Garcia v Fowler

[2000] NSWSC 576

CITATION:	Garcia v Fowler & Anor [2000] NSWSC 576
FILE NUMBER(S):	SC 10513/90
HEARING DATE(S):	20/11/98
JUDGMENT DATE:	26 June 2000
PARTIES :	Robert James Garcia Gregory John Fowler & Anor
JUDGMENT OF:	Dowd J at 1

COUNSEL :	Mr P. Semmler QC Mr P. Blackett
SOLICITORS:	Turner Freeman Bartier Perry
CATCHWORDS:	Indemnity costs - court's costs powers - costs of overseas principal - costs incurred overseas
LEGISLATION CITED:	Motor Accidents Act 1988 Americans With Disabilities Act Evidence Act 1995 Legal Profession Act 1987
CASES CITED:	Bruinsma v Mensa (1995) 40 NSWLR 716 Marks v GIO Holdings (1996) 137 ALR 579 Rouse v Shepherd (No.2) (1994) 35 NSWLR 277 Lapira v JAS Investments (unreported, Dowd J 7 July 1998) Calderbank v Calderbank (1976) FAM 93 Multicon Engineering Pty Ltd v Federal Airports Corporation (1996) 138 ALR 425 Maitland Hospital v Fisher (No.2) (1992) 27 NSWLR 724 Oshlack v Richmond River Council (1998) 193 CLR 92 James R. Neeley v Newport News Ship Building and Dry Company, unreported 1986 Jarrell v Newport News Ship Building Dry Dock Compant, unreported March 1982 Muscella v Sun Shipping and Dry Dock Co 12 BRBS 272 (1980)
DECISION:	Costs awarded on indemnity basis from 14 June 1994; costs awarded for work in the United States

IN THE SUPREME COURT
OF NEW SOUTH WALES
(COMMON LAW DIVISION)

DOWD J

Monday 26 June 2000

ROBERT JAMES GARCIA v GREGORY JOHN FOWLER & ANOR

JUDGMENT

1   This is an application for orders for costs by a successful United States plaintiff who sued for damages as a result of personal injuries sustained in a motor vehicle accident in this State, where he was a passenger. Proceedings were brought under the Motor Accidents Act 1988 against the defendants.

2   The plaintiff recovered a verdict in a judgment delivered by me subject to a finding of 10% contributory negligence against the plaintiff. Not all of the issues were resolved between the parties as to damages and I granted liberty to make further submissions in terms of the remaining issues as to damages. I reserved liberty to the parties to apply in respect of costs, interest and in respect of any consequential orders that needed to be made.

3   After some considerable time further evidence was adduced before me and a further hearing occurred on 10 June 1998. Judgment was delivered that day in respect of all of the remaining issues outstanding, with costs again being reserved.

4   By Notice of Motion heard on 20 November 1998 the plaintiff made application for orders as to costs in the following terms:

1. That the defendant pay the plaintiff’s costs of the proceedings, including:
(a) The costs of the Motion to take evidence from witnesses in the United States of America
(b) The plaintiff’s costs incurred in the United States of America in connection with these proceedings, including but not limited to the plaintiff’s costs of proceedings in the United States of America seeking Orders for the taking of depositions, appeals to the United States District Court against earlier Orders made in relation to the taking of depositions for use in these proceedings and advice in relation to defences raised by the defendant during the course of the trial including the effect of the American’s With Disabilities Act, and the Federal OHSA Regulations.
2. That the Plaintiff’s costs be paid on a party/party basis up to and including 14 June 1994 and on an indemnity basis thereafter.
3. That the Defendant pay the Plaintiff’s costs of this Motion.

5   Subsequently material was furnished to me by the plaintiff in February 1999, as to the law and costs practice in California, U.S.A, with the approval of the defendant. No further comment was provided. The documents were admitted and marked Exhibit “AA.”

6   The Court was subsequently advised that an appeal had been lodged by the defendants against the judgment of 10 June 1998. There was a cross-appeal by the plaintiff as to certain findings in the judgment. The appeal and cross-appeal were heard on 19 February 1999, judgment on the appeal was handed down on 5 May 1999 with the defendant’s appeal and the plaintiff’s cross-appeal both being successful in part, increasing in the event, the plaintiff’s verdict.

7   In the judgment of Meagher JA with which the other members of the Court of Appeal agreed, His Honour made a finding as to the allowing of interest on past economic earnings in relation to s.73 of the Motor Accidents Act 1978. I will later refer to this passage when dealing with the indemnity costs application.

8   Subsequent to the delivery of the Court of Appeal judgment, an opportunity was provided to the parties to make further submissions to the court. Neither party sought to make further submissions.

The evidence in the application

9   The application was supported by the affidavits of Mr Armondo Gardiman solicitor for the plaintiff, Ms Diane Middleton of 3 November 1998 who was the Californian attorney instructed by the plaintiff in his own State and Mr Marc Coleman of 2 November 1998 who was retained by the law offices of Diane Middleton to assist on behalf of the plaintiff in relation to these and related proceedings in the U.S. Federal District Court.

Background History

10   Although the plaintiff suffered a large number of injuries the primary ongoing basis of compensation was loss of the sight of one eye. The plaintiff had started on a career as a longshore man on the coast of California, which in the United States is an extremely highly structured industry for advancement to the higher paid jobs such as crane driver, subject to the fairly strict rules of advancement based on skills and seniority.

11   The plaintiff had succeeded notwithstanding the loss of one eye to advance to the position of crane driver using his one eye and with considerable skill carried out his crane drivers’ duties.

12   One of the issues in the proceedings is, notwithstanding that the employer was not aware of the plaintiff’s disabilities was as to whether the plaintiff was protected by, and therefore non-compensable in part by the defendants under the American legislation protecting people with disabilities in their employment and in relation to their salaries.

13   In mid 1991, Diane Middleton employed an attorney Marc Coleman who was an expert in employment law relating to the circumstances of the plaintiff. He was later retained by Ms Middleton to appear in interlocutory proceedings conducted in California in relation to the taking of evidence.

14   Ms Middleton, on behalf of the plaintiff first retained Turner Freeman in January 1989. Mr Armondo Gardiman then commenced to act for the plaintiff. The Government and Insurance Office, the insurer of the defendants conducting the proceedings on behalf of the defendants were advised of his retainer and by letter dated 10 October 1989 were advised of his intention to make an offer to settle the matter. Mr Gardiman then wrote a series of letters and eventually in March 1989 received a request for details of the plaintiff’s earnings, medical reports and tax returns.

15 In order that settlement could be considered a further letter requesting complete details was forwarded to Mr Gardiman by the GIO in May 1990 to which a reply providing certain information, including wage levels was furnished on 11 June 1991. The statement under Pt 33 R8A SCR was served on 19 June 1991 setting out the plaintiff’s particulars in compliance with the rule. The plaintiff’s income tax years for 1990-1991, 1991-1992 were furnished on 27 May 1993 subsequent to which a series of medical examinations were arranged.

16 Amended Particulars under PT 33 R8A were furnished on 30 June 1993 setting out in some considerable detail the injuries of the plaintiff and his wage earning loss. Detailed pay records were also furnished by the plaintiff from Dianne Middleton to the GIO. On 24 September 1993 details of damages and medical examinations were furnished to the GIO by Mr Gardiman.

17 On 26 October 1993 Messrs Turner Freeman served a Notice of Motion and affidavits in support for the taking of evidence on commission under Pt 27 R1A SCR in the United States in respect of certain witnesses going to the plaintiff’s medical condition and the wages that he earned.

18   Considerable additional material was furnished together with a “without prejudice” letter dated 14 June 1994 to Messrs Creagh and Creagh the solicitors for the GIO setting out an offer of compromise of $972,000.00 inclusive of costs. On 14 June 1990 an issues and listing conference was held before a registrar of this Court but the GIO was unable to make an offer because the GIO had mislaid its file containing the medical reports. On 29 June 1994 the GIO rejected the plaintiff’s offer and put a counter offer of $250,000.00.

19   On 20 June 1994 Studdert J, by consent dismissed the plaintiff’s Notice of Motion of 22 December 1993 seeking to take evidence on commission in the United States. The plaintiff was awarded costs by Studdert J on the basis that they be costs in the cause. The Motion was dismissed on the basis that the GIO would agree to admit all of the statements, affidavits and medical reports into evidence without the necessity for cross-examining any witness where a statement, affidavit or report had been served prior to 18 June 1994. The GIO had opposed the orders seeking to have evidence taken in the United States from date of service of the Notice of Motion in December 1993 until the hearing before His Honour in June 1994.

20   On 12 July 1994 Messrs Creagh and Creagh transmitted an offer of compromise of $290,000.00 plus costs. This was the only offer made by the GIO to settle the proceedings. Up until the time of the hearing the plaintiff’s solicitors furnished further additional details of its case to the solicitors for the GIO.

21   In the United States Federal Court, District of California, an order was obtained ex parte for the taking of evidence by way of deposition pursuant to the relevant US legislation for the hearing in Sydney. The Californian magistrate who made the orders sought by the GIO ordered depositions to be taken on 12 October 1994. No reasons were published. Application was also made before me for restraining the taking of the evidence in the United States which I declined, making an order as to costs.

22   The GIO had then indicated prior to the hearing before Studdert J and subsequently it was intending to take evidence on commission under Pt 27 T1A SCR on behalf of the defendants in the United States notwithstanding that the hearing was due to commence on 17 October 1994.

23   On 30 September 1994 Messrs Creagh and Creagh for the GIO advised that arrangements had been made under the rules of the United States Federal Court in Los Angeles for the issuing of an order for the taking of a deposition of the most knowledgeable person in the Pacific Maritime Employers Association in the United States. It was then indicated that leave would be sought to take evidence from the plaintiff’s witnesses if that deposition did not provide the necessary information.

24   On 11 October 1994 the plaintiff through Marc Coleman brought an Notice of Motion before a United States District Court Judge and reversed the magistrates order allowing the taking of depositions and made an order that such depositions not be taken pending the hearing in Sydney. No orders appear to have been made as to costs.

25   Subsequent to this Mr David Arian left the United States to give evidence in the proceedings as to the circumstances of the waterfront in the United States because of the GIO’s refusal to admit his statement into evidence.

26 On 14 October 1994 further particulars under Pt 33 R8A SCR were furnished by the plaintiff’s solicitors.

Application for indemnity costs

27   As the parties argued this question before the other orders sought I will deal first with this application for an order that the defendants bear the plaintiff’s costs on an indemnity basis after 14 June 1994, the date of the plaintiff’s facsimile offering $972,000.00 including costs and on a party/party basis prior to that.

28 The letter containing the plaintiff’s offer was exhibited in the affidavit of Armondo Gardiman referred to. That letter which was a “without prejudice” communication between the parties in an effort to resolve the dispute is admissible in determining the question of liability for costs: S. 131(1) and (2)(b), Evidence Act 1995; Bruinsma v Mensa (1995) 40 NSWLR 716; Marks v GIO Holdings 137 ALR 579 at 581, which last case is in the context of the rules under the Federal Court Act. Einfeld J in those proceedings expressed doubt at the view that the usual rule is that costs will be paid on a party/party basis and indemnity costs only in the most exceptional basis. His Honour said at 582:

“There is a public interest involved in the assessment of costs litigation. Parties must be dissuaded from bringing unnecessary litigation to court. The weight of court lists and the cost of litigation today both to the parties and to the public mean that there is a major community interest in encouraging hearing litigants to settle their cases without resort to a court hearing.”

29   At p.590 His Honour noted the introduction of regulations made pursuant to the NSW Legal Profession Act 1987 taking effect from May 1995 which abolished the previous scale of costs and evinced a trend towards widening the circumstances for the awarding of indemnity costs.

30 Orders for the payment of costs on an indemnity basis may be made by this Court under its inherent jurisdiction or pursuant to the powers contained in Pt 52A R 28A SCR. The rules under the Legal Profession Act 1987 also applies. Before the Legal Profession Amendment Act 1984 the practice of awarding indemnity costs was restricted to circumstances such as where a party maintained proceedings which had no real prospect of success or where a defendant attempted to obtain a tactical advantage and unreasonably delayed an admission of liability: Rouse v Shepherd (No.2) (1994) 35 NSWLR 277.

31   In Lapira v JAS Investments Pty Ltd, (unreported 7 July 1998) I held that an offer in similar terms made by the plaintiff in these proceedings was a Calderbank offer (Calderbank v Calderbank (1976) FAM 93) even though it was not an offer of compromise under PT 22 SCR. I held that it was clearly the policy of the law to encourage such offers to resolve litigation and prevent the time of the court and that the strict application of the SCR was not required.

32   In those proceedings the plaintiff argued that there is a presumption in favour of an order for indemnity costs where a Calderbank offer is made and rejected and relied on Rolfe J in Multicon Engineering Pty Ltd v Federal Airports Corporation (1996) 138 ALR 425 at 451:

“In my opinion the proper approach to take an offer of compromise, whether made under the rules or pursuant to the Calberbank letter, is that there should be a prima facie presumption in the event of the offer not being accepted and in the event of the recipient of the offer not receiving a result ore favourable than the offer, that the party rejecting the offer should pay the costs of the other party on an indemnity basis from the date of the making of the offer. I proceed on this basis that the unreasonableness was the failure by the offeree to accept the offer, which unreasonableness is demonstrated, prima facie by the ultimate result. This approach is consistent with the decisions to which I have referred, the policy evidenced by the Act and the Rules and the widely accepted philosophy that settlements should be encouraged. The relevant Rules provide that costs will be paid on the basis set out therein “unless the Court otherwise orders.” My understanding is that the Court is required to proceed on the basis that it should make the order provided for by the Rules, unless the party rejecting the offer is able to establish good reason for having done so.”

33   I further relied on Maitland Hospital v Fisher (No.2) (1992) 27 NSWLR 721 at 724 where the Court of Appeal found that it was usually appropriate to order indemnity costs in such offer of compromise cases:

“This is deemed appropriate because, from the time of the rejection or deemed rejection of the compromise offer, notionally the real cause and occasion of the litigation is the attitude adopted by the defendant which has rejected the compromise. In such circumstances , that party should bear the costs of the litigation.”

34   I held in that matter that there is no authority supporting the proposition that the mere rejection of a Calderbank letter without more would justify an order for costs in favour of a successful party. I further held at p. 21 that the authorities emphasise the courts discretion to award indemnity costs must be exercised according to the circumstances of each individual case and I relied on Rolfe J in Multicon at 451:

“In saying what I have I acknowledge the force and accept the applicability of the principle that each case must be determined by an exercise of the judicial discretion having regard to the particular facts of each case. Thus the prima facie position having been established the Court must be satisfied that an order for indemnity costs is not appropriate.”

35   I have referred to the decision of the Court of Appeal against the substantive verdict in these proceedings against the award of damages in the current proceedings, His Honour Meagher JA, with whom the other judges agreed, held:

“The highest offer made by the defendant was $290,000.00 plus costs on 12 July 1994. That offer seems to me to have been risible. At that date sufficient facts were known to the defendant to make it realize that a huge verdict would be available to the plaintiff.”

36   Notwithstanding the very full particulars of the plaintiff’s injuries and loss of income that were submitted by the plaintiff, the only offer by the GIO was the sum of $290,000.00 plus costs. This was pursuant to Pt 22 SCR one month after the plaintiff’s offer. The plaintiff’s Counsel points out that the ultimate verdict as it then was at the time of the hearing was more than six times the only amount ever offered and indeed the amount allowed by the Court of Appeal was higher than that.

37   The GIO argued that there was no way of testing the assertions until cross-examination occurred and that it was only in the course of the hearing that the extent of the claim could have been known. It was further argued that the facts were not known and the GIO were not in a position to make an assessment and that the case must been seen in the light of the evidence which emerged in the hearing.

38   Counsel for the GIO further submitted that there was no notice given of the seeking of the indemnity costs and that the plaintiff had from the earliest been endeavouring to compromise the proceedings. In my view, the rejecting of an offer of compromise as such where no notice had been given is not, as such a basis for rejecting an indemnity costs application.

39   It should be noted, as pointed out by the plaintiff, that a letter was sent in September 1993 proposing the taking of evidence in the United States. This was opposed by the defendants and the matter was not resolved until July 1994. The GIO could have informed itself if it wished to by taking evidence in the United States. In my view the defendant had ample opportunity well before the hearing to ascertain the extent of the plaintiff’s claim in addition to the material that was furnished by the plaintiff’s solicitors.

40   In my view as His Honour Meagher JA colourfully said above, the offer of $290,000.00 plus costs was inappropriately low. The GIO had either sufficient information or the opportunity to obtain precise information to indicate that this plaintiff was likely to receive a very substantial verdict. It was always likely that there would be a major verdict for damages.

41   It seems to me that the belated actions of the GIO in endeavouring to obtain evidence in the United States some few days prior to the commencement of the Sydney hearing rather than some few months or indeed years before, underline the inappropriateness of the GIO’s actions in the conduct of the proceedings obliged the plaintiff to proceed with a lengthy and expensive hearing in terms of the bringing of witnesses and parties from the United States, and the complex factual issues involved.

42   In the comments made by the United States Court dealing with the application by the GIO for depositions adverse criticism was made of the “end run” application and the GIO was criticised for its belated attempt to obtain evidence clearly necessary quite a considerable time before. I agree with the plaintiff’s submission that the GIO was well aware or could have place itself in a position of being well aware of the plaintiff’s claims. The offer of compromise in fact made by the plaintiff was of a considerable compromise on the ultimate claim but vastly more than the $290,000.00 plus costs offered by the defendant.

43   I consider the GIO’s actions unreasonable in rejecting the plaintiff’s offer particularly as it included costs, and in the circumstances in applying the reasoning of Rolfe J in Multicon (cited above) I consider it a proper exercise of the courts discretion that costs be paid by the defendants on a party/party basis until 14 June 1994 thereafter costs be paid on an indemnity basis.

Costs of the Defendants Motion seeking to take evidence from witnesses in the United States

44   In December 1993 as set out earlier in this judgment the plaintiff sought costs for the taking of lay and expert evidence under Pt 27 SCR. As I have referred to above that matter was disposed of above on 17 June 1994 when the solicitors for the GIO advised the plaintiff that all of the evidence sought to be admitted with one exception would be admitted. The Motion was dismissed by consent on 20 June 1994.

45   The motion of the plaintiff in December 1993 to take evidence in the United States was based on the fact that the plaintiff returned to the United States shortly after he sustained in the injuries and most of his medical treatment had occurred there. The plaintiff had worked in the United States before the accident and afterwards and all of the issues relating to his employment could have been easier in terms of costs and determining the issues involved. Studdert J by consent made an order that costs be costs in the cause.

46   The plaintiff seeks for the guidance of a costs assessor, a special order that the plaintiff’s costs include costs of that Motion.

47   In the light of the history of the costs application it seems to me clear that any costs recovered should include the costs of the Notice of Motion of the plaintiff and the proceedings in disposing of such application be paid by the GIO. The action of the plaintiff was entirely reasonable in endeavouring to achieve those orders and in endeavouring to advent evidence.

That the plaintiffs costs include costs incurred in the United States in connection with these proceedings

48   As I have indicated earlier the plaintiff relies on the affidavits of Ms. Diane Middleton and Marc Coleman and the evidence admitted as to the practice of the courts of the United States in assessing costs.

49   I have examined the very extensive details and account of Diane Middleton and the evidence of the rate at which she is allowed costs in the United States. The costs sought are for Dianne Middleton and her staff at the rate of $US 200.00 per hour for a total of $ US 82,150.00, together with disbursements and out of pocket expenses $US 14,954.13. Additionally costs are sought for the separate work of attorney Marc Coleman, whose rate is $US 300.00 per hour, the amount he has been allowed in various proceedings, of $US 24,705.00, making, in all $US 121,908.33.

50   Ms Middleton’s work involved the retaining of solicitors and counsel in Australia and arranging witnesses. Ms Middleton has practised for many years in representation of injured workers on the waterfront.

51   Ms Middleton’s work involved the arranging and preparation of medical evidence and the negotiations between the parties as to the taking of medical evidence, the arranging of employment records and independent witnesses and the preparation for the witnesses for trial. This is an inevitably complicated procedure involving numerous phone calls and fax attendance. Ms Middleton’s work also involved the instructing of Marc Coleman in the proceedings in which he appeared.

52   Marc Coleman’s work as retained counsel was to assist in development of proper witness statements from relatives of the plaintiff, research regarding Californian law on aspects of liability as to use of seat belts as an offence and contributory negligence and assumption of risk. His work also involved the obtaining analysing and resolving issues of reimbursement of medical providers and the application of the “Americans With Disabilities Act” to the plaintiff’s case and the preparation of evidence relating to the prospective future employment of the plaintiff as a long shoreman and the resistance to ultimately the initially successful and then unsuccessful attempt to obtain evidence in the United States immediately prior to the hearing,

53   There has not been any suggestion, other than to the one area which I will later refer as to how the way in which portions of an hourly rate are determined by courts in assessing costs, that the time claimed was not so spent. The very detailed costs and assessments of both Ms Middleton and Mark Coleman appear on a reading of that material to have been as a result of work actually carried out.

54   There has been no challenge to the detail of the work done in the United States however there was opposition by the GIO to the making of orders against it, as the work constituted duplication of work incurred and should not be paid by the GIO in addition to the NSW costs.

55   It is submitted on behalf of the GIO that the defensive procedures in the overturning of the United States magistrates decision taken by Mr Marc Coleman were without notice to them and that much of the work done by him in preparing the case was duplication of effort. There was a considerable amount of time spent by Mr Coleman investigating the “Americans With Disabilities Act” which should not be visited on the GIO.

56 The courts power to award costs arises under the courts inherent jurisdiction and Pt 52A SCR. This is as modified by the Legal Profession Act 1987 and in particular s.208 of that Act. The court has a very wide discretion, which discretion should be liberally construed subject to restrictions clearly expressed; (Oshlack v Richmond River Council (1998) 193 CLR 92). The Court is obliged to exercise the discretion judicially and therefore costs would normally follow the event unless there is clear material to justify a contrary result. There is no suggestion here that costs as such should not follow the event. The issue is the extent to which the defendant should have to bear the very considerable costs of the plaintiff.

57   Where, through remoteness it is necessary for there to be principle and agent there is an inevitable increase in costs be that for the plaintiff or defendant.

58   In these particular proceedings there were evidentiary and legal issues to be resolved in the United States that were relevant to the hearing in Sydney which were occasioned by the issues arising in the Sydney hearing, in addition to the actual hearing which occurred in the United States where the defendant initially succeeded in obtaining orders which were later reversed through the efforts of Mr Marc Coleman.

59   It seems to me that in principle the plaintiff is entitled to recover costs incurred in the United States as flowing inevitably from the Sydney hearing but subject to the order that I have already made as to party/party costs until 14 June 1994, the date for the ordering of indemnity costs and thereafter at the indemnity rate.

60   That should include the costs incurred in the United States for both attorneys, Mr Coleman acting in the nature of a specialist attorney in the nature of counsel or senior counsel would here in NSW. I accept however, in part, the submission of Counsel for the GIO that there has been a degree of duplication because of the number of attorneys representing the plaintiff.

61   It seems to me that if Mr Marc Coleman is an experienced specialist in Waterfront law that the amount of time accorded by him involving dealings with the “Americans With Disabilities Act” and the practices of the waterfront and other matters that one would expect him to be in his expertise that the amount charged by him, although I do not question that he actually spent the time, is not fully recoverable from the GIO. I would therefore disallow twenty percent of his fees, in the exercise of the courts discretion in costs charged by him as an assessment of the level of duplication between the various lawyers. A defendant must take a plaintiff as he finds him but not necessarily the way be obtains legal advice.

62   In relation to Ms Middleton’s work the evidence that has been produced is that the courts of the United States will assess costs on the basis of a minimum fee for a quarter hour of work rather than on some other basis such as on one tenth of an hour as is often calculated here in Australia as a basis for assessing attorney’s fees.

63   A number of authorities have been cited, by the plaintiff including the actual US rules, and in particular an appellate decision of James R. Neeley v Newport News Ship Building and Dry Dock Company of November 1986; a decision of Jarrell v Newport News Ship Building and Dry Dock Company of March 1982 whereby billing on a quarter hour minimum charge basis was held to be reasonable.

64   I note that in the decision of Snowden v Ingalls ShipBuilding Incorporated of 18 November 1991 that the Court at p. 251 held that an attorney’s fee award is discretionary and will not be set aside unless shown by the challenging party to be arbitrary, capricious and abuse of discretion or not in accordance with the law, citing Muscella v Sun Shipping & Dry Dock Co, 12 BRBS 272 (1980). In that case the Court held that a quarter hour minimum billing method is appropriate.

65   I note however that in Biggs v Ingalls Shipbuilding Inc of 1993 that an administrative law judged approved a one eighth hour for some items. That decision however reaffirmed that an administrative law judge does not abuse his discretion in awarding an attorney’s fee based on a quarter hour billing method as being reasonable.

66   In each of these decisions the question of an attorney’s fee relates to an attorney’s fee only. An examination of Ms Middleton’s account however shows that her fees include not only herself but, by inference, presumably para-legals, clerks, secretaries or receptionists as the account is expressed to cover the time of her staff as well but at her personal charge out rate. Many of the items detailed are less than one or two minute phone calls and include items such as the sending of a fax, or a call to a copy service, on the basis of $US 200.00 per hour. To endeavour to recover $US 50.00 for having a member of staff, who is clearly included in the number of billable hours, send a fax or check with a copy service is in my view is an unreasonable cost to recover from the GIO.

67   It seems to me that it is the wide costs discretion of this Court, which is the discretion here being exercised, that I accept that for an attorney the reduction below a quarter of an hour for that attorney’s time is considered most unreasonable in the United States in the general case, the attorney’s time, but that for the performing of perfunctory and short term tasks by staff members such an allowance is not here warranted.

68   The court cannot act as a taxing officer but it seems to me that although the bulk of the hours spent by Ms Middleton as outlined by her appear to be actually incurred and I do not question nor does the defendant that the time was spent and the calls were actually made but it seems to me that an examination of the telephone accounts show that a very large number of calls were very short phone calls, which the plaintiff has been charged at a quarter of an hour rate and thus the number of hours spent has been considerably increased for relatively little work in some cases being of only a mechanical nature. This does not seem to me to be just a cost to be properly visited on the GIO.

69   It seems to me that the allowance of fees to Diane Middleton should therefore be discounted not as to disbursements but as to billed hours by fifteen percent.

70   In exercise of the courts discretion it seems to me that as between the parties the costs of over turning the magistrates decision in the United States at the Federal Court hearing were properly incurred by Ms Middleton through the use of Marc Coleman as specialist counsel, and therefore an order should be made subject to the remarks I have made for the recovery of those costs.

71   The plaintiff should therefore recover from the plaintiff on a party/party basis the costs as sought by Ms Dianne Middleton and Mr Marc Coleman up to 14 June 1994 and thereafter that costs be recovered on an indemnity basis. In the exercise of the courts discretion however the costs to be recovered will be discounted by 15% of the fees charged by Ms Middleton and 20% of the fees charged by Mr Coleman but that the disbursement fees charged should otherwise be payable by the GIO.

72   As the plaintiff has been successful in this application I consider that the plaintiff should recover the costs of this motion which will therefore be on an indemnity basis.

73   To allow an opportunity to clarify any issue which may arise I will reserve liberty to apply.

74   I make the following orders: -

1. That the defendants pay the plaintiff’s costs of the Motion under Pt 27 SCR to take evidence in the United States.

2. That the defendants pay the plaintiff’s costs incurred in the United States in connection with these proceedings on the basis of 85% of the fees charged by Ms Dianne Middleton in addition to disbursements incurred on a party/party basis until 14 June 1994 and that thereafter the defendant should pay those costs on an indemnity basis.

3. That the defendants pay the plaintiff’s costs incurred in the United States in connection with these proceedings on the basis of 80% of the fees charged by Mr Marc Coleman in addition to disbursements incurred on a party/party basis until 14 June 1994 and that thereafter the defendant should pay those costs on an indemnity basis.

4 (a). That the defendants pay the plaintiff’s costs of the suit and in respect of all matters not otherwise previously ordered on a party/party basis until 14 June 1994 and;

(b). That the defendants pay the plaintiff’s costs of the suit and all matters not otherwise previously ordered from 15 June 1994 on an indemnity basis.

5. That the defendants pay the plaintiff’s costs of this Motion.

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Last Modified: 09/26/2000