Michael, S.S. and Anor v Monitronix Ltd and Ors

[1991] FCA 386

Re: SHAWKY SHAFEEK MICHAEL and JOYCE MARY MICHAEL
And: MONITRONIX LTD; BERNARD WILLIAM RIDGEWAY; DAVID CHRISTOPHER NICHOLSON and
GRAHAM CHARLES SYLVESTER
No. WA G126 of 1989
FED No. 386
Practice and Procedure

COURT

IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
French J.(1)

CATCHWORDS

Practice and Procedure - costs - reconsideration - review - entitlement to taxation of interlocutory costs - order that costs be paid forthwith - procedural requirements.

Federal Court Rules O.62 r.43, O.62 r.44, O.62.r.42, O.62 r.3

HEARING

PERTH

#DATE 1:5:1991

Dr S.S. Michael and Mrs Michael appeared on their own behalf.

Counsel for the Respondent: Ms G. Pitt

Solicitors for the Respondent: Williams and Hughes

JUDGE1

On 23 November 1989 these proceedings were stayed until further order. The stay was based upon the existence of cognate proceedings in the Supreme Court of Western Australia concerned with circumstances surrounding Dr Michael's employment and subsequent dismissal from the office of managing director of Monitronix Limited. When I published the reasons for the stay on 23 November 1989, I said that if circumstances should change in such a way as to justify reactivation of the proceedings, then Dr Michael might come back and apply to this Court but that such an application would not be lightly entertained unless it was shown that efforts had been made to bring the matter within the jurisdiction of the Supreme Court and that for some combination of circumstances he could not get a trial or be heard in that Court on those issues. I was there assuming, as I said, that there was some cause of action and not disposing summarily of that question.

1. Nearly a year later, on 10 August 1990, Dr and Mrs Michael moved for an order reactivating the action, in effect, lifting the stay. They also sought to add the name of Christine Yvonne Ridgeway as a fourth-named second respondent, leave to file a statement of claim which was attached to the motion and summary judgment for the applicants. On 16 November 1990 I dismissed the motion and ordered that the applicants pay the respondents' costs. On 14 December 1990 the respondents filed a bill of costs for taxation pursuant to that order. A notice of objection to the bill was filed by the applicants on 14 February 1991 and the matter came on before Deputy Registrar Rayney on 25 February 1991. At that time the respondents handed up an amended bill of costs for taxation which made three changes to the previous bill; two were to correct dates (in items 35(b) and 36(c)) and the other was to add a further item claiming $50 pursuant to an order which I had made on 20 February 1991 dismissing another motion filed on 25 January and fixing costs in that amount. That, incidentally, was entered into the amended bill of costs with the wrong date showing 20 February 1990, when it should have been 20 February 1991.

2. It appears that the amended bill of costs was received very late in the day but, having regard to the very minor nature of the amendments, nothing really turns on that. Deputy Registrar Rayney then proceeded with the taxation of the bill and on 25 February allowed the costs at $1,562. On 11 March 1991, Dr Michael delivered to the Court a document entitled "Applicants' Submission in Support of the Reconsideration of the Taxation of the Respondents' Bill of Costs". This was said to be a submission lodged pursuant to O.62 r.43 of the Federal Court Rules. It was accompanied by a letter dated 11 March directed to the Deputy District Registrar which said, inter alia:
   

"Please find attached our submission under Rule 43 for reconsideration. This is identical to the submission handed to you on 25 February 1991 but you preferred that we lodge it later. The slight additional information concerns some points dealt with during the taxation."

According to his affidavit, Dr Michael personally delivered the submission to the Court where it was checked against the file and accepted by somebody in the Registry as the Deputy Registrar was not available on that day. On 12 March, the Deputy Registrar sent a letter, which reached Dr and Mrs Michael on 13 March, in which she referred to his letter of 11 March and the submission. In her letter she said:

"Please note O.62 rr.42 and 43 of the Federal Court Rules which provide (inter alia) that a request for reconsideration shall be made by filing a notice of motion together with a statement of objections. The statement of objections should specify by a list the items to which the applicants object to the decision of the taxing officer and must state briefly but specifically the nature and grounds of each objection. As a notice of motion has not been filed, I am unable to deal with the matter and I return the document referred to above."

Dr Michael responded with a further letter of 13 March. I need not deal with its details save to say that it asked that the Deputy Registrar consider various points as there would be a denial of natural justice if the applicants had to pay for affidavits which contained what he contended was false and/or irrelevant information.

1. The matter comes before me today on a motion filed on 5 April to set aside the bill of costs and alternatively to review the taxation. On 13 March the Deputy Registrar signed the certificate indicating that she had taxed the bill of costs and allowed it at $1,562. By his motion Dr Michael seeks orders:
   

1. That the amended bill of costs filed and served on 25 February and as signed by the Deputy Registrar be set aside as being irregular and/or null or alternatively be permanently stayed.

2. The notice of motion dated 18 February 1991 be dealt with prior to the taxation review.

3. Alternatively, the bill of costs be re-taxed and reviewed and the costs of taxation on 25 February 1991 be the applicants'.

4. The respondents pay the costs of this notice in any event.

Subject to one comment that I will make shortly, there is no basis for setting aside the amended bill of costs. The position with an application for review of a bill of costs for taxation is covered by O.62 r.44 and that follows upon the provisions of the rules which relate to objections and requests for reconsideration. As the Deputy Registrar had pointed out in her letter to Dr Michael, O.62 r.42 allows for a party to the taxation to object to the decision of the taxing officer and to apply to the taxing officer to reconsider the decision. Order 62 sub-r.42(2) requires that an application under sub-r.(1A) shall be made by a motion to the taxing officer. Sub-rule (3) requires the motion to be filed within 14 days after the date of the decision and sub-r.(4) that the applicant file with or subscribe to the notice a statement of his objections. Sub-rule (5) requires that a statement of the objections:

"Shall specify by a list the items as to which the applicant objects to the decision of the taxing officer and must state briefly, but specifically, the nature and grounds of each objection."

And by sub-r.(6) an applicant under sub-r.(1A):

"...shall on the date of filing the notice of motion and statement of objection serve the notice and statement on each party interested."

1. Rule 43 provides where a motion is made under r.42, the taxing officer is required to reconsider the decision, to give a certificate in accordance with her decision on reconsideration and, upon request by any party, to state in her certificate or some other document and by reference to the objections to her previous decision her reasons for the decision on reconsideration.

2. Rule 44 then deals with review, and provides that:
   

"Where a taxing officer gives a certificate in accordance with his decision on reconsideration under r.43 and pursuant to that rule a party requests the taxing officer to state his reasons for the decision, the Court shall on motion by any party interested, review the decision of the taxing officer on reconsideration."

This rule ties the review procedure to the reconsideration and provision of reasons dealt with in r.43. An exception is made in the case of death or incapacity or other matters personal to the taxing officer, none of which are applicable in this case. The difficulty that Dr Michael confronts with his motion today is that there has been no motion for reconsideration as required by O.62 r.42(2). And although he did lodge a submission, the form of the submission which was lodged on 11 March, does not commply with the requirements of sub-r.42(5). A pre-condition for the exercise of the court's jurisdiction to review the bill of costs is therefore not satisfied. But that is not the end of the matter for O.62 sub-r.3(3) provides:

"An order for costs of an interlocutory proceeding shall not, unless the Court otherwise orders, entitle the party to have a bill of costs taxed until the principal proceeding in which the interlocutory order was made is concluded or further order."

The respondent faces the difficulty that the principal proceeding has not been concluded. The stay order did not have that effect for it left open the possibility that it might be lifted or varied, although as I think is now apparent, that eventuality is unlikely. No application was made for an order that the costs of the Michaels' motion seeking to lift the stay be paid forthwith when the matter was dealt with in November, although had such an application been made, it would have been granted. In these circumstances, I don't propose to waste everybody's time by setting aside the bill of costs and making the parties go through the procedures again, including seeking a variation of the costs order to require the costs to be payable forthwith. In my opinion the proper course is to dispense with compliance with the requirement of O.62 sub-r.3(3) that the costs cannot be taxed unless the Court has otherwise ordered within the meaning of that subrule. I can exercise that dispensing power under O.1 r.8 which provides that:

"The Court may dispense with compliance with any of the requirements of the Rules, either before or after the occasion for compliance arises."

At the same time and in order that substantial justice may be done on the question of the right of reconsideration, I will extend the time within which Dr Michael can file a motion and objections in proper form for reconsideration of the taxed costs under O.62 r.42. I do that in order that the forms and substance of justice in this case can be observed in the most economic and efficient way.

1. I might add that I regard this whole debate as somewhat uneconomic and inefficient and it will, of course, serve the interests of both parties if they could compromise on the question of costs on this motion in any event.

2. The orders will be:
   

1. The Court dispenses with the requirement of O.62 sub-r.3(3) that the respondents not be entitled to have their bill of costs in relation to the order of 16 November 1990 taxed unless the Court otherwise orders.

2. The Court orders that the costs of the motion dismissed on 16 November 1990 be paid forthwith.

3. The time limited for the applicants to apply for reconsideration of the respondents' bill of costs in relation to the order of 16 November 1990 under O.62 r.42 be extended until 15 May.

4. The costs of $50 ordered to be paid on 20 February 1991 be paid forthwith.

5. No order as to the costs of today's hearing.