Kowalski v Lieschke & Weatherill Lawyers - [2014] SASC 182

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
KOWALSKI v LIESCHKE & WEATHERILL LAWYERS
[2014] SASC 182
Reasons of Judge Dart a Master of the Supreme Court
1 December 2014
PROCEDURE - COSTS - TAXATION - REVIEW
Application for review of provisional costs order - consideration of Rule 178 - provisional costs order confirmed.
Supreme Court Civil Rules 2006 Rule 276, referred to.
Ebner v The Official Trustee in Bankruptcy (2000) 205 CLR 337, applied.
Attorney-General v Kowalski [2014] SASC 1, considered.

KOWALSKI v LIESCHKE & WEATHERILL LAWYERS
[2014] SASC 182
JUDGE DART:

The applicant seeks a review of a provisional costs order made on a taxation. He sought a taxation pursuant to s 42 of the Legal Practitioners Act 1981 (“the LPA”) to ascertain the fees properly claimable by the respondents, his former solicitors.
The applicant was declared to be a vexatious litigant earlier this year.[1] He was given permission to pursue this taxation and two taxations against other firms of solicitors. They each relate to modest amounts of costs incurred between 1989 and 1996. In this matter the applicant paid costs in the amount of $2000 in 1995. Until amendments made earlier this year, the LPA contained no limitation of time in respect of commencing an application for a taxation.[2]
[1] Attorney-General v Kowalski [2014] SASC 1.
[2] Clause 37 of Schedule 3 to the Legal Practitioners Act 1981 now provides that, subject to a discretion to extend the time, an application for an adjudication must be made within six months of receipt of the bill.
The taxation proceeded pursuant to s 42 of the LPA, which provides as follows:
42—Costs
(1)On the application—
(a)of a person claiming to be entitled to legal costs; or
(b)of a person who is liable to pay, or who has paid, any legal costs,
the Supreme Court may tax and settle the bill for those costs.
(1a)The Supreme Court's power to tax and settle a bill of costs (but no other power of the Supreme Court under this section) may, subject to any rule, order or direction of the Court, be exercised by the Registrar of the Court.
(1b)Subject to the rules of the Supreme Court, an appeal lies to a judge against a decision of the Registrar pursuant to subsection (1a).
(2)Where an application has been made under subsection (1), the Supreme Court may—
(a)restrain a person claiming to be entitled to the costs from commencing an action for recovery of the costs; or
(b)stay any proceedings for recovery of the costs.
(3)The Court may, on taxation of a bill of costs under this section—
(a)order the refund of any amount overpaid; or
(b)where the proceedings have been instituted by the person seeking recovery of the costs—order payment of legal costs in accordance with the taxed bill.
(4)The Board may institute proceedings for the taxation of legal costs under this section on behalf of a person who is liable to pay, or has paid, the legal costs and must institute such proceedings if ordered to do so by the Tribunal.
(5)Any court in which proceedings for the recovery of legal costs have been instituted may order the plaintiff to apply to have the legal costs taxed in accordance with this section, and may adjourn the proceedings until the taxation has been completed.
(6)A legal practitioner may make an agreement in writing with a client for—
(a)payment of a specified amount by way of legal costs (which may—but need not—consist of a daily, hourly or other time-related rate for professional work carried out by the legal practitioner on the client's behalf); or
(b)payment of legal costs in accordance with a specified scale; or
(c)subject to any limitations imposed by the Society's professional conduct rules or the regulations—payment of a contingency fee to be calculated on a basis set out in the agreement on fulfilment of a condition stated in the agreement.
(7)The Supreme Court may, in proceedings under this section, rescind or vary an agreement under subsection (6) if it considers that any term of the agreement is not fair and reasonable.
The respondents acted for the applicant in respect of an appeal to the Full Court from litigation that had been conducted in the Workers Compensation Tribunal. The appeal was instituted by the applicant’s former employer.
After the appeal the applicant complained to the Legal Practitioners Conduct Board (“the LPCB”) in 1996 in relation to both the conduct of the respondents and the costs that they charged. By letter dated 13 August 1996 the LPCB indicated they found no evidence of misconduct and also declined to take further the question of whether or not there had been over-charging. The latter occurred because the respondents agreed to limit their claim for costs to the sum of $2000. The bills rendered in relation to the Full Court appeal totalled $3536.16.
Prior to the appeal the applicant had placed the sum of $2000 into the trust account of the respondents, to be held on account of costs. After the appeal, the respondents transferred that money into the firm’s account in full satisfaction of their claim for costs. They have not since that time pursued the applicant for any further costs.
The matter appeared to be resolved and in 2006 the relevant file was destroyed by the respondents. This application was commenced on 21 May 2014. As the file no longer exists, it was not possible to conduct a taxation in the usual manner.
The general provisions in relation to the taxation of costs are set out in Rule 274, which provides as follows:
274—General provisions about adjudication upon costs
(1)This rule applies both to proceedings in the nature of a preliminary assessment of costs and proceedings in the nature of a detailed adjudication upon costs.
(2)The Court has—
(a)the same powers as it has in relation to an action in the Court;
Examples—
1The Court may take evidence on affidavit or orally.
2The Court may require the attendance of witnesses or the production of documents (or both).
3The Court may make orders about the representation of persons interested in the adjudication.
(b)the following special powers—
(i)the Court is not bound by the rules of evidence but may decide questions by estimation or in any other way that may be expedient in the circumstances;
(ii)the Court may make interim orders.
(3)The following general principles will be applied—
(a)costs will be allowed so far as they are necessary and reasonable but not so far as they result from over-caution, negligence or mistake;
(b)the necessary and reasonable costs of procuring evidence reasonably required for the presentation of a party's case will generally be allowed;
(c)if the same solicitor or firm of solicitors represents two or more parties to an action—costs will not be allowed separately for each party but on the basis of the aggregate work necessary and reasonable for the representation of both or all parties;
(d)if proceedings are adjourned because of the default of a party—the party should bear the costs and, if proceedings are adjourned because of the default of a party's lawyer—the lawyer should bear the costs.
(4)The Court may—
(a)require a party to produce its records of costs and disbursements and any other material that might be relevant to the assessment;
(b)require a party to provide further details of any item in respect of which the party claims to be entitled to costs.
(5)If it appears that costs have been overpaid, the Court may make an order for repayment.
As can be seen from Rule 274(2)(b)(i) the Court may decide questions on an adjudication by estimation or in any other way that may be expedient in the circumstances. Given that the file has been destroyed, it was necessary to proceed by way of estimation.
The respondent was content on the taxation for the costs to be fixed in the sum of $2000. The respondent sent two bills in relation to the Full Court appeal. The bills were detailed and calculated on the then applicable Supreme Court Scale. I am satisfied, having regard to that fact, and also to the fact that this is a taxation on a solicitor and own client basis, that, if it had been possible to conduct a full taxation of the bill, the amount taxed would have been closer to the amount charged rather than to the sum of $2000. In the circumstances, the bill was taxed in the amount of $2000. After a bill is taxed, the order of the Court is a provisional order until the period for review has expired.[3]
[3] Supreme Court Civil Rules 2006, Rule 276.
The applicant applied for a review of the taxation. He did so by email dated 12 November 2014. I have treated the email as a formal application. A review of a provisional costs order is allowed by Rule 278, which provides as follows:
278—Review of provisional costs order
(1)A party who is dissatisfied with a provisional costs order may, within 14 calendar days after the date of the order, apply for review of the order by a Master.
(2)An application for review must specify, in detail, the applicant's objection to the decisions made on the adjudication.
(3)If the provisional order was made by a Master, the review will, as a general rule, be in the nature of a reconsideration by the Master who made the order (but another Master may conduct the review if for some reason it is not possible or convenient for the same Master to do so).
(4)On a review, the Court may—
(a)confirm the provisional costs order and order that it be entered in the Court's record as a judgment of the Court; or
(b)vary the provisional costs order as may be appropriate in the circumstances and order that it be entered in the Court's record as a judgment of the Court.
(5)A party who is dissatisfied with the decision on review may, within 14 calendar days of that decision, apply for a further review by a Judge.
(6)The Court may, on the further review, confirm the costs order as entered in the Court's record as a judgment of the Court or order that it be varied as the Court thinks appropriate.
The grounds of review set out in the email were that:
1Section 42(3) of the LPA gave the Court jurisdiction to order a refund of any amount overpaid, but the Court has failed to order a refund of the sum of $2000.
2That the same sub-section gives the Court power or jurisdiction to order payment of legal costs in accordance with the taxed bill and the Court has failed to so order.
3The Court failed to comply with the obligations set out in s 42(7) of the LPA.
4The Court failed to take into account facts found in the affidavits filed by the applicant.
5That I should have disqualified myself from the taxation because I was biased.
6That the court erred in accepting that Rule 272 of the Supreme Court Civil Rules 2006 gave power or jurisdiction that the only power was that power found in s 42 of the LPA.
I will deal with the first two grounds of review first, as they appear to be related. The power provided in sub-s 42(3) of the LPA provides the Court with power to make orders consequential upon the outcome of a taxation. In circumstances such as this, where the amount taxed is the same amount that was paid by the applicant, there is no basis to order a refund or to order the payment of any legal costs.
The third ground relates to the provisions of s 42(7) of the LPA, which permits the Court to rescind or vary an agreement if it considers any term of the agreement is not fair and reasonable. The power relates to the entitlement of a legal practitioner to make an agreement in writing, provided in s 42(6) of the LPA. That provision permits the legal practitioner to make an agreement in writing to charge on a basis other than the Supreme Court Scale. Here, first, there was no written agreement and, secondly, the applicant was charged on the basis of the Supreme Court Scale applicable at the time. There is simply no work for sub-s 42(7) to do.
The fourth ground is incomprehensible. This matter was simply a taxation to ascertain the amount properly claimable by the respondent in respect of bills sent. I had regard to all of the affidavits filed by the parties and to the submissions they made.
The next ground is that I should have disqualified myself because I was biased. It is clear that judicial officers have a duty to exercise their judicial function when their jurisdiction is directly invoked.[4] A proper basis for disqualification must be established. The applicant says that I “jumped into the arena” with the respondent and was biased against him.
[4] Ebner v The Official Trustee in Bankruptcy (2000) 205 CLR 337 at [19]-[20].
The test in relation to bias is whether a fair-minded lay observer might reasonably apprehend that a judge might not bring an impartial mind to the resolution of the question that the judge is required to decide.[5] The taxation was conducted, albeit on the basis of an estimation, and there is no substance in the arguments of the applicant in respect of bias and I declined then and now to disqualify myself.
[5] Ebner v The Official Trustee in Bankruptcy (2000) 205 CLR 337 at [6]
The final ground of review is that the Court erred in accepting that Rule 272 of the Supreme Court Civil Rules 2006 gave power or jurisdiction when in fact the power to conduct a taxation was found in s 42 of the LPA. The Rules of Court provide a procedure whereby the Court can exercise the jurisdiction given by statute. There is no inconsistency between Rule 272, as it was at the relevant time, and s 42 of the LPA and no substance in the ground of review.
Since the preparation of these reasons, the applicant has filed an Interlocutory Application seeking a review. The application itself does not set out any grounds of review. However, there is a supporting affidavit filed with the application which sets out 42 grounds of review. Many of the grounds are an amplification of the six grounds set out above. I have considered each of the further grounds in the affidavit and am satisfied that there is no proper basis on which to vary the outcome of the taxation.
In summary, each of the grounds of review put forward by the applicant fails. I confirm my original decision on the taxation that the bill is taxed in the sum of $2000.