Power v Northam Air Services Pty Ltd - [2003] WADC 224

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS

LOCATION: PERTH

CITATION: POWER -v- NORTHAM AIR SERVICES PTY LTD [2003] WADC 224

CORAM: DEPUTY REGISTRAR HARMAN

DELIVERED : 17 SEPTEMBER 2003

FILE NO/S: CIV 4357 of 1997

BETWEEN: ROBERT POWER
Plaintiff
AND
NORTHAM AIR SERVICES PTY LTD (ACN 070 416 661)
Defendant

Catchwords:

Practice - Western Australia - Practice under the Rules of the Supreme Court of Western Australia - Review of taxation - Sufficiency of objections - Getting up case for trial - Disbursement

Legislation:

Nil

Result:

Unsuccessful

Representation:

Counsel:

Plaintiff: No appearance
Defendant: No appearance

Solicitors:

Plaintiff: Phillips Fox
Defendant: Srdarov Richards Burton

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

Grigoletto v Myer Properties WA Limited, unreported; DCt of WA; Library No 3667; 31 March 1993
Smith v Buller (1875) LR 19 Eq 473
Tenbohmer v Eden (1992) 6 WAR 366

Case(s) also cited:

Nil

DEPUTY REGISTRAR HARMAN: The defendant has filed objections to some of the determinations made in the course of taxing its bill of costs.
The first is identified as having being made in relation to item 9 of the bill. It is expressed as follows:
"9.Getting up case for trial $27,000"
No constituent part of the services for which that claim was made was disallowed. The quantum of the claim was determined at $18,000.
The first task is to identify the determination the subject of objection. By the terms of the notice the extent of the defendant's objection to the taxation of that item is described as being "part", the ground as being "error in principle" and the reasons as follows:
"(1)Amount allowed is so low as to suggest error of principle in allowance made: Myer v Grigoletto (unreported, WADC, Heenan DCJ, 31.3.93)
(2)Further, allowance fails to give any or any adequate recognition of the principles (sic) that a successful party has an expectation that costs reasonably incurred ought to be allowed: Tenbohmer v Eden (1992) 6 WAR 366"
The terms by which the first reason is expressed suggest that the objection taken is only to the determination made in relation to quantum.
Jurisdiction to review taxation is provided by r 53. It provides:
"A party who contends that the Taxing Officer has made an error in principle in allowing or disallowing any item or part of an item in a bill of costs taxed by him may, at any time before a certificate of taxation dealing finally with that item is signed, …"
I infer that in order to satisfy the terms of r 53, the defendant would contend that the disallowance the subject of the objection is found in the extent of the reduction made to the amount claimed.
The rule only provides jurisdiction to review errors made in the allowance or disallowance of items or their constituent parts. Determining quantum is the step taken after any such allowance or disallowance has been effected. It is the task of reflecting upon the value of the services for which allowance has been made. There was no disallowance, indeed from memory, none was even sought. The only determination made was in relation to quantum. That determination does not resonate in either allowance or disallowance it is simply the valuation of the services (or parts of the item) for which allowance had already been made. It seems to me that the error contended for could not go to anything other than the quantum determination. I am reinforced in that opinion by the failure of the defendant to articulate any service that was disallowed.
I accept that in Grigoletto v Myer Properties WA Limited, unreported; DCt of WA; Library No 3667; 31 March 1993 the Court found jurisdiction for a judge to review a quantum determination beyond the scope for review expressed in r 55, however on a proper analysis the error isolated in that case went to disallowance of part of the item, namely the time spent for which recovery was disallowed under an item which was expressed to be time rated. Be that as it may, if it was considered desirable to have taxing officers review their own quantum determinations there is no doubt that the obiter comments in Grigoletto would provide some justification for extension beyond the scope for review expressed in r 53. In my opinion there is a significant consideration that militates against that prospect. If the same taxing officer was to be presented with the task of valuing the same services in the same context he ought to come to more or less the same conclusion. I would go so far as to suggest that where the party who carries the onus of establishing error seeks to put exactly the same case then it must fail to discharge that onus. In the absence of consideration being given to some aspect of the case that was not previously presented, I would expect that the plaintiff would be alarmed if any different conclusion could be justified. It is appropriate to record that the defendant also carried the onus at the taxation. As a matter of common sense, whether the first reason advanced for the objection has any validity could only be for someone else to judge.
In any event I would have thought that the test to be satisfied was one that would establish rather than merely suggest error. It is my opinion that the test of any such error would be more appropriately expressed along the lines that no taxing officer acting reasonably could have made the relevant determination.
Further the determination was made after a significant amount of time had been devoted to the taxation of the bill in circumstances where each party had experienced representation and was for two-thirds of the maximum available. It seems to me that of itself an award of two-thirds of the maximum could hardly qualify as reflecting an error of principle. I should add that the fact that I am able to portray the determination by such a tidy relationship with the maximum is coincidental.
Finally it is not as though the defendant puts forward any ground which would suggest that properly considered in the circumstances an award of two-thirds of the maximum was low by any measure.
As to the second reason it is curious that the defendant purports to elevate what at best could be described as a consideration to the level of principle. The touchstone of recovery was expounded in Smith v Buller (1875) LR 19 Eq 473 as being limited to services necessarily provided. The actual cost recoverable for such services is limited to a reasonable level of remuneration.
As in this case the only consideration raised by the objection relates to the quantum of the fee. That determination ought to been made on an objective assessment of what the services were worth bearing in mind the datum provided by the scale. Any different expectation as to how quantum may be assessed even if that expectation it is informed, at best is only a consideration. What the defendant’s expectations may be I could only hazard a guess. It is my understanding that its interest in the action is represented by an entity that operates in an industry comprised of commercial litigators. As much as in this case it would wish to make comprehensive recovery, I imagine that in others it promotes a more considered analysis of the proper extent of recovery.
It is only because courts have failed to both recognise the distinction expressed in the term, the reasonable cost of services necessarily provided and that the qualification "reasonable" relates to quantum not to services that the defendant is able to put the proposition that it seeks to draw from Tenbohmer v Eden (1992) 6 WAR 366. To fail to make the distinction would allow for the prospect of recovery beyond the scope of services necessarily provided. In effect the test of necessity would be abandoned.
I would have thought that in order to justify such a radical departure a court would go to the trouble to conduct some detailed analysis. It is hardly likely that the imagined expectation of a party whether successful or not would provide either any useful guidance or sufficient justification for taking such a step.
Turning to the support provided in Tenbohmer for the proposition on which the defendant relies, the only useful analysis is provided by a limited analysis of r 1. Apart from the expressed conclusion suffering from a logical deficiency, evidently there was a failure to appreciate the circumstances in which the court may see fit to exercise the discretion thereby provided. The unreasonableness to be considered at that point is only likely to be that considered to have been manifested by a party. It would be incidental that any such conduct had any connection with the level at which the costs have been charged to that party for relevant services by its solicitor. I doubt that it would occur to the court to even make enquiry along the lines of the extent to which services had been provided in such a context. It is hardly likely that the level of provision of services would be considered to be relevant in the context of making such a determination. Be that as it may, for the purpose at hand whilst the solicitor may state the claim to quantum, ultimately the issue of reasonableness only attaches to the process of making the quantum determination.
As I have perhaps indicated, if I were to cast about for mere expectations that may properly have an impact on recovery I would have some difficulty in ignoring either the intention of the Court in making the order for costs or what may be considered to be the reasonable expectations of the paying party.
It seems to me that the obiter remarks of the Chief Justice in Tenbohmer are simply part of the clamour heard in the last 20 years or so for comprehensive recovery of the costs of litigation by the successful party. To take such a simplistic approach to the task of taxation would ignore the subtlety that properly attends upon an analysis of the services provided to the successful party.
On a different analysis, I accept the reversal of the onus may be portrayed as the significant feature of an order for indemnity costs. It is my appreciation that at a practical level such is the case. However I suspect that at a philosophical level the justification for such an order is that it is accepted that there is a significant prospect that otherwise there would be less than full recovery.
I appreciate that I may be somewhat out of step with the collective thinking of successful parties, some commentators and many members of the bench but in an era which has seen the profession embrace business practices and the use of new technologies, there is at least as much reason to reflect on the concepts of reasonableness and necessity as ever there was in the past.
What else can be drawn from the terms by which the ground is expressed is difficult to discern. I do not know whether it is the case that the defendant would contend that it has incurred an expense of $27,000 and that should be the end of the matter.
When all is said and done you probably do not need to have been a Rhodes scholar to tax a bill. The considerations to be applied are relatively straightforward. The first step is to consider whether particular services performed by the practitioner were necessarily provided to the client in order to present or meet a case. It is only after such an assessment is made that the reasonable cost of those services considered to have been necessarily provided is required to be evaluated.
Going back to the issue of jurisdiction, it is only provided to review determinations made as to the provision of services. If it is determined that the provision of particular services was not necessary then they would be disallowed and the taxing party would be provided with the opportunity to seek review of that disallowance. In the case of a claim for getting up case, in all probability what would be disallowed would be part of the item for which a claim had been made.
It might be useful to add that in my experience of taxing party and party bills over the last ten years or so, I can recall only two cases where there has been disallowance made of part of the item "getting up case for trial". Rarely is disallowance of part of a claim under the item sought.
It is probably appropriate to respond to the ground by recording that it is for the objecting party to put an objection in clearer terms.
The second objection relates to determinations made in relation to item 33.1 of the bill whereby the defendant sought to recover a disbursement incurred as a consequence of the provision of services to the defendant by a person who was accepted by the plaintiff as having been an expert witness.
The taxation of that claim proceeded upon the analysis of the content of three accounts rendered to the defendant. Those accounts identify the services for which the defendant seeks recovery and the dates of the provision of those services. At the conclusion of each account there is a claim for disbursements and the value of the account expressed as a composite amount. As I recall, at taxation most of the component parts were in issue. Accordingly each service was separately considered.
The first account is dated 25 January 1999. Well before the taxation of the item drew to its conclusion recovery for the cost of all of the services referred to in that account had been abandoned.
The next is dated 23 May 2000. For each service it details the period of time devoted to the provision of that service. The disbursements include a claim for mileage/travel of 11 hours.
Of the services in that account 11 were disallowed, so too was the claim for mileage/travel. The only other significant features of the process were firstly that the parties agreed that the claim for recovery for services provided on 20 April 2000 for three hours would be reduced to 1.5 hours and secondly that the claim recorded for 13 May 1998 was abandoned.
The final account is dated 21 February 2001 it too provides the periods if time over which the services were delivered. In the case of that account because the travel claim is the only basis for recovery of disbursements it is possible to determine that the hourly rate claimed for travel by the witness was in the order of $34. The plaintiff abandoned the claim recorded for 29 January 2001. The defendant accepted the claim of 30 January 2001 for three hours. The balance of the services described in that account were uncontroversial.
After the issue of recovery for the first account fell away I recall that the plaintiff’s concern and the reason for lengthy analysis of the other accounts was for what he considered to be an excessive amount of time devoted to the provision of both particular services and services as a whole. It was the plaintiff’s submission that recovery by the defendant ought to be for considerably less than the proportion of the claim attributable to the second and third accounts made in the bill.
The taxation of the accounts took place over a considerable period of time. I recall that after the defendant had made submissions the taxation was adjourned for the plaintiff's submissions. Upon the resumption of the hearing a fair amount of the information that had already been canvassed by the defendant was put again in the form of a summary. Accordingly the parties had sufficient time available to them to put, and even refine, their submissions as to the complexity of the tasks set for the expert by the defendant and the steps that he took to discharge what he considered to be his responsibilities.
It is fair to say that the plaintiff entertained some doubts as to the accuracy of the periods of time expressed in relation to some of the claims. He was able to demonstrate that in relation to some, there was an inconsistency between the amount of time recorded by the witness and that recorded elsewhere such as in the records of counsel. Furthermore, plaintiff proposed that upon an analysis of some of the services far more time was spent than objectively was warranted. In putting that proposition the plaintiff referred to the issues in the action and the cases of each of the parties. I suppose that the clearest expression of that point is that over the period of three days immediately before the trial claims were made for 23 hours.
I had the opportunity to review the reports of the experts of each of the parties and the analysis that the defendant's expert made for counsel. It was my opinion that significant effort had been expended by the witness upon the request of the defendant for assistance. At various points of the litigation, particularly close to trial that assistance extended to reliance upon the witness' expertise for the purposes of preparation.
It was not my opinion that the case was so technically difficult that the defendant’s representation demanded that degree of assistance. I accept that the defendant had a different view and that it was motivated to succeed in the action. Nonetheless, there is a limit to the scope of recovery under the order for the defendant's costs.
The reasons advanced for the contention of an error in principle are as follows:

"Item Extent of Ground Reasons

in bill objection

33.1Part Error in
principle(1) Amount allowed is so low in the possible range as to suggest error in the exercise of the discretion: Grigoletto v Myers Properties (op cit)
(2)The amount is so low as to suggest an allowance which no taxing officer properly exercising his discretion could make: Mossensons v Coastline Associates (unreported, Full Court, WASC, Lib No 970661, 2.12.92); Associated Provincial Picture Houses v Wednesbury Corporation [1948] 1 KB 223.
(3)The allowance is inadequate in failing to make any or any adequate allowance for the services of the expert in:
• preparing a report to the defendant's solicitors
• drawing a responsive statement to the expert's statement for the plaintiff
• qualifying to give evidence for the defendant
• 'refreshing' to give evidence for the defendant
• attending at the offices of the plaintiff's solicitors twice for the purposes of examining a proposed exhibit in the presence of the plaintiff's expert
• conferring with counsel before both parts of the trial
• carrying out 61 discrete tasks
Further and in the alternative:
(4)The allowance of 5 hours is flawed, even on the approach of the taxing officer, in that:
(a)the plaintiff acknowledged an allowance of 1 hour for each way travelling by Mr Wilson was not excessive;
(b)therefore at least an additional 18 hours for travel should be allowed for
(i)giving evidence 29.1.01 (2 hrs travel)
(ii)Phillips Fox (x 2) (4 hrs travel)
(iii)conference Srdarov Richards Burton on 24.1.00 (2 hrs travel)
(iv)further conference at Srdarov Richards Burton on 9.2.00 (2 hrs travel)
(v)conference Srdarov Richards Burton on 20.4.00 (2 hrs travel)
(vi)conference with Richard McCormack on 22.4.00 (2 hrs travel)
(vii)conference with Richard McCormack on 24.4.00 (2 hrs travel)
(viii)conference with Richard McCormack on 23.1.01 (2 hrs travel)

[Total travelling time = 18 hours]

These attendances alone account for 18 hours x $110 per hour
TOTAL 18 hours = $1980.00

Preparation of report
13.4.00     8 hours     $880.00
Advice on plaintiff's expert reports and witness statements
Nov 992 hours (scrutinise plaintiff's expert report)  $220.00
23.1.006 hours (responding to substance of expert evidence of aircraft engineer)      $660.00
April 001 hour (scrutinise further updated substance of expert evidence from plaintiff's expert)   $110.00
2 hours (scrutinise plaintiff's witness statements – Skeet, Peake, Burrows, Powers and Bailey)
$220.00

TOTAL: 11 hours $1210.00
Additional services
2.11.991 hr Documents for Srdarov Richards Burton - $110.00

*24.1.005.1hrs Conferences at Srdarov Richards Burton - $561.00
*9.2.003 hrs    Conference at Srdarov Richards Burton - $330.00
14.2.008 hrs    Scrutinise substance of own expert statement - $880.00
21.2.000.25     Correspondence – Srdarov Richards Burton - $27.50
13.4.001 hr     Scrutinise Watson proof - $110.00
*24.4.003 hrs    Conference with Richard McCormack (part allowed) - $330.00
TOTAL 21.35 hrs $2348.50
* = travel"

In Grigoletto the Court was considering a quantum determination made against the datum provided by the scale. The relevant determination in this case was upon an analysis of the accounts themselves, the evidence and information provided by the parties in relation to matters such as records of attendances, written opinions and the like. Significantly it was made in the absence of a scale. Although I accept that the defendant contends that the amount determined is low or indeed "so low as to suggest error" that cannot be as a result of a comparison between the amount determined and the manner prescribed in any scale as implicitly it proposes in the objection. On a proper analysis Grigoletto has no application.
The next basis for the allegation of error is put along broader lines but ultimately only goes to quantum. I have nothing more to add to what I have already outlined on that subject in relation to the objection to the first item the subject of the notice.
The terms of the third reason for objection portray the result as a failure to allow for particular services alternatively an inadequate allowance for those services. I presume that the reason why the defendant has chosen to not identify those services is that in reality the issue is not a failure to allow but rather as the phrase "or make adequate allowance" suggests, that there is simply a difference of opinion as to the quantum determination. The compelling reason for making that assumption is that even in the absence of such identification I am satisfied that it was not the case that the plaintiff had sought to have the sort of services identified by the objection disallowed. They broadly describe the services that both parties and I considered founded the claim for recovery. The only exception to that proposition is the last point expressed in the ground. Absent are any of the tasks accumulated at that point being identified I can say nothing useful other than that the onus is on the defendant. Being professionally represented, in drawing the objection in such a meaningless way it is properly taken to have been aware that it was wasting both its time and mine.
If I am correct and the intention of the defendant was to contest quantum then I rely on the observations that I have already made as to the process adopted for dealing with the claim. In essence the determination was made after the submissions were put, and they were made at length. I will leave the assessment as to whether the determination was short of the mark for others to judge.
If I am wrong then the defendant has failed to identify either the services described in the objection by reference to the accounts or the error the subject of objection.
The fourth reason provided in support of the ground is difficult to reconcile with the relevant determinations. Be that as it may it is clear from (a) and (b) that the defendant would contend that allowance should have been made for 18 hours of travel.
Even on the case put by the defendant the witness was not seeking remuneration at something in the order of $200 per hour. Accordingly I assume that the five hours nominated by the defendant, as the allowance made is an error in the notice.
Before dealing with what appear to be the propositions put at (a) and (b) I will examine some of the relevant detail provided. Paragraph (b)(i) identifies travel on 29 January 2001. The only services provided on that date are contained in the third account. As I have already recorded, the claim for reimbursement of the cost of that service was abandoned. It is difficult to understand how it is that the defendant could seriously advance any case for recovery for related travel. Further the information contained in (b)(ii) to (vii) inclusive suggests that appropriate recovery would be had for a total 14 hours. However over the same period the witness claimed for only 11 hours. Furthermore, the only point at which it is possible to discern the hourly rate for travel is for the claim made in the third account. At that point the witness articulates the claim at around $34 not $110 per hour.
The bulk of the claims for the journeys identified in 4(b) were the subject of the disallowance of the 11 hours claimed for travel in the second account. On an analysis of the services articulated in that account there is no way of knowing which of them was the subject of a related claim for travel. Conceivably each one that identified the provision of services by reference to an attendance at the office of an identified person involved travel. Where a claim is subject to a contest and the taxing officer is called upon to make a determination, consideration is properly given to where the onus lies and whether it has been discharged. Following the analysis that I have just suggested it may be that for the services rendered in the second account, on up to ten occasions the witness travelled for the total period of 20 hours, yet he claimed for only 11 hours.
Furthermore, simply on the basis of how the claim was expressed in the accounts, once one or more of the claims that would appear to call for travel were disallowed it became inevitable that the defendant would have a difficulty in discharging the onus.
Even if the concession made by the plaintiff had been made prior to the disallowance of the travel claim it would not have been of much assistance as there was sufficient uncertainty in my mind as to how the 11 hours nominated in the second account related to the services therein described. By way of illustration, although it was disallowed, the claim for 26 April 2000 for six hours was for the first day of trial. I accept that strictly speaking as against the defendant, the witness may not have considered that he was constrained in billing the defendant by the hours devoted to trial on that day. According to the Associates record, it was for 4.25 hours. It is conceivable that no part of the 11 hours travel claimed was in respect of that day as the travel claim had already been included in the six hours. Another illustration is for the services provided on 20 April 2000, a consultation at the office of the defendant's solicitor. I have already referred to discrepancies between the accounting of the witness and records of others. In this instance the difference was 1.5 hours, again conceivably accounted for by travel time.
It was my opinion that the defendant simply had not discharged the onus to enable me to make either any separate allowance for the travel claim or otherwise provide for significant recovery for travel. That said, in determining quantum I did recognise that the that plaintiff had made the concession and that in all probability the witness would have been required to travel from time to time.
It is not as if the defendant complains that I failed to accord to the defendant the opportunity to provide further information in relation to the claim. The fact that the taxation at the point of dealing with the claim was adjourned at least once would have given it at least the opportunity to do so. In any event I have no reason to doubt that once the issue of recovery for travel at 11 hours was put in issue and at least to me presented as a difficulty, in accordance with my usual practice I would have given the defendant the opportunity to clarify the claim with the witness.
Whilst the determination was reflected in disallowance that was not because I was not satisfied as to the cost had been incurred but rather because I considered that it was not recoverable under the terms of the order. As I have recorded the defendant simply failed to satisfy the onus.
Returning to the qualification that I expressed as to the plaintiff's concession, it was made in the context of assessing quantum after the disallowance had been affected.
What I take to be the next part of the objection seems to lack something in its expression. That part commences at the words "Preparation of report". It is difficult to reconcile the objection from that point onwards with the opening words of reason (4). It appears to be the intention of the defendant to focus upon particular services for which evidently it seeks to emphatically state a claim for recovery either at a particular level or at all. I accept that the services were provided, that the defendant was satisfied with the performance of the witness in providing them and has paid the invoices. Other than to the extent of the disallowances recorded each of the claims were allowed.
Similar comment may be directed at the material appearing after the words "Additional services" expressed at the fourth reason. In this case however the detail at that point includes a mixture of claims that were and were not allowed. Those disallowed were expressed as dated 2 November 1999 and 21 February 2000. Briefly each failed because in my opinion to allow them would exceed the proper scope of recovery under the order for costs.
The first was expressed in the account as being to source and supply documents to the defendant's solicitor. The defendant did not satisfy me that it was appropriate to allow for recovery for engagement of the witness in that exercise. It is not appropriate for some allowance to be made effectively for getting up on the basis that had the witness not sourced the documents the solicitor would have undertaken that task. Taxation is the process of recovery for services rendered. It is not part of that task to reconstitute services for the purpose of facilitating recovery.
The second was for correspondence of confirmation to the defendant's solicitor. There was no basis to allow for recovery for that correspondence under the order for costs.
In relation to the claim for 24 February 2000 it is suggested that it was in part allowed. It was claimed as the cost of a conference with the defendant's counsel for seven hours on that day. On investigation being undertaken by the defendant it transpired that counsel's note was for 3.5 hours. According to my note there was no concession by either party and no determination other than to the effect that on the day there had been a conference held with counsel. Beyond satisfying me of that fact the onus was not discharged
Otherwise I really do not know what to make of the latter parts of the fourth reason. The objection was filed on 20 May 2003 and it is now considerably later in the year. That is unfortunate but at least it has given the parties sufficient time to consider whether they wish to address or to promote the objection. In the absence of there being any listing of the review, I considered that it was appropriate to review the objections as they had been filed.
In my opinion there is no reason to interfere with either of the determinations the subject of the defendant's notice.