Koehler v Cerebos (Australia) Limited - [2004] WADC 64

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS

LOCATION: PERTH

CITATION: KOEHLER -v- CEREBOS (AUSTRALIA) LIMITED [2004] WADC 64

CORAM: DEPUTY REGISTRAR HARMAN

HEARD: NOT APPLICABLE

DELIVERED : 13 APRIL 2004

FILE NO/S: CIV 2631 of 1998

BETWEEN: NUHA JAMIL KOEHLER
Plaintiff
AND
CEREBOS (AUSTRALIA) LIMITED (ACN 004 304 803)
Defendant

Catchwords:

Practice - Western Australia - Practice under the Rules of the Supreme Court 1971 - Review of taxation in relation to claim for getting up case for trial - Duplication and research considered - Sufficiency of notice

Legislation:

Nil

Result:

Each application unsuccessful

Representation:

Counsel:

Plaintiff: No appearance
Defendant: No appearance

Solicitors:

Plaintiff: Marks & Sands
Defendant: McAuliffe Williams & Partners

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

Smith v Buller (1875) LR 19 Eq 473
Tenbohmer v Eden (1992) 6 WAR 366

Case(s) also cited:

Nil

DEPUTY REGISTRAR HARMAN: The plaintiff is entitled to her costs of the action. In accordance with the expression given to that term in Smith v Buller (1875) LR 19 Eq 473, that entitlement is to the reasonable cost of the services necessarily provided to her for the purposes of the action.
Each of the parties has filed a notice of objection to determinations made in the course of taxation of her claims.
The first determinations identified by the defendant's notice were made in relation to the claim for getting up case for trial. It was the subject of item 8 in the amount of $6,810 under the "1996 scale" and 9, for $67,487 under the "1999 scale". The amount recoverable for the service would normally be constrained by the limit of the taxing officer's discretion expressed at item 13 in the scale. In this case that constraint had been removed.
Paragraphs 2 and 3 of the defendant's objection are as follows:
"2. (The defendant) considers that the taxing officer made an error in principle by including in items 8 and 9 of the plaintiff's bill of costs, costs that were not reasonably incurred in the getting up of the action for trial.
3. (The defendant) considers that the costs which were not reasonably incurred for the purpose of the getting up of the action for trial included excessive time spent proofing and re-proofing non expert witnesses who were not also not witnesses of fact, proofing and re-proofing expert and lay witnesses, research and preparation of documents. The learned taxing officer whilst noting this was directed by counsel and may have been excessive, in our submission, erred in holding this did not equate to unreasonableness and should be paid for by the defendant."
The significant feature of those paragraphs is that they appear to confuse the provision of services and the test of recovery for such provision with the cost of such provision and the test of recovery for such cost.
To the extent that the defendant takes issue with the allowance of discrete services the notice fails to identify the services that it would contend have been allowed in error. Review is not generally available. The jurisdiction to review depends upon a sufficient notice that identifies the error contended for.
To the extent that the notice may suggest that an error was made in relation to the valuation of discrete services, the scale provides for recovery under the composite item "getting up case for trial". Although that term embraces many services (or in the terms of r 53, parts of the item), in assessing quantum under item 13 there is a single determination to be made for the total of the parts. Under the former regime of taxation that fell into desuetude some 50 years ago it may have been the practice to allocate value to discrete services that now comprise the term "getting up case for trial".
To the extent that an issue raised by the notice goes to the assessment of value, there is no jurisdiction to review. Rule 53 provides the only jurisdiction to review. Such review is expressed to be available in relation to errors in principle made in the allowance or disallowance of items or their component parts: that is to the allowance or disallowance of a service or services for which a claim has been made.
To the extent that the objection raised is simply that the amount of time devoted to particular activities was excessive, suggests to me that it is proposed that a taxing officer should undertake the task of determining how much time ought to have been devoted to the delivery of the relevant services.
Although the plaintiff had the benefit of an order removing the scale maximum for "getting up the case for trial", that order did not interfere with the methodology by which the reasonable cost of the relevant services would be determined. In valuing a service for which allowance has been made, the taxing officer is required to do no more than to assess the reasonable cost of provision of the service. Time is but one matter to be considered in making that assessment. The more significant matters are likely to be the relative complexity of the case presented in the action and of the task represented by the relevant activities. As I have already recorded there was no assessment made of the value of particular services within the scope of the item "getting up case for trial". Once consideration had been given to the myriad matters that would have had a bearing on the assessment of value of the item, there was no reason to dwell on how much time ought to have been taken to deliver particular services in order to discern whether some of the time actually taken might be considered to have been unreasonably utilised.
It is not the role of the taxing officer to check the claim of the taxing party. At the very least to do so would tend to elevate the claim made to the datum. There is nothing in the rules or the scale to justify such an approach.
To go about conducting such an examination would be well beyond the scope of what is required by the process of taxation for a claim under an item in the scale under which recovery is not expressed to be time-costed. It seems to me that if there was any justification for such examination then the practice that has been in place for the last 50 years would need to be adapted in order to accommodate the more detailed examination of the services provided and the manner in which they were provided. Any such procedure would extend considerably the time taken to tax bills.
The focus in recent times on time devoted to activity demonstrates some greater attention to the non-scale pronouncements of the Legal Costs Committee than under r 11(1) and (2) is warranted.
To the extent that the defendant contends that any error may be found in the assessment of the re-proofing, in taxing under the usual order, there is no reason to distinguish re-proofing from proofing.
In order to provide my reasons for the consideration given to the determination made in relation to re-proofing, perhaps I only need to reiterate that the plaintiff was not entitled to recover costs actually incurred, only to the reasonable cost of services necessarily provided. What is reasonable imports a measure of efficiency into the provision of a service. The explanation given by the plaintiff for the re-proofing hardly resounds in efficiency.
Of the myriad considerations would have impacted upon the only determination made in relation to quantum for "getting up the case for trial", that relating to the proofing would properly be expressed along the lines that what was recovered reflected what was achieved by the process rather than the particular activity in which the plaintiff's solicitor engaged.
As to the research, it was the plaintiff's case that some research or investigation was undertaken in relation to her condition. The proposition with which the defendant by its objection may have sought to engage is that inter parties there is no scope for recovery for research because by their qualification, practitioners are deemed to have certain knowledge. So far as I am aware the impact of that presumption is limited to matters of practice and substantive law that properly regarded are other than obscure.
The defendant does not specify the research the subject of the objection. To the extent that it is some or all of the research to which I have referred, it would not fall into the limited scope of the presumption. If it is not, I do not understand the objection, as the research is not identified.
I do not recall that at taxation there was any contest in relation to the preparation of documents. From the terms of the objection no document is identified.
In my opinion by the grounds expressed in pars 2 and 3 the defendant raise no proper objection.
The next ground of objection is as follows:
"(The defendant) considers that the taxing officer made an error in principle by accepting that additional work was done as a result of instruction of counsel and that this was merely the way counsel pursued litigation, in that counsel was seeking a greater degree of certainty than was subjectively necessary but that this should be recoverable."
I assume that the word "subjectively" was intended to be presented as "objectively". Again the defendant has failed to identify the services the subject of the objection. It is for the defendant by the notice to identify those services so that some appropriate analysis can be given to the error contended for.
The next ground of the objection is as follows:
"(The defendant) considers that the taxing officer made a error in principle by allowing the plaintiff an amount twice that provided under the cost scale. The nature of this case did not warrant a "doubling" of the maximum under the scale."
At that point the focus is squarely upon the determination as to the reasonable cost.
As I have recorded, in my opinion there is no jurisdiction for a taxing officer to review a quantum determination. I accept that there is authority that may allow for judicial review in relation to quantum determinations but it is my understanding that the test of any such error would be satisfied only in the event that no taxing officer acting reasonably could have made the determination. The terms in which the objection is expressed does not raise that prospect.
In any event, in this case the limit expressed in the scale had been rendered irrelevant.
The next claims in the bill the subject of objection are items 26, expressed as the application for the special costs order and 30, for the bill of costs. In providing each of the relevant services the plaintiff provided extensive schedules of work performed for the purposes of the action.
The defendant objects as follows:
"7. (The defendant) considers that the taxing officer made an error in principle i.e. including in item 26 of the plaintiff's bill of costs, costs were duplicated under item 30.
8. At the taxation of the plaintiff's bill of costs on 27 August 2003 counsel for the plaintiff submitted that different schedules were produced under items 26 and 20. However, on analysis of the schedules, it is submitted that there is clearly a duplication of the work involved."
Because of the nature of the application, I would not expect to have found that the schedules filed in support of the bill would be significantly different to those filed along with the application.
The fact that the plaintiff sought to recover on each occasion for similar services or components of similar services provides scope to recognise that the measure of efficiency imported by the limit of recovery may properly have an impact.
However, unlike the case with the re-proofing identified by the defendant, the significant feature of the context is that the claims made by the plaintiff relate to different items in the scale. In the case of the re-proofing it was appropriate to consider that the plaintiff would recover for no more than the cost of proofing to the extent of the proofing regardless of how that result was achieved.
In relation to the provision of each of these services there was no proper basis to deny recovery for reflection on the presentation of the case at each point. Even if the services had been provided at about the same time it would not have been appropriate to disallow review of the schedules generated for the application at the point of making the claims in the bill. To the extent that the schedules were amended there is no reason why the plaintiff should not recover in addition for the redrafting.
The fact that consideration of the schedules was a feature of each of the services and was canvassed at different times determined that I would have erred had I disallowed such consideration.
The defendant has not bothered to provide any analysis of the content of the schedules in order to identify the scope of the abuse to which it refers. I have conducted some fairly basic analysis and I make the following observations:
1.Statement of claim - different document expressing a slightly different gross claim.
2.Giving discovery - different document expressing different gross claims.
3.Inspecting defendant's documents - same document.
4.Further and better particulars - different document same gross claim.
5.Reply to defence and counterclaim – same document.
6.Getting up case for trial – different document – different gross claims.
7.Junior counsel – same document.
8.Junior counsel – subsequent days of trial, different document same gross claim.
9.Chambers Summons - same document.
10.Application for specific discovery – different documents – same gross claim.
11.Application for evidence by video link - different documents – same gross claim.
12.Schedule 13 – no corresponding document.
13.Photocopies – same document.
14.Bill of Costs – no corresponding document.
Any closer analysis would no doubt reveal a significant amount of common ground.
The only rational explanation for the differences that I have identified is that the schedules were generated at different times as a consequence of reconsideration at the point of drafting the bill. A number of the schedules were different. I do not have any difficulty with the plaintiff choosing to refine her case at the point of drawing the bill even if by some measure it is considered to be inefficient.
Returning to the terms of the objection, because it is my usual practice to proceed through a bill from the first item to the last in consecutive order I have no doubt that I would have dealt with item 26 before I dealt with item 30. I did not include any services in item 26; I simply taxed the plaintiff's claim, as she constituted it. The services in relation to the application were provided prior to those relating to the bill. On that analysis in my opinion any scope for duplication would arise at item 30, not item 26. I am not sure that I can reconcile what appears to me to be logical with what the defendant expresses at par 7 of the objection.
Although at par 8 the defendant may be correct in recording that the plaintiff put the proposition that the schedules were different, it was not the case that she contended that they were utterly different. Indeed by the end of the analysis conducted at the taxation it was probably the case that the plaintiff agreed with the broad thrust of the proposition then and now put by the defendant.
My final observation is that in par 8 no reference at all is made to the taxing officer.
To the extent that review is available on its notice, the defendant is unsuccessful.
The plaintiff’s notice of objection simply relates to part of item 8 of the bill. The objection taken by the plaintiff is expressed to relate to part of the item however she fails to identify the part to for which a determination was made to which determinations he takes objection.
The grounds of the objection refer to an error in principle in the failure to have any or any adequate regard to:
1.The principle that a successful party ought to be indemnified for costs reasonably incurred; Tenbohmer v Eden (1992) 6 WAR 366;
2. Complexity of fact and law concerning:
(And here the plaintiff sets out 12 features of the case)
In relation to the proposition that no consideration was given to the complexity of fact or law, in my opinion the issue raised only goes to quantum. An assessment of the degree of complexity of the process of "getting up case for trial" is not a consideration that would relate to the allowance of the service or its component parts. It is simply a feature of the process of assessing quantum. By that statement I do not seek to reduce the proper impact of that consideration, in my opinion it is the most significant feature of the process of assessment in any case. Particularly so in this case. On a reading of the transcript of the application for the special order for costs, a significant motivation for the exercise of discretion was the complexity of the case. I might add that the features of that complexity are no doubt particularly well summarised by the plaintiff at par 2 of the objection.
Upon reviewing the terms of the grounds I am satisfied that the plaintiff advanced submissions along those lines at the taxation and the considerations now articulated by the plaintiff were taken into account in assessing quantum.
At par 1 the plaintiff proposes an error or errors in the application of the principle that a successful party ought to be indemnified for costs reasonably incurred. Under the usual order for costs no such principle applies on the taxation of a party and party bill. As I have earlier recorded, the plaintiff's entitlement under the order is limited to recovery for the reasonable cost of services necessarily provided.
What the plaintiff contends as principle was expressed as obiter comment in Tenbohmer v Eden (supra) at p 370. The only support given for the proposition that a successful plaintiff should recover all costs reasonably incurred was that it was implicit in O 66. That was said to be so on the strength of a reference to r 1(2). It allows for the prospect that a court may impose a penalty in the event that costs have been unnecessarily or unreasonably incurred. It was said to follow that costs necessarily and reasonably incurred should be covered by any order for costs in favour of a party. Accordingly, the "principle" to which the plaintiff subscribes might more accurately be put in terms that a successful party should recover all costs reasonably and necessarily incurred.
The difficulty that I have with that prospect is that whatever the context, what is considered to be reasonable and what is considered to be necessary would provide different results. When the terms are put as a combined test then either one or both of the concepts must be compromised.
On an analysis of the sub-rule, if the distinction between the provision of a service and the value of that service is recognised, then it may be considered that the rule was so expressed to allow for the imposition of the penalty in either case. That is, where a party has perhaps raised what was considered to be a non-issue and also where the perception of abuse lay more in the extent to which an issue had been laboured. That such a distinction is open and would account for the disjunctive "unnecessary or unreasonable" was not recognised by the court. It is interesting that via the process of translation in which the court engaged, the terms expressed disjunctively in the rule came to be expressed conjunctively.
I have some difficulty with the prospect that a provision expressing the consequence of the imposition of a penalty in a special case has anything to say about what would pertain absent the penalty or indeed, about the general case. The sub-rule itself provides not only that the penalised party may lose costs but also that its opponent may recover costs. It says nothing about the extent of the opponent's recovery. In the absence of any further order its recovery would properly be constrained, as was the plaintiff in this case.

At the very least, what in any event could only be obiter must be the subject of some considerable doubt if only because the court failed to engage in any analysis of the law at all. It did not recognise either the limit on recovery imposed by the usual order or the distinctions expressed at r 11 (3).
In my opinion there is no basis to conduct any review on the objection taken by the plaintiff.