Kinder v Gross
[2008] WADC 69
•21 MAY 2008
KINDER -v- GROSS [2008] WADC 69
| DISTRICT COURT OF WESTERN AUSTRALIA | Citation No: | [2008] WADC 69 | |
| Case No: | CIV:755/2006 | 7 MAY 2008 | |
| Coram: | DEPUTY REGISTRAR HEWITT | 21/05/08 | |
| PERTH | |||
| 10 | Judgment Part: | 1 of 1 | |
| Result: | Application dismissed | ||
| PDF Version |
| Parties: | DANE ANTHONY KINDER CLIVE JAMES GROSS |
Catchwords: | Practice and procedure Western Australia Costs Scale Lifting scale limits |
Legislation: | Legal Practice Act 2003 ss 210, 215 |
Case References: | Heartlink Ltd v Jones as Liquidator of HL Diagnostics Pty Ltd (in liq) [2007] WASC 254 |
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
CLIVE JAMES GROSS
Defendant
Catchwords:
Practice and procedure - Western Australia - Costs - Scale - Lifting scale limits
Legislation:
Legal Practice Act 2003 ss 210, 215
Result:
Application dismissed
(Page 2)
Representation:
Counsel:
Plaintiff : Mr J G Staude
Defendant : Mr K N Allan
Solicitors:
Plaintiff : Donna Percy & Co
Defendant : K N Allan
Case(s) referred to in judgment(s):
Heartlink Ltd v Jones as Liquidator of HL Diagnostics Pty Ltd (in liq) [2007] WASC 254
(Page 3)
1 DEPUTY REGISTRAR HEWITT: This action was settled by the making of a consent order in 27 February 2008 which provided that a judgment be entered for the plaintiff in the sum of $4,500,000 and that the costs of the action be taxed. Subsequently the plaintiff brought an application which was filed on 17 April 2008 seeking that the limits on costs fixed by the relevant cost determination under s 210 of the Legal Practice Act 2003 be removed by virtue of unusual difficulty and complexity. That application was subsequently modified and the plaintiff now seeks that the limits be removed in respect of two items only, namely getting up case for trial and pre-trial conference. Insofar as the application relates to pre-trial conferences, it appears to me to be misconceived. There is no upper limit prescribed by the scale for a pre-trial conference and as a consequence there is no limit to lift. The focus of my decision will therefore be on the other aspect of the application, namely, that the limit in respect of the getting up case be raised.
2 The relevant legislation is contained in s 215(1) and (2) of the Legal Practice Act 2003 which provides as follows:
"(1) Subject to sections 221 and 241 of this Act and section 14 of the Legal Aid Commission Act 1976-
(a) the taxation of bills of costs of legal practitioners, as between legal practitioner and client or party and party; and
(b) any other aspect of the remuneration of legal practitioners the subject of a determination;
is regulated by a legal costs determination in force under section 210.
(2) Despite subsection (1), if a court or judicial officer is of the opinion that the amount of costs allowable in respect of a matter under a legal costs determination is inadequate because of the unusual difficulty, complexity or important of the matter, the court or officer may do all or any of the following-
(a) order the payment of costs above those fixed by the determination;
- (b) fix higher limits of costs than those fixed in the determination;
(c) remove limits on costs fixed in the determination;
(d) make any order or give any direction for the purposes of enabling costs above those in the determination to be ordered or taxed."
3 In my view the assessment of this issue requires a two-step process. Firstly, the judicial officer needs to form a view that the costs allowable in respect of a matter under a legal costs determination is inadequate. The next step is to determine whether or not that inadequacy flows from the unusual difficulty, complexity or importance of the matter. If both of those issues are resolved in favour of the applicant then the court has the power to make a variety of orders, the affect of which would be to increase the amount recoverable by the taxing party on a taxation.
4 In 1997 the Legal Practitioners (Supreme Court)(Contentious Business) Determination 1996 ("the Determination") was published. That Determination introduced for the first time a different basis of costing which was essentially a reflection of the almost universal adoption within the profession of time costing charges.
5 The Determination however referred in par 7 to the provisions of O 66, r 12 of the Rules of the Supreme Court which was then the basis upon which a court could make special costs orders.
6 In par 7(5) the committee stated "it will be noted from items 13 and 14 of the Schedule that if more than 100 hours must reasonably be spent on getting up the case for trial and if more than 3 days must reasonably be spent by counsel in mastering the brief and preparing for the trial, then the committee considers that to be a basis to seek a special order for costs under O 66, r 12 of the Rules of the Supreme Court.
7 That order is no longer consistent with the legislative basis upon which an increase in costs may be awarded and the affect of s 215 of the Legal Practice Act 2003 is to provide a fresh basis upon which an order increased in costs may be made. The approach to be adopted has been considered by the Chief Justice in the case of Heartlink Ltd v Jones as Liquidator of HL Diagnostics Pty Ltd (in liq) [2007] WASC 254. In that case his Honour said:
(Page 5)
- "The question posed to the court under s 215(2) will almost always arise before taxation has occurred. It is of course the responsibility of the taxing officer to tax the bill and identify with precision the amount that should be allowed in respect of the particular claim for costs. Section 215(2) also falls to be construed in the context of the well-known principle that at least in respect of costs as between party and party, the principle is that the successful party should be compensated by the unsuccessful party for their costs (see O 66, r 1, Rules of the Supreme Court 1971 (WA)).
Those two considerations provide a guide to the proper approach to be taken to the question posed to a court when an application is made under s 215(2). The policy considerations that should guide a court when addressing an issue under s 215(2) are, firstly, that the court should not usurp the role of the taxing officer and, secondly, that at least where party and party costs are concerned, the court should make an order that would give effect to the general principle of allowing the successful party to be compensated for their costs by the unsuccessful party, where appropriate.
There are two alternative ways in which one might approach the question of inadequacy posed by s 215(2). The first would be to require an applicant for an order under that subsection to satisfy the court that the bill to be taxed will, on the balance of probabilities, tax at an amount that is greater than the limit that would be imposed by the item in the relevant costs determination, which is therefore inadequate. The alternative approach would simply be to require an applicant for an order under the section to satisfy the court that there is a fairly arguable case to be put before a taxing officer to the effect that the bill to be taxed should tax out at more than the limit that would be imposed by the costs determination.
On this alternative view of the section, the court could arrive at the conclusion that the limit was inadequate because the maintenance of the limit would preclude the applicant from presenting a fairly arguable case to the taxing officer. The considerations to which I have referred, and in particular the view that the court should not, under this section, usurp or anticipate the role of the taxing officer, lead me to conclude that
(Page 6)
- the latter of those two alternatives is the preferred approach to an application under s 215(2).
It therefore seems to me that the requirement of inadequacy will be demonstrated if the applicant shows that there is a fairly arguable case that the bill to be presented to the taxing officer may tax at an amount which is greater than the limit that would be imposed by the relevant costs determination. Of course, as I have pointed out, that is only the first question which the court must address. The second question is whether that inadequacy arises because of the unusual difficulty, complexity or importance of the matter."
8 I now turn from that general proposition of principle to the material which is placed before me for my consideration.
9 Counsel for the plaintiff urges me to take what I might describe as a broad brush approach. In essence, counsel invites me to consider the pleadings and various materials which have been filed in the case which he contends should demonstrate to my satisfaction that the amount of work which has gone into this case shows that the allowance of $36,300 provided by the relevant scale is inadequate in the circumstances. To assist me in that analysis, I have been provided with a large number of documents, including a bundle of reports obtained by the plaintiff, a comprehensive schedule of damages prepared by the plaintiff and of course I have the documents which have been lodged with the court in the course of these proceedings. These materials show that the plaintiff then aged 18 was involved in a motor vehicle accident which left him a quadriplegic. On the question of liability the defence admitted facts which clearly showed the defendant to have been negligent and raised the issue that in part (driving on the wrong side of the road) the manner of driving was at the instigation of the plaintiff and further that there was contributory negligence on the part of the plaintiff travelling in a car driven by an inexperienced driver affected by alcohol.
10 Those issues do not seem to have generated much activity by the plaintiff's solicitor other than to cover them in the plaintiff's proof of evidence with which I have been provided. The materials indicate that the main thrust of preparation of the plaintiff's case revolved around quantification of his past and future economic loss and the home and other modifications, assistance and care he required in his every day life. In respect of such items evidence was obtained to identify the need and cost
(Page 7)
- it with projections prepared for the balance of the plaintiff's life expectancy with discounts applied.
11 Additionally I have two affidavits sworn by the plaintiff's solicitor, the first of which was sworn on 17 April 2008 which indicates in a brief way the tasks identified by that solicitor as being significant and time consuming in the conduct of the case on behalf of the plaintiff. Mention is made of the need for the plaintiff's solicitors to be involved in what is described as " ... applications by the plaintiff to the commission for an extensive variety of funding ... this included information and requests relating to: attendant carer arrangement. Equipment needs. The provision of a motor vehicle and its modifications. Advances for gratuitous services. Home modification. Travel. Re-imbursement for special damages."
12 In par 12 the deponent stated:
"The plaintiff did not have a case manager to manage the above issues and my office had regular contact and requests from the commission in relation to assisting with providing quotes and medical reports in order to substantiate the plaintiff's need for many of the above items."
13 It therefore appears on the basis of that affidavit that the plaintiff's solicitor provided services to the plaintiff which would not be properly regarded as getting up case for trial, nor indeed any other part of the process of taking the matter to trial but would form a proper basis for a separate solicitor-client account for those services. The amount of the tasks is unquantified however there is further information provided by the plaintiff's solicitors by way of an affidavit sworn on 5 May 2008. That annexes a document which effectively is a computer print-out of the time record system operated within the plaintiff's office. Essentially that system records time spent in terms of tasks undertaken and allocates a minimum of 6 minutes to each such task and if the task takes longer than 6 minutes then the time taken appears to be rounded up to the next highest complete unit. Whilst I have no criticism of the system within the plaintiff-solicitor's office which no doubt provides perfectly good information for the management of the office, it cannot be regarded as a totally reliable indicator of time.
14 The process of rounding every task up to a 6 minute unit creates an inherent inaccuracy in the recording system. If one were to assume that the time taken for each item identified in the print-out was between one
(Page 8)
- second and 6 minutes and assume a normal distribution of the times within that range then it would be seen that for every entry contained in the annexure there would on average be a 3 minute error. Therefore, when considering the document, it is necessary to make some adjustments in the event one wishes to determine what time is likely to have been spent on various tasks.
15 As I have earlier mentioned, counsel for the plaintiff advances the proposition that I should confine my enquiry into the adequacy or otherwise of the scale item by a general overview of the nature of the case and the documents generated in it. I have completed that exercise and I find myself unable to conclude on the basis at that information alone that there is what Chief Justice Martin would describe as a "fairly arguable case" that the maximum prescribed for getting up case is inadequate. Rather than base a conclusion on that impression I am inclined to look deeper in to the matter to see if the materials do support the plaintiff's application and, in my view, I should more fully analyse all of the materials which are placed before me including the print-out which has been provided by the plaintiff.
16 That print-out is a compendious aggregation of all the entries made within the plaintiff-solicitors office for every item of work which was undertaken during the course of this action. It appears to extend beyond the date upon which a judgment was entered and to that extent I propose to disregard it but I think the matter deserves some level of analysis. I have calculated the time recorded as being spent by the plaintiff's solicitor (as distinct from paralegals) and find the total of that time to be 88 hours. That total was derived from consideration of 285 separate entries. As I have earlier indicated, I consider that the system in use in the plaintiff's office does not generate a completely accurate record of time taken and consider that in order to adjust the assessment of time to something more accurate, a deduction of 3 minutes per entry should be made. That figure should then be divided by 60 to reduce it to hours and I find that process yields me a figure of 14.25 hours. Deducting that figure from the original 88 hours which I calculated brings me to a total of 73.75 hours.
17 The schedule covers all items of work carried out within the solicitor's office during the conduct of this action many of which could not be properly characterised as getting up case for trial. Included are giving discovery, preparing a statement of claim, attending various chamber summons, issuing the writ and a whole variety of other matters which are the subject of separate items within the appropriate scale. It is not possible for me to accurately calculate what proportion of the
(Page 9)
- solicitor's time might be referable to other items but I am able to determine that 10 hours of her time was allocated to pre-trial conferences. By deducting that figure from the 73.75 hours earlier calculated, I arrive at a new total of 63.75 hours.
18 I know that the figure I have calculated includes work which would not be appropriately regarded as getting up case for trial and I know that figure will contain some element which would be purely a solicitor-client cost and not a matter which could properly be part of a taxation on a party-party basis. It is not possible for me to further analyse the matter but clearly the figure of 63.75 hours would need to be further reduced by some unascertained amount to reflect the matters to which I have referred.
19 Item 16 of the 2006 Determination fixes the amount of getting the case for trial at a maximum of $36,300, that being an allowance for 100 hours of a senior practitioner's time. Not all of the time in this case was spent when that scale was in effect and for time spent prior to the 2006 scale coming into effect, namely 1 July 2006, there was approximately 31 hours of work recorded. The hourly rate provided by the 2004 Determination which applies to that time was somewhat lower than that introduced by the 2006 Determination, the earlier rate being $341 an hour.
20 If I were to take as a working hypothesis that the principal of the firm of the plaintiff's solicitors spent 50 hours preparing the case for trial and that an average hourly rate over the duration of the case was $350 per hour, I would reach a total of $17,500. Counsel has also performed certain tasks by way of getting up case by giving advice on evidence and so forth and my calculation of the amount charged for that work is $4,800, a total of some $22,300. The rate which may be charged for paralegals over the period varied from $165 under the 2004 scale to $176 per hour under the 2006 scale. If I were to take as an average an allowance of $170 per hour and divide that into approximately $14,000, I would reach the conclusion that approximately 82 hours of a paralegal's time could also be absorbed into the item of getting up case for trial without exceeding the prescribed maximum.
21 As I have earlier explained this process is beset with uncertainties because I know by virtue of the affidavits filed in support of this matter that considerable other work was done on matters that are purely solicitor-client, and my own perusal of the file indicates that substantial tasks were undertaken by way of pleading the case and so forth which
(Page 10)
- have not been isolated and removed from the conglomerate with which I am presented.
22 In an application such as this the plaintiff bears the onus of persuasion. The onus is to persuade me that an allowance of $36,000, in the light of the materials which have been presented to me, is inadequate. That is a determination I must reach before I even go on to consider whether that inadequacy is due to the unusual difficulty, complexity or importance of the case. On the analysis that I have undertaken, I am unable to perceive that there is any inadequacy. It is therefore not necessary for me to go on and consider whether the cause of that inadequacy has its roots in any of the criteria which are mentioned in s 215. For these reasons I am of the view that the plaintiff's application to increase the scale insofar as it applies to the items of getting up and attending pre-trial conference should be dismissed and that is the order which I propose to make.
1
1