Harpur & Ors v Levy & Ors

[2009] HCATrans 307

[2009] HCATrans 307

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Melbourne   No M76 of 2007

B e t w e e n -

PAUL HENRY HARPUR

First Applicant

PAMELA FAYE RAND HARPUR

Second Applicant

KAI TAK PTY LTD (ACN 005 568 721)

Third Applicant

and

FRANK ERNEST WILLIAM LEVY

First Respondent

LEON MOSCOVITCH

Second Respondent

ANGELO TESORIERO

Third Respondent

MICHAEL AQUILINA

Fourth Respondent

Application for extension of time for filing notice of dispute

HAYNE J

TRANSCRIPT OF PROCEEDINGS

AT MELBOURNE ON TUESDAY, 24 NOVEMBER 2009, AT 9.44 AM

Copyright in the High Court of Australia

__________________

MR P.C. WOODHOUSE:   If the Court pleases, I appear for the applicants.  (instructed by Mills Oakley Lawyers)

MR M.G.R. GRONOW:   If the Court pleases, I appear for the respondents.  (instructed by Sackville Wilks & Co)

HIS HONOUR:   Mr Gronow, you move on the summons of 2 November 2009.  Is that right?

MR GRONOW:   Yes, your Honour.

HIS HONOUR:   In support of it do you read the affidavit of ‑ ‑ ‑

MR GRONOW:   Mr Israel Bock.

HIS HONOUR:   Sworn on?

MR GRONOW:   Sworn 30 October, your Honour.

HIS HONOUR:   Yes, 30 October.  Is there any objection to my receiving the affidavit of Mr Bock, Mr Woodhouse?

MR WOODHOUSE:   No, your Honour.

HIS HONOUR:   Yes, thank you.  There is, as I understand it, your outline of argument in support of the application, and there is then an affidavit of Graeme Peter Arnold, sworn 23 November 2009, which is filed ‑ ‑ ‑

MR GRONOW:   I have not seen that, your Honour.

HIS HONOUR:   You have not seen that?

MR WOODHOUSE:   It was served yesterday at about 3.00 pm at the solicitor’s offices who act for the other side, your Honour.

HIS HONOUR:   Yes.

MR WOODHOUSE:   I have a spare copy that I can provide.

HIS HONOUR:   Perhaps if you can show Mr Gronow that copy please, Mr Woodhouse?

MR GRONOW:   Thank you.  Thank you, your Honour, I have read that.

HIS HONOUR:   Yes.  Is there any reason not to receive the affidavit, Mr Gronow?

MR GRONOW:   No, your Honour.

HIS HONOUR:   Yes, thank you.  The affidavit of Graeme Peter Arnold may be taken as having been read.  Now, Mr Gronow, can I just understand what rule was the rule in respect of which there was default as to time?

MR GRONOW:   Rule 57.01.4(a).  That rule says that:

Unless, within 14 days of the Taxing Officer sending notice of the estimate made under rule 57.01.1:

(a)     the party who has filed the bill –

namely, my clients –

gives notice that that party disputes the estimate and requires taxation of the bill –

Now, (b) is not applicable –

there shall be no taxation of the bill and a Certificate of Taxation shall be issued for the amount of the estimate.

HIS HONOUR:   Yes.  Has a certificate of taxation issued in this matter?

MR GRONOW:   I believe so, your Honour, yes.

HIS HONOUR:   One issued I think on 20 October 2009.

MR GRONOW:   Yes, which was the day after the day we should have filed our notice of dispute.

HIS HONOUR:   Now, a certificate of taxation having issued under 57.01.4, 57.04.3 gives effect to that certificate, does it not, in the sense that – or rather prescribes the form of that certificate, certifying the total amount of the costs allowed.

MR GRONOW:   Yes.

HIS HONOUR:   Now, the issue of the certificate would then ordinarily be a gateway to 57.05 and review, would it not?

MR GRONOW:   Yes, your Honour, although, your Honour, the view would also be open that the review procedure is – well, I accept it does not expressly say so – it is intended to operate after a taxation.

HIS HONOUR:   Exactly so.

MR GRONOW:   One would probably say, if we have just issued an application for review the answer would be, well, how can you complain about anything the taxing officer did on the taxation because there was not one?

HIS HONOUR:   Yes, and there would be no ground for review.  Therefore, as I understand it, what you seek is an order extending to a time past giving of the certificate – giving of the notice.

MR GRONOW:   Yes.  On reflection, your Honour, I think it would be better for me to seek an order extending the time until tomorrow.

HIS HONOUR:   Yes.

MR GRONOW:   I was initially thinking that since we had attempted to file the notice one could simply declare it to have been filed on 20 October, but I think on reflection the better course for me is to ask for the time to be extended until tomorrow, which you have power to do under rule 4.02 if you are so minded.

HIS HONOUR:   Do I need to achieve the result that you seek to set aside the certificate of taxation that has already issued?

MR GRONOW:   I initially thought you did.  I did seek an order that it simply be set down for taxation, which would seem to me implicitly to set aside the certificate, but if your Honour were minded to do so, assuming

you are in favour of my application, I would also be happy to have an order formally setting aside the certificate.

HIS HONOUR:   No doubt you would, but do you need it?

MR GRONOW:   Very possibly not, your Honour.  It would be out of an abundance of caution.

HIS HONOUR:   Yes.

MR GRONOW:   I think I need either an order that it be set down for taxation, or an order setting aside the certificate.

HIS HONOUR:   Now, if you go down the taxation path you encounter the one‑sixth rule, do you not?

MR GRONOW:   Yes, your Honour, and indeed we counted generally the taxing officer’s discretion as to costs so we are at risk that if we cannot sustain our bill we will – an appropriate order will be made against us on the taxation.  Indeed, we have to lodge a sum of $1,250 as security for the applicant’s costs of the taxation when we lodge our notice of dispute.  We will be at risk of an adverse costs order of the taxation in the normal way, as the taxing officer sees fit.

HIS HONOUR:   Yes.  Well, now, thank you, Mr Gronow.  Mr Woodhouse, what do you say I should do or not do?

MR WOODHOUSE:   Your Honour, Mr Arnold in his affidavit – I would like to go to that first – refers to the fact that he practises “exclusively in the area of legal costs”, has done so since 1997.  He has “drawn numerous Bills of Costs” in special leave applications.  He has appeared as advocate in taxations in this Court.  His evidence is that a typical range that you find in bills of costs is from $75,000 to $150,000.  He further says that through the estimate procedure where the taxing officer issues an estimate, a typical outcome is in the range of $18,000 to $24,000.  He further says that that typical outcome holds true even after a taxation.

In this case a certificate of taxation issued for $19,961.20, which is right in the range of typical outcomes.  So the first submission I would make, your Honour, is the applicants in this application lost nothing by not being able to file a notice of objection, and they would gain nothing – it would be futile in effect to extend the time to file a notice of objection because what could be expected if we go down a taxation path would be just what happened.

HIS HONOUR:   What detriment or disadvantage would be suffered by your side if I were to give the extension which Mr Gronow’s client seeks?

MR WOODHOUSE:   That was the other point that I was going to make, your Honour.  That is my first submission, that it would be futile to extend the time.  On the question of discretion, I would like to point out that in no other court is the finality of litigation as important as it is here.  This proceeding was done with, it was completed.  My clients had applied for special leave and that had been refused.  They had psychologically put this matter behind them and gotten on with their lives.  This application will resurrect it.  A certificate of taxation had issued and they had paid it.  They had sent a cheque to the respondents in the proceeding, the applicants here, and paid the costs in full, this is on the same day the certification of taxation was issued.

Now, according to Mr Bock in his affidavit, the cheque has not been banked, but they have not returned it either.  On the question of discretion I would just like to point out that if leave is given here to extend the time it will bring this matter back into my client’s mind and raise it in circumstances where they had been able to put it behind them and get on with their lives.  May it please, your Honour, those are my submissions.

HIS HONOUR:   Yes, thank you very much, Mr Woodhouse.  Yes, Mr Gronow.  Why should I undo what has happened?  Basically you want to undo what has happened.  It has been paid, done and dusted.  Why should I?

MR GRONOW:   Because there is a very large discrepancy between the amount of the certificate and the amount claimed in the bill.

HIS HONOUR:   Yes.

MR GRONOW:   The problem arose entirely through a mistake by my instructing solicitor.  He was a day late in filing his notice and we seek to be relieved of that.  In my submission, there is no prejudice to the applicants, the present respondents, because it was only a day late.  They must have known by 20 October that we intended to dispute the assessment even though we had not done so validly under the rules.

HIS HONOUR:   Why so?

MR GRONOW:   Because they got a purported notice of dispute, although it was out of time.

HIS HONOUR:   After?  Yes, after they had paid?

MR GRONOW:   Well, they sent us a cheque on the same day.

HIS HONOUR:   Sorry, on the same day as?

MR GRONOW:   They sent it on 19 October, we should have but ‑ ‑ ‑

HIS HONOUR:   Can I get the sequence right?

MR GRONOW:   Sorry.  On 19 October we should have but did not file a notice of dispute.  After four o’clock the Registry was closed, so we did not file it on that day.  We deemed to file it on the 20th, which was the following day.

HIS HONOUR:   Yes.

MR GRONOW:   Now, we also sent one to Mr Woodhouse’s firm, so they must have known we were doing something although they were perfectly entitled to say, “You are out of time, certificate is issued, here is your cheque for $20,000”, which they did, and they sent that to us on 20 October.  My instructing solicitor has retained the cheque and not banked it.  He has not yet returned it to Mills Oakley but, of course, he will if this application is successful.

HIS HONOUR:   Yes.

MR GRONOW:   About Mr Arnold’s affidavit, your Honour, I accept we have established he is an expert in taxation of costs, but it is relevant particularly at the last paragraph, paragraph 8, that suggests that he has not actually looked at our bill of costs for $156,000.  All he says is High Court taxing officers often reduce bills of costs by very large amounts.  In my submission, his evidence is completely useless on the point of the extent to which this bill ought to be reduced on a taxation.  As I have said before, if it is then we are at risk on costs in the normal way.  We consider that we will get, you know, significantly more than $20,000 otherwise we would not have troubled to make this application.

HIS HONOUR:   How would the one‑sixth rule apply to a bill of 156,000 and some dollars?

MR GRONOW:   Well, it is a matter of discretion for the taxing officer in the first instance.  The one‑sixth rule is a rule but it is not a cast‑iron, binding thing because as I understand it the taxing officer maintains a discretion.  If the bill were reduced by one‑sixth or a greater amount the taxing officer might well form a view about costs.  Those matters, however, in my submission, should be left to the taxing officer.

We can make some submission, let us say reduce it by a third, but we can persuade him that we should not have to pay the costs and we will no doubt seek to do so, but that is a matter for the taxing officer on the taxation.  All I say is that if the bill is significantly reduced we are, of course, at risk of having to pay the costs of the taxation.  We would certainly be at risk if we did not get more than the certificate or the assessment that has already been made.  I think actually the one‑sixth rule would not apply because of rule 58.03, which starts with the words, “Where a Taxing Officer has not made an estimate under rule 57.01”.

HIS HONOUR:   So 58.02.1 is engaged, is that right?

MR GRONOW:   Yes.

HIS HONOUR:   There is an estimate?

MR GRONOW:   Yes, and if the total is varied in our client’s favour by one‑sixth or more then that would actuate a costs - if we cannot get it increased by at least a sixth I would expect we would have to pay the costs.

HIS HONOUR:   So you would have to bring in a result.  The estimate was what, 19,900, say, 20,000?  You would have to ‑ ‑ ‑

MR GRONOW:   Have to be about 23, 24.

HIS HONOUR:   Yes.  Now, is there anything more you wish to say about the point of finality?  The point of finality I will say to you now is a matter that troubles me.

MR GRONOW:   Yes, your Honour.  With respect, the applicants would if we have done it in time be subject to a taxation cost.  All I am seeking to do is, as you say, to unwind the past and have the effect that we did something on the 19th that we really did on 20 October.  I accept that finality is significant, but so also is the rule that generally speaking the loser pays the costs of the proceeding, and if there is not agreement about the quantum of the costs that is assessed by the Court.  My clients should not be shut out of their right to have their bill of costs properly assessed by the taxing officer simply because of the inadvertent mistake of their solicitor.

If the discrepancy were a small one I would accept that you might well say, well, the principle of finality outweighs that.  But it is not.  The bill is 156,000, the preliminary assessment is 20.  Now, it may be that we are completely wrong and the taxing officer does not increase the amount by a sixth and we will have to pay the cost of the taxation; that is our risk.  In my submission, that fact – coupled with the fact that it is not my client’s

fault, it is a relatively minor slip by their solicitor that has caused this problem.

HIS HONOUR:   Yes.

MR GRONOW:   Thank you, your Honour, apart from – otherwise I rely on the outline.

HIS HONOUR:   Yes, thank you, Mr Gronow.

In July 2007, Paul Henry Harpur, Pamela Faye Rand Harpur and Kai Tak Pty Ltd filed an application for special leave to appeal to this Court against orders of the Court of Appeal of the Supreme Court of Victoria made on 22 June 2007.  That application for special leave came on for hearing on 14 December 2007 on which day the Court, constituted by Justices Kirby, Crennan and myself, dismissed the application with costs.

In August 2009, the respondents to the application for special leave filed and served a copy of a bill of costs relating to the costs order that had been made at the dismissal of the application for special leave.  The bill was endorsed with a request that the taxing officer, in the absence of the parties and without making any determination of any individual item in the bill, make an estimate of the approximate total for which, if the bill of costs were taxed, the certificate of taxation would be likely, in the opinion of the taxing officer, to issue.  A taxing officer made that estimate estimating the costs likely to be allowed on taxation in an amount of $19,961.20.  That estimate was significantly less than the amount claimed in the bill, which was $156,118.30.

The Rules of Court permitted a party interested in the bill to file and serve, on all other parties to the taxation, a notice of objection.  That notice of objection could be filed within 14 days of the taxing officer sending notice of the estimate made and, unless notice of objection was served within that time, the Rules provided that there shall be no taxation of the bill and a certificate of taxation shall be issued for the amount of the estimate.

It is common ground in the present matter that the time by which notice of objection was to be filed and served, if the requirements of the Rules that there be no taxation and a certificate of taxation issue not be engaged, expired on 19 October 2009.  No notice of objection was filed within that time and, on 20 October 2009, a certificate of taxation issued.

The respondents in the application for special leave, as the parties filing the bill of costs, had intended to give notice of objection and to trigger a taxation of the bill that had been filed and served.  The failure to give notice within the time prescribed by the Rules was brought about by an error on the part of the solicitor having the carriage of the matter on behalf of the parties whose bill was under consideration.

Application is now made for an order pursuant to rule 2.03.1 of the High Court Rules for an extension of the time within which notice of objection may be given.  If needs be, application is also made to set aside the certificate of taxation that has issued.  The applicants in the application for special leave, the parties liable to pay the costs whose taxation is in issue, tendered a cheque in payment of the amount estimated by the taxing officer as the amount that would be allowed on taxation of the respondents’ costs and tendered that cheque on 20 October 2009 together with a copy of the certificate of taxation that had issued.  That cheque, though received by the respondents has, it seems, not yet been banked.

There is no doubt that the power to relieve from non‑compliance with the Rules and, in particular, to enlarge and abridge time fixed by or under the Rules is large.  As rule 4.02 of the High Court Rules records:

Any period of time fixed by or under these Rules may be enlarged or abridged by order of the Court or a Justice whether made before or after the expiration of the time fixed.

There is then no doubt of the power of the Court to enlarge the time fixed by the Rules under rule 57.01.4 as the time within which notice of objection is to be filed.  Disposition of the present application turns then on whether the power to enlarge time should be exercised in the particular circumstances of this case.

Provision is made in the Rules of Court for the making of estimates of the amount which it is expected would be allowed on taxation for a number of reasons.  Not least among the reasons for making such a provision in the Rules is that taxation of bills of costs is expensive and time consuming.  It is to be noticed that in the present matter there is a very considerable disparity between the amount claimed in the bill and the amount of the estimate.  The respondents to the principal application, the parties propounding the bill, say, in effect, why should they not have their chance to justify an allowance of costs in an amount greater than that which had been estimated when, as here, the amount of the estimate is so much less than the amount of the claim.

The parties liable to the pay the respondents’ costs, the applicants in the principal application, respond by pointing out that there must be an end to litigation.  Disposition of the amount to be allowed for the costs of their failed application was the last step in litigation which had proceeded through a trial in the Supreme Court, appeal to the Court of Appeal and, ultimately, an unsuccessful application for special leave to appeal to this Court. 

No notice of objection having been given within the time fixed by the Rules and, as it happens, the parties liable to pay the costs having tendered their cheque in payment of the amount estimated by the taxing officer as the amount properly to be allowed to the respondents for the costs of their opposition to the application for special leave, why should now the matter be reopened on account of an oversight on the part of those advising the parties propounding the bill?  In my opinion, the discretion to extend time should not be exercised in this case.

In all the circumstances which I have described, I consider that the estimate of costs which was made and which yielded the certificate of taxation in accordance with the Rules of Court should not now be intercepted and the parties should not now be set upon a path of taxation of the bill of costs.  The application is refused.

MR WOODHOUSE:   Your Honour, I seek an order for costs of the application.

HIS HONOUR:   Yes.  Are you able to resist that, Mr Gronow?

MR GRONOW:   No, your Honour.

HIS HONOUR:   Summons dismissed with costs.

AT 10.22 AM THE MATTER WAS ADJOURNED