MELLOS v SHEPPARD - [2004] WADC 147

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION: PERTH

CITATION: MELLOS -v- SHEPPARD [2004] WADC 147

CORAM: DEPUTY REGISTRAR HARMAN

HEARD: NOT APPLICABLE

DELIVERED : 21 JULY 2004

FILE NO/S: CIV 610 of 2003

BETWEEN: PAUL MELLOS
Plaintiff
AND
GAIL PATRICIA SHEPPARD
Defendant

Catchwords:

Practice - Western Australia - Practice under the Rules of the Supreme Court of Western Australia - Review of taxation of costs - Pre-trial conference - Rate of recovery - Listing conference - Preparation - Getting up case for trial - Time costing - Counsel fee on brief - Recovery where there is no trial

Legislation:

Nil

Result:

Objections not sustained

Representation:

Counsel:

Plaintiff: No appearance
Defendant: No appearance

Solicitors:

Plaintiff: S C Nigram & Co
Defendant: Peter Momber

Case(s) referred to in judgment(s):

May v Vincent Smith as Administrator for Cole Engineering Pty Ltd (Under Administration) & Anor [2001] WASC 352

Case(s) also cited:

Nil

DEPUTY REGISTRAR HARMAN: Under an order for his costs the plaintiff is entitled to recover the reasonable cost of services that were necessarily provided to him for the purposes of the action. He has filed a notice of objection to particular determinations made in the course of taxing his bill of costs.
The first objection relates to the claim for the pre-trial conference. It is as follows:
"The taxing officer erred in principle in determining that although the plaintiff was represented by a senior practitioner at each of the pre-trial conferences and that each of the pre-trial conferences took the time as claimed in the plaintiff's bill, an allowance should only be made at the rate of $250.00 per hour rather than at the rate of $313.00 per hour without any reason for this reduction."
The error contended for relates to the determination of the rate of recovery.
On its terms r 53 does not provide jurisdiction to review all determinations of taxing officers, only those by which items or their parts are allowed or disallowed. According to r 42 the term "item" used in r 53 refers to a particular service for which a claim is made in a bill under an item in the scale: in this instance the pre-trial conference. Correspondingly the term "part of an item" refers to a particular part of a service, such as that part of the conference conducted other than in the presence of the Registrar. A determination in relation to whether recovery is available for the provision of a particular service is distinguishable from a determination of the value of that service. On a plain reading r 53 does not provide jurisdiction to review the process of valuation.
The only justification for finding jurisdiction to review determinations made in that process of which I am aware does not draw on the wording of the rule but rather that the rule does not provide for such review and it being considered that such determinations ought be amenable to appeal. Accordingly, judges have found jurisdiction in cases where they have been satisfied that no taxing officer acting reasonably could have made a particular quantum determination.
It is a matter of considering whether by a process of interpretation r 53 would provide jurisdiction. On an analysis of its terms there are a number of considerations that would tell against that proposition.
The impact of an error in the determination of the value of a service would not resonate with the absolutes "allowance or disallowance" expressed in the rule. As much as the fact that a service has been provided can be distinguished from its value, the test of allowance for service provision is different to the test of recovery for its value. For service provision the test is necessity. The result of the application of that test could only be allowance or disallowance. For value the test is reasonableness. The result of the application of that test could not be allowance or disallowance. I accept that the term "allowance" would not be out of place in the process of recording the value determined where no adjustment was required to be made to the claim. On analysis however such allowance would relate to the administrative consideration of the claim undertaken after the determination of value had been made not the determination itself. Any error at that point would be arithmetic, not in principle.
To find jurisdiction to review it would be necessary to discount the prospect that the failure to provide jurisdiction was intentional. The last amendment to the rule was in the 60s by the qualification of error by the term principle. That amendment showed something other than an intention to make review more broadly available.
In my opinion it would be difficult to justify an interpretation of r 53 as extending jurisdiction beyond its terms to conduct a review on the basis of error alleged as to quantum.
In this case there was neither allowance nor disallowance, simply a determination made as to the value of the service. That determination was recorded by way of reducing the amounts claimed. I might add that there was no arithmetic error made, the reduction of each of the claims by the amounts shown in the bill was the correct result based on the determination made.
The plaintiff is entitled to reasons for the decision which I will provide by reference to the terms of the objection. Before I do I will record that although the plaintiff chose to express two claims in the bill, the entitlement to recover for a service necessarily provided is not divisible. Be that as it may, recovery under the relevant item in the scale being expressed by reference to the time taken to provide the service and there was no contest raised in relation to the prospect of duplication or inefficiency by multiple claims, I did not consider that there was any reason to interfere.
The rate of $313 per hour expressed in the objection was that claimed by the plaintiff in the bill. It is also the figure expressed in the scale as the maximum rate of recovery under the item.
The only issue raised by the plaintiff for consideration is that the practitioner providing the service by some measure or measures may qualify for the description "senior practitioner". Even accepting that proposition, unless the case warrants such a level of representation, it is not compelling. By assessing what is a reasonable rate of recovery for the service provided to the plaintiff at a figure less than what a senior practitioner may command does not involve any notional reallocation of the work to someone "more junior"; but rather simply applies the test of recovery for the value of the service. Unless the beneficial party has been accorded some advantage by the provision of the service at a reduced price, what is reasonable will reflect the objective assessment of value of the service provided to the beneficial party.
Judging from the terms of the objection it may be implicit that the plaintiff considers that the maximum rate would reflect the reasonable cost of the provision of the service to the plaintiff. Whilst there is probably some justification for considering that provision of the service is always a complex task, across a range of cases there is scope to consider that it will be more complex in some cases than it is in others. What would be the reasonable rate or arguably, rates of recovery in any particular case will be informed by an appreciation of the case, the issues to be determined, the scope of those issues, the evidentiary material and the attitude of the parties to the prospect of compromise. Ultimately the rate or rates set by the process of taxation should reflect the objective value of the service provided within the context of the case. If I am correct in my assessment of the objection the plaintiff may not have considered that the service provided in this case simply does not justify the maximum.
Further or alternatively the plaintiff may consider that the claim made in the bill is somehow constituted as the datum for the purpose of determining value. I must confess that my approach to the task of valuation is to start at the bottom of the range and determine what I consider to be warranted by working up. Whatever methodology is utilised for the purpose of making an objective assessment of value, I suspect that the only utility of a claim is either to prompt the taxing officer to enquire whether there is any justification yet to be expressed when the claim seems high or to alert the taxing officer to what may be the actual cost where it would be considered to be low.
It may be that the plaintiff may have been charged or anticipate being charged $313 per hour by his solicitor and being entitled to recover costs simply seeks to do so. I have no difficulty with prospect that the solicitor who provided the service considered that his time was worth the maximum. He may have considered that to be the case on an objective view or perhaps simply because he had an agreement to that effect with his client. Whatever the justification for the claim, in my opinion the value of the service provided to the plaintiff did not warrant recovery at the maximum hourly rate. I made the determination that recovery would reflect a return to the plaintiff in the order of $250 per hour and having made that determination, recorded it on the bill by reducing the claims.
The second error alleged is the failure to provide reasons for the rate of recovery being set at $250 per hour. I have no doubt that I informed the parties at the time of that rate being set that it was the reasonable rate for the service provided to the plaintiff. If I am wrong and I did not then it is not as though I was required to determine any other issue. It would take little imagination to recognise that the reason for the determination was that it was the reasonable rate and the extent to which the claims made were reduced reflected the amount by which each exceeded what was reasonable.
I accept that as a matter of procedure, failure to provide reasons may allow for a perception of error in the relevant determination. It is my understanding that the process of taxation is not complete until any review has been concluded. Rule 54(2) provides for reasons upon determination of the review. Any failure to provide reasons at an earlier time simply reflects the procedure established by the rule.
The next objection taken relates to the taxation of the claim made under item 24 of the scale for the listing conference. It is as follows: -
"The taxing officer erred in principle in making an allowance (at approximately $313 per hour) for only the actual time spent at the listing conference, thereby making no allowance for the time necessarily spent in preparation for the listing conference on the basis that some of the preparation for the listing conference notwithstanding that the taxing officer found that although some preparation for the listing conference could, in his view, be recoverable under getting up, some of that same preparation may not be recoverable even under getting up (sic)."
The first part of the objection refers to the disallowance of that part of the claim represented by the preparation for the conference. There are two fundamental issues raised by the objection. The first is whether inter partes there is any scope for recovery. The second, whether preparation for the conference is anything other than getting up case for trial.
I have previously recorded that the test of recovery for service is whether it was necessarily provided. That statement is subject to a significant qualification. Rule 11 (3) provides that recovery of costs inter partes is limited by the terms of the scale. Unless provision is made in the scale for a service there is no basis to justify recovery.
Item 24 is expressed as follows: -
"Pre-trial, mediation or other conferences – required by order of the Court, by the Rules of the Supreme Court or by practice direction – per hour."
There being no reference in the item to preparation for the conference implicitly the plaintiff contends that, on a proper interpretation, item 24 would provide for recovery.
The listing conference is a relatively recent innovation. Prior to the advent of the pre trial conference, trial dates were allocated under various procedures for which it was accepted that recovery was available under what is now item 14(g) of the scale. By the time of the callover, the solicitor with the conduct of the file would have undertaken sufficient of the task of "getting up the case for trial" to be familiar with the considerations that would bear upon its listing. I did not tax costs at the time but I have no doubt that the considerations that would bear upon the listing of an action undertaken prior to callover would properly have been accommodated under the item "getting up case for trial".
Upon the introduction of the pre-trial conference, actions that would proceed to trial were allocated dates at the conclusion of the conference. The conference being more than a callover and there being no particular item in the scale, it was considered that under r 18 recovery would be available under what is now item 23.
I accept that as much as the quantum awarded for an application in chambers may have reflected preparation, the same would apply to preparation for the pre-trial conference; however I consider that the case for drawing an analogy with item 23 would not have been supported by the need to provide for preparation for the prospect that the action would be listed, that would have been recoverable in any event as getting up case.
The next significant change was not to the procedure but rather to the scale. In 1991 item 23A was introduced. It provided: -
"Pre-trial and mediation conferences including preparation and notices associated therewith".
The next change to the procedure was the introduction of the listing conference. It was put in place on 1 January 1997. At about the time of that change item 23A was amended to its current form as item 24 which does not refer to preparation.
During the period from 1991 until those changes there is no doubt that recovery was available as pre-trial conference for the preparation for that part of the process which would result in hearing dates being allocated.
The other significant change to the item made in 1996 was that quantum recoverable would be determined on the basis of time costing rather than on the value of the service provided within the range $75-1000. The general scheme of the scale is that quantum is determined according to the objective value of the service provided. That is, upon consideration of the dimensions of the task to be undertaken in the particular case and how it would be undertaken in a reasonably efficient manner. On those few occasions for which recovery is available on the basis of unlimited utilised time, in the ordinary course the relevant service would have been provided in the presence of the adverse party. At the point of the service being valued it would have the opportunity to comment as to how the time spent was utilised. It may then contend that the service for which recovery is sought was not being provided during the relevant period or that time was wasted or otherwise was inefficiency utilised. In the change to unlimited time costing, to have left in the item provision for recovery for preparation, a part of the service that would usually be provided in the absence of the adverse party would have been contrary to that scheme.
To consider that time devoted to preparation would be recoverable under item 24 would leave the adverse party exposed to what could be a significant claim with no appreciation of whether it could be justified.
In my opinion it is appropriate to consider that in amending the scale in 1996 to delete the reference to preparation the Legal Costs Committee had determined that recovery would no longer be available inter partes. There is nothing remarkable about that result. There are many activities properly undertaken in the course of litigation for which recovery inter partes is not available. And it is not as if recovery for preparation represented an integral component of the ITEM of long-standing. It was introduced as part of the item in 1991 and disappeared in 1996. Since the 1996 determination there have been at least three opportunities for the Legal Costs Committee to remedy any unintended omission. Having failed to do so, it is not inappropriate to conclude that the removal was intentional.
As a matter of interpretation there is little to justify recovery for preparation for the listing conference. On the analysis that I have conducted I consider that it is open to conclude that recovery has always been available for what is properly considered to be "getting up case for trial". Between 1991 and 1996 there was scope for double recovery.
In my opinion there is no basis for the contention that there was an error in principle in disallowing the claim made for preparation. Indeed, had I done otherwise I would have erred in principle.
The next issue raised by the objection is what to make of the balance of its terms. I suspect that it expresses the plaintiff's appreciation of the observation that I made at the time that part of the claim was disallowed. It was that despite the disallowance it was conceivable that some, but not necessarily all of the amount claimed for preparation for the conference would be recoverable as getting up case for trial.
There are two reasons that justify the observation that recovery under item 13 may be less than would be the case if the service was valued under item 24. The first is that under item 24, recovery is available for accumulated identifiable periods of time: but for the prospect that the taxing officer will reach a different conclusion as to the value of that time, conceivably recovery would be available to the extent of costs actually incurred. However under item 13 the valuation process is not one that translates accumulated identified minutes into dollars but rather values the service "getting up case for trial" undertaken in the action.
The second reason is that under item 13 the valuation undertaken would cover a broad range of activity that would be undertaken from time to time over the course of an action. How such work may be undertaken and the extent to which it is undertaken in any particular case may speak more about the individual undertaking the work than it says about the complexity of the task presented by the case. At least for that reason, for at least the last couple of centuries it has been recognised that recovery under the usual order should be circumscribed by considerations of efficiency in the provision of services. Essentially the extent of recovery against the adverse party should be much the same regardless of the choice of representation made by the beneficial party. It is appropriate to consider that the cost to the adverse party would tend towards the cost that would be generated at the more efficient end of the range of practitioners.
The fundamental flaw in the plaintiff's proposition for error is that he constitutes the fact that the claim had been made for preparation under item 24 as some useful datum. There simply was no basis for that claim. As I observed at taxation, to the extent that the time devoted to preparation fell within the scope of "getting up the case" all was not lost. On that assessment the complaint of the plaintiff is little more than that quantum under item 13 is not calculated on the same basis as quantum for item 24. However tempting it may be to indulge in comparison between the results achieved under different items in the scale it would not be productive of any useful result. The scale provides that under each of the items the determination of quantum be made on a different basis.

The next item in relation to which the plaintiff objects is "getting up case for trial". The ground of objection is expressed as follows: -
"(a)The taxing officer erred in principle in not making any, or any adequate provision in determining an allowance for getting up for the time spent in:
(i) obtaining and considering medical reports;
(ii)the additional time spent in communicating with the plaintiff given the plaintiff's residence in Wollongong and the plaintiff's psychiatric condition;
(iii)considering the file, including medical reports obtained by the plaintiff's solicitors from the plaintiff's solicitors (sic) in relation to his compensation claim arising out of an incident during 1993;
(iv)preparing for pre-trial conferences;
(v)preparing for the listing conference on 15 August 2003;
(vi)briefing counsel;
(vii)contacting and scheduling witnesses for the trial listed for 2 October 2003 and securing the attendance of witness at the trial;
(viii)considering the defendant's medical reports and analysing the differences between the medical opinions expressed by the plaintiff's experts and the defendant's experts."
My reading of the objection is that the issue raised is put in terms of an error in determining quantum. In putting that case the plaintiff contends that allowance was made for each feature of the process identified but that in effect those features had no impact or insufficient impact in the process of valuation of the service "getting up case for trial". To the extent that he puts the case that allowance was made for the preparation for the pre trial conference he is wrong. If such a claim was articulated it would have been disallowed. On my reading there is no objection taken to any such disallowance.
The first point to make about the terms of the objection is that there is no jurisdiction for review. As to the provision of reasons for the determination it is difficult to undertake the task by reference to the terms of the objection because I do not understand how the plaintiff justifies the conclusion that there was either no or no adequate provision made for the listed considerations. But for the preparation for the conference they fall squarely within the scope of the features of the case that would be considered in the process of valuing getting up case. There was a single determination made in relation to the value of the service getting up case for trial.
The next ground of objection is again in relation to the claim for "getting up case for trial", it is as follows: -
"The taxing officer further erred in principle in having undue regard to the quantum of the settlement rather than the time necessarily spent by the plaintiff's solicitors in getting up the case for trial."
I have some difficulty in understanding how that ground could be sustained. It might have been useful for the plaintiff to have indicated how it is that he came to that conclusion. I am aware that others have used the quantum of a judgment to justify determinations at a lower level than otherwise may have been justified. I confess that I struggle to come to terms with the proposition that that the reasonable cost of the provision of a service should be constrained by a consideration that does not speak to the complexity of the task that was undertaken. In my opinion such a proposition is as wide of the mark as the proposition that recovery is available under item 13 for activity only accounted for by a record of utilised time.
I might add that there is a popular misconception that "getting up case for trial" covers any activity undertaken which is not recoverable under any other item. Getting up case for trial is itself a process founded on the issues that emerge on the close of pleadings. Engaging in the process is distinguishable from what otherwise is mere activity. As Templeman J stated at par 20 in May v Vincent Smith as Administrator for Cole Engineering Pty Ltd (Under Administration) & Anor [2001] WASC 352, although there may be an overlap between the two, there is a distinction to be drawn between the general preparation of a case and "getting up a case for trial".
I was aware of the quantum of the judgment. As much as the value of the compromise may not reflect the value of the claim it has nothing to say in relation to the work undertaken in getting up the case for trial. I would not have suggested that the value of "getting up the case" should somehow reflect the compromise reached in relation to the subject of the claim.
The next ground of objection relates to the claim for counsel fee on brief. It was disallowed accordingly there is jurisdiction to review.
The grounds of objection are as follows:
"The taxing officer erred in principle in finding that there was no scope for any recovery for counsel's preparation in the circumstances of this matter where the trial had not actually commenced, the taxing officer's view in this regard being that the trial only commences when evidence is led at the trial. The taxing officer further erred in finding that the inclusion by the Legal Costs Committee of 'preparation' in the scale item 14(a) meant no more than the 'old concept of counsel fee on trial'."
Item 14(a) is for "Fee on brief, i.e. first day of trial and preparation".
There is no substance to any distinction that may be drawn between the terms fee on brief and fee on trial. Regardless of how the item is expressed fundamentally provision is made for recovery for the service provided by a practitioner in representing a party at trial. In this case settlement was achieved days prior to trial. In the circumstances I do not understand the significance of the reference to evidence being led. As a matter of principle, recovery depends upon a service for which a claim is made having been provided. Implicitly the plaintiff proposes that in undertaking preparation for trial a service is provided. That is not the case. Preparation is simply part of the service for which recovery is available under item 14(a).
It is appropriate to consider that the change in the description of the service to which the plaintiff refers in the objection was intended to have some meaning. It is conceivable that by introducing the term "preparation" the Legal Costs Committee considered that it was providing for recovery for preparation independent of trial itself. In my opinion a more obvious reason for the change is that it simply expresses the service in its parts and facilitates reconciliation with the assumptions made by the Committee in calculating the maximum recovery available under the item. It is worth recording that the basis on which the Committee undertook its task of setting the scale would probably be of greater interest to a court in the context of considering an application under r 12 (1) than it would be at taxation.
Ultimately I am not persuaded that the disallowance of the claim made for preparation under item 14(a) was in error. The service contemplated by item 14(a) was not provided.
The terms in which the objection is expressed cause me to consider whether what I gather is comment attributed to me should be read within the context of the claim made and maintained at taxation.
Although not expressed at any time to this point, it may be that the plaintiff will contend that the taxing officer had a responsibility to consider an exercise of discretion under r 21 even though he did not and does not now advocate the taxing officer following that course. In my opinion it is not for the taxing officer to cast about for a basis to provide for recovery beyond that sought by the beneficial party. In any event the submissions of the defendant in opposing recovery may have been such that the plaintiff's best prospect of success was under the entitlement that he considered existed under item 14(a) rather than an exercise of discretion under r 21. I suppose the reason why I raise the issue is that I do not accept that there is no scope for recovery for preparation.
I do not have any difficulty with the prospect that services were provided in the form of preparation or that otherwise counsel was entitled to charge the amount now claimed by the plaintiff. Further that the plaintiff's solicitor would have been aware that settlement close to trial would bring the prospect that counsel would have undertaken preparatory work. And that in the process of the solicitor taking instructions to brief counsel the plaintiff would have been made aware of the risk that costs may thereby be both enhanced and put at risk for any number of reasons. Indeed there is a prospect that the plaintiff would have inquired of his solicitor what would be the financial ramifications of the settlement being reached close to trial.
In my opinion, if in the course of compromising an action the parties have chosen to remain silent as to for wasted costs that may simply have been their choice; it is not for the taxing officer to undertake what may be considered to be a remedial task on behalf of the beneficial party in order to allow for recovery simply because he may consider that it is open for him to do so.
In the context of review it is for the plaintiff to articulate an error in principle. The objection expressed is limited to the failure to realise on what is portrayed as an entitlement.
There is nothing unusual about the prospect that services even those necessarily provided to a party for the purposes of litigation for a particular reason will not be recoverable. The fact that the service lies outside the scope of the order for recovery is fundamental.
The next item the subject of objection is for preparing for and attending the taxation of costs. At taxation the claim was disallowed. The reason for the disallowance was that the plaintiff had recovered less under the process of taxation than had been offered by the defendant prior to the taxation. The grounds of objection are as follows: -
"The taxing officer's error flows from the errors made in relation to items 8, 9, 11, 12 and 13."
In my opinion, the plaintiff has failed to enunciate any error.