Lobban v Lawson Legal
[2014] WASC 243
•4 JULY 2014
LOBBAN -v- LAWSON LEGAL [2014] WASC 243
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2014] WASC 243 | |
| 04/07/2014 | |||
| Case No: | LPA:16/2012 | 6 JUNE 2014 | |
| Coram: | COMMISSIONER SLEIGHT | 6/06/14 | |
| 11 | Judgment Part: | 1 of 1 | |
| Result: | Certificate of assessment set aside Period for lodging objections extended | ||
| A | |||
| PDF Version |
| Parties: | CHRISTOPHER DONALD GEORGE LOBBAN LAWSON LEGAL |
Catchwords: | Practice and procedure Costs assessment under Legal Profession Act 2008 (WA) Whether Rules of the Supreme Court 1971 (WA) apply to assessment Court' inherent jurisdiction to set aside allocator Whether certificate should be set aside Late objections not drawn to attending of taxing officer |
Legislation: | Legal Profession Act 2008 (WA) Rules of the Supreme Court 1971 (WA), O 66 r 53, r 54, r 55 |
Case References: | Australian Coal and Shale Employees Federation v Commonwealth [1953] HCA 25; (1953) 94 CLR 621 Landsal Pty Ltd (in liq) v REI Building Society (1993) 41 FCR 421; (1993) 113 ALR 643 Mossensons (a firm) v Coastline Associates (Unreported, WASC, Library No 970661, 2 December 1997) Pryles & Defteros (a firm) v Green [1999] WASC 34; (1999) 20 WAR 541 Rankilor v Circuit Travel Pty Ltd [2012] WASCA 155 Theocharides v Joannou [1955] 1 All ER 615; [1955] 1 WLR 296 Thorne v Thorne [1979] 3 All ER 164; [1979] 1 WLR 659 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA CITATION : LOBBAN -v- LAWSON LEGAL [2014] WASC 243 CORAM : COMMISSIONER SLEIGHT HEARD : 6 JUNE 2014 DELIVERED : 6 JUNE 2014 PUBLISHED : 4 JULY 2014 FILE NO/S : LPA 16 of 2012 BETWEEN : CHRISTOPHER DONALD GEORGE LOBBAN
- Plaintiff
AND
LAWSON LEGAL
Defendant
Catchwords:
Practice and procedure - Costs assessment under Legal Profession Act 2008 (WA) - Whether Rules of the Supreme Court 1971 (WA) apply to assessment - Court' inherent jurisdiction to set aside allocator - Whether certificate should be set aside - Late objections not drawn to attending of taxing officer
Legislation:
Legal Profession Act 2008 (WA)
Rules of the Supreme Court 1971 (WA), O 66 r 53, r 54, r 55
Result:
Certificate of assessment set aside
Period for lodging objections extended
Category: A
Representation:
Counsel:
Plaintiff : Mr M S MacDonald
Defendant : Mr D J Garnsworthy
Solicitors:
Plaintiff : Macdonald Rudder
Defendant : Lawson Legal
Case(s) referred to in judgment(s):
Australian Coal and Shale Employees Federation v Commonwealth [1953] HCA 25; (1953) 94 CLR 621
Landsal Pty Ltd (in liq) v REI Building Society (1993) 41 FCR 421; (1993) 113 ALR 643
Mossensons (a firm) v Coastline Associates (Unreported, WASC, Library No 970661, 2 December 1997)
Pryles & Defteros (a firm) v Green [1999] WASC 34; (1999) 20 WAR 541
Rankilor v Circuit Travel Pty Ltd [2012] WASCA 155
Theocharides v Joannou [1955] 1 All ER 615; [1955] 1 WLR 296
Thorne v Thorne [1979] 3 All ER 164; [1979] 1 WLR 659
- COMMISSIONER SLEIGHT:
(This judgment was delivered extemporaneously on 6 June 2014 and has been edited from the transcript.)
1 This decision concerns an application by the respondent for an order setting aside an allocator signed by a taxing officer on a costs assessment made pursuant to the Legal Profession Act 2008 (WA) (the Act). There is a further application for an extension of the time to file objections.
2 The respondent, Lawson Legal (the practitioner), provided legal services to the applicant Mr Lobban (the client) purportedly pursuant to two costs agreements. The practitioner initially rendered an account to the client for $27,720. The client applied, as he is entitled to do under the Act, to a taxing officer of the Supreme Court of Western Australia for an assessment of the practitioner's account. The practitioner made a number of alterations to its bill of costs but finally lodged for assessment a bill for $24,995 of which $2,700 related to the costs of preparing the bill and the costs of the assessment.
3 Registrar Dixon, the taxing officer, conducted an assessment of the bill of costs on 19 August 2013 and called for supplementary submissions from the parties, which were in due course filed. On instructions from the registrar, the associate to the registrar wrote to the parties by letter dated 23 October 2013 informing the parties that the registrar proposed to allow the bill in the sum of $12,267.20. The letter concluded by stating:
Any objections are to be lodged within 14 days of the date of this letter, failing which the certificate to the bill will be signed without further notice.
4 On the basis of this letter, the final date for filing objections was 6 November 2013. The practitioner filed and served objections on 8 November 2013. Although the practitioner's written submissions argue that the time period for filing objections had not expired at the time the objections were filed, it clearly had. The late objections filed by the practitioner were not brought to the attention of the registrar. On 2 December 2013 the registrar signed the certificate of his assessment of the bill of costs, ignorant of the existence of the objections filed by the practitioner. On 5 December 2013 the client's solicitors wrote to the associate enclosing a written response to the objections, stating:
If notwithstanding the objection was late and the registrar is minded to consider the objections.
5 On 17 December 2013 counsel for the practitioner wrote to the associate of the registrar stating that he assumed the objections had been dismissed and requested reasons for the dismissal so that he could consider seeking a review. In response to this letter the associate to the registrar wrote to the parties stating that if the registrar had been aware of the objections he would not have signed the certificate of assessment on 2 December 2013 without dealing with the objections. In due course, the registrar accepted a submission from the solicitors for the client that he could not reopen the taxation by virtue of O 66 r 54(4) of the Rules of the Supreme Court 1971 (WA) which provides:
[T]he taxing officer shall not, after a certificate of taxation is signed, review his taxation or amend his certificate, except to correct a clerical or manifest error.
6 The practitioner seeks an order to set aside the certificate of assessment (the allocator) relying upon a suggested inherent jurisdiction of the Supreme Court, and for an order for extension of the time for filing the objections. The client acknowledges a judge of the Supreme Court has an inherent power to set aside an allocator. However, the client contends that in the circumstances of the present case this inherent jurisdiction should not be exercised.
7 When the matter first came before me on 6 May 2014 I raised a number of preliminary issues:
1. Firstly, whether an assessment of the costs of the practitioner by a taxing officer under the provisions of the Act is to be conducted in accordance with the Rules of the Supreme Court. This is an important issue because it is the Rules of the Supreme Court which prescribe a procedure for filing objections and provide that a taxing officer cannot reopen an assessment of costs once a certificate is signed by the taxing officer; and
2. Secondly, whether an inherent jurisdiction to set aside an allocator on a taxation of costs extended to setting aside a certificate of assessment signed by a taxing officer under the Act.
Question 1
8 To answer this question it is necessary to consider the statutory provisions. The starting point is that a client may apply to a taxing officer of the Supreme Court for assessment of a bill of costs: s 295 of the Act. There is no express provision in the Act that the assessment is to be conducted in accordance with the procedure contained in the Rules of the Supreme Court.
9 A certificate, once signed by the taxing officer, is binding on the parties to the costs assessment (s 305(2) of the Act), subject to a review by the Supreme Court. A costs assessment may be reviewed by the Supreme Court in accordance with the Rules of the Supreme Court: s 308(1) of the Act.
10 The procedures for taxation and review were summarised in the case of Rankilor v Circuit Travel Pty Ltd [2012] WASCA 155. However, it should be stressed that that case concerned an issue of party-party costs, not the assessment of a solicitor-client bill under the provisions of the Act.
11 The procedure to be followed on the assessment of party-party costs is a five-step procedure:
(1) an assessment known as a taxation of the bill of costs takes place before the taxing officer;
(2) immediately prior to the signing of the certificate of taxation or such other time as directed, a party may lodge an objection in writing listing those items the objecting party contends the taxing officer has made an error in principle in allowing or disallowing: O 66 r 53(1);
(3) if objections are lodged the taxing officer then reviews the taxation and, after completing the review, then signs the certificate of taxation. By O 66 r 54(4), the taxing officer shall not, after a certificate of taxation is signed, review his taxation or amend his certificate except to correct a clerical or manifest error before payment or process is issued for recovery of the costs. Accordingly, except to correct clerical or manifest errors, the taxing office is functus officio once he or she has signed the certificate of taxation: see Australian Coal and Shale Employees Federation v Commonwealth [1953] HCA 25; (1953) 94 CLR 621, 624; Rankilor v Circuit Travel [64];
(4) if requested by a party, the taxing officer shall state in his certificate of taxation or by reference to the objection, the grounds and reason of his decision on the objection and any special facts or circumstances relating to his decision: O 66 r 54(2); and
(5) if a party is dissatisfied with the certificate of the taxing officer as to any item or part of an item objected to he may within 14 days from the date of the certificate or such other time as the court or taxing officer allows apply to a judge in chambers for an order to review the taxation. If such an application is made, the judge, if of the opinion that a taxing officer has made an error in principle, may thereupon make such order to rectify the error as the judge thinks fit: O 66 r 55(1) and (2).
12 Although the Act makes no express mention that the costs assessment by the taxing officer is to be in accordance with the Rules of the Supreme Court, in my opinion it is implicit that the costs assessment is to be conducted in accordance with the rules. This is because the Act expressly provides in s 308 that the review by the Supreme Court of the assessment of the taxing officer is to be in accordance with the Rules. Order 66 r 55(1) in relation to such a review provides that the review is permitted where a party is dissatisfied with the certificate of taxation 'as to any item or part of an item objected to under Rule 53'.
13 Accordingly, it is contemplated by the review provisions before a judge that a party seeking a review has lodged objections before the taxation officer as provided in O 66 r 53. Further, as the costs assessment is to be conducted by a taxing officer of the Supreme Court, if the legislation was meant to change or alter the time-honoured procedures of such an assessment in the Supreme Court, then you would expect that an express provision to this effect would be included in the legislation.
14 Following my conclusion that the costs assessment of a taxing officer is to be in accordance with the Rules of the Supreme Court, I also conclude that in accordance with the Rules once the taxing officer signs the certificate of assessment he or she becomes functus officio and is unable to set aside the certificate and consider outstanding objections.
Question 2
15 The second preliminary issue to be considered is whether the inherent jurisdiction of the Supreme Court to set aside a certificate of a costs assessment still exists notwithstanding the provisions in the Act which provide that the certificate signed is binding on the parties.
16 In the matter of Pryles & Defteros (a firm) v Green [1999] WASC 34; (1999) 20 WAR 541, Parker J stated that the inherent and general power of the court provided the court with the jurisdiction to secure that a legal practitioner is remunerated properly for work undertaken as a legal practitioner [22]. Parker J went on to state that the statutory scheme which then existed under the Legal Practitioners Act 1893 (WA) for taxation of costs could be seen as complementing and not displacing the inherent jurisdiction [24].
17 Like the current legislation, the Legal Practitioners Act 1893 provided a client with the right of a taxation of the practitioner's bill of costs by a taxing officer of the Supreme Court with a review by a judge. Accordingly, there is no basis for distinguishing the authority of Pryles & Defteros v Green based upon the regime of the current legislation. Also, s 465 of the Act acknowledges the existence of an inherent jurisdiction. The section provides that matters in pt 13 of the Act, dealing with complaints and disciplinary proceedings against a practitioner, do not affect the inherent jurisdiction and power of the Supreme Court. Although there is no reference to the inherent jurisdiction in pt 10 of the Act dealing with costs assessments, one would expect an express provision if it was intended that the legislation was meant to remove the inherent jurisdiction. In Landsal Pty Ltd (in liq) v REI Building Society (1993) 41 FCR 421; (1993) 113 ALR 643, 650, the Full Court of the Federal Court stated:
The true rule is that a court may exercise its inherent or implied powers in a particular case, even in respect of matters that are regulated by a provision of a statute or rules of court, so long as it can do so without contravening any such provision.
18 In my opinion, the inherent jurisdiction to set aside a certificate of assessment complements the provisions of the Act. I accept the submission of counsel for the practitioner that the inherent jurisdiction provides an important procedure for the court to intervene where otherwise justice would be denied. An example of this is the factual circumstances of Australian Coal and Shale Employees Federation v Commonwealth where the taxation officer had signed a certificate on the day of the taxation without giving the parties a reasonable opportunity to consider the assessment and lodge an objection.
19 For the above reasons I conclude that an inherent jurisdiction of the court exists to set aside a certificate of costs assessment signed under the Act.
Should the allocator be set aside
20 Having disposed of the preliminary issues and having found that the court does have jurisdiction to grant the orders sought by the practitioner, I will now deal with the issue of whether such an order should be made. The guiding principle as to whether the signed certificate of the taxation officer should be set aside is whether the court thinks it right or proper in all the circumstances to do so: see Thorne v Thorne [1979] 3 All ER 164; [1979] 1 WLR 659 cited with approval in Mossensons (a firm) v Coastline Associates (Unreported, WASC, Library No 970661, 2 December 1997).
21 The case of Thorne v Thorne requires further consideration as to what is meant by 'it is right or proper in all the circumstances to do so'. The case concerned an assessment of costs to be paid by the husband in divorce proceedings. The assessment took place and the husband, under the rules of the court, had 14 days in which to file objections. The husband failed to lodge objections within the 14 day period and the certificate of the assessment of costs was signed and issued. The court was informed that the failure to lodge the objection occurred as the solicitor who had the conduct of the matter left the law firm and it took some time before the solicitor who took over the matter to realise that the objections had not been lodged. Once the oversight was realised, as soon as practicable, an application was made for an extension of time. This application was lodged 21 days after the period for the lodging of the objections had expired. An application to reopen the taxation was initially dismissed on the grounds that the allocator having been signed the matter could not be reopened and the period of time for lodging of objections extended. On application to a judge, Comyn J set aside the allocator on the basis that:
(1) there had been a satisfactory explanation of the default on the husband's side, namely the husband's solicitors had overlooked the matter; and
(2) the delay had been a very short period.
22 His Honour went on to state as follows:
I think that the circumstances for setting aside a registrar's certificate of taxation have got to be strong, but they are not to be confined to the heads I have mentioned, such as fraud or mistake, or breach of natural justice. They are, in my judgment, sufficient to cover error and a delay of a short period (169).
23 His Honour then went on to take into account that no prejudice arose to the other party by the taxation being reopened. He concluded, rather, that an injustice might be done by not allowing the taxation to be reopened where costs had been allowed at £10,027 whereas the husband's contention was that costs should have been allowed at no more than £7,000, a difference of approximately £3,000.
24 In this case, the client relies upon the fact that no explanation has been presented by the practitioner in an affidavit as to why the objections were lodged two days after the expiration of the period set by the taxation officer for lodging objections. I do not believe the lack of explanation offered is sufficient to distinguish the case from Thorne v Thorne where the explanation offered was hardly persuasive of injustice. The delay in this matter has been very short, being two days, from which I infer that the failure to lodge within time was due to an oversight.
25 A factor which favours the application that the certificate of assessment should be set aside is that, due to court administration error, the objections were not brought to the attention of the taxing officer. The taxing officer made it clear that if he had been aware of the objections before signing the certificate of assessment he would have dealt with the objections, albeit that they were lodged two days later than the period set. The taxing officer had the power to deal with the objections even though they were lodged out of time. This is because the taxing officer has power to reopen his taxation at any time prior to his signing of the certificate, although in so doing the registrar should ensure that procedural fairness is afforded to the parties. Until the certificate is issued the registrar has not completed the taxation of the bill: see Australian Coal and Shale Employees Federation v Commonwealth (625).
26 In this case there would have been no procedural unfairness if the taxing officer had dealt with the objections prior to signing of the certificate, given that the objections were filed only two days late.
27 There is one other matter that can be taken into account in this case on the question of whether it is proper to set aside the certificate of assessment. In deciding whether to set aside a certificate of assessment a judge can have regard to the applicant's prospects of success on review. A court will not exercise its inherent jurisdiction to set aside a taxation certificate unless it is satisfied that such an order would not be futile: Mossensons v Coastline Associates (6). This means that some merit must be demonstrated. However, it is not necessary for a judge considering an application to set aside a certificate of assessment to actually conduct a review in order to decide if there is merit to the objections. It should be noted that in Thorne v Thorne the certificate of assessment was set aside and the matter sent back to the registrar for the reasons earlier described in this decision.
28 An objection lodged against an assessment must be on the grounds that an error in principle has occurred. An error in principle may occur both in determining whether an item should be allowed and in determining how much should be allowed.
29 A review will only interfere with a taxing officer's assessment if the discretion appears not to have been exercised at all or has been exercised in a manner that is manifestly wrong. When the question is one of amount only, the court will only interfere in extreme cases: Australian Coal and Shale Employees Federation v Commonwealth (628 - 629). A decision as to quantum alone might be so outrageous as to speak for itself and show that the taxing officer did not exercise his discretion in a proper manner: Theocharides v Joannou [1955] 1 All ER 615; [1955] 1 WLR 296, 619 - 620.
30 In this matter, the nature of services provided by the practitioner to the client were multifaceted. They included representing and providing written advice in relation to extradition proceedings, conducting eviction proceedings against an individual residing in premises in Western Australia, preparing a Power of Attorney document, visiting the client at Hakea Prison for instructions and also representing him in court. At one stage during the retainer the client terminated the practitioner's services but then reinstated them. The client signed a costs agreement when he initially instructed the practitioner and a second costs agreement when he reinstated the practitioner's services. The services were finally terminated on 28 July 2011. The bill of costs lodged for assessment by the practitioner consisted of numerous items of attendances where the practitioner charged the client on a time basis at an hourly rate of $440, consistent with the hourly rate prescribed in the two written costs agreements. As I earlier mentioned, the total amount of the bill was $24,995.
31 The objections lodged by the practitioner can be divided, I believe, into two categories:
(1) objections on the basis that the allowance made by the taxing officer on items relating to the extradition matter had been allowed on the scale applicable to proceedings in the Magistrates' Court for criminal proceedings and that the services provided in relation to the extradition were not analogous to matters in the Magistrates Court; and
(2) objections on other matters identified on the basis that the amount allowed was so inadequate as to suggest an error.
32 Counsel for the client has submitted that the essence of the objections is to challenge the discretionary powers of the taxing officer. Of course, the right to lodge objections is caveated by the fact that the objections must be on errors of principle and not simply a review of the decision: see Australian Coal and Shale Employees Federation v Commonwealth (627). In my opinion, the objections raised by the practitioner come within the scope of errors of principle as explained above and I am satisfied that the objections are not objections which could be described as futile. Although counsel for the client complains that the objections do not state the amount that ought to have been allowed on the items to which objection has been made, it is implicit that it is the amount that is claimed in the bill of costs.
33 There remains a significant difference between the amount claimed by the practitioner and the amount allowed by the taxing officer. Not to set aside the certificate and extend the period for lodging of objections so as to permit a review by the taxing officer, would also have the effect that the practitioner would be denied a review by a judge.
34 It is not my task at this point of time to conduct the review.
35 Having considered all of the circumstances of this case, I am satisfied that the certificate should be set aside. In my view, it is proper to do so. The matter should be remitted back to the taxing officer to consider the objections that have been filed by the practitioner. To enable the review, the period for lodging objections should be extended to 8 November 2013.