Lumley Life Ltd v IOOF of Victoria Friendly Society

[1992] FCA 1063

/O.jP 32

JUDGMENT NO. ........ ........ .. I ........ -

IN THE FEDERAL COURT OF AUSTRALIA	)
)
NEW SOUTH WALES DISTRICT REGISTRY )	No. G354 of 1989

1

GENERAL DIVISION 1

BETWEEN:  LUMLEY LIFE LIMITED and
DRAKE & EADES PTY LTD

Applicants

AND :  IOOF OF VICTORIA FRIENDLY
SOCIETY

Respondent

23 April 1992

REASONS FOR JUDGMENT

LOCKHART J .

This is a motion by the respondent, IOOF of Victoria Friendly Society ( " IOOF" ) , for a review by the Court of the decision of a taxing officer of the Court made on 12 November 1991 in the taxation of IOOFfs bill of costs against the applicants, Lumley Life Limited and Drake & Eades Pty Limited. The review is made pursuant to Order 62 rule 44 of the Court's Rules which empowers the Court to review the decision of a taxing officer made on reconsideration by the taxing officer of any earlier decision of his with respect to the disallowance of certain items of costs and disbursements (see rules 42 and 43).

before the Court on questions of principle rather than detail.	defined categories which enabled the whole matter to be argued
This was due in large measure to the good sense of counsel and solicitors for the parties.
I should say at the outset that the task of the taxing officer was difficult and complicated, and, although challenged in certain respects on this appeal, and largely successfully, does not reflect on the sound approach made to much of the taxation. But certain questions of principle emerged from the disallowance of costs and disbursements which call for a review by the Court.
The case has a long history. It commenced with an application by Lumley for an interlocutory injunction to restrain IOOF from engaging in allegedly misleading and deceptive conduct said to constitute a contravention of S . 52 of the T r a d e P r a c t i c e s A c t 1974 ("the T r a d e P r a c t i c e s A c t " ) and passing off
by reason of the use of the word "flexibond" by IOOF in and about its business activities as a building society in Australia,
especially in Victoria. The Court granted an interlocutory injunction upon Lumley giving the usual undertaking as to
damages. Later the matter came on for final hearing and the Court found in essence in favour of IOOF. It followed that there was a third hearing, being the hearing of the motion by IOOF for an award of damages by reason of the costs, expenses and losses incurred and suffered by it as a result of the grant of the early interlocutory relief based upon the giving of the undertaking as to damages. There were thus three hearings. The third hearing, that is the hearing on the question of damages, is not involved in the present motion. The other two hearings are involved.
The primary question argued before me related to the disallowance by the taxing officer of the fees paid to senior counsel for IOOF. Senior and junior counsel appeared for IOOF, both on the hearing for interlocutory injunctive relief and the final hearing. The taxing officer concluded that it was not a case of sufficient difficulty or complexity to warrant the retention of both senior and junior counsel. He therefore disallowed the fees for brief on hearing and refreshers together with any preparation fee charged and attendant expenses such as air fares and accommodation because, although the matter was heard in Sydney, counsel (both senior and junior) and the solicitors for IOOF are based in Melbourne. Lumley is a Sydney based organisation and its counsel and solicitors are based in Sydney. The hearing was in Sydney.
The items in the bill of cost which relate to senior counsel's fees are items 84, 89 and 103, also 327 and 328, together with the charges of senior counsel relating to the final hearing, items 277, 284, 293, 297, 301 and 314.
The relevant principles appear from Stanley's Case (1966) 115 CLR 470 at 477, 486, 492. I apply those principles in this case; but Stanley's Case was concerned with a very different factual situation. It was a case that was decided at the time when "running down" cases constituted a large proportion of the work of the State Supreme and District or County Courts.
Stanley's Case was a jury trial in the Victorian County Court,
but was an assessment of damages only.
The Federal Court is at the threshold of new Commonwealth law and there are very few contested cases which have come before me for hearing in nearly 13 years on this Bench where the retention of senior counsel would not have been justified. This is a S. 52 case and the legal principles which govern S. 52 are generally well established, but there are still grey areas which will call for future decisions of principle. The factual issues in the present case were complex and the legal issues were not easy. There was no novel point, but there were points of importance and there was a volume of material to be handled in the case. It is true that the total claim for damages by Lumleys was $137,000, but the basic case was over an injunction and the injunction of course was the only matter in issue in the
interlocutory proceedings. It is true that only one counsel was
briefed by Lumley, namely, junior counsel but that says nothing as to whether it was proper for IOOF (or Lumley for that matter) to retain two counsel. The taxing officer erred in principle in not allowing senior counsel's fees.
Another item rejected by the taxing officer was item 327 which were Mr Meehan's (the officer of IOOF giving instructions to its lawyers in this case) airfares to Sydney for a number of days. These were airfares between Melbourne and Sydney and it is not suggested that Mr Meehan attended Sydney other than for the purposes of this case. It was found by the taxing officer that it was unnecessary for him to attend as the officer of IOOF to instruct solicitors and counsel. Reliance was placed on certain authorities (see Russo v Russo per Scholl J . [l9531 VLR 57 at 67, Cachia v Hanes & Anor. (1991) 23 NSWLR 304 at 317 and Oliver on Costs, 1st ed, page 66. Reliance was also placed by counsel for IOOF on Helsham C. J. in Eq. 'S decision in Austra l ian
Blue Metal v Hughes [l9701 2 NSWR 119 at 123, a decision with
which I entirely agree. It seems to me that in this day and age it cannot be said that a corporation is not entitled to have its representative in Court to give instructions, notwithstanding the advances of technology through all forms of telephonic and facsimile communication. Also on the last day of the hearing M r Meehan was in Court pursuant to a notice to attend Court (given by Lumley) for cross examination. It was only after he arrived here on the Sunday and that a discussion occurred between the
parties' representatives on the Monday morning that he was told
he was not required to give oral evidence; but by then of course
he had flown from Melbourne to Sydney. These items should all have been allowed.
The next set of items disallowed relates to junior counsel's fees. These related mainly to the drafting of af f idavits for the purposes of the interlocutory hearing and the final hearing. Most of the affidavits used on the interlocutory hearing were also used on the final hearing, either in whole or in part. For the interlocutory hearing the taxing officer allowed $1,625, the claim having been for $2,675. No objection was made with respect to this. With the affidavits for the final hearing he allowed a total of $700. He allowed the solicitor the charge for engrossing the affidavits, but nothing for instructions to draft them or for the actual drafting of them. He said that generally solicitors draft affidavits and counsel settle them. This certainly was the practice many years ago and indeed there are still solicitors who draft affidavits and counsel settle them. But it has for many years become more and more of a fiction. Counsel in fact draft af fidavits far more than solicitors do. The taxing officer recognised this by allowing counsel's fees for the drafting of the affidavits, though he did so on the basis of the fee for drafting allowed in the Second Schedule relating to costs provided by Item 14 and then allowed an additional fee taking the whole of it to $700 on the basis of there being some 50 folios. It is plain that there are far more than 50 folios
involved. There were in fact 13 affidavits, and, although the
taxing officer allowed an engrossing fee of 50 folios, there are in fact 123 folios. It seems to me to reflect an error in principle. What should have been done was to allow the solicitors the engrossing fee; counsel should have been allowed a reasonable charge under the items of the Second Schedule relating to work done by counsel, and it is difficult to see how this could be done other than on a time basis and that is how I think this should have been approached in the present case.
It seems that with respect to the interlocutory hearing the taxing officer disallowed preparation fees for junior counsel on the basis that they would have been involved in the brief on hearing. There are two ways of approaching this. The modern tendency is for counsel to charge a flat fee on a daily basis of both preparation and court work rather than the traditional brief on hearing and refreshers being two-thirds of the brief on hearing. The taxing officer took the view that the brief on hearing approach was preferable here and I do not think he has erred in this respect. Hence he cannot be criticised for disallowing the preparation fees. A helpful analysis of the relevant principles is to be found in the judgment of Astley J.
in Produential Finance Limited v Davander Nominees P t y Ltd & Ors,
Supreme Court of Victoria, 20 March 1991, unreported.
For the final hearing the taxing officer allowed a brief fee of $1,700 and four refreshers of two-thirds each, that is the brief fee on the Monday and the refreshers on Tuesday to Friday
the following Monday, the last day of the hearing (21 August) inclusive plus two conferences of $150. The problem is that on
junior counsel did not appear but senior counsel did. No fee was allowed for any counsel on the 21st. The taxing officer should have allowed senior counsel's fee for that day. Also junior counsel charged for the Saturday and Sunday as appears from the backsheet to his brief which was before the taxing officer marked as "All Day". What junior counsel did was to prepare written submissions on Saturday, 19 August and conferred with his instructing solicitor and on 20 August consultedwith his leader. The consultation should not in my view have been allowed and nor was it allowed, but junior counsel did in fact prepare the written submissions over that time and they were very useful to me on the following Monday. Indeed without them the case would never have finished on the Monday and would have necessitated continuing on Tuesday. These preparation fees should have been allowed, not just on the basis of two conferences of $150 each, but on a basis more akin to a refresher.
[The parties then settled the matter, so there was no necessity for the Court to formally enter judgment.]

Although large numbers of items in the bill of costs were
disallowed and are the subject of the appeal to the Court from
the taxing officer's decision, they fall into certain well

I certify that this and the

preceding seven (7) pages are a true copy of the reasons for judgment herein of the Honourable Mr. Justice Lockhart.

Associate

Dated: 23 April 1992 V

Counsel for the Applicant	D.A. Caspersonn
Solicitors for the Applicant :	Phillips Fox
Counsel for the Respondent	F.G.A. Beaurnont Q.C. L. Watts
Solicitors for the Respondent:	Higgins Teale
Date of Hearing	23 April 1992
Date of Judgment	23 April 1992