Moon v Woodward

[1991] TASSC 35

Serial No 3/1991
List "A"

COURT:  SUPREME COURT OF TASMANIA

CITATION:              Moon v Woodward [1991] TASSC 35; A3/1991

PARTIES:  MOON
  v
  WOODWARD

FILE NO/S:  2778/1985
DELIVERED ON:  8 February 1991
JUDGMENT OF:  Wright J

Judgment Number:  A3/1991
Number of paragraphs:  12

Serial No 3/1991
List "A"
File No 2778/1985

MOON v WOODWARD

REASONS FOR JUDGMENT  WRIGHT J

8 February 1991

1. In an action for damages for personal injuries the plaintiff recovered consent judgment against the defendant for $60,000.00 and interest thereon "together with costs to be taxed". The plaintiff's bill of costs was taxed before the Assistant Deputy Registrar as taxing officer on 13 September 1990. As drawn, the plaintiff's bill claimed $8,697.92 for professional services and $2,617.90 for disbursements. On taxation the Assistant Deputy Registrar taxed $1,492.80 off the claim for professional services, leaving a balance of $7,205.12. The sum of $1,492.80 is greater than one sixth of the sum of $8,697.20. Included in the bill as lodged for taxation were items 376 and 377 which read as follows:

"19/7/1990      376     Attending pre–taxation conference       $0.00.

19/7/1990        377     Attending taxation  $0.00."

1. At the conclusion of the taxation the plaintiff's solicitor sought to amend the bill of costs by quantifying the claim made in respect of these two items. It was common ground that the parties had held a pre–taxation conference and that the conference took a period of two hours. The taxation of the bill before the Assistant Deputy Registrar took 3½ hours. It was apparently not disputed that in principle each of these attendances was recoverable as an item of party and party costs. The Assistant Deputy Registrar indicated that for the total period of 5½ hours expended in this way he would be disposed to allow $84.00 per hour or a total of $462.00 to the plaintiff's solicitor. The consequence of including this additional sum within the bill would be to increase the claim for professional services to $9,159.92. By calculating the one sixth rule against this figure, rather than the original figure of $8,697.20, the plaintiff could avoid the penalty provisions to be found in Rules of the Supreme Court, O.80, r.78 which is in the following terms:

"If on the taxation of a bill of costs the amount of the professional charges contained in the bill is reduced by a sixth part then, unless the taxing officer determines otherwise, no costs shall be allowed to the solicitor leaving the bill for taxation, for drawing and copying it, nor for attending the taxation."

1. The solicitor for the defendant, seeking to obtain the advantage of r78, opposed the plaintiff's application to amend items 376 and 377. After hearing argument, the Assistant Deputy Registrar allowed the amendment and, taking the view that the one sixth rule should then be applied in respect of the sum of $9,159.92, rather than $8,697.20, refused to disallow the plaintiff's solicitors' costs for drawing and copying the bill for taxation and for attending the taxation. The defendant sought to review the Assistant Deputy Registrar's decision pursuant to O80, r100. It was argued that once a bill of costs has been delivered, the taxation must be on that bill and the taxing officer has no power to amend the bill in any way whatsoever. Relying upon the decision of Davis v The Earl of Dysart (No 2) (1855) 21 Beav. 124; 25 LJ Ch 122; 52 ER 805 at 809, the Assistant Deputy Registrar concluded that he had power to amend a party and party bill of costs such as this. He referred to the following passage in the judgment of Romilly MR:

"The bill of costs, as between party and party, is always susceptible of being added to or varied after it has been brought into the office. In this respect, it is quite different from a bill of costs taxed under the statute, where an alteration cannot be made as against the client, except with his consent, after the bill has been brought in for taxation. In cases of taxation of costs, as between party and party, the bill of costs is analogous to a mere state [sic] of facts, and is a claim by one party against another party to a suit, and it may be amended, in any way and at any time, before the taxation is concluded. This has been the invariable practice, as I am informed on inquiry."

1. In this passage the Master of the Rolls was drawing a clear distinction between the principles which apply upon a party and party taxation and those which obtain where, for example, a solicitor seeks to tax a bill of costs which he has delivered to a client in respect of which special considerations and indeed special statutory provisions such as are found in Part V of the Legal Practitioners Act 1959 (Tas) frequently apply. In the latter situation, as Farwell J pointed out in In Re Grant Bulcraig & Co [1906] 1 Ch 124 at 127 – 128:

"There is an unbroken line of authorities since the passing of the Act which establishes that, for the purposes of taxation under the Act, and the costs thereof, the solicitor is bound by the bill that he has delivered. In the case of In re Carven 8 Beav 436,438 Lord Langdale says that, 'if a solicitor has delivered his bill, he is bound by it, and the taxation must be on that bill; he is not entitled, as of course, to reduce his demand, or to reserve the power of delivering a bill containing other charges'. This general rule was recognized and approved by the Court of Appeal in In re Heather (1870) LR 5 Ch 694; and again in In re Thompson (1885) 30 Ch D 441, where Cotton LJ says Ibid 448 'Now, it has been well established that, when a solicitor sends in his bill, he gives the client to whom he sends it a right to have that bill taxed. ... The rule has been carried so far that even where objections have been made to particular items of a bill delivered, and the solicitors have, with the assent of the client, taken back the bill for the purpose of reconsideration and have struck out certain items, the Court has held that the bill to be taxed must be the bill as it was originally sent in and not the bill as amended.' Nor has the taxing master any power to add or strike out items; his functions, as defined by the order, are to tax and settle. To tax is to deal seriatim with each item by way of allowance or disallowance. To settle is finally to ascertain the amount (if any) recoverable. The only way in which the solicitor can add or strike out items, or increase amounts, is by special application to the Court, as was done in In re Walters 9 Beav 299 and In re Walley (1855) 20 Beav 576: but such alteration is not allowed to affect the costs of taxation of the original bill; it is merely to prevent the solicitor from losing charges which he is entitled to make, but has overlooked; in neither case is he allowed to diminish the amount of his charges. The reason for the rule is stated by Cotton L.J. in In re Thompson Ibid 448: 'It was laid down to prevent any attempt being made by solicitors to impose on clients, who did not know what the proper charges were, by sending in a bill which could not stand taxation, and then, when taxation was insisted on or threatened, sending in another bill which they knew could stand taxation.' The solicitor is treated strictly because he is dealing with his client in a matter in which the solicitor is an expert and the client is not, but the reasoning has no application to details which are not the subject of taxation and the accuracy of which the client is as well able to test as the solicitor; such matters become mere matters of evidence, and the taxing master may allow the solicitor to correct blunders therein if, in his discretion, he thinks proper to do so."

1. Counsel for the defendant also submitted to the Assistant Deputy Registrar that if, contrary to his submissions, an amendment was to be allowed to items 376 and 377, those items should have been left out of account for the purpose of making the calculation required under the provisions of O80, r78. No direct authority was cited for this proposition and the Assistant Deputy Registrar overruled the objection. As a consequence, the Assistant Deputy Registrar confirmed the view which he had originally taken and declined to disallow the plaintiff's solicitors' costs for drawing and copying the bill for taxation and for attending the taxation. Accordingly, the Assistant Deputy Registrar issued his certificate of taxation on 8 November 1990 in the following terms:

"I hereby certify that on the 13th day of September 1990 I taxed the costs of the plaintiff as between party and party and allowed the same in the sum of $10,585.02 including a taxing fee of $300.00 and whereas the plaintiff lodged an objection in writing to my disallowance of the sum claimed in respect of item 292 and whereas the defendant lodged an objection in writing to my decision to permit the plaintiff to amend the sum claimed for items 376 and 377 respectively and whereas after reconsidering and reviewing the taxation upon the defendant's objection I have decided to disallow the objection and whereas the plaintiff has been allowed to withdraw her objection and whereas I have taxed the costs of the plaintiff of the objections by consent in the sum of $168.00 I hereby certify that the plaintiff's costs be taxed in the sum of $10,753.02 including a taxing fee of $300.00."

1. Pursuant to the provisions of O.80, r.102, the defendant now applies to the Court for an order to review the taxation. During the course of his submissions, counsel for the defendant observed that there is no provision in the Rules of Court in other States or in England providing that the one sixth rule shall apply to a normal party and party taxation. He also pointed out that prior to its amendment in 1978, O.80, r.78 provided as follows:

"If on the taxation of a bill of costs payable out of an estate or a fund or out of the assets of a company in liquidation, the amount of the professional charges contained in the bill is reduced by a sixth part, no costs shall be allowed to the solicitor leaving the bill for taxation, for drawing and copying it, nor for attending the taxation."

1. On the basis that the very limited rule which had applied before 1978 has now been expanded into a rule generally applicable upon the taxation of any bill of costs whether between party and party or otherwise, counsel for the defendant contended firstly, that a distinction between solicitor and client bills and party and party bills of the kind explained in the two abovementioned decisions, could no longer be justified in this State and secondly, that it was plain that the Rules of Court as they currently stand are intended to penalise a party who brings in an excessive bill which is substantially disallowed on taxation and consequently, the calculation necessary for the purpose of O80, r78 should be carried out without regard to the discrete costs involved in the actual process of taxing the bill.

1. In my opinion neither of these arguments was sustained by authority and cannot be supported as a matter of principle. In the first place the distinctions drawn in In re Grant Bulcraig & Co (supra) and Davis v The Earl of Dysart (supra) between party and party taxations and those involving a solicitor and his client are as valid now as they were before 1978. Furthermore, the evils inherent in allowing a solicitor to diminish his bill upon taxation as pointed out by Farwell J in In re Grant Bulcraig & Co (supra) cannot arise in a situation where the solicitor in fact applies to increase his bill as occurred in the present case. In my opinion, it was permissible for the learned Assistant Deputy Registrar to entertain an application to amend the bill of costs as he did in this case and I have heard nothing from counsel which would persuade me that he misconceived his function or failed to properly exercise his discretion to allow those amendments in the circumstances of the matter before him. As the learned Assistant Deputy Registrar said in giving his reasons for disallowing the objection:

"... I accept that the discretion to permit the amendment to be made is a discretion which must be exercised judicially. In this instance the factors which influence me to permit the amendment are:

1The bill does give notice of the items. It follows any element of surprise is limited.

2Items 376 and 377 are not always easy to quantify because they involve the estimating of time. This bill contains 407 items in my view the number of items in the bill can be a factor in determining the difficulty of making an estimate of times.

3Many bills are filed in the Registry where for these items notice is given of the item but no sum is claimed, the column being left blank or a notation such as 'to be awarded' appears. In other words, the absence of a sum claimed for these items is not something which is unusual in the practice of the Court (see Symons & Ors v Hay [1934] SASR 66), and what has happened here is in my view another example of the same theme.

4Unless the practitioner happened to correctly estimate the correct allowance for the two items, an amendment would be required whatever other practice had been adopted."

1. In my opinion the learned Assistant Deputy Registrar correctly identified the relevant factors which should be taken into account by him in exercising his discretion and in my opinion, having taken this course, he arrived at the correct conclusion to allow the amendments in the instant case.

1. There is nothing in O80, r78 which indicates whether or not the solicitors' fee for drawing and copying the bill for taxation and for attending the taxation, should be taken into account for the purpose of making the one sixth calculation. Counsel for the defendant conceded that the costs of drawing and copying the bill for taxation must be taken into account for this purpose but he contended that an attendance upon taxation, being a "separate proceeding", should be omitted. In the absence of any clear indication in the language of the rule or any binding or persuasive authority to the contrary, I have come to the conclusion that the calculation required for the purposes of O78 must take account of the amounts claimed in the bill both for drawing and copying the bill and for attendance upon taxation by the successful party's solicitor. These are all part of the professional charges contained in the bill and recoverable by the successful party (in this case the plaintiff) pursuant to the order of the Court. No separate order is required for the successful party to recover these items. To my mind it would be an artificial, illogical and unwarranted distinction to make to include the costs of drawing and copying the bill on the one hand, but to exclude the attendance upon taxation upon the other.

1. Whilst r78 in its current form can no doubt be justified upon the basis of discouraging extravagant bills, I can see little justification for applying its quasi penal provisions except in the clearest cases. It should not be overlooked that r81 enables a taxing officer to penalise a party in costs if that party is guilty of neglect or delay or puts any other party to any unnecessary or improper expense relative to such proceedings. I can see little justification for affording an unsuccessful party to civil litigation the benefit of a windfall gain to which he would not otherwise be entitled but for the successful party's solicitor omitting to include a specific item for his fee for the attendance upon taxation. Such would be the result in the present case if I were to accede to the submissions of counsel for the defendant.

1. In my opinion, the decisions of the Assistant Deputy Registrar were correct and the defendant's application for an order for review should be refused with costs.