Hobbs v Oildrive (No 2)

[2008] QSC 52

SUPREME COURT OF QUEENSLAND

CITATION:

Hobbs & Anor v Oildrive (No 2) [2008] QSC 52

PARTIES:

PHILLIP LESLIE HOBBS
and
KAREN LEIGH McLELLAN
(plaintiffs)
v
OILDRIVE PTY LTD (ACN 010 191 821)
(defendant)

FILE NO:

636/04

DIVISION:

Trial Division

PROCEEDING:

Application for Costs

ORIGINATING COURT:

Supreme Court of Queensland

DELIVERED ON:

18/3/08

DELIVERED AT:

Brisbane

HEARING DATE:

On the papers

JUDGE:

Daubney J

ORDER:

1.    That the plaintiffs pay the defendant’s costs of an incidental to the proceeding (including any reserved costs) to be agreed or assessed on the standard basis;

2.    That the assessment of the defendant’s costs be made on the basis that, except so far as they are of an unreasonable amount, the fees of two counsel should be regarded as costs necessary and proper.

CATCHWORDS:

PROCEDURE – COSTS – TAXATION – PARTICULAR ITEMS – Counsel’s fees – Certifying for Counsel – where the defendant briefed junior and senior counsel – whether the court should make an order certifying that the Defendant recover its costs of defending the proceedings with an allowance for both senior and junior counsel

PROCEDURE – COSTS – TAXATION – ASSESSMENT IN LIEU OF TAXATION – whether an order should be made giving the parties liberty to re-list the matter for fixing of costs under Rule 687 of the Uniform Civil Procedure Rules

Australand Corporation (Qld) Pty Ltd v Johnson & Ors  [2007] QSC 128
Chongherr Investments Ltd v Titan Sandstone Pty Ltd [2007] QCA 278 at [6].
ASIC v Atlantic 3 Financial (Aust) Pty Ltd & Ors [2008] QSC 9

Uniform Civil Procedure Rules1999 (Qld).

COUNSEL:

C A White for the Plaintiff
J C Bell QC with P D Lane for the Defendant

SOLICITORS:

Ruddy, Tomlins & Baxter for the Plaintiff
Moray & Agnew for the Defendant

1. On 10 March 2008, I gave judgment in this matter for the defendant, and gave the parties leave to make further submissions on costs.

1. The defendant now seeks the following orders:

(a)That the plaintiffs pay the defendant’s costs of and incidental to the proceeding, including any reserved costs, to be agreed or assessed on the standard basis;

(b)That it be certified that the defendant recover its costs of defending the proceedings with allowance for both senior and junior counsel at the trial;

(c)That in the event the parties have not agreed on the defendant’s costs by 11 April 2008, the defendant be at liberty to re-list the matter for its costs to be fixed pursuant to Rule 687 of the Uniform Civil Procedure Rules 1999 (“UCPR”).

1. Judgment having been given in the proceeding for the defendant, the plaintiffs (quite properly) do not oppose the first of these orders.

1. As to the second of these orders, the practice of certifying (or seeking certification for) two counsel seems to be a relic of the procedure provided for under the previous Rules of the Supreme Court.  Order 91 Rule 108 provided:

‘In cases in which the costs of employing two or more counsel may properly be allowed, such allowance may be made although neither of such counsel is one of Her Majesty’s counsel.’

1. The potential impact of that rule became particularly relevant for the taxation of costs after 1991.  Until 1991, the rules of the Queensland Bar required (with limited exceptions) that senior counsel not accept a brief without a junior.  That rule was abolished in 1991.  The learned authors of Ryan Weld & Lee ‘Queensland Supreme Court Practice’ said, at para l9.108.1 that:

‘In light of that [abolition of the two counsel rule], it is submitted that to justify the employment of two counsel if one of them is Queen’s counsel, there must be sufficient legal complexity to justify the employment of Queen’s counsel and the case must also be sufficiently large to justify two counsel.  The criteria to be considered in this latter aspect include the volume of material to be handled, the number of witnesses to be examined and cross-examined and the anticipated length of the case at the time two counsel are briefed.’

1. One could refer also to the Schedule 2 Scale of Fees and Costs which was operative in the District Court pursuant to Rule 365 of the District Court Rules 1968. Item 85 under that scale expressly called for certification by a judge for recovery of the costs of more than one counsel.

1. There is no provision equivalent or similar to 0.91 r 105 in the UCPR.

1. In relation to the assessment of costs on the standard basis, UCPR r 702(2) provides:

‘When assessing costs on the standard basis, a costs assessor must allow all costs necessary or proper for the attainment of justice or for enforcing or defending the rights of the party whose costs are being assessed.’

1. It is trite to observe, however, that the award of costs, and the basis for the award, remains within the discretion of the Court.  Rule 703(1) provides:

‘Unless these rules or an order of the court provides otherwise, a costs assessor must assess costs on the standard basis.’  (Underlining added)

1. The overriding discretion of the Court is also preserved in Rule 680 which provides that ‘a party to a proceeding can not recover any costs of the proceeding from another party other than under these rules or an order of the Court’.  (Underlining added)

1. Similarly, Rule 681(1) provides that:

‘Costs of a proceeding, including an application in a proceeding, are in the discretion of the Court but follow the event, unless the Court orders otherwise.’  (Underlining added)

1. The plaintiffs do not oppose the making of an order which will enable the defendant to recover for the proper costs of two counsel.  This was, in my view, an appropriate case for the retention of senior and junior counsel.  The only issue, to my mind, is whether it is appropriate that this be affected by way of a ‘certification’. 

1. In my opinion, the preferable form of order is that made by McMurdo J in Australand Corporation (Qld) Pty Ltd v Johnson & Ors[1], namely to order that the assessment of the defendant’s costs be made on the basis that, except so far as they are of an unreasonable amount, the fees of senior counsel and junior counsel should be regarded as costs necessary and proper.  It seems to me that an order in those terms conforms with an assessment being made under Rule 703.

   [1][2007] QSC 128.

1. As to the third order sought, Rule 687 provides:

‘(1)     If, under these rules or an order of the court, a party is entitled to costs, the costs are to be assessed costs.

(2)However, instead of assessed costs, the court may order a party to pay to another party –

(a)a specified part or percentage of assessed costs;  or

(b)assessed costs to or from a specified stage of the proceeding;  or

(c)an amount for costs fixed by the court;  or

(d)an amount for costs to be decided in the way the court directs.’

The rule in this form was introduced to the UCPR as part of the suite of amendments made under Uniform Civil Procedure Amendment Rule (No 4) 2007.

1. In applying for this order, the defendant pointed to the desirability of parties agreeing the quantum of costs, rather than being compelled to undergo an assessment (which is now undertaken in accordance with the provisions of Chapter 17A Part 3 of the UCPR). The defendant referred to Practice Direction 3 of 2007 (“PD 3”), which invoked the provision, then found in Rule 685(2) of the UCPR, that instead of ordering assessed costs, the court may order a party to pay to another party an amount for costs decided by the court.

1. Paragraph 2 of PD 3 stated that it was intended:

(a)to encourage parties to agree on the amount of costs otherwise to be assessed;  and

(b)to signal the authority of the court, in an appropriate case, to fix costs, and to ensure parties are in a position to inform that process.

1. The court’s discretion to fix costs was confirmed by paragraph 3 of PD 3, in that:

‘The court has a broad discretion to fix costs, and will do so where that will avoid undue delay and expense, but only provided the court is confident to fix costs on a reliable basis.’

1. It is, of course, a matter for the Court in each particular case as to whether, in the circumstances of that case, it is appropriate for the Court to embark on a cost-fixing exercise under Rule 687(2), rather than leaving the costs for assessment as is the primary position contemplated by Rule 687(1). The factors which might be regarded as relevant on such a consideration would include:

-if the issues in question in the particular case were of short compass and concerned matters of broad principle – Chongherr Investments Ltd v Titan Sandstone Pty Ltd[2]

[2] [2007] QCA 278 at [6].

-that the party ordered to pay the costs does not advance any reason why the court should not exercise the power to fix costs –Chongherr[3]

-that the relevant costs order is substantially for indemnity costs – ASIC v Atlantic 3 Financial (Aust) Pty Ltd & Ors[4].

[3]At [6].

[4][2008] QSC 9 at [39].

1. None of these factors are present in this case and there is, in my view, no reason for a departure from the primary position provided for under Rule 687. Whilst this Court does, in appropriate cases, have authority and power to fix costs, I do not apprehend it to be intended that judges should effectively become taxing masters.

1. In any event, I note that the assessment provisions of the UCPR expressly contemplate the parties reaching agreement – see, for example, Rule 707, which enables the parties to apply for a consent order if they agree on the amount of costs before a costs assessor is appointed.

1. Accordingly, I order:

1.That the plaintiffs pay the defendant’s costs of and incidental to the proceeding (including any reserved costs) to be agreed or assessed on the standard basis;

2.That the assessment of the defendant’s costs be made on the basis that, except so far as they are of an unreasonable amount, the fees of senior counsel and junior counsel should be regarded as costs necessary and proper.