Maunchest P/L v Bickford, J.L

[1994] FCA 197

1 9 7    99

JUDGMENT No. .....,........ ... I ....,......

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IN THE FEDERAL COURT OF AUSTRALIA ) No. NG 808 of 1992

9UEENSLAND DISTRICT REGISTRY	)
GENERAL DIVISION	)

BETWEEN: MAUNCHEST PTY. LIMITED

Applicant

AND:  JOHN LINDSAY BICKFORD

First Respondent

AND :	NOOSA HUB PTY. LTD. (IN LIOUIDATIONl A.C.N. 010 204 789
AND PHILIP GREGORY JEFFERSON

Second Respondent

MINUTES OF ORDERS

JUDGE MAKING ORDER:	Drummond J
DATE OF ORDER:	11 April, 1994
WHERE MADE:	Brisbane
THE COURT ORDERS THAT:

1.        The applicant's application for an order vacating the certificate of taxation dated 13 January, 1994 is refused.

2.        The applicant pay the respondents' costs of and incidental to this application to be taxed as between party and party.

NOTE :
-	Settlement and entry of orders is dealt with in
Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA )	No. NG 808 of 1992
QUEENSLAND DISTRICT REGISTRY	)
GENERAL DIVISION	1

BETWEEN: MAUNCHEST PTY. LIMITED

Applicant

AND:  JOHN LINDSAY BICKFORD

First Respondent

AND :  NOOSA HUB PTY. LTD. (IN LIOUIDATIONl
A.C.N. 010 204 789
AND PHILIP GREGORY JEFFERSON

Second Respondent

Coram:  Drummond J

Place: Brisbane

Date :  11 April, 1994

REASONS FOR JUDGMENT

This is an application by the applicant in the action for an order vacating the certificate of taxation dated 13 January, 1994, given by the taxing officer, taxing the costs of the first and second respondents in the sum of

$26,693.23. The order in respect of which the certificate was	issued was an order which I made in interlocutory proceedings
in the action on 7 July last where, after striking out the applicant's claim against the first respondent and one of the second respondents, I ordered that the applicant pay the costs of those two respondents to be taxed on a solicitor and client basis.
The certificate, as I have said, is for the amount of $26,693.23. The application to set it aside is made essentially on the ground that the applicant, by its managing director, was not aware of any relevant events, including the fact that a bill of costs had even been filed or served, until, he says, 30 January, 1994 when he received a facsimile from the solicitors for the respondents enclosing a copy of that certificate of taxation. It is also made on the basis that a Mr. Gray, while he received all relevant information from the applicant's solicitors in time to enable the applicant to challenge the making of the estimate of costs made under 0. 62, r. 46(3), simply did not bother to read the material forwarded to him. Thus the applicant, by inference, was deprived of the opportunity of taking action to challenge the estimate and to prevent the issue of the certificate without being heard.
Mr. Gray's position is somewhat unusual. He describes himself as a barrister and he says:

the Managing Director of Maunchest Pty. Limited, the	"I have acted as intermediary between Mr. Simpson,
Applicant in these proceedings and the company's solicitors, Messrs. Utz Wellner, latterly Messrs. Wellner & Chittenden in the delivery and receipt of correspondence between them."

His involvement on behalf of the applicant in the proceedings is further dealt with in the ex tempore reasons I gave when I made the order of 7 July under which the certificate has issued.

The facts are essentially undisputed. The position is as follows: Mr. Monteath, a solicitor employed by Messrs. Utz Wellner, or Wellner Chittenden as it now is, says that he took over the conduct of the matter from the former principal of those solicitors, Mr. Utz Wellner, on 23 November, 1993. Mr. Wellner, so Mr. Monteath says, no longer resides in Australia. Mr. Monteath also says that he was not previously aware of the taxation and only learned about it upon his perusal of the file on that date, 23 November. He says that soon after 22 November, he received a letter bearing the latter date from the Federal Court of Australia. That letter refers, among other things, to the holding of a conference on 22 November pursuant to the provisions of 0. 62, r. 46 and the non-attendance of the applicant at that conference. The letter continues:

"It has now been directed that an estimate be made pursuant to the provisions of Order 62 Rule 46 of the approximate totals for which, if the Bills filed on 26 October 1993 were to be taxed, the certificates of taxation would be likely to issue. The estimates will be made in the near future and I will write to you informing you of the amounts of

the estimates."

The procedure provided for by 0. 62, r. 46 where the Registrar decides to apply the rule involves the taxing officer making an estimate of the approximate total for which the certificate would be likely to issue if the bill were to be taxed, then notifying each party interested in the bill in writing of the estimate so made. The rule then gives each party 14 days after receipt of the Registrar's notice of the amount of the estimate to flle a notice of objection to the estimate. In the absence of the filing of such a notice of objection, the amount of the estimate is, in terms of the rule, deemed to be the amount for which a certificate of taxation may issue. The position as I have already indicated is that no notice of objection was filed on behalf of the applicant to the estimate made pursuant to the rule and thus the certificate that issued on 13 January was for an amount equal to the amount of that estimate.

To return to the chronology of the events, on 3

December, Mr. Monteath received a letter from the Court dated

1 December which informed him of the making of the estimate in

the amount now reflected in the certificate. This letter
concludes:

"Under the provisions of Order 62 Rule 36 unless within 14 days of receipt of this notice of the estimates of the bills, you file and serve notice of objection to the estimates, the amounts of the estimates are deemed to be the amounts for which the Certificates of Taxation will issue."

It was not necessary for Mr. Monteath to even open up his copy of the Rules; the Deputy District Registrar put him on clear notice as to what had taken place and what would be the consequences of inaction. The only action that Mr. Monteath took was to send to Mr. Gray, by letter dated 6 December, 1993, among other material, the letter from the Court of 1 December, 1993. Mr. Gray acknowledges receipt of that material, although he does not say the precise date on which it was received. But it can be inferred that it was received soon after 6 December.

No objection being taken on behalf of the applicant, on 13 January, as I have mentioned, the certificate issued.

On 21 January, Mr. Monteath received a letter dated 18 January from the solicitors for the respondents which enclosed the certificate of taxation and a notice under S . 459 the cor~orations Law demanding payment of the sum, together with the, to be expected, warning, that unless the amount of the certificate was paid within the 28 day period allowed by the notice, winding up proceedings would be commenced against the applicant. On 20 January, 1994 a copy of the certificate of taxation was served at the registered office of the applicant company. This is not disputed, although Mr. Simpson, the managing director of the applicant, says, in effect, that he did not receive notice of the certificate until he saw the facsimile from the respondents' solicitors on 30 January.

On 27 January, Mr. Monteath sent that letter dated 18 January 1994 which he had received from the respondents' solicitors, together with the enclosed certificate of taxation and S. 459 notice, to Mr. Gray, who also acknowledges receiving it, it can be inferred, on a date soon after 27 January. Mr. Gray says after acknowledging receipt of the material I have referred to, among other material, that:

"I did not look at that material and did not look at

the letter from the Federal Court until after 4
February 1994."

Although he acknowledges receiving material from the solicitors for the applicant relating to this matter, he does not descend to any explanation why he did not bother to look at that material. The position appears to be that the applicant chose to rely on Mr. Gray as the person charged with responsibility for passing on communications to it from its solicitors in relation to this action. It is clear, in my view, that the applicant, by its chosen intermediary, had ample opportunity to object to the estimate and to prevent the certificate of taxation, now challenged, issuing without the applicant first being heard.

Mr. Gray, as I have said, was put on notice on about 6 December, 1993 in a way sufficient, if he had discharged his duty to the applicant, to give the applicant an opportunity, if it wished to exercise it, to object to the estimate and prevent the issue of a certificate at least without being	heard. If the certificate stands, it seems to me the	applicant will have, on the material before me, what looks
like a good case to recover any loss it may thereby suffer from Mr. Gray for breach of duty as its intermediary for the purpose I have referred to. The applicant may possibly, in that event, also have a claim against its solicitors, who have been its solicitors on the record continuously at all times presently material.
However, whether the applicant can recover any loss it may suffer as a result of the certificate being allowed to
stand from its solicitors will depend, in large part, I would expect, upon the precise instructions which the applicant gave those solicitors in relation to what Mr. Gray's role was to be. It is also apparent that from 20 January, when the unchallenged evidence is that the certificate of taxation was delivered to the registered office of the applicant company, and, in particular, from 30 January, 1994, when the managing director of the applicant actually saw the S. 459 notice, the applicant itself took no interest in attacking the notice, until it brought these proceedings in late March.
The same comment applies in relation to Mr. Gray's role from about 4 February, 1994, after which date Mr. Gray says he read the material forwarded to him by the applicant's solicitors. He does not descend to any explanation why he did not take any action which might have led to an earlier challenge to the certificate and the notice being made. As I have said, this inactivity on the part of both the applicant
Moreover, there is no evidence that the applicant will be company and its intermediary, Mr. Gray, is unexplained.
prejudiced if the certificate stands. There is no evidence, for example, that the applicant cannot itself pay, or cannot procure from those associated with it, the amount necessary to satisfy the certificate. Any prejudice that it might suffer, if it be the case that it has lost an opportunity to challenge the certificate, might be thought sufficiently to be met by

the claim that it would appear to have agalnst Mr. Gray, if
not also against its solicitors.

I also take into account that there has been no challenge to the appropriateness of the amount reflected in the certificate which is substantially less than the amount of the bills, save for a very general challenge made by Mr. Gray. In the absence of some indication from Mr. Gray that he has some special expertise in the area of costs, an assertion on oath by the solicitor for the applicant as to the excessiveness of the amount of the certificate, supported by reasons, would have carried rather more weight. Certainly, detailed evidence from a cost assessor, which should not have been too difficult to procure, would have been likely to have been even more informative.

Accepting that I have power to grant the relief sought, for the reasons I have given, I am not prepared to exercise the discretion to grant the relief. The application is therefore refused.

I certify that this and the preceding

seven pages are a true copy of the reasons for judgment herein of the Honourable Mr. Justice Drummond.

Associate: Bd

Date :  11 April, 1994