THE FRIGGER SUPER FUND -v- MASSEY [2024] WASC 398
CORAM:   LEMONIS J
HEARD:   16 FEBRUARY 2024
DELIVERED          :   31 OCTOBER 2024
FILE NO/S:   CACV 8 of 2021
BETWEEN:   ANGELA CECILIA THERESA FRIGGER as trustee for THE FRIGGER SUPER FUND
HARTMUT HUBERT JOSEF FRIGGER as trustee for THE FRIGGER SUPER FUND
Appellants
AND
HOLBORN LENHOFF MASSEY
First Respondent
COMPUTER ACCOUNTING & TAX PTY LTD (IN LIQ)
Second Respondent
MERVYN JONATHAN KITAY AS LIQUIDATOR OF COMPUTER ACCOUNTING & TAX PTY LTD (IN LIQ)
Third Respondent

Catchwords:

Review of taxation by a registrar - consideration of relevant principles - consideration of indemnity principle - whether costs agreement excludes liability of another party to pay costs - implied retainer - onus of establishing no liability to pay costs - whether costs necessary and proper - consideration of whether any error in principle

Legislation:

Legal Profession (Supreme and District Courts) (Contentious Business) Determination 2020 (WA)
Legal Profession (Supreme and District Courts) (Contentious Business) Determination 2022 (WA)
Rules of the Supreme Court 1971 (WA)
Supreme Court (Court of Appeal) Rules 2005 (WA)

Result:

Application for review is dismissed

Category: B

Representation:

Counsel:

Appellants	:	In person
First Respondent	:	D Banda
Second Respondent	:	No appearance
Third Respondent	:	No appearance

Solicitors:

Appellants	:	In person
First Respondent	:	Bennett
Second Respondent	:	Lenhoff & Hotz
Third Respondent	:	Lenhoff & Hotz

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

Adams v London Improved Motor Coach Builders Ltd [1921] 1 KB 495
City of Belmont v Saldanha [No 2] [2018] WASC 278
Director of the Fair Work Building Industry Inspectorate v Abbott (No 7) [2015] FCA 969
Frigger v Banning (No 13) [2023] FCA 923
Frigger v Kitay [No 10] [2016] WASC 63 (S)
Hancock Prospecting Pty Ltd v Hancock [No 3] [2016] WASC 423
Noye v Robbins [2010] WASCA 83

LEMONIS J:

The appellants (the Friggers) have applied for the review of the taxation of items contained in a bill of costs filed on behalf of Holborn Lenhoff Massey (the first respondent).
The Friggers' liability for costs arises in the following way.
The Friggers are the plaintiffs in Supreme Court proceeding CIV 2765 of 2010. They applied for an injunction to restrain the first respondent from acting for the defendants in those proceedings. The application was dismissed. Le Miere J ordered that the Friggers pay the first respondent's costs of the application, which were fixed.[1] The Friggers appealed against that costs order, the appeal being CACV 8 of 2021. The Friggers joined the first respondent as a party to the appeal.
[1] Frigger v Kitay [No 10] [2016] WASC 63 (S).
By orders made 30 July 2021 in CACV 8 of 2021, the Court of Appeal ordered the Friggers to provide security for the first respondent's costs of the appeal. The Friggers did not give the security ordered. As a consequence, the first respondent applied to dismiss the appeal by application filed 26 August 2021. On the hearing of that application on 3 September 2021, the Court of Appeal granted the Friggers an extension of time to give security of costs. The Court of Appeal also ordered that if the Friggers did not give security by the extended timeframe, the appeal would be dismissed and in that circumstance 'the [Friggers] are to pay the first [respondent's] costs of the appeal and its application filed 26 August 2021, including any reserved costs, to be assessed if not agreed'. The Friggers did not give security by the extended timeframe. Accordingly, the appeal was dismissed and the costs order became operative.
The first respondent filed a bill of costs in the appeal, which was taxed by the learned registrar on 17 March 2023. The Friggers sought a review of the taxation, which was dealt with by the learned registrar on the papers. By way of written reasons (the primary reasons), the learned registrar dismissed the Friggers' objections. In summary, the learned registrar found that that none of the objections amounted to an error in principle or the erroneous application of such principle.[2]
[2] Primary reasons [48].
The Friggers then applied for a review of the learned registrar's decision. The Friggers made the application to the Court of Appeal, presumably because it was the Court of Appeal who made the costs order. The Court of Appeal referred the application for review to the general division of the Supreme Court.
The Friggers' principal contention is that the first respondent did not have any liability to pay costs to the solicitors who represented it on the appeal (Bennett + Co). Therefore, the Friggers say, there is no liability with which the costs order can engage. This complaint is directed to the entirety of the bill.
Before setting out the grounds of the application, I will summarise the principles applicable to a review of the taxation.

Applicable principles

Order 66 of the Rules of the Supreme Court 1971 (WA) (the Rules) sets out the applicable rules concerning costs.
In City of Belmont v Saldanha [No 2],[3] Vaughan J (as his Honour then was), summarised the operation of the Rules in relation to an objection made to a taxing officer concerning a taxation of costs. His Honour said:[4]
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.
[3] City of Belmont v Saldanha [No 2] [2018] WASC 278.
[4] City of Belmont [32].
A party who is dissatisfied with the review conducted by the taxing officer may then seek review by a judge. In City of Belmont, Vaughan J explained that process as follows:[5]
[5] City of Belmont [35] - [43].
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. 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. 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)).
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. For a decision to be 'wrong' it must be shown that there is an error in principle.
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.
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. 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. The amount allowed must be so extraordinary as to be demonstrable of an error in principle. Thus, a decision of a taxing officer as to quantum is generally final except in an exceptional case.
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. 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.'
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.
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. 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.
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. (footnotes omitted)
I adopt and apply these observations in respect of this review proceeding.
As to the nature of a costs order itself, in Hancock Prospecting Pty Ltd v Hancock [No 3],[6] Pritchard J (as her Honour then was) explained that costs are awarded to indemnify the successful party for their liability for costs. This is known as the indemnity principle. If a party is not liable to pay costs, there is nothing to indemnify.
[6] Hancock Prospecting Pty Ltd v Hancock [No 3] [2016] WASC 423 [16].
Her Honour made the following observations regarding the indemnity principle:[7]
[7] Hancock [17] - [19], [21] - [23], [26] - [27].
The making of a costs order in favour of a party is not dependent upon the party seeking costs producing a costs agreement between that party and their solicitors.
The application of the indemnity principle means that a party (the client) who does not have a liability to his or her solicitors for costs cannot recover costs against an unsuccessful party to the litigation.
The indemnity principle is flexible, and is designed to allow for a just and fair result. Accordingly, if the client and his or her solicitor reach an agreement that the client will not have to pay the solicitor's costs, the client cannot obtain an award of costs against an unsuccessful party in litigation. Similarly, if the liability of the client to the solicitor is limited, the quantum of costs that can be recovered from the unsuccessful party is also limited to that amount.
…
The liability of the client to pay the fees charged by the solicitor for the legal work performed for the client arises by contract, called the retainer. Like any contract, proof of the existence of a retainer can be implied from conduct. Furthermore, once it is established that a solicitor was acting for a client with the client's knowledge and assent, it will be presumed that the retainer existed, and that the client is liable to his or her solicitors for the solicitors' costs. The presumption that a retainer exists is a strong one. So strong is the presumption that it has sometimes been equated to a 'deemed retainer'.
The indemnity principle will apply even if the instructions to act on behalf of the client have come to the solicitor from another party, or from some non-party interested in the litigation.
The indemnity principle will not be displaced merely because a third party has undertaken to pay the client's legal costs. Furthermore, the fact that by the time a costs order is sought, the costs of the client have already been paid by a third party does not preclude the recovery of those costs by the client pursuant to the costs order against the unsuccessful party.
…
To displace the indemnity principle it is necessary to prove either that there was no retainer, or that there was an agreement, either between the client and the solicitors, or between the third party and the solicitors, that under no circumstances would the client be liable for the costs.
The onus of establishing that a client had no liability to pay the legal fees charged by his or her solicitors rests upon the party seeking to resist the making of a costs order, or the payment of costs pursuant to a costs order (in this case, HPPL).
(footnotes omitted, emphasis added)
The decisions of Noye v Robbins[8] and Adams v London Improved Motor Coach Builders Ltd[9] were cited by her Honour in support of the proposition italicised in the passage above that the indemnity principle will not be displaced merely because a third party has undertaken to pay the client's legal costs.
[8] Noye v Robbins [2010] WASCA 83.
[9] Adams v London Improved Motor Coach Builders Ltd [1921] 1 KB 495.
In Noye, Owen JA considered the application of the indemnity principle in circumstances where a third party is liable to pay a party's costs. Owen JA observed that the indemnity principle does not mean that a party cannot recover costs merely because he may be relieved from the obligation of paying his solicitor's costs.[10] His Honour referred with approval to the decision of Adams, where Bankes LJ made the following observation:[11]
When once it is established that the solicitors were acting for the plaintiff with his knowledge and assent, it seems to me that he became liable to his solicitors for costs, and that liability would not be excluded merely because the Union also undertook to pay the costs. It is necessary to go a step further and prove that there was a bargain, either between the Union and the solicitors, or between the plaintiff and the solicitors, that under no circumstances was the plaintiff to be liable for costs.
[10] Noye [298] (Owen JA; Pullin JA and Buss JA agreed).
[11] Adams (501).
Owen JA observed that Adams illustrates the successful party can recover costs if he has an obligation to pay solicitors notwithstanding the fact a third party might (and in all probability will) relieve him of that obligation.[12] His Honour was also of the view that even if the third party payer had discharged the cost liability prior to the award of costs, a successful party can still recover costs.[13]
[12] Noye [299].
[13] Noye [313].
In terms of when the indemnity principle can be raised by the unsuccessful party, in Frigger v Banning (No 13) Colvin J held that it can be raised both at the stage the costs order is made, or at the stage of assessment of the quantum of costs.[14] From having reviewed the court file, the Friggers raised the indemnity principle in opposition to the initial costs order being made by the Court of Appeal. The first respondent does not suggest that precludes the Friggers from raising the issue on taxation, or on a review therefrom.
[14] Frigger v Banning (No 13) [2023] FCA 923 [4], [26] - [27].

The application for review

The Friggers' application is constituted by an amended application sent through to the court on 18 January 2024. The application sets out seven grounds of review. The first ground applies to the entirety of the taxation. The remaining grounds apply to specific items the subject of the taxation.
The grounds of review are as follows, with the paragraph references being referable to the primary reasons:
1.All items: The taxing officer erred in principle by finding Holborn Lenhoff Massey has liability to pay Bennett + Co costs, contrary to the terms of the retainer adduced by David Lenhoff in the taxation. [13] - [29]
2.Item 2: No explanation given for rejecting an objection that a cost was neither necessary nor proper. [30]
3.Items 3, 6, 7: An objection that costs were neither necessary nor proper is not an objection to the amount allowed. [31],[34], [35]
4.Items 4 and 5: Legal Profession (Supreme & District Courts) (Contentious Business) [12] states 'the costs of or in relation' shall not exceed the amounts set out in Table B. Item 25(e) has a maximum of $4,510. The registrar allowed $6,020. No special cost order was made for the application. [32]
5.Items 8 and 9: The registrar conflated an item that is allowable at taxation, with jurisdiction to award costs under that item. [36] ‑ [40], [44] - [47]
6.Item 8: The registrar allowed a disbursement of $94.50 for a service that costs $15.00, the error of principle arises because of the substantial difference. [41]
7.Item 8: The registrar allowed a disbursement of $57.50 which disbursement was not necessary nor proper. [42]
Ground 1 initially provided that a registrar/taxing officer does not have jurisdiction to decide whether a party has liability to pay costs. However, since the application was initially filed, Colvin J delivered the decision in Banning in which his Honour found that:[15]
… it is not the case that the issue whether the indemnity principle had been met in respect of the costs claimed by the respondents was a matter that was required to be dealt with by a judge of the Court.
[15] Banning [40].
Subsequently to his Honour's decision, the Friggers filed the amended application, which contained the new ground 1 as set out at [20] above.
In addition to the items set out in the application, the Friggers also complain about the amount which the learned registrar allowed for the first respondent's costs of the taxation itself.
I will deal with each of the grounds in turn.

Ground 1

The ground as amended is that the learned registrar erred in principle by finding the first respondent has liability to pay the claimed costs, contrary to the terms of the retainer which were adduced by Mr Lenhoff in the taxation.
The circumstances relevant to this ground are as follows.
Mr David Lenhoff swore an affidavit on 15 July 2022 (dated 14 July 2022) in opposition to the Friggers' objections to the bill of costs.
In that affidavit, Mr Lenhoff explained that he had previously been a partner of the first respondent and was authorised to swear the affidavit on its behalf. Mr Lenhoff also explained that he retained the firm of solicitors Bennett + Co to act for him and the first respondents in the appeal.
Mr Lenhoff annexed to his affidavit a costs disclosure letter from Bennett + Co to him dated 8 April 2021[16] and a costs agreement made between him and Bennett + Co.[17] The letter recorded that Mr Lenhoff had instructed Bennett + Co to provide advice and representation to him and to the first respondent in CACV 8 of 2021. The costs agreement identified the 'Client' as being Mr Lenhoff[18] and was signed by Mr Lenhoff.[19]
[16] Affidavit of Mr Lenhoff sworn 15 July 2022, pages 5 - 7.
[17] Affidavit of Mr Lenhoff sworn 15 July 2022, pages 11 - 19.
[18] Affidavit of Mr Lenhoff sworn 15 July 2022, page 19, cl 47.
[19] Affidavit of Mr Lenhoff sworn 15 July 2022, page 19.
Clause 43.3 of the costs agreement provides:
If, during the course of the Client's engagement with Bennett + Co, the Client instructs Bennett + Co to provide advice or Legal Services to an entity that is related to or associated with the Client, then that entity may become a client of Bennett + Co and a separate Costs Agreement with that client will be required. If for any reason a separate Costs Agreement with that client is not entered into then the Client agrees that the Client will be liable for the Costs of the advice and Legal Services provided by Bennett + Co to the related or associated identity in accordance with the Client's instructions.

The costs agreement has attached to it a schedule pertaining to estimates and other matters. The subject matter of the schedule was identified as being to 'provide advice and representation in CACV 8 of 2021'.[20]
[20] Affidavit of Mr Lenhoff sworn 20 April 2021, page 20 cl 1.1.
In the appeal, Bennett + Co filed a notice of intention on behalf of the first respondent. The notice stated that the first respondent intended to take part in the appeal and was represented by Bennett + Co.
Further, the first respondent's application for security for costs was brought by Bennett + Co on its behalf. Mr Lenhoff swore an affidavit in support of the application.[21] The affidavit stated that he had been authorised to swear it on the first respondent's behalf. The affidavit also said that Mr Lenhoff swore it in support of the first respondent's application for an order that the Friggers give security for the first respondent's costs of the appeal.
[21] Affidavit of Mr Lenhoff sworn 20 April 2021.
The affidavit also attached a letter from Bennett + Co to the Friggers attaching a draft bill of costs. [22] The letter said that the draft bill of costs reflected an estimate of the first respondent's costs of the appeal calculated by reference to the applicable costs scale.[23]
[22] Affidavit of Mr Lenhoff sworn 20 April 2021, pages 27 - 30, par 14.
[23] Affidavit of Mr Lenhoff sworn 20 April 2021, page 28, pars 5 and 6.
The relevant objection raised by the Friggers before the learned registrar was that:[24]
The taxing officer erred in principle by finding the first respondent does have liability to pay costs of the appeal, notwithstanding the clear and unequivocable terms of who is liable to pay Bennett & Co's costs, she found that the first respondent is liable to pay Bennett & Co's costs in CACV 8 of 2021.
[24] Primary reasons [11(3)].
In fairness to the Friggers, the manner in which the first respondent's position was initially presented at the taxation on this topic was somewhat ambiguous. As I have explained at [27] - [29] above, the first respondent filed an affidavit of Mr Lenhoff attaching the costs disclosure letter and the costs agreement made between him and Bennett + Co. The first respondent's submissions filed prior to the taxation said the affidavit establishes the liability of the first respondent to Bennett + Co. This proposition was footnoted by reference to the costs disclosure letter and the costs agreement.[25] At the taxation, the first respondent's counsel initially submitted that:[26]
The affidavit of Mr Lenhoff attaches a costs agreement between us and Mr Lenhoff in relation to our retainer. And that should be the end of the matter.
[25] First respondent's written submissions dated 15 July 2022, par 7.
[26] Taxation, 17 March 2023, ts 41.
The first respondent's counsel subsequently clarified that position. He explained that Bennett + Co's retainer to act for the first respondent arose independently of the costs agreement made with Mr Lenhoff.[27] This was the same position as was advanced on the review before the learned registrar.
[27] Taxation, 17 March 2023, ts 69 - ts 72.
On the review application, the learned registrar found that Bennett + Co was retained to act on behalf of the first respondent and did so act.[28] The learned registrar stated that consistently with the decision in Hancock, there is a strong presumption that a retainer exists and that the onus of establishing that there is no liability to pay legal fees rests upon the parties seeking to resist such payment.[29] The learned registrar also noted that the fact that the third party is liable to pay legal costs does not displace the indemnity principle.[30]
[28] Primary reasons [21].
[29] Primary reasons [22].
[30] Primary reasons [23].
The learned registrar found that the Friggers had not adduced evidence sufficient to displace the presumption of a retainer and further, that all the available evidence pointed to the existence of a retainer.[31] The learned registrar ultimately found that even if Mr Lenhoff is a third party payer, that did not displace the indemnity principle.[32]

Disposition on ground 1

[31] Primary reasons [24].

[32] Primary reasons [28]. The reference in [28] to 'par 58' should be a reference to 'par 23'.

The ground as now articulated is that the learned registrar's finding that the first respondent was liable to pay the first respondent's costs is contrary to the costs agreement. In essence, the Friggers contend that the arrangements were such that Mr Lenhoff was solely liable for payment of the costs of Bennett + Co.
There can be no doubt that Bennett + Co was retained to act for the first respondent in CACV 8 of 2021. Bennett + Co filed a notice of intention to act on its behalf. Bennett + Co appeared for it at the court hearings and filed applications and other documents on its behalf. There is no suggestion on the evidence that the first respondent was not aware of the appeal, nor that it was not aware Bennett + Co was acting for it in the appeal. The costs disclosure letter from Bennett + Co to Mr Lenhoff recorded that Mr Lenhoff had instructed Bennett + Co to act on behalf of the first respondent and Mr Lenhoff.
Subsequent to the hearing of the review application before me, the Friggers filed further submissions contending that the first respondent is a sham partnership and that Mr Lenhoff is in truth the first respondent. That contention was not a ground of review raised before the learned registrar. The raising of it now cannot give rise to an error in principle by the learned registrar. Further, that contention is not the subject of the amended application for review before me. Moreover, it is quite incongruous for the Friggers to now complain about the identity of the first respondent given the Friggers sought an injunction against it.
In support of ground 1, the Friggers placed particular reliance on the decision of Director of the Fair Work Building Industry Inspectorate v Abbott (No 7).[33] Pritchard J summarised Abbott in her Honour's reasons in Hancock.[34] In Abbott, the Director had been ordered to pay the respondents' costs. Mr Windus was one of the respondents. The Director sought a stay of the bill of costs filed for Mr Windus on the ground that no retainer existed between him and the two firms of solicitors who had acted for him in the proceedings (Gibson & Gibson and Corser & Corser). Gilmour J held that Mr Windus was not liable to pay the fees and a third party payer (Mr Windus' union) was solely responsible for payment. Gilmour J therefore granted a stay of assessment of the bill.
[33] Director of the Fair Work Building Industry Inspectorate v Abbott (No 7) [2015] FCA 969.
[34] Hancock [28] - [37].
Pritchard J made the following observations in respect of the result in Abbott:[35]
It is apparent that the result in Abbott is entirely referable to the facts established on the evidence in that case. Justice Gilmour concluded that the evidence, as a whole, displaced the presumption that there was a retainer between Mr Windus and Gibson & Gibson, or between Mr Windus and Corser & Corser.
Further, nothing in the reasons of Gilmour J in Abbott establishes any new point of principle. In particular, nothing in his Honour's reasons is inconsistent with the authorities, such as Noye and Marsh v Baxter (No 2), which establish that in order to displace the indemnity principle, evidence is required to establish either that there was no retainer at all, or to establish the existence of an agreement that the client will not be liable for the costs charged by the client's solicitor.
If I am wrong in that conclusion, then to the extent that the principles applied by Justice Gilmour in Abbott constitute a departure from the principles applied by the Court of Appeal in this State in Noye and Marsh v Baxter (No 2), the latter decisions are binding on me.
[35] Hancock [35] - [37].
I agree with and respectfully adopt these observations.
In respect of the circumstances of this case, as I have already observed, it is clear that the first respondent retained Bennett + Co to act for it in CACV 8 of 2021. The issue raised by the Friggers' ground is whether or not the costs agreement made between Mr Lenhoff and Bennett + Co excluded any liability of the first respondents for Bennett + Co's costs.
In support of their contention, the Friggers placed particular reliance on cl 43.3 - see [30] above. Clause 43.3 does not operate to exclude the first respondent's liability for costs. Rather, cl 43.3 operates to extend Mr Lenhoff's liability for costs where the instructions he provides extend beyond the scope of the initial engagement. The costs agreement makes no reference to the first respondent's liability for costs being excluded.
Another particular emphasis of the Friggers' submissions is that no invoices were sent by Bennett + Co to the first respondent. However, even if that is so, merely because a legal practice looks initially to a third party for payment, does not mean the party for which the legal practice is acting is not responsible for the payment of fees. The matter has to be assessed on the circumstances of the case as a whole.
The fallacy in the Friggers' overall contentions is revealed by the following passage in their written submissions:[36]
It is clear from the above terms of the agreement between [Bennett + Co] and Lenhoff, that the only person liable to pay the costs pursuant to the costs agreement adduced by Lenhoff, is Lenhoff who is defined as the 'Client'. (emphasis added)
[36] Friggers' written submissions provided 22 January 2024, par 17.
The first respondent's liability to pay costs in this case is not 'pursuant to the costs agreement'. Rather, it is by way of an implied retainer. In the circumstances of this case, that retainer is not displaced by the costs agreement made between Bennett + Co and Mr Lenhoff.
Moreover, the retainer is confirmed by what occurred in the appeal itself. The first respondent made an application for security for its costs of the appeal. Mrs Frigger now suggests that Mr Lenhoff did not have the first respondent's authority to swear the affidavit in support of the application. Implicit in that submission is that the application was made without the first respondent's authority. However, that was not a matter raised by the Friggers in opposition to the application. Further, it is implicit in the making of the order for security for costs, and the subsequent order for dismissal of the appeal if security was not provided, that the application for security was properly brought.
In my view, the first respondent, by making the application for security for costs, acknowledged a liability to pay Bennett + Co's costs. Otherwise, there would be nothing to provide security for. That liability for costs is a liability to pay legal costs in accordance with the costs determination applicable to the work undertaken. The liability is not to pay legal costs calculated by reference to the hourly rates set out in the costs agreement made with Mr Lenhoff.
There are therefore two costs regimes in place applicable to the work undertaken by Bennett + Co. First, the regime whereby Mr Lenhoff was liable under the cost agreement. Second, the regime whereby the first respondent was liable under a general retainer to pay Bennett + Co in accordance with the applicable costs determination.
Accordingly, the Friggers have not displaced the indemnity principle. The learned registrar was correct to conclude that the costs agreement made between Bennett + Co and Mr Lenhoff did not displace the indemnity principle. This ground of review is therefore not made out.
Finally in respect of ground 1, the Friggers also relied on the learned registrar having incorrectly described Mr Lenhoff as a partner of the first respondent.[37] That description was not correct; Mr Lenhoff was a former partner at that time. However, the reference in the primary reasons to Mr Lenhoff being a partner was merely descriptive of his connection to the first respondent. It did not affect the learned registrar's reasoning process. Accordingly, the error in description does not advance ground 1.
[37] Primary reasons [28].
For these reasons, ground 1 is dismissed.

Ground 2

This ground concerns item 2 in the bill of costs, which pertained to preparation of the first respondent's answer in the appeal. The learned registrar reduced the amount claimed by $2046, representing two hours of a senior practitioner's time ($990) and three hours of a junior practitioner's time ($1056).[38]
[38] Taxation, 17 March 2023, ts 84.
The Friggers' initial objection concerned the time spent by a junior practitioner in preparing the answer. The Friggers contended before the learned registrar that in circumstances where the learned registrar found the appeal contained complex matters of law and fact, it was neither necessary nor proper for a junior practitioner to be involved in preparing the first respondent's answer.
In dismissing this objection, the learned registrar accepted the first respondent's submission that an allowance for the work of more than one fee earner is not an error in principle.
On the review before me, the Friggers' ground is that the learned registrar provided no explanation for rejecting the Friggers' objection, which was that the costs were neither necessary nor proper. However, that proposition does not correctly characterise the learned registrar's reasons. As I have explained, the objection raised by the Friggers before the learned registrar was that it was not appropriate for a junior practitioner to be involved in preparing an answer when the appeal involved complex matters of law and fact. The learned registrar found that the allowance for the work of more than one fee earner was not an error in principle. That finding was correct.
Further, the Friggers' objection was directed to quantum, not principle. It is clear from the deductions made by the learned registrar that she considered the extent to which the time claimed for the junior practitioner's work was necessary and appropriate. It must also be kept in mind that a junior practitioner is a practitioner who has been permitted to practise law on their own account for less than five years. Here, the relevant junior practitioner was admitted in 2017, so would have been three to four years post admission at the time of the appeal. Given these matters, in my view the amount allowed is not so extraordinary as to be demonstrable of an error in principle.
The Friggers' written submissions also said that the total time claimed to have been spent on preparing the answer was false. That is a generalised assertion without any proper foundation.
For these reasons, ground 2 is dismissed.

Ground 3

This ground pertains to items 3, 6 and 7.
The objection raised by the Friggers before the learned registrar was that these items were 'neither necessary nor proper'. The learned registrar disallowed this objection on the ground that the objection is as to the amount.[39]
[39] Primary reasons [31], [34] - [35].
At the hearing before me, the Friggers did not advance any grounds in respect of item 3.
Item 6 pertains to the first respondent's application to issue a subpoena. The learned registrar allowed the sum of $3,761.82. The Friggers contend in their written submissions that the amount allowed is so excessive that it amounts to an error in principle.[40] The written submissions state that a subpoena is a standard form to be downloaded from the court's website and the issue of the subpoena can hardly take the time claimed. However, this submission does not directly address the relevant item. Item 6 is in respect of an application to issue the subpoena, not just the preparation of the subpoena itself.
[40] Friggers' written submissions provided 22 January 2024, par 23.
When taxing the bill, the learned registrar observed that r 42A(c) of the Supreme Court (Court of Appeal) Rules 2005 (WA) required leave to issue the subpoena. The learned registrar also noted that an affidavit in support was filed[41] and that an order granting leave for the issue of the subpoena was made at the hearing on 30 July 2021. Given these matters, in my view the amount allowed is not so extraordinary as to be demonstrable of an error in principle.
[41] The work itemised by Bennett + Co in support of this item did not expressly refer to an affidavit. However, an affidavit of Ms Stewart affirmed 4 June 2021 was filed in support of the application. The learned registrar took the affidavit into account when taxing the item.
Item 7 is in respect of the first respondent's application to dismiss the appeal. The application was supported by an affidavit. The amount claimed was initially $4,510. After having heard submissions on the matter, the learned registrar reduced that amount by $3,025 and only allowed the sum of $1,485. The sum allowed equated to three hours of a senior practitioner's time.[42]
[42] Taxation, 17 March 2023, ts 101.
The Friggers' objection before the learned registrar was that she erred in principle by condoning a junior practitioner spending time on the matter.[43] However, as I just explained, the learned registrar did not allow any amount for the work of the junior lawyer. Given these matters, in my view the amount allowed is not so extraordinary as to be demonstrable of an error in principle.
[43] Primary reasons [11(8)].
On the hearing before me, the Friggers also submitted that there was no need to make the application, as it would automatically follow that if they did not give security for costs as ordered, the appeal would be dismissed.[44] However, that is not the effect of the orders made by the Court of Appeal. The order for security made 30 July 2021 provided that the security be given by 13 August 2021 (order 3). It was also ordered that the appeal be stayed pending compliance with the order for security for costs (order 4). An order was not made that the appeal be dismissed if the security was not given. It was therefore necessary for the first respondent to make an application to dismiss the appeal for non-compliance with the security order.
[44] Review, 16 February 2024, ts 25.
For these reasons, ground 3 is dismissed.

Ground 4

Ground 4 pertains to items 4 and 5 of the bill. Item 4 of the bill is in respect of the first respondent's application to adduce further evidence. Item 5 of the bill is in respect of the first respondent's application for security for costs.
The first respondent filed an application dated 20 April 2021 in the appeal in which it sought orders to adduce further evidence, and for security for costs. The application set out the orders sought in respect of those topics under headings 'Application to adduce further evidence' and 'Application for security for costs' respectively. The application dated 20 April 2021 came on for hearing on 30 July 2021. The Court of Appeal reserved the costs of the application. The ultimate costs order made in favour of the first respondent (see [4] above) included the payment of reserved costs.
Items 4 and 5 of the first respondent's bill of costs were claimed under item 25(e) of the Legal Profession (Supreme and District Courts) (Contentious Business) Determination 2020. Item 25(e) allows a maximum of $4,510 for:
An application in an appeal, an interlocutory or directions hearing before a single Judge or Registrar.
The bill of costs claimed the maximum of $4,510 for each of items 4 and 5. The learned registrar reduced that amount by $1,500 in respect of both items.[45] In doing so, the learned registrar took account of potential overlap in the work undertaken.[46]
[45] Taxation, 17 March 2023, ts 93 - ts 95.
[46] Taxation, 17 March 2023, ts 92.
The Friggers contend the learned registrar erred in principle by treating the applications the subject of items 4 and 5 as separate applications. This contention is predicated on the application to adduce further evidence, and the application for security for costs, being contained in the one document.

The learned registrar found that while the applications were contained on the one document, they were separate applications and distinct and different work was required.[47] That characterisation was clearly correct. The parties filed separate submissions and affidavits pertaining to each application. It would have been open to the court to make different costs orders in respect of each application.
[47] Primary reasons [32].
Further, item 25(e) is directed to the substance of what has occurred, not to technicalities as to whether the applications are contained in one or two documents. The substance of what occurred is that two separate applications were brought, which were contained in the one document.
For these reasons, the learned registrar did not make an error in principle in concluding that the application for security for costs, and the application to adduce further evidence, were separate applications. Accordingly, ground 4 is dismissed.

Ground 5

Ground 5 pertains to items 8 and 9 on the bill of costs. Item 8 is in respect of drawing the bill of costs. Item 9 is in respect to the taxation of the costs. The Friggers' objection before the learned registrar was that the learned registrar lacked jurisdiction to make an order for costs of the taxation. The Friggers did not press ground 5 before me.
Ground 5 is dismissed. I will still make the following observations regarding ground 5.
The Friggers' written submissions before the learned registrar attribute to Dal Pont, Law of Costs[48] the following passage:[49]
Where the rules make no provision for costs of taxation, the taxing officer lacks the jurisdiction to order costs. This can be justified in that, if a court cannot exercise a jurisdiction to order costs except as conferred by statute, a taxing officer cannot exercise the same simply by inherent power. That the rules in most jurisdictions make specific provision for such a power in the taxing officer of itself suggests that this power is lacking at general law. The rules in all States, save Western Australia, make such specific provision for costs of taxation.
[48] G Dal Pont, Law of Costs, Dal Pont (5^th ed, 2021).
[49] Friggers' written submissions dated 14 April 2023 (filed 13 April 2023), footnote 4.
The learned registrar adopted this passage in the primary reasons.[50] However, the recitation of the passage in the Friggers' submissions is not correct. The passage in both the hard copy and the online version of Law of Costs states:[51]
Other than in Western Australia, statute or rules prescribe by whom the costs of the process of taxation are to be paid.
…
Where the rules make no provisions for costs of taxation, the taxing officer arguably lacks the jurisdiction to order costs. This can be justified in that, if a Court cannot exercise a jurisdiction to order costs except as conferred by statute, a taxing officer cannot exercise the same simply by inherent power. That the rules in most jurisdictions make specific provision for such a power in the taxing officer of itself suggests that this power is lacking at general law. (emphasis added)
[50] Primary reasons [36].
[51] Law ofCosts [18.41].
As can be seen, this passage does not definitively state that the taxing officer lacked jurisdiction to order costs of the taxation. Rather, the passage stated it is arguably the case that the taxing officer lacks such jurisdiction.
In the primary reasons, the learned registrar explained the basis for her jurisdiction.[52] The learned registrar referred to O 66 r 19(a) of the Rules, which provides:
Any of the following items, disbursements, expenses, payments, or charges are allowable on taxation -
(a)items of costs allowable under any relevant scale and such counsel fees as may be allowed;
[52] Primary reasons [37] - [39].
The learned registrar also referred to item 32(b) of the Legal Profession (Supreme and District Courts) (Contentious Business) Determination 2022 (which applied at the time of taxation), which states:
Taxation of costs, including the time spent in preparing for the taxation and time required to be spent attending any mediation or conference convened by the court or attending to any matters required by the Rules or a Practice Direction.
The learned registrar correctly concluded that it follows from O 66 r 19(a) of the Rules and item 32(b) of the determination that the costs of taxation are within the jurisdiction of a registrar taxing the bill.[53]

Ground 6

[53] Primary reasons [39].

Ground 6 pertains to item 11 of the bills of costs, which relates to disbursements.[54]
[54] The Friggers' application says that ground 6 relates to item 8 but that is obviously an error. It relates to item 11.
The relevant item claimed was for AFSA Bankruptcy searches of both Mr and Mrs Frigger. The amount claimed is $94.50 in respect of each of Mr and Mrs Frigger.
The Friggers contend that the relevant search can be done for $15 and provided evidence on the review before me to that effect. However, that is not determinative of an appropriate amount.
The evidence before the learned registrar set out the costs incurred by Bennett + Co in conducting the searches.[55] The costs were claimed in respect of multiple searches in respect of Mr and Mrs Frigger, not just one search as the Friggers appear to contend. It appears that the cost of each search was $37.86.[56] The learned registrar accepted on the evidence before her that the costs claimed represented the cost actually incurred. To have allowed that cost is not reflective of an error in principle, especially given the very modest difference in dollar terms between the actual cost per search of $37.86, compared to the cost of $15 put forward by the Friggers.
[55] Affidavit of Mr Lenhoff filed 15 July 2022, page 23.
[56] It is not apparent how the sum of $94.50 claimed was calculated, however that was not an issue raised before the learned registrar or before me.
Ground 6 is dismissed.

Ground 7

Ground 7 pertains to a further disbursement claimed in item 11 of the bills of costs,[57] being the cost of obtaining an ASIC record of the presentation of accounts and statement for the second respondent.[58]
[57] While ground 7 in the amended application refers to item 8 it is clearly intended to refer to a disbursement claim in item 11.
[58] Bill of costs, schedule F, item 3.
Before the learned registrar, the Friggers contended that this item should not have been allowed because the second respondent did not take part in the appeal.[59]
[59] Primary reasons [11(10(b))].
The learned registrar observed in the primary reasons that the cost of the ASIC search ($57.50) was established by the evidence.[60] The learned registrar concluded that no error in principle was demonstrated.[61]
[60] Primary reasons [42].
[61] Primary reasons [43].
The Friggers' written submissions on the review before me contended that even if there were utility in obtaining the ASIC record, Mr Lenhoff could have obtained the record from the second respondent's liquidator without incurring any cost.[62]
[62] Friggers' written submissions provided 22 January 2024, par 26.
Whether or not a corporate entity takes part in proceedings does not determine whether it is necessary to obtain an ASIC search of that entity. Accordingly, the primary matter raised by the Friggers before the learned registrar did not substantiate any error in principle by the learned registrar in allowing the cost of the search. As to the additional ground raised before me, that certain corporate records might be available from the liquidator does not make it inappropriate to obtain it by way of an ASIC search, especially where the cost is a very modest $57.36. No error in principle is established.
Ground 7 is dismissed.

Additional matter

The Friggers also objected to the learned registrar allowing the sum of $1,518 for the costs of the review before the learned registrar.[63] That sum represented three hours of a senior practitioner's time.
[63] Friggers' written submissions provided 22 January 2024, par 27.
On the review hearing before me, Mrs Frigger accepted that is purely an objection on quantum. The review before the learned registrar was determined on the papers. The Friggers' submissions filed in support of their objections were three pages in length and contained a number of objections. The first respondent's submissions in response were eight pages in length. The learned registrar's allowance of three hours of a senior practitioner's time was plainly not excessive.

Conclusion

For these reasons, the application for review is dismissed.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
SP
Associate to the Hon Justice Lemonis
31 OCTOBER 2024