| JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA LOCATION : PERTH CITATION : McCABE -v- CORPORATE EXPRESS AUSTRALIA LTD [2013] WADC 149 CORAM : DEPUTY REGISTRAR HEWITT HEARD : 12 SEPTEMBER 2013 DELIVERED : 3 OCTOBER 2013 FILE NO/S : CIV 1277 of 2009 BETWEEN : SEAN FRANCIS McCABE Plaintiff
AND
CORPORATE EXPRESS AUSTRALIA LTD
Defendant
Catchwords: Practice and procedure - Application for increase in scale of costs - Consent judgment - Power to increase scale Legislation: Legal Profession Act 2008 s 280
Workers Compensation and Injury Management Act 1981 s 87 Result: Application dismissed
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Representation: Counsel:
Plaintiff : Mr P Lafferty
Defendant : Ms Kubacz
Solicitors:
Plaintiff : O'Halloran Legal
Defendant : Jackson McDonald
Case(s) referred to in judgment(s):
Feaver v Smith [2008] WADC 72
Lewandowski v Lovell (No 2) (Unreported; WASC; Library No 960310; 14 June 1996)
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1 DEPUTY REGISTRAR HEWITT: This matter was commenced by a writ filed on 1 May 2009. On 10 July 2009 a statement of claim was filed and on 1 August a defence to that statement of claim was filed. Thereafter a number of subpoenas were issued by the defendant but there appears to have been no further activity recorded on the file on the part of the plaintiff.
2 On 12 May 2011 the parties filed a consent dated 10 February 2011. That consent provided that the plaintiff's action against the defendant be dismissed and that the plaintiff's costs be taxed if not agreed. Thereafter nothing further happened until the defendant issued a chamber summons to force the plaintiff to file and serve a bill of costs for taxation. Orders were made on 14 January 2013 that such a bill be filed and served within 14 days of the order. Subsequently a further application by the defendant in the same terms returnable on 21 February was brought for reasons which are not obvious to me and that application was dismissed. Eventually on 18 February 2011 the plaintiff filed a bill of costs entitled 'draft plaintiff's bill of costs for taxation'. That bill came before the court for taxation on 3 April 2013, the taxation was adjourned and it was ordered that on or before 5 April 2013 the plaintiff file and serve any application for a special costs order. Such an application was eventually filed on 13 May and it is that application which is before me for determination. The precise orders which are sought by the plaintiff in the application are as follows: 1. The application be granted. 2. The prescribed fee for work done in relation to getting up case for trial being items 1(b), 7 and 16 of the Supreme Court Scale of Costs set out in the Legal Practitioners (Supreme Court) (Contentious Business) Determination 2006 and items 1(b), 7 and 16 of the Legal Practitioner's (Supreme Court) (Contentious Business) Determination 2008 not apply and costs be allowed for all work reasonably and necessarily undertaken at the rates set out in item 33 of the Scale of Costs in the Legal Practitioner (Supreme Court) (Contentious Business) 2010 Determination. 3. The Defendant pay the costs of this application to be taxed if not agreed. 3 The matter was first listed before me on 21 August 2013 and I indicated that I required the plaintiff's solicitors to provide information concerning the accounts which had been rendered to the plaintiff and whether those accounts had been satisfied by the plaintiff. That information was provided by an affidavit of RGS Harrison sworn (Page 4)
11 September. In support of the application I have been provided with an extremely large volume of material comprising the affidavit of PJ O'Halloran sworn 20 June 2013. Although not obvious from the terms of the application the submissions which have been filed on behalf of the plaintiff make it clear that the plaintiff applies for a special order for costs pursuant to s 280(2) of the Legal Profession Act 2008 on the grounds that the action was of unusual difficulty or importance. The relevant provision is in the following terms. Subsection (1) of s 280 provides that (with certain exceptions not relevant to the present case) costs which may be charged by law practices are regulated by applicable costs determinations. 4 Subsection (2) provides as follows: Despite subsection (1), if a court or judicial officer is of the opinion that the amount of costs allowable in respect of a matter under a cost determination is inadequate because of the unusual difficulty, complexity or importance of the matter, the court or officer may do all or any of the following - (a) order the payment of costs above those fixed by the determination; (b) fix higher amount of costs than those fixed in the determination; (c) remove limits on costs fixed in the determination; (d) make any order or give any direction for the purpose of enabling costs above those in the determination to be ordered or assessed. 5 Of the identified items in the application which has been lodged by the plaintiff's solicitor only the claim for getting up case is in excess of maxima prescribed by relevant costs determinations and it is therefore necessary, if the amount claimed is to be allowed, for orders to be made permitting the taxing officer to exceed the prescribed maxima for that item. The application raises a considerable number of questions. As a starting point it is necessary to consider: (Page 5)
3. It is necessary to consider the circumstances in which the order came to be made bearing in mind that it was a consent order and there appears to have been some interaction between the parties as to whether the consent order should contain a provision reserving leave to the plaintiff to apply for a special costs orders and associated with that consideration what the terms of the consent between the parties were and whether there might be said to be an estoppel which might preclude the plaintiff from obtaining the orders sought. 4. Finally a consideration of the basic propositions which are embedded in s 280 need to be considered namely whether the case was one of special difficulty, complexity or importance and whether the applicable scales for the items the subject of the application are inadequate such as to justify the uplift which is sought. 5. As an additional matter it appears from the materials before me that the plaintiff's solicitor has issued accounts based upon a costs agreement which seems, on the face of it to infringe the prohibition which is contained in s 87(2) of the Workers' Compensation and Injury Management Act 1981. 6 To start at the beginning I now consider whether the judgment is perfected and, if it is, whether the proposed orders would amount to a variance of the judgment of the court and if so whether the court has the jurisdiction to entertain them. The consent order bears the seal of the court and is endorsed with the words 'settled signed and sealed in accordance with RSC O 43 r 16' and is signed by a registrar. In my view the consent has been constituted a perfected order by that process. The decision in Feaver v Smith [2008] WADC 72, a decision by Schoombee DCJ delivered on 27 May 2008 is in point. Her Honour in that case held that a perfected order could only be varied by a court in the exercise of an inherent jurisdiction which the District Court of Western Australia does not possess. At page 19 [52] she had this to say: 52 Insofar as a costs order which has already been extracted can only be varied by application of the inherent jurisdiction of a court, this Court would in any event not be able to do so. The District Court is a creature of statute and does not have inherent jurisdiction: Murcia & Associates v Grey (2001) 25 WAR 209 at [16]. In DJL v Central Authority (2000) 201 CLR 226 at [50] Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ came to the conclusion that the Full Court of the Family Court of Australia, itself a (Page 6)
7 Her Honour then went on to say whether a special costs order is a variation of a costs order or a supplementary order and her conclusion is to be found at page 19 which are as follows [55] - [58]: 55This leaves open the question whether an application for a special costs order is always a variation of an existing costs order granted in general terms (e.g. the plaintiff to pay the defendant's costs to be taxed) or whether, at least in some cases, it can be regarded as an application for a supplementary costs order. 56In Caboolture Park Shopping Centre Pty Ltd (in liq) v White Industries (Qld) Pty Ltd (1993) 117 ALR 253 at 264 - 265, the Full Court of the Federal Court came to the conclusion that an order for indemnity costs to be paid by a party's solicitors was a supplementary order to an existing costs order and that an application for the indemnity costs order against the solicitors did not involve a variation of the existing party and party costs order. 57In my view the special costs orders sought in this case cannot be said to be supplementary to the existing costs order between the parties. These special costs orders applied for in this case raise the scale limit in relation to getting up case for trial in a number of respects and request an additional allowance in respect of the advice and assistance of counsel. In addition the application for the special costs order requests that the allowance for getting up not be reduced by 25 per cent by reason of the fact that liability was not in issue. The only order requested as part of the special costs orders which could be considered to be supplementary to the existing costs order is that the plaintiffs be awarded any reserved costs. 58Accordingly, if I had to decide this case on the basis of an application under O 66 r 51(2) and O 3 r 5 I would have followed Lewandowski v Lovell and come to the conclusion that the special costs orders applied for require a variation of the existing extracted (Page 7)
costs order and that the existing costs order could only be amended by a court with inherent jurisdiction. 8 In Feaver Judge Schoombee discussed to some degree the relevance of O 66 r 51(2) to the application before her. That order is in the following terms: 51. When Court may fix costs 9 It is argued on behalf of the applicant that in the light of legislative changes O 66 r 51 was not relevant to the case before her Honour nor is it relevant to the case before me and the time limits embedded in that order do not govern the issues which I am required to determine. In my view such arguments are beside the point. Her Honour decided that orders of the kind sought in the case before her, and in the case before me, could only be made in the exercise of an inherent power which was not possessed by the District Court as a consequence I am of the view that time limits are not of relevance, what is of relevance is the fact that the order has been perfected and it forms part of the court record and it is beyond the power of this court to modify it. In reaching that decision I also rely on the decision of Murray J, White J concurring in Lewandowski v Lovell (No 2) (Unreported; WASC; Library No 960310; 14 June 1996) particularly page 9 of his judgment: In expressing his agreement with that conclusion, Owen J said:
'The inherent jurisdiction exists to relieve cases of injustice. However, justice does not exist in a vacuum and the ramifications of actions taken in the interests of justice extend beyond the interests of the parties to the litigation in which the question arises. There is a public interest in the way in which justice is administered. When a litigant calls in aid the power of the court to review, correct or alter a judgment that has been made but not
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perfected, the court must exercise its discretion having regard to the public interest in maintaining the finality of litigation. The public interest in the finality of litigation is of even more significant when the litigant is calling in aid the inherent jurisdiction to review an order after it has been perfected and on the basis of error or inadvertence on the part of the legal representatives of the applicant. With burgeoning court delays and increasing pressure on courts to dispose of matters expeditiously it will, in my view, be only in exceptional cases that the court should intervene.' I would respectfully adopt those remarks. In my view, they properly lay emphasis upon the limited and exceptional nature of the exercise of the inherent jurisdiction to relieve injustice, in the consideration of which the court will have regard to the interests of all affected parties to the litigation and the important public consideration of the desirability that the finality of orders disposing of litigation be generally maintained. 10 Further to the point of time, if there were a time limit to apply for the orders sought by the plaintiff, and there were a power to extend that time the circumstances of this case in my view operate against the exercise of that power. The consent judgment was lodged a considerable time ago, the plaintiff delayed in bringing in a bill for taxation and had to be forced to do so, the plaintiff delayed in every step along the way in bringing the present application and in my view those facts in combination would be sufficient to deny the plaintiff an extension of time were one to be required. 11 I next turn to the manner in which the consent order which comprises the judgment in this court was entered into. These proceedings were run in parallel with an application in WorkCover which was necessary because the plaintiff in order to pursue a claim against his employer required a determination that his degree of disability equalled or exceeded 30% assessed in accordance with the criteria set out in the Workers' Compensation and Injury Management Act. Ultimately the plaintiff did muster sufficient evidence to have a realistic prospect of obtaining such a determination and at that point the parties agreed to settle the application in WorkCover and these proceedings. That settlement required both these and the workers' compensation proceedings to be dismissed and for the defendant to pay the costs of each. It would seem the parties negotiated an agreement for a payment of a sum of money in settlement and, so far as the District Court proceedings were concerned, the payment of the plaintiff's costs to be taxed. Subsequently the plaintiff's solicitors made a unilateral change to the form of the consent to be filed into this court including a provision that the plaintiff have leave to apply for a special costs order. The defendant responded by refusing to (Page 9)
execute such a consent and requiring it to be brought in line with what they contended had been agreed. That process is reflected at pages 473 and 477 of the affidavit of Mr O'Halloran. Preceding correspondence makes it clear that the defendant was offering what it described as a reasonable contribution to costs. I think when one looks at the chain of correspondence starting at page 459 and finishing at page 477 it is clear that the defendant did not contemplate, and did not agree, to expose itself to a taxation based upon an uplift of the District Court scale. It is, I think, fairly clear that the parties were not able to agree as to what a reasonable contribution to costs might be and as a consequence agreed that those costs should be taxed and fixed in the normal way by a taxation in the District Court. I think it open to conclude from the materials before me that had the plaintiff insisted on an order of the kind which it now pursues a settlement would not have been achieved. For those reasons I am of the view that the conduct of the plaintiff's solicitor in achieving the agreement that it did has estopped the plaintiff from pursuing the present application. 12 The next matter to consider is whether there were matters which might be described as of unusual difficulty or complexity or importance. The issue which preoccupied the plaintiff's solicitor was the need, before the plaintiff had any prospect of successfully pursuing a District Court action, to secure a determination that his disability was not less than 30% assessed according to the Act. That is the issue which preoccupied the solicitor and there were undoubted difficulties and complexities in pursuing that issue. That however is only a part of this case albeit an important one. It should also be borne in mind that the efforts which were made by the plaintiff's solicitors to secure evidence which might support a determination of the necessary percentage were not only for the purposes of the District Court proceedings but also critical to the pursuit of the WorkCover proceedings. I acknowledge that there is an overlap between the two jurisdictions because the same point must be litigated in each if the plaintiff is to succeed. Nonetheless it must be borne in mind that the plaintiff recovered a contribution towards that work in the WorkCover proceedings, that the amount claimed for getting up case involved something approaching 140 hours or thereabouts of work if one accepts the figures contained in the bill of costs which has been presented, and additional sums should be added to account for whatever has been recovered in regard to the WorkCover proceedings which in my view is a truly astonishing amount of time to have spent on what largely involves a single issue. In part the explanation for the large amount which has been charged might well lie in the costs agreement which is before me and which is exhibited to the affidavit of Mr Harrison at page 133 that (Page 10)
provides for a charge regime in which although the hourly rates correspond to the relevant prescribed rates, there are minimum charges, which have considerably bulked up the solicitor's account, and which in my view would render the costs agreement void pursuant to the provisions of s 87 of the Workers' Compensation and Injury Management Act. 13 As to the issue of importance the case was undoubtedly important to the plaintiff but purely because he had a financial stake in the outcome. The case was otherwise a fairly routine piece of personal injury litigation and quite unremarkable within this jurisdiction. 14 In summary therefore I conclude as follows: 1. This court does not have the power to vary the consent order which grants the plaintiff to right to costs in this jurisdiction. 2. If an application for a special costs order were to be made it was required to be made in a reasonable time, which this application was not. 3. Even if the application was made within a reasonable time the plaintiff should be estopped from pursuing the application in the light of the manner in which the consent was reached. 4. Although there were difficulties and complexities in the pursuit of a determination in favour of the plaintiff: (a) in part that has been satisfied by the costs order in the WorkCover jurisdiction bearing in mind; (b) the scale limits are quite adequate to satisfy any reasonable claim for the work which has been performed in this case bearing in mind that it was basically a single issue; and (c) the high figures which are claimed by the plaintiff may well be due to the nature of the costs agreement which he has entered with his solicitor and which appears to me to be void. 15 For those reasons I take the view that the claim in respect of the getting up case aspect of the bill of costs should be dismissed. 16 I have made known to the parties my concern that this appears to have been pursued for the benefit of the solicitor at the risk of the client. I make that remark because I am aware from the information with which (Page 11)
I have been provided that the plaintiff has paid his solicitor amounts which at least equal those which are claimed in the bill of costs which have been filed. It therefore follows that the taxation, which applies equally party/party or solicitor/client, will only affect the amount which the solicitor is obliged to refund to the client but will not make, or should not make, any difference to the total amount which the plaintiff is ultimately entitled to be reimbursed. That is an issue which may have some bearing on the impact of costs as a consequence of this application and one which I invite the parties to consider when making submissions in regard to costs.
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