Maisano v Bodycorp Pty Ltd (No 2)
[2016] VSC 92
•11 March 2016
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COSTS COURT
S CI 2014 1914
| ANUNIZIATO ENZO MAISANO (also known as Michael Maisano and Michael Mason) | Applicant |
| v | |
| BODY CORP REPAIRERS PTY LTD (ACN 068 589 408) | First Respondent |
| OAKLEY THOMPSON & CO PTY LTD (ACN 092 053 239) | Second Respondent |
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JUDGE: | Wood AsJ |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 3 March 2016 |
DATE OF JUDGMENT: | 11 March 2016 |
CASE MAY BE CITED AS: | Maisano v Bodycorp Pty Ltd (No 2) |
MEDIUM NEUTRAL CITATION: | [2016] VSC 92 |
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DECISION AND REASONS ON REVIEW
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APPLICATION TO REVIEW DECISION OF JUDICIAL REGISTRAR IN PARTY PARTY TAXATION – Refusal of adjournment – Standing of former solicitor to prosecute taxation of former client’s party party entitlement to costs where equitable right over costs judgment.
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APPEARANCES: | Counsel | Solicitors |
| For the Applicant | In person | |
| For the First Respondent | Mr J Levine | Templeton Fox Rothchild |
| For the Second Respondent | Mr S Senathirajah | Oakley Thompson & Co |
HIS HONOUR:
On 3 March 2016 I heard the parties and reserved my decision in this proceeding (‘current proceedings’). I now publish my decision and reasons.
There are two separate matters for consideration and determination, namely two applications for reconsideration/review initiated by the applicant and the first respondent respectively against orders made by a Judicial Registrar in a taxation of costs completed on 11 November 2015 in the current proceedings.
The matter has a long and complicated history. In 2005 the first respondent brought proceedings against the applicant and others (‘substantive proceedings’). The substantive proceedings were ultimately dismissed[1] with the applicant obtaining costs orders in his favour against the first respondent arising from a number of costs orders.[2] Oakley Thompson & Co Pty Ltd (‘the second respondent’) acted for the applicant in the substantive proceedings and they filed a Summons for Taxation on behalf of the applicant in the current proceedings on 23 April 2014 to recover legal costs on the applicant’s behalf.
[1]Bodycorp Repairers Pty Ltd v Maisano (No 8) [2013] VSC 472.
[2]Daly AsJ (19 April & 15 November 2012) and Elliot J (24 April, 31 July & 4 September 2013).
The original bill of costs claimed $286,384.36. An amended bill was filed on 9 May 2014 claiming $300,500.88. The first respondent was represented by Fulton Legal at that point and a comprehensive Notice of Objection to the amended bill was filed on 25 July 2014.
The taxation proper proceeded on 5 and 6 August 2014[3] before Judicial Registrar Gourlay. Further hearings were conducted on 25 August 2014 and 31 October 2014 but they did not advance the taxation proper. Procedural orders were made in relation to affidavits and the first respondent’s strike out application.
[3]An interim sum of $70,000 was quantified on that day.
There are two judgments of significance by Elliot J which were the subject of argument in the current proceedings before me. The first judgment in time was in a separate proceeding initiated by the second respondent (as plaintiff) against the applicant (as first defendant) and the first respondent (as second defendant) in S CI 2014 05814[4] (‘declaratory judgment’). The second judgment (in time) arose from an application in the current proceedings by the now second respondent to be substituted as, or joined as, an applicant (‘joinder judgment’).[5] Up to that point the only named parties in the current proceedings were the applicant and first respondent.
[4]Oakley Thompson & Co Pty Ltd v Maisano (No 2) [2015] VSC 210 (published 30 June 2015).
[5]Maisano vBodycorp Repairers Pty Ltd (No 2) [2015] VSC 365 (published 24 July 2015).
At the hearing in the current proceedings a fundamental divide emerged between the first and second respondents as to the effect of these two judgments. In short, inter alia, the second respondent relied heavily on portions of the declaratory judgment to justify its standing to prosecute the taxation in their own right in November 2015. The first respondent argued that the only judgment (and order) of relevance was the joinder judgment. This aspect will be discussed further below.
Orders arising from both the declaratory judgment and the joinder judgment were both made on 24 July 2015 by Elliot J.
The order arising from the declaratory judgment included (in paragraph 1) a declaration that the second respondent has an equitable right over the costs judgment made on 4 September 2013. In paragraph 2 the second respondent was also declared to be ‘…entitled to have the costs, ordered in favour of (the applicant) taxed’. In paragraph 3 it was declared that the assessment of costs that already occurred on 5 and 6 August 2014 (in the absence of the applicant) were not invalid.[6]
[6]Exhibited at ‘JMV 4’.
The order arising from the joinder judgment (in paragraph 1) added the second respondent to the current proceeding and in paragraph 2 ordered that ‘..the part heard taxation of costs in this proceeding resume’ on a date to be fixed by the Costs Court.[7] The order noted in ‘Other Matters’ that the second respondent undertook that it agreed that any amount that the first respondent was ordered to pay was to be paid into court and that the second respondent would not seek payment of any such amount to itself except by order of the court or with the applicant’s consent.
[7]On 18 February 2016 the Court of Appeal refused the first respondent’s application to stay that order
(Bodycorp Repairers Pty Ltd v Oakley Thompson & Co Pty Ltd (2016) VSCA 19).
The second respondent was therefore entitled to an equitable right over the costs judgment. Any costs assessment that occurred on those two taxation days in August 2014 was not affected. In other words, in practical terms, the taxation was effectively part heard. Rulings made on behalf of the applicant/second respondent as against the first respondent when the applicant was not present, stood. Implicitly contained in the order of Elliot J giving effect to this scenario is a conclusion that the interests of the applicant and second respondent coincided and there was no prejudice to the applicant as a result of his absence.
The part heard taxation in the current matter was listed for mention at a call over on 18 August 2015. The applicant appeared in person and the first respondent also appeared and was represented by counsel, Mr Levine. This was not counsel’s first involvement as he had appeared on numerous previous occasions as outlined in paragraph 23 below.
Upon the resumption of the taxation before Judicial Registrar Gourlay on 10 November 2015 there was no appearance by the applicant or the first respondent and the second respondent prosecuted the taxation of their bill. The Judicial Registrar proceeded to scrutinise and tax the bill utilising the Notice of Objections previously filed by the first respondent. The matter was then adjourned part heard to 11 November 2015.
On 11 November 2015 the applicant and first respondent appeared. The Judicial Registrar’s order of 11 November 2015 records the following (in part) in ‘OTHER MATTERS’ :
On 18 August 2015 the applicant appeared in person at a call-over. Mr Levine of Counsel represented the first respondent on that date. Orders were made listing the matter for resumption of the taxation on 10 and 11 November 2015.
On 10 November 2015 there was no appearance by the applicant or the first respondent and the matter proceeded unopposed to conclude the taxation of costs previously heard on 5 and 6 August 2014, 24 August 2014 and 30 August 2014.
On 11 November 2015 Mr Maisano appeared in person and sought to adjourn the matter on the basis that he understood that this matter was to recommence on 11 November 2015. This application was refused as he had appeared at the call-over when the matter was listed and a copy of the order made that day was sent to his Post Office box by the Court. He then withdrew from the taxation hearing.
On 11 November 2015 Mr Fulton appeared on behalf of the first respondent to seek an adjournment of the matter as, despite Mr Levine of Counsel appearing at the call-over Mr Fulton had been informed that the matter was to recommence on 11 November 2015. Mr Fulton also sought to adjourn the matter as Mr Murdaca, the director of the first respondent was recovering from surgery and unable to attend Court. No material about Mr Murdaca’s medical condition was produced to the Court. This application was also refused.
Mr Fulton then sought leave to withdraw as the practitioner on record for the first respondent. This application was granted.
The taxation of costs proceeded on both days unopposed as neither the applicant nor the first respondent attended the taxation.
The taxation continued and was completed on 11 November 2015. Both the applicant and Mr Fulton (for the first respondent), elected to withdraw from the hearing before finalisation of the taxation. The final figure was varied under the ‘slip rule’ on 13 November 2015 to $233,588.68.
First Respondent’s Application
The ‘Application for Review’ filed by the first respondent recites five grounds as follows:
1. The Costs Court did not have the power to hear the proceeding in the absence of the applicant.
2. The Costs Court should have adjourned the hearing of the taxation of costs as the first respondent had a medical certificate that had been filed and accepted by the Court of Appeal (upon the consent of the second respondent) in proceeding SAPCI 2015 0081.
3. The Costs Court did not have the power to make an order that the first respondent pay the second respondent directly.
4. The Costs Court acted contrary to the orders of Justice Elliot made 24 July 2015 that provided that Oakley Thompson would be added as a second respondent in permitting Oakley Thompson to prosecute the taxation of costs.
5. The Costs Court acted contrary to the undertaking provided to Justice Elliot on 24 July 2015, that the second respondent agrees that any amount that the first respondent is ordered to pay is paid into court.
Subsection (1) of Section 17HA of the Act states:
Subject to the Rules, a party who objects to a determination made by a judicial registrar in accordance with this Division (including a review under section 17H) may apply to the Costs Court constituted by a Costs Judge for a review of that determination.
The Act provides for a review of a determination of a Judicial Registrar by a Costs Judge. If a strict reading of the Rules means there is no rule that provides for the process of review in the current circumstances then the Court’s own Rules provide the solution and it can adopt its own procedure.
Rule 1.15 (1)(b) states that where the manner or form of the procedure:
by which the jurisdiction, power or authority of the Court is exercisable – is not prescribed by these Rules or by or under any Act, or for any other reason there is doubt as to the manner or form of that procedure, the Court shall determine what procedure is to be adopted and may give directions.
This analysis has been approved by the Court of Appeal in AJH Lawyers vMathiesonNominees Pty Ltd.[8] That Court has also determined that the review is not by way of de novo hearing and that it is appropriate to adopt a procedure for a review on the basis of long standing principles governing taxation decisions and review of decision making on discretionary principles. A clear error must be demonstrated.
[8](2015) VSCA 227.
The first respondent filed written submissions on 12 January 2016. They submit that the applicant is the party who has standing to prosecute the taxation of the bill of costs because the second respondent was added as a respondent and not an applicant. Further, the order of the judicial registrar in regard to payment of costs ought not stand as it is in breach of the undertaking given to Elliot J. The second respondent is criticised for misleading the Judicial Registrar about the existence of a medical certificate covering the director of the first respondent. In oral submissions at the hearing the first respondent was critical of the second respondent’s failure to produce it before the Judicial Registrar. This ignores the fact that the legal representative of the first respondent failed to put the certificate before the Judicial Registrar. The certificate was not sighted by me at the hearing, although counsel for the first respondent advised the Court it certified the director of the first respondent as unfit for a year.[9] Even assuming it was produced before the Judicial Registrar an adjournment would have been extremely unlikely having regard to the provisions in the CivilProcedure Act 2010.
[9]Mr Murdaca, the director of the first respondent, in fact represented the company before the Court of Appeal on 18 February 2016 (see footnote 7).
The second respondent filed amended written submissions dated 10 February 2016. They largely coincide with the written submissions filed in relation to the applicant’s review outlined below at paragraphs 60 to 62. The medical certificate issue is not common to the applicant’s review.
It should be noted that Mr Fulton, who appeared and withdrew on 11 November 2015, had been acting for the first respondent since 2014. For example, he was on record when the Notice of Objections were drawn (July 2014), he appeared for the first respondent on 5 and 6 August 2014 when the taxation hearings commenced and was adjourned part heard, and he was on record when affidavits were prepared in August and October 2014. Mr Levine of counsel was briefed and appeared on 31 October 2014 in the Costs Court and before Elliot J (July 2015) and at the call over on 6 May 2014 when the dates of 5 & 6 August 2014 were set. He also appeared at the call over on 18 August 2015 when the part heard dates of 10 and 11 November 2015 were set.
The reference to a medical certificate in ground 2 of the review notice relates to Mr Murdaca who is a director of the first respondent. No medical certificate was put before the Judicial Registrar on 11 November 2015. It appears the issue of the health of a director of the first respondent was put to the Court of Appeal on 7 October 2015.[10] The second respondent consented to adjourn a hearing scheduled for 21 October 2015 in the Court of Appeal only. On 8 October 2015 the second respondent emailed the solicitor for the first respondent putting him on notice that the part heard taxation scheduled for 10 and 11 November 2015 would proceed.[11]
[10]Affidavit of Julian Vagg sworn 10 February 2016 at paragraph 9.
[11]Paragraph 10 and ‘Exhibit JMV7’ to that affidavit.
Mr Fulton had already appeared in the taxation in August 2014 so was aware of the rulings made in relation to the bill of costs assisted by the Notice of Objection prepared no doubt with his client’s instructions. He had the option on 11 November 2015 to ascertain the rulings made on the 10 November 2015, participate in the taxation on 11 November 2015 and then utilise the reconsideration rights embodied in the Rules to ask the Judicial Registrar to reconsider any ruling made throughout the entire taxation. Withdrawal on 11 November 2015 and not exercising that right has denied the first respondent that opportunity.
Assuming the director of the first respondent was covered by a current medical certificate at that time, the vast majority of taxations run without a client or instructing solicitor present as the arguments are technical ones based on taxation principles. The client’s presence invariably adds nothing to that process.
There is no apparent justification for the first respondent withdrawing its legal representation on 11 November 2015. At taxation the party seeking to justify items are put to their proof, the objections are taken into account, oral submissions made and rulings made on each item. Legal costing is an esoteric area and taxations of costs are not exercises where a client can traditionally add value. Any value, if there is any, is added at the stage where Objections are formulated and this had already occurred. If unfavourable rulings are made then there is the opportunity to seek instructions if necessary before formulating the request for reconsideration. The withdrawal on 11 November 2015 effectively denied the first respondent that opportunity.
Any confusion in the first respondent’s camp about the scheduled resumption date on 10 November 2015 would have been rectified by the second respondent’s email of 8 October 2015 reminding them of their intention to proceed on 10 November 2015 notwithstanding the existence of a medical certificate dated in October 2015.
As identified in paragraphs 6 and 7 above, at the hearing the first respondent argued that the second respondent had no standing to prosecute the taxation on 10 and 11 November 2015. They rely on paragraphs in the joinder judgment to the following effect - the applicant indicated at the hearing before Elliot J on 24 July 2015 for the first time that he intended to prosecute the taxation on his own behalf.[12] The relationship between the applicant and second respondent had broken down,[13] it was undesirable the applicant and second respondent be ‘co-plaintiffs’,[14] the applicant was the proper plaintiff, and he was entitled to exercise his rights pursuant to the costs judgment.[15] However, it should be noted that in this joinder judgment it is acknowledged by Elliot J that the second respondent was entitled to be joined as a party (in spite of the opposition of the first respondent) as it has a ‘real interest in the outcome of the taxation of costs.’[16] The first respondent submitted that the order and judgment in the joinder proceedings were stand alone proceedings and therefore the only matters relevant to standing in the taxation. The declaratory judgment was said to be irrelevant.
[12]Paragraph [4] of the joinder judgment.
[13]Paragraph [6] of the joinder judgment.
[14]Paragraph[ 7] of the joinder judgment.
[15]Paragraph [8] of the joinder judgment.
[16]Paragraph [9] of the joinder judgment.
The second respondent relied on the wording of the order in the joinder proceeding specifically granting the second respondent a right to have the costs taxed.[17] The declaratory proceedings were specifically referred to in the joinder judgment as ‘the related proceeding’.[18]
[17]See paragraph 9 of these reasons.
[18]Paragraph [1] of the joinder order.
It should be noted at this point that the perfecting orders for both the declaratory judgment and joinder judgment were made on the same day. They can sit easily together without contradiction. There are both logical and practical reasons why the taxation in November 2015 can be prosecuted by the second respondent. When the applicant failed to appear on 10 November 2015 and only the second respondent appeared it was entirely justified for the Judicial Registrar to proceed with the taxation, prosecuted by the second respondent who had the clear and demonstrable interest in quantifying the first respondent’s liability and finalising the quantum of the sum that Elliot J determined they had an interest in.
As a matter of logic it would be inconsistent for the Judge to have intended that, having recognised the existence of the second respondent’s equitable right in the taxed costs to be recovered from the first respondent, leave the prosecution and maximisation of the quantum to an unrepresented individual who did not have the litigation file. This would have potentially prejudiced the value of their right and left their fate in the hands of someone who the Judge found had an unworkable relationship with them.
From a purely practical point of view it is obvious the second respondent possesses the litigation file which contains the relevant documents necessary to discharge the onus of proof necessary to quantify a figure that the party liable has to ultimately pay. They have an interest in completing the part heard process as they have an equitable interest in the final figure to be paid into court and await distribution to interested parties. The applicant did not possess the necessary documents to perform this exercise.
The second respondent relies on portions in the declaratory judgment that make it clear that the first respondent has a right to ‘prosecute the taxation in the Costs Court proceeding to conclusion,’[19] and ‘complete the part heard taxation’[20] in its ‘own right’.[21]
[19]Paragraph [4] of the declaratory judgment.
[20]Paragraph [116] of the declaratory judgment.
[21]Paragraph [118] of the declaratory judgment.
The second respondent also submits that the same argument put to me in the current proceeding by the first respondent, namely that only the applicant can enforce the costs orders, was rejected by Elliot J in the declaratory judgment,[22] and an issue estoppel scenario arises.
[22]Paragraph [79] of the declaratory judgment.
The second respondent in effect argues that the failure of the second respondent to achieve applicant status in the joinder proceedings is explained in that judgment as being tied up with the deterioration of the relationship between the applicant and the second respondent. This does not detract from the second respondent’s right to prosecute the bill of costs to conclusion irrespective of the applicant’s participation.
Turning to the first review ground – The Costs Court did have power to continue with the taxation in the absence of the applicant. The second respondent carries the burden of proof to substantiate items in their bill of costs and produce documents from their file in justification. The first respondent has the task of opposing based on their Notice of Objection as the party liable for the costs. They are the primary players.
Second ground of review – The refusal of the adjournment application was appropriate. No medical certificate was produced. Even assuming it was, a decision to continue with the absence of a director of the first respondent was justifiable for the reasons set out in paragraphs 26 and 27 above. There is no dispute that the second respondent advised the first respondent (by email on 8 October 2015) of their intention to resume the taxation on 10 November 2015 notwithstanding the existence of a medical certificate covering the absence of the director of the first respondent. Mr Levine appeared for the first respondent at the callover when the 10 November date was set. Mr Fulton told the Judicial Registrar on 11 November he was told that date. Mr Levine appeared before me in this hearing but no further explanation was proffered. There was no suggestion this email of 8 October 2015 was not received. No explanation was proffered before me as to why there was no appearance on 10 November 2015 even assuming there was confusion about the date. The first respondent was put on notice a second time about the 10 November date on 8 October 2015.
Third ground of review - The Costs Court did not order that the first respondent pay the second respondent directly. The order of JR Gourlay says ‘the first respondent is to pay the second respondent the sum of……pursuant to the Orders made by His Honour Justice Elliot on 24 July 2015 in this proceeding…’. The order of 24 July 2015 contains the undertaking referred to in paragraph 10 above. The words ‘Pursuant to that order’ picks up the entire effect of that order. An order of a Judicial Registrar cannot alter the effect of the undertaking or an order of the judge. All the Judicial Registrar was doing was quantifying the amount owing. Ordering payment by the second respondent ‘pursuant to the order of Elliot J’ is therefore subject to the wording in the undertaking that any amount the first respondent is ‘ordered to pay in this proceeding’ (ie ordered by JR Gourlay in the Costs Court proceeding ) is to be ‘paid into Court and that it will not seek payment of any such amount to itself’ (ie, out of Court) ‘except by order of the court or with the (applicant’s) consent’.
After the taxation the first respondent wrote to the first respondent advising of their bank account details for payment.[23] This was said to be a ‘slip up’. At the hearing the first respondent made reference to a subsequent statutory demand served on the first respondent pursuant to Corporations Law. The first respondent foreshadowed a possible application for contempt as a result of an alleged breach of the undertaking. This is not a matter relevant for determination by me.
[23]‘Doc D’ attached to the applicant’s submission and discussed at paragraph 57 below.
The fourth ground of review – the addition of Oakley Thompson as the second respondent did not have the effect of altering their status as the prosecutor of the taxation. It was their bill, the taxation was prosecuted by them when the matter became part heard. It was still part heard when Elliot J made his order in relation to the resumption of that taxation. This is referred to further in paragraph 61 below.
The fifth ground of review – The order of the Judicial Registrar did not have the effect of breaching the order of Elliot J or releasing the second respondent from the undertaking. The effect of the undertaking was to consent to the payment of the taxed sum owing by the first respondent sum into court. The first respondent has the option of paying money directly into Court, or to the second respondent who has the obligation to then pay it into court pursuant to the undertaking.
It is trite law to state that the onus is on the reviewing party to establish that the discretion of the Judicial Registrar was not reasonably open.[24] In all the circumstances the decisions of the Judicial Registrar to refuse the adjournment application and to allow the second respondent to conduct the taxation to completion were reasonable. I can identify no basis to conclude there was any error.
[24]House v King (1936) 55 CLR 499 at 504 to 505.
Applicant’s Application
The applicant’s document is headed ‘63.56.2 Reconsideration of review by the Costs Court constituted by a Judicial Registrar’ and contains 11 paragraphs. The document does not comply with the Rules. No item is identified as being sought to be reconsidered. There is a clear procedure for an aggrieved party to seek a reconsideration of any ruling for particular items. Rule 63.56.2 (4) states the notice must ‘state by a list each item’ and state ‘specifically and concisely the grounds of objection and the order sought in its place.’
I will therefore treat the notice as a review pursuant to the Supreme Court Act as per paragraphs 17 to 20 above.
In essence the applicant claims in the reconsideration/review document that he thought the taxation was to resume on 11 November 2015. He claims he was denied a ‘recess or adjournment’ to look at documents from the second respondent’s file that had been produced. This was refused and the taxation proceeded. He claims that he made it known that if he was not allowed to view the documents that were before the Judicial Registrar he would appeal. The other matters relied upon relate to the order of Elliot J in relation to payment into court and the fact that a figure of $170,000 mentioned to Elliot J is now increased to $233,588.68. He takes issue with the fact a ledger of 10 May 2015 of the second respondent showed a ‘nil’ balance, that the second respondent misled the Costs Court in August 2014 about the existence of his retainer, and they misled the Costs Court by requesting that money held by Funds in Court be released in September 2014. A breach of the undertaking in the order of 24 July 2015 is said to constitute contempt.
On 16 December 2015 the applicant wrote to my associate clarifying he was appealing the decision ‘not granting the adjournment and also her complete judgment’.
The applicant filed written submissions on 29 January 2016 containing 10 paragraphs. The issues identified can be distilled down to three main complaints.
First, the fact of the payment of the sum of $56,400 from Funds in Court in September 2014. This sum was paid into Court by the first respondent pursuant to a court order for security for costs. The sum was paid out pursuant to a Court order to the second respondent.
Second, the lack of invoices issued by the second respondent for their fees and accounting for the sums received.
Thirdly, the decision to allow the second respondent to continue the taxation in the absence of the other parties.
Fourthly, the alleged contempt and breach of the undertakings to Elliot J by the second respondent.
The second respondent filed a written submission dated 10 February 2016 and an affidavit of Julian Vagg sworn 10 February 2016.
Taking the Funds in Court issue first and the release of funds in 2014 it should be said that these were held as security for costs and they were released before any undertaking was given. The undertaking applied to funds payable by the first respondent after 24 July 2015. The Costs Court, in a review of a taxation of costs on a party party basis conducted by a Judicial Registrar pursuant to orders of various Judges and Associate Judges of the Court has no power to scrutinise an order made on 10 September 2014 by a different Judicial Registrar in Funds in Court to release money held as security for costs.[25]
[25]Referred to in the declaratory judgment - Oakley Thompson & Co Pty Ltd v Maisano (No 2) [2015] VSC 210 at [7],[10] and [66].
The reference to $170,000 comes from a written submission of the second respondent dated 26 May 2015 in declaratory proceeding SCI 2014 5814 where ‘outstanding costs’ were said to be approximately $170,000. This was not a reference to total costs.
The ‘nil’ balance as at 12 September 2014 is when Funds in Court released $56,400 to the second respondent. A lot of figures are shown as owing also on that same date. The ledger print out ends later on 30 October 2014 with a sum showing as a debt. In any event the internal accounting procedures of the second respondent are not relevant to the assessment of costs owed by the first respondent on a party party basis pursuant to orders of the court in the substantive proceedings. This is a matter that may be relevant at the point when the applicant’s liability to the second respondent is determined and release of any sums from court paid in by the first respondent is considered.
‘Doc D’ attached to the applicant’s review is a letter dated 16 November 2015 from the second respondent to the first respondent demanding payment of $233,588.68 into their bank account. This is referred to in paragraph 40 above. However, from the written submissions the second respondent reiterates its position that it will honour the undertaking and deposit any payment received in Court.[26] This is a matter for consideration by Elliot J or another judge if the first respondent proceeds with the foreshadowed contempt application.
[26]Paragraph 27.
In oral submissions the applicant’s principal complaint is with the actions of the second respondent in relation to his own liability to them and the lack of information in relation to accounting detail for the sums received on his behalf. It was in effect conceded by the second respondent that once the first respondent’s debt is paid into court the issue of the applicant’s liability to the second respondent will be addressed before the sum can be released to anyone.
The second respondent’s submissions highlight the deficiency of the applicant’s reconsideration notice and its failure to comply with the Rules. They rely on Shaw v Yarranova Pty Ltd.[27] There is no doubt that the notice is non compliant.
[27][2012] VSCA 189 at [5] to [8].
As discussed already in relation to the first applicant’s review, briefly, they also submit that the proceeding in the Costs Court is not assessing the applicant’s liability to the second respondent. It is assessing the party party costs in the substantive proceedings. The second respondent has an equitable right over the outcome of the taxation and the sum is to be paid into Court. The second respondent has the right to prosecute the taxation. The order of Elliot J in the declaratory judgment proceeding provides that the second respondent is entitled to have the costs order in favour of the applicant taxed.[28] Elliot J also found that the second respondent – ‘will be granted relief to enable….itself, to prosecute the taxation in the Costs Court to conclusion.’[29] This entailed assuming responsibility in its own right for the prosecution of the part heard taxation.[30]
[28]Paragraph 2 of the Order dated 24 July 2015.
[29]Oakley Thompson & Co v Maisano (No 2)[2015] VSC 210 at [4].
[30]At [118].
As discussed above in relation to the first applicant’s review, comment was also made by His Honour to the effect that the second respondent was entitled to ‘complete the part heard taxation in the costs court against Bodycorp (and adopt what has occurred so far)’.[31] Further, that the second respondent is entitled to advance its position whether or not that right aligns with the position adopted by the applicant.[32]
[31]At [116].
[32]At [15].
The second respondent submits there was nothing preventing them obtaining an order for payment from JR Gourlay and that the undertaking is predicated on obtaining such an order. See discussion at paragraph 39 above.
The second respondent submits there was no error in refusing the applicant’s adjournment application. First, he was present at the call over on 18 August 2015 when the dates were fixed and therefore he was on notice about the hearing dates. Further, his attendance was of peripheral utility as it was a party party taxation and the sum would only determine the liability of the first respondent. Further, the second respondent would be seeking to recover the highest amount it could against the first respondent and it was in the interests of the applicant it do so.
In my view there was no prejudice to the applicant by the Judicial Registrar continuing with the taxation on 11 November 2015. The applicant chose to withdraw.
It is worth noting that Elliot J made it clear that rulings made on 5 and 6 August 2014 in the absence of the applicant stood. In other words, the applicant was not prejudiced by not being present on those days as the second respondent was protecting their collective and respective interests which coincided. Nothing has changed in relation to that dynamic. If Elliot J found that the applicant was not prejudiced by his absence for the first two days on 5 and 6 August 2014 it logically and reasonably follows that he was not prejudiced by his absence on the remaining two days on 10 and 11 November 2015.
The applicant appears to be under the impression that he should argue to reduce the second respondent’s bill of costs when they were acting on his behalf in the substantive proceedings involving the first respondent. It is not in his interests to do so. The more costs the second respondent can recover from the first respondent the better the outcome for the applicant. This taxation is not determining the applicant’s liability to the second respondent. It is determining the first respondent’s liability to the applicant. The prosecution of the second respondent’s bill to maximum effect was in its, and the applicant’s interest.
As discussed above, any issue the applicant has with the second respondent about invoices and accounting for sums received is not relevant to the taxation of costs as between the parties to the substantive proceedings on a party party basis. It will be an issue if the second respondent ever seeks to recover any money from the applicant in the future, or when, and if, the first respondent pays the taxed sum into Court, or pays it to the second respondent who pays it into Court.
Any allegation of breaches of the undertaking and contempt of the order of Elliot J is not a relevant matter relevant in these review proceedings.
Conclusion
The decision of the Judicial Registrar to continue on the fourth and final day to complete the taxation utilising the Notice of Objections already filed, and refuse the adjournment applications of the applicant and first respondent was entirely reasonable and justified. There is no valid notice for individual items to be reconsidered. The second respondent had standing to prosecute the taxation in November 2015. The order of the Judicial Registrar is not inconsistent with the order of Elliot J made 25 July 2015. Both notices of review/reconsideration are dismissed. Ordinarily costs should follow those events but any party wishing to address the court otherwise can file and serve any written submission within 21 days. The issue of costs will be finalised on the papers without a further hearing.
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