Pickering v Smoothpool (No 6)
[2001] SASC 440
•21 December 2001
PICKERING v SMOOTHPOOL (No. 6)
[2001] SASC 440Appeal from a Master
GRAY J This is an appeal from an order made by a master of this court.
Background
The litigation preceding the making of this order has a long and involved history. In substance it was a dispute between commercial fishermen regarding the nature of a trust arrangement entered into in the early 1980s. The arrangement related to an attempt to circumvent the effect of the fisheries legislation which the parties perceived prevented a person from holding more than one abalone authority. On 10 August 2000 following a lengthy trial, the trial judge ordered that the defendants pay a percentage of the plaintiffs’ costs. The precise terms of the order are not relevant to the matter under appeal[1].
[1] Edmunds v Pickering (1999) 75 SASR 407
Application was made by the plaintiffs pursuant to Supreme Court Rule 101.01(1)(a) for the trial judge to award a lump sum for costs.
Rule 101.01(1)(a) provides:
“[T]he Court may:
(a) award a lump sum, award a lump sum in lieu of, or in addition to, any taxed costs; …”
The trial judge dismissed the application because there was insufficient information to allow a lump sum to be fixed. The trial judge said:
“ … I have read the evidence contained in the affidavits. I am aware of the reasons for the application. However, I believe that I am constrained to find, as the defendants claim, that there is insufficient evidence before me upon which I could make a meaningful assessment of an appropriate amount for a lump sum. The plaintiffs have not provided me with even a draft of the plaintiffs’ solicitor’s costs in any form, let alone in any taxable form. They have not provided me with an opinion from a costs expert who has examined the files, which form the subject matter of the application … I am not satisfied that there is sufficient evidence before me upon which I can make a proper assessment of a lump sum which would be fair to all parties.”[2]
[2] Smoothpool Nominees Pty Ltd & Anor v Pickering & Ors [2001] SASC 131 at [46]
The trial judge dismissed a further application for an interim allocatur. He took the view that the application would more properly have been made pursuant to Rule 101.13 to a taxing officer conducting a taxation of costs. The following reasons were given:
“It seems to me, with respect, that the order sought in the plaintiffs’ application for an interim allocatur is misconceived. The procedure under r101.01(1)(a) allows, as I have said, for the Court to award a lump sum in lieu of or in addition to any taxed costs. This aspect of the plaintiffs’ application, which was the second ground of the application, is not in accordance with r101.01(1)(a). In effect, the plaintiffs are seeking, on this aspect of their application, an interim allocatur whilst a Short Form Bill of Costs is prepared. I think there is not doubt that the taxing officer, or Master, would have power to grant an interim allocatur whilst a taxation is proceeding: r101.13. That is, however, not what is sought by the plaintiffs. They seek to invoke the jurisdiction of the Court to make that order independently of any taxation. In my opinion, I do not have power to make an order pursuant to r101.13. The absence of the power is not because I am not a taxing officer but it is because I am not conducting a taxation of costs. Indeed, the very point of the plaintiffs’ application, at least that part of it pursuant to r101.01(1)(a), is to avoid a taxation of costs. In my opinion, therefore, the application for an interim allocatur must be dismissed.”[3]
[3] Smoothpool Nominees Pty Ltd & Anor v Pickering & Ors [2001] SASC 131 at [20]
Bill of Costs in Taxable Form
The trial judge used the expression “taxable form”. This expression has long been used to refer to the form of bill required to be lodged to initiate a taxation of costs. Reference may be found to that expression in legal dictionaries, legal texts and in legal authorities. Conventionally such a bill involves a chronological, item by item list of each attendance. The bill should disclose the nature of the attendance with sufficient particularity to enable the basis of the claim to be ascertained and an assessment of reasonableness to be undertaken.
In Ex Parte Farmers’ Fertilizers Corporation Ltd[4] Cullen CJ said:
“The present is a case not between a solicitor and his own client, but between a solicitor and the mortgagor who was liable for the payment of the proper costs chargeable by the mortgagee’s solicitor. The delivery of an account ... was not a detailed bill which would enable the mortgagor to exercise his judgment on the propriety of the amount of the charges. The word ‘bill’ as used in the Act is defined in s. 21, sub-s(3) as a ‘a bill of fees, charges and disbursements.’ The authorities upon that definition show what is meant is a detailed account showing the specific items of work done, and the specific charges allocated to each of those.”
[4] (1916) 16 SR (NSW) 645 at 649
Short Form Bill Procedure
The short form bill procedure was introduced in 1987.
Rule 101A.02 provides:
“(1) … a party wishing to tax costs pursuant to Rule 101 or an order of the Court ... shall prepare and serve a short form bill of costs in the form set out in Form 37.
Pursuant to this Rule the plaintiffs served a short form bill of costs (“the short form bill”). The bill was prepared as required in accordance with form 37. That form provides that the information be presented by category of work referrable to periods of time. The work undertaken is not set out in a chronological item by item listing. The short form bill procedure is designed to encourage and facilitate an expeditious and economic resolution to claims for costs. The procedure seeks to avoid the costs and delays associated with the preparation of a bill of costs in taxable form. Any claim for costs can only be assessed broadly.
In this matter the defendants disputed every item in the short form bill. The short form procedure did not result in a speedy resolution of the dispute.
Application to the Master
The plaintiffs then applied to a master seeking pursuant to Rule 101.13(a) and (f)[5]:
- an order for a lump sum taxation of costs pursuant to the order of the trial judge of 10 August 2000; or in the alternative,
- an order for an interim allocatur in the amount of $400,00 being approximately 50% of the costs sought pursuant to the plaintiff’s short form bill.
- directions as to whether or not the court fee for taxing a bill of costs as prescribed in the Supreme Court (Fees) Regulations 1999, is payable where a bill is taxed on a lump sum basis.
- general directions in respect of the procedure to be followed in taxation.
[5] No reliance was placed on Supreme Court Rule 101.01(1)(a).
The application was supported by an affidavit which exhibited the short form bill.
Rule 101.13 (a) relevantly provides:
“On a taxation of costs, a taxing officer may:
(a) Tax the costs either item by item or by calculation or estimation of the same on a lump sum or other basis as the taxing officer may in his absolute discretion think fit or in such manner as may be specified in the order giving rise to the taxation.
...
(f) make separate or interim allocaturs, direct the issue of any separate or interim certificates or allocaturs;”
The defendants opposed the application. They submitted that because the plaintiffs had not lodged and served a bill of costs in taxable form, the master could not embark upon any form of taxation. It was said that the master did not have the power to award a lump sum or issue an interim allocatur.
The Master’s Order
On 2 July 2001 the master ordered:
“As to the largest taxation I direct that proceed on a lump sum basis, the format of such to be proposed by the pltfs’ solicitors via an affidavit with the dfts’ solicitors having the right to dispute such a course (again by affidavit) and submit some other format as appropriate. I will consider that matter afresh on the adjourned date. In respect of that same taxation on the information before me I direct the issue of an interim allocatur in the sum of $400,000.00.”
Preliminary Issues
No entitlement to appeal
It was said that because the defendants had complained in respect of the taxation it was necessary to seek a “reconsideration” by the master. The plaintiffs contended that Rules 101.19, 101.20 and 101.21 provided a code for the review of the master’s order:
“Rule 101.19 (1) Party dissatisfied with a taxation to deliver and serve written objections and the Master is then to reconsider his taxation. Where a party is dissatisfied with the decision of a taxing officer as to all or some of the items of the bill of costs he may, before the certificate of taxation or allocatur is signed, or at such other times as may be fixed by the Master:
(a) deliver specific objections to the Master;
(b) deliver to the other party interested in the allowance or disallowance a copy of such objections;
(c) thereupon apply to the Master to reconsider the taxation in respect of those items or parts.
Rule 101.20 Where an application is made pursuant to Rule 101.19 to reconsider the taxation, the Master:
(a) may receive further evidence, shall reconsider the taxation in relation to the objections and he may, if he thinks fit, receive further evidence in respect of the objections;
(b) shall state his reasons, shall publish the grounds and reasons for his decision on the objection incorporating therein any special facts and circumstances relating to his decision, and thereafter the final allocatur for the taxation may be issued by the Registrar.
(c) may allow costs of the objections, may tax the costs of the objections and add them to, or deduct them from, any sum payable by or to a party to the taxation.
Rule 101.21 (1) A party dissatisfied with a reconsideration may seek a review by a Judge. A party dissatisfied with the certificate or allocatur made after reconsideration pursuant to the preceding two Rules may within fourteen days from the date of the certificate or allocatur, apply to a Judge in Chambers for an order to review the taxation as to the item or part of an item, the subject of dissatisfaction.
(2) No further evidence on the review unless Judge so orders. The application shall be heard and determined by a Judge upon the evidence which has been brought in before the Master, and further evidence shall not be received upon the hearing of the application unless the Judge so orders.
(3) Allocatur conclusive on all times not objected to. The certificate or allocatur of the taxing officer is final and conclusive as to all matters which have not been objected to in accordance with these Rules.”
I reject the plaintiffs’ submission. Rules 101.19, 20 and 21 address specific issues which can only arise on a taxation of costs. The point raised on the appeal is that a taxation of costs had not commenced. These rules do not apply in this case.
Appeal to a Single Judge
The plaintiffs then submitted that notwithstanding section 50(2) of the Supreme Court Act 1936 (SA) any appeal lay to the Full Court and not to a single judge.
Section 50(2) provides:
“Subject to the rules of court, an appeal shall lie to a judge against a judgment, order, direction or decision of a master.”
Attention was drawn to Rule 106.05(1):
(1) Subject to subrule (2) below an appeal from any assessment or award of damages or any other final finding, decision, direction, award or judgement, arrived at, made, given, directed or entered on the trial or hearing of any proceedings or of any question or issues by a Master lies to the Full Court and is to be governed by Rule 95.
(2) Any appeal from a Master ...”
(b) from an order, decision or judgement to which subrule (1) does not apply;
(c) … is to be to a single Judge and to be governed by Rule 97.
Rule 106.05 does not apply in this case. The appeal is from the master’s decision to proceed with a lump sum taxation, issue an interim allocatur and the consequent procedural directions. The orders were interlocutory. I do not consider that the master’s orders were final orders.
The Appeal
The Grounds of Appeal
The defendants complained that the master:
-erred in law in making the order in that he had no jurisdiction to tax costs when an itemised long form bill of costs had not been filed and served by the plaintiffs.
-erred in law in that he directed the issue of an interim allocatur without having the jurisdiction to tax costs.
-erred in law or alternatively erred in the exercise of his discretion in awarding ‘a lump sum interim allocatur in lieu of taxation’.
Jurisdiction
Counsel for the defendants submitted that the master had no jurisdiction to conduct any form of taxation unless and until a bill of costs in taxable form (“bill in taxable form”) had been lodged and served. It was said that the master did not have the power to issue an interim allocatur or give procedural directions.
Rule 101.09 provides:
“(1) After due compliance with Rule 101A.02, and in accordance with Rule 101A.02(6)[6], a party wishing to tax costs pursuant to an order of the Court or the Rules shall lodge and serve a bill of costs.”
[6] SCR 101A.02(6) provides: “(6) In the event that within the period referred to in Rule (4) above no agreement is reached between the parties as to the amount payable or agreement is reached as to part only of the sum which the applicant seeks, the applicant may seek a taxation of the whole of the costs sought or of the costs remaining in dispute (as the case may be) in accordance with the provisions of Rule 101.”
Counsel for the defendants submitted that this rule required that a bill in taxable form be lodged and served. It was said that the expression “in taxable form” referred to the conventional form of a bill of costs. It was said that the second schedule to the Rules and the terms of practice direction 15 confirmed these requirements. It was accepted that Rule 101.13 provided a wide discretion to the taxing master as to the manner in which a taxation of costs could proceed. However a bill in taxable form had to be lodged and served before that discretion arose.
Counsel for the defendants submitted that the lodging and serving of a bill of costs in taxable form was a necessary precondition to a taxation of costs. As no bill of costs had been lodged and served as required by Rule 101.09 it was said that the taxing master had no power to commence the taxation process. Additionally it was contended that the taxing master had no power to direct that the taxation proceed on a lump sum basis or to issue an interim allocatur. It was said that these powers only arose “on a taxation of costs.”
Attention was drawn to the wording of Rule 101.13 “on a taxation of costs” and “tax the costs ... on a lump sum basis.” Counsel for the plaintiffs submitted that the terms of Rule 101.09 were broad enough to include a short form bill of costs. It was said that consequently the master’s powers under Rule 101.13 (a) and (f) had been correctly invoked.
Distinction Between the Short From Bill and Bill of Costs in Taxable Form
There are clear differences between the purpose and form of a short form bill of costs and a bill of costs in taxable form. It was submitted that the provisions of form 37 and the second schedule highlighted these differences.
Form 37 addresses the contents of a short form bill. The form identifies categories of attendances; for example, perusals, attendances and telephone attendances. The short form bill requires a claim for the category referable to a period of time. Minimal particularity is required. An item by item listing, disclosing each charge for each attendance is not required.
There are sound reasons for requiring that a bill in taxable form as prescribed by the Rules and practice direction 15 be lodged and served. The party against whom the taxation proceeds has no knowledge of much of the work the subject of the taxation. That party is entitled as a matter of procedural fairness to be given full particulars of the claim.
The preparer of a bill of costs in taxable form must reconstruct the file with a view to representing its contents in a chronological and intelligible form. This enables the payee to gain an understanding and an appreciation of the work undertaken and view the services provided. The payee can then assess the reasonableness of the charges against each item in accordance with the statutory scale allowances. Independent advice can also be taken if necessary[7].
[7] Malleson v Williams [1930] VLR 410
The second schedule to the Rules specifies in detail the form and content necessary for a bill for taxation:
“A The amount allowed for each of the above items is to be at the discretion of the taxing Master, who shall be at liberty in the particular circumstances of the matter to disallow any item entirely or to allow a greater or a lessor amount for any item and provided that a greater amount may be allowed in conveyancing matters where the matter is of importance or difficulty.
B Each bill of costs must show:
(1) the time spent on any attendance;
(2) the number of folios contained in any document for which a charge is made;
(3) the name of any solicitor and the status of any clerk in respect of whom any attendance is charged;
(4) a separate identifying number of each item;
(5) the items of work and disbursements in chronological order.”
Finally it was said by the defendants that the distinction was expressly recognized by practice direction 15 which provides:
“2. In the event that the short form procedure as detailed in Rule 101A.02 does not result in a determination of the taxation under that Rule and a full taxation is required the party, lodging the bill in taxable form, shall lodge with it a copy of the short form bill including the respondent’s responses. Evidence in letter form shall be filed confirming service of the bill sought to be taxed. Practitioners need not lodge their files and other supporting documents at the registry when lodging bills of costs for taxation. If the court requires the practitioner’s file and supporting documents for a taxation without attendance, or for inspection prior to the time set for a taxation, a written notice to that effect will be given to the practitioner by leaving the same for collection by him/her in the registry. Where a solicitor has not lodged his or her file and other supporting documents prior to an appointment for a taxation he or she must be able to produce them on request to the taxing officer at the taxation. In addition to Note B of the Second Schedule of the Supreme Court Rules, bills of costs must:
(1) Show the individual items for profit costs in the bill without any percentage increases being added to those individual items.
(2) Have each item in the bill numbered consecutively.
(3) Have each page in the bill numbered
(4) Show the year in which the work claimed for was done at least once on each page of the bill.
(5) Be divided into parts which correspond to the period over which any particular statutory increase is applicable and make provision for the amount of the statutory increase that is to be added at the end of each such part.
The notice of dispute filed pursuant to Rule 101.09(7) shall contain brief grounds for each item of dispute. Practitioners involved in any disputed taxation shall confer prior to the taxation appointment with a view to resolving, limiting or clarifying the items in dispute. A date for taxation of the bill will not be fixed until written confirmation that the parties have conferred has been received by the court. Bills which are not in this form will not be accepted for taxation.”
The general terms of the short form bill in this matter were made in accordance with form 37. However the following extracts illustrate the lack of particularity:
Preparation for meetings
9 attendances of varying lengths
8 hrs $132.00 $1,056.00 General Preparation
139 attendances of varying lengths
274 hrs 36 mins $132.00 $36,247.20 General Preparation
89 attendances of varying lengths
126 hrs 33 mins
$132.00
$16,704.60
Database Attendances
31 attendances of varying lengths
142 hrs 42 mins
$ 80.00
$11,416.00
Preparation
65 attendances of varying lengths
259 hrs 54 mins
$80.00
$20,792.00
20 Attendances on databasing of varying lengths
91 hrs 18 mins $64.00 $5,843.20
27 Research Attendances of varying lengths
61 hrs 18 mins $64.00 $3,923.20 27 General clerk attendances of varying lengths
55 hrs 42 mins $64.00 $3,564.40 138 x 6 min telephone attendance
138 $12.00 $1,656.00 59x12 min telephone attendance 59 $24.00 $1,416.00
I consider that Rule 101.9 required the plaintiffs to lodge and serve a bill in taxable form. The Rules, the second schedule to the Rules and practice direction 15 provide specifically for the content of the bill. A bill in taxable form permits the payee and the taxing master to assess the reasonableness of the claim for each item of work. The short form bill procedure is designed to avoid the delay and expense involved in the preparation of a bill in taxable form. A short form bill is of a different character to a bill in taxable form. It is not a bill lodged for taxation as required by Rule 101.9.
Conclusion
The powers of the master pursuant to R 101.13 arise “on a taxation of costs”. As no bill of costs in taxable form had been lodged in this matter, the taxation of costs had not commenced. For these reasons the appeal must be allowed. The order made by the master on 2 July 2001 is set aside.
LIST OF CITATIONS AS THE APPEAR IN THE JUDGMENT
1 Edmunds v Pickering (1999) 75 SASR 407
2 Smoothpool Nominees Pty Ltd & Anor v Pickering & Ors [2001] SASC 131 at [46]3 Smoothpool Nominees Pty Ltd & Anor v Pickering & Ors [2001] SASC 131 at [20]
4 (1916) 16 SR (NSW) 645 at 6495 No reliance was placed on Supreme Court Rule 101.01(1)(a).
6 SCR 101A.02(6) provides: “(6) In the event that within the period referred to in Rule (4) above no agreement is reached between the parties as to the amount payable or agreement is reached as to part only of the sum which the applicant seeks, the applicant may seek a taxation of the whole of the costs sought or of the costs remaining in dispute (as the case may be) in accordance with the provisions of Rule 101.”
7 Malleson v Williams [1930] VLR 410
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