Quarmby v Oakley and Harper (No 2)
[2013] TASSC 32
•12 July 2013
[2013] TASSC 32
COURT: SUPREME COURT OF TASMANIA
CITATION: Quarmby v Oakley and Harper (No 2) [2013] TASSC 32
PARTIES: QUARMBY, Alan
v
OAKLEY, Barrie Graeme
and
QUARMBY, Alan
v
HARPER, Noel Geoffrey
FILE NOS 155/2002 and 171/2002
DELIVERED ON: 12 July 2013
DELIVERED AT: Hobart
HEARING DATES: 3 and 4 July 2013
JUDGMENT OF: Holt AsJ
CATCHWORDS:
Procedure – Costs – Taxation – Review – Principles applicable – In general – Review confined to contents of notice of objection before taxing officer.
Supreme Court Rules 2000 (Tas), r868.
Sanders v Snell (No 2) [2000] 174 ALR 53, followed.
Aust Dig Procedure [650]
REPRESENTATION:
Counsel:
Plaintiff: In person
Defendants: T J Williams
Solicitors:
Plaintiff: In person
Defendants: Gunson Williams
Judgment Number: [2013] TASSC
Number of paragraphs: 16
Serial No 13/2013
File Nos 155/2002171/2002
ALAN QUARMBY v BARRIE GRAEME OAKLEY
ALAN QUARMBY v NOEL GEOFFREY HARPER
REASONS FOR JUDGMENT HOLT AsJ
12 July 2013
The plaintiff has applied for a review of a taxation of costs.
It is useful to begin by giving a brief explanation of the context in which such an application is usually brought. The context is as follows:
·The court has a discretionary power to award the costs of court proceedings to a party and usually makes such an award in favour of the successful party.
·The assessment of the amount of the costs recoverable under the award is conducted by a court officer. The assessment process is called a taxation and the officer undertaking the process is called a taxing officer. These terms are of long standing, but perhaps now might be regarded as anachronistic.
·Unless otherwise specified in the order awarding costs, only those items of cost or expenditure which the party, in whose favour the award has been made, can demonstrate were necessary or proper for the attainment of justice will be recoverable. The amount allowed for the recoverable items will be in accordance with the Court's scale of costs and fees or, if there are special circumstances justifying it, such greater amount as is reasonable. Such costs are known as party and party costs and unless the order awarding costs otherwise specifies the taxation is conducted on a party and party basis.
·In awarding costs a court may order that the costs are to be taxed on a solicitor and client basis. This means that when the taxing officer considers whether an item claimed will be allowed the test will be whether it was reasonable to incur the cost or expense rather than whether the incursion of the cost or expense was necessary or proper for the attainment of justice. The amount assessed on each recoverable item will simply be such amount as is reasonable. An award of solicitor and client costs is distinguishable from an award for indemnity costs on the basis that, although the test for both is reasonableness, on a solicitor and client taxation the onus remains on the party in whose favour the award has been made to establish reasonableness, whereas on an indemnity taxation the onus is on the party against whom the award has been made to demonstrate that the cost or expenditure was unreasonable.
·In order to recover the costs awarded the successful party must file a bill of costs in which each item of cost or expenditure is separately identified and numbered.
·At the taxation, the party against whom the award has been made may concede items so that the taxing officer is only required to consider the balance. The consideration may be undertaken on an item-by-item basis or it may be undertaken on groups of items where a determination will necessarily dictate the outcome of the dispute in relation to all of the items in the group.
·The taxation is a summary process and the rules do not oblige the taxing officer to give reasons for each determination made in the course of the taxation.
·At the conclusion of the taxation, the taxing officer is to state the amount recoverable in a certificate and the issue of the certificate ends the roll of the taxing officer.
·The certificate must not issue before the parties have had a chance to object to any allowance or disallowance made by the taxing officer.
·An objection must be in writing and must specify in concise form each item or part of an item which is the subject of the objection and must specify the grounds for the objection. The taxing officer must then reconsider the items, the subject of the notice of objection, before issuing a final certificate of taxation. Although the reconsideration will usually be confined to the grounds stated in the notice of objection the onus does not change from that applicable at the original taxation. Pending the hearing of the objection the taxing officer may issue an interim certificate for the items which were not the subject of objection and when that has been done no further challenge on such items can be made to the taxing officer.
·On the hearing of an objection a party may put further evidence before the taxing officer. The taxing officer, if asked to do so, must give written reasons for the decision on the matter the subject of an objection, with such reasons to be incorporated with the final certificate which issues following the hearing of the objection.
·A party dissatisfied with the decision on an objection may apply to a judge to review the taxation as to all or any of the items the subject of the objection on the grounds stated in the objection. Unless the judge otherwise directs, the review is to be determined on the same evidence which was before the taxing officer.
A taxing officer, in taxing a bill of costs, is undertaking a function of the court by virtue of the delegated authority given by the rules. It follows that the court has jurisdiction to review what has been done by its delegate independently of the rules. However, this does not mean that rules will lightly be ignored, and so generally a party applying for a review will be bound by the contents of the notice of objection. This is made clear in Garrard v Email Furniture Pty Ltd (1993) 32 NSWLR 662 where Mahoney AP said at 680 – 681:
"At least three matters require consideration: (a) the power of a judge to review the certificate; (b) whether that power has been included by the Rules; and (c) whether the judge may deal with items not the subject of objection before the taxing officer.
(a) Under the general law it is an incident of the nature of the taxing officer's power that it be subject to review by a judge. The office of taxing costs is, under the general law, 'the business of the court itself'. It has delegated that office to one of its officers, but 'the Court has necessarily jurisdiction to control this delegated authority, and therefore, a right to review' what is done: Sandback Charity Trustees v North Staffordshire Railway Company (1877) 3 QBD 1 at 4-5; see also Re McMillan (1905) 5 SR (NSW) 350 at 362; Schweppes' Ltd v Archer (1934) 34 SR(NSW) 178 at 18351 WN (NSW) 71 at 72-73; Saddington, Taxation of Costs Between Parties (1919) at 116-117.
(b) The Supreme Court Rules provide for taxation (Pt 52) and for review (Pt 52, r 62). On one construction, the power of review given by r 62 is based on the assumption that a 'reconsideration' of his previous rulings has taken place (r 62(1)). In the present case, there was no reconsideration and it is arguable that r 60 and r 61 do not envisage reconsideration where a certificate of taxation has followed a failure to file a notice of objection. If the Rules be intended to provide exhaustively the procedure for reconsideration or review, it may therefore be that no review by a judge is available.
I do not think that the Rules exclude the inherent right of the court to review what its officers have done on taxation: see generally, Woolf v Snipe (1933) 48 CLR 677 at 678-679. It is important that the rules of a court be enforced but, to adapt what was said by Thesiger LJ in Tildesley v Harper (1878) 10 Ch D 393 at 397, that 'may be done at too great a price': see Commissioner for Railways v Bielewicz (at 468; 792). It is open to the court, even retrospectively, to set aside some at least of the effects of the rules: it would be open to the judge in this case to make such orders as may be necessary to allow the items to be reviewed: cf Pt 1, r 12.
(c) It remains to consider whether the judge, on such a review, would reconsider items which had not been the subject of a notice of objection at taxing officer level. It has been frequently said that, on such a review, a party is 'strictly tied to the objections made by him to the taxing master and answered by the latter': Mentors, Ltd v Evans [1912] 3 KB 174 at 178. This was applied by Webb J in Sundell v Queensland Housing Commission (1954) 94 CLR 531 at 533. But this rule is, of course, subject to the circumstances of the case. Thus, for example, where the signing of the certificate of taxation was 'irregular', the court felt able to consider items not dealt with in a notice of objection: see Australian Coaland Shale Employees' Federation v The Commonwealth (1953) 94 CLR 621 at 624 et seq. In this case, if it was otherwise proper to extend the time for filing a notice of objection, the judge would, I think, have allowed the items to be reviewed although the notice of objection was not filed and considered by the taxing officer."
Upon an application to review, following objection, a court will intervene where a taxing officer has proceeded on a wrong principle. In cases where the determination of an objection calls only for the exercise of a discretion a court will generally only intervene where the discretion has not been exercised at all or has been exercised in a way which is manifestly wrong. This principle is set out in Sanders v Snell (No 2) (2000) 174 ALR 53 where Kirby J said at par[11]:
"My powers in conducting this review are confined to those proper to judicial review of an administrative decision. The review contemplated by O 71 r 89(1) of the High Court Rules is not a hearing de novo of the decisions of the court's taxing officer. The ordinary principles governing the review of administrative decisions and, in particular, those in the nature of decisions concerning practice or procedure, apply. See Australian Coal and Shale Employees’ Federation v Commonwealth (1956) 94 CLR 621. In that case, Kitto J adopted as a correct summary of the law an opinion expressed in the Supreme Court of New South Wales by Jordan CJ, delivered with the concurrence of Harvey CJ in Eq, and of Street J in Schweppes’ Ltd v Archer (1934) 34 SR (NSW) 178 ; 51 WN (NSW) 71. In that case, Jordan CJ said:
In appeals as to costs, the principles to be applied are these. The court will always review a decision of a taxing officer where it is contended that he has proceeded upon a wrong principle, for the purpose of determining the principle which should be applied; and an error in principle may occur both in determining whether an item should be allowed and in determining how much should be allowed. Where no principle is involved, and the question is, whether the taxing officer has correctly exercised a discretion which he possesses and is purporting to exercise, the court is reluctant to interfere. It has undoubted jurisdiction to review the taxing officer's decision even where an exercise of discretion only is involved, and will do so freely on a proper case, using its own knowledge of the circumstances, but it will in general interfere only where the discretion appears not to have been exercised at all, or to have been exercised in a matter which is manifestly wrong; and where the question is one of amount only, will do so only in an extreme case.
It was common ground between the parties that this statement of principle should guide me in conducting the present review. I agree with this submission."
Before turning to the notice of objection lodged by the plaintiff it is appropriate to provide a short background. This case was essentially concerned with a dispute between the plaintiff and the defendants over a narrow strip of land running between land owned by the plaintiff and two blocks of land respectively owned by each of the two defendants. The defendants' blocks were created by subdivision and the strip was left in the name of the original subdivider. This was the result of an error at the time of subdivision. The parts of this strip adjacent to each of the defendants blocks of land should have formed part of their titles. The plaintiff claimed to be entitled to occupy this strip of land, but the basis of the claim was never made clear. The defendants applied to the Recorder of Titles to have their boundaries rectified. They had engaged a surveyor who pegged out the land and this is where the dispute began. In January 2002 the defendants lodged their application. The Recorder of Titles approved the application and the title boundaries were consequentially amended in October 2004. Before and after the amendments there were minor altercations between the plaintiff and the defendants on or near to the disputed strip of land. In 2002 the plaintiff issued writs against each of the defendants claiming damages for various assaults and trespasses. The pleadings were amended from time-to-time to include new claims up until shortly before the trial in 2011. The defendants by their counterclaims claimed damages for trespasses committed by the plaintiff and claimed injunctive relief.
All of the plaintiff's claims were dismissed, as he never had title to the disputed strip of land. The defendants' claims failed in respect of incidents occurring before their titles were amended in October 2004. The defendants had prosecuted the earlier claims on the basis that they were entitled to possession of the land. Post October 2004 claims made by one of the defendants were upheld where the evidence supported findings that the plaintiff had entered the land. Both defendants were successful in obtaining injunctive relief preventing further incursions by the plaintiff.
The following orders were made as to costs:
"1 The plaintiff pay each defendant's taxed costs of the action against the defendant, and the defendant's counterclaim against the plaintiff insofar as it succeeded against the plaintiff, including the cost of an incidental to serving an endorsed order pursuant to r883, to be taxed on a party and party basis until 9 October 2009, and thereafter to be taxed on a solicitor and client basis.
2 In respect of the costs and out-of-pocket expenses of any service provided for the purposes of both No 155 of 2002 and No 171 of 2002, it is to be apportioned between them.
3 Each defendant is to pay the plaintiff's taxed costs of defending the defendant's counterclaim insofar as it has been dismissed. The taxation is to be on a party and party basis."
The costs of the defendants were taxed as a single bill and apportioned equally between them. Following the hearing of the plaintiff's objection, final certificates were issued in favour of each of the defendants in the sum of $68,004.27 plus a taxing fee of $2,000. This resulted in the total payable by the plaintiff being $136,008.54 plus a taxing fee of $4,000
Prior to the issue of the certificates the plaintiff lodged a notice of objection in each action in identical terms. The notices, insofar as they were advanced by the plaintiff on the hearing of the application to review, were confined to three grounds which, in broad terms, were as follows:
(1)It was contrary to principle to allow to the defendants items in respect of issues, whether canvassed in defence of the plaintiff's claim or canvassed in support of the counterclaims, upon which the defendants did not succeed. The plaintiff claimed that the primary issue in the dispute was the defendants' "failed claim of prior possession". I take this as a reference to the dismissal of the defendants' allegations of trespass prior to the title amendments in 2004.
(2)Only one of the defendants succeeded in his claim for damages for trespass. Two trespasses were found to have occurred and the damages awarded were $400. The plaintiff contended that the amount allowed on the recoverable items of the bill of costs should have been reduced to reflect the small amount of damages awarded.
(3)The amount of the final certificates should have been reduced by allowing a set-off of the plaintiff's costs of successfully defending the trespass claims on which the defendants failed.
As to the first ground of objection, the learned trial judge framed the costs orders so that the costs followed the success or failure of the various claims for relief rather than the success or failure of the parties on particular issues. If costs were to be recovered only on issues on which the defendants succeeded a special order would have been necessary. For example, an order awarding the defendants only a proportionate part of their costs of defending the plaintiff's claim and pursuing the successful parts of their counterclaim.
Although speaking in the context of appeals, the principles are as expressed in Sanders v Snell (No 2) (supra) where Kirby J said at pars[14] to [15]:
"This court might, in a particular case, make a special order as to costs. It sometimes does so, usually in pursuance of argument advanced at the hearing or reserved for further and separate hearing following the determination of the proceedings. Such an order could reflect a view that a party had wasted the court's time in arguing needless or futile points, or had succeeded on part only of the matters put in issue by the appeal: cf Wickstead v Browne (1992) 30 NSWLR 1 at 19. Alternatively, a special order might be made on the basis that particular costs should be disallowed, for example, where appeal papers have been needlessly prepared and costs of that kind imprudently incurred.
Usually, however, the orders made by a Full Court are, as here, in perfectly general terms. This is the practice followed by Full Courts in this and other Australian appellate courts out of recognition of the fact that the appellant needs to bring the appeal to secure relief and, without a successful appeal, will be bound by the orders that have been made below. Usually, then, taxation is left to the discretion of the taxing officer acting within the ambit of the appellate court's orders. It is not usual for the court to specify that costs will only be payable in respect of particular issues. Accordingly, it is not usual or appropriate for a taxing officer to proceed in such a nice way, unless there are good and exceptional reasons in the particular case to do so. The marginal expense of calculating the costs of arguing particular issues, themes, ideas, facts, cases or arguments will ordinarily be outweighed by the inutility of doing so."
The costs orders having been made in general terms, the taxing officer did not err in declining to attempt to divide the case into a multiplicity of issues and then endeavouring to determine success or failure on the issues. He may have had a discretion to do so, especially where expenditure on issues ought to have been recognised as going to a futility, or arising from unnecessary zeal, but was not obliged to exercise it. Expenditure on lost issues was not clearly identifiable as unnecessary waste and so, in my view, the taxing officer was plainly right in declining to embark on an analysis of the merits of particular issues raised by the parties in the course of the litigation.
The objection based on the ground that the costs awarded should have been reflective of the small amount of damages recovered on the successful trespass claims was rejected by the taxing officer. If the claim for damages for trespass was the only claim between the parties there would be merit in this ground. Such claims would normally not be prosecuted in the Supreme Court and would usually attract taxation on a significantly lower cost scale than the scale used by the taxing officer in this case. However, it was the plaintiff who commenced the proceedings in the Supreme Court. The primary counterclaim of the defendants was for injunctive relief. The history of the altercations between the plaintiff and the defendants was relevant to the consideration of whether or not injunctive relief was needed. The taxing officer made no error in declining to reduce the amounts claimed on the basis that the damages recovered were small.
The plaintiff's claim to a set-off was misconceived. He had not filed a bill of costs, as he could have done under the third costs order made by the learned trial judge. Until he filed such a bill and it was taxed there was no ascertainable amount to be set-off. The taxing officer made no error in failing to allow a set-off for the plaintiff's recoverable costs.
There were other matters advanced on the hearing of the applications to review which were not the subject of the notices of objection, nor the subject of reconsideration prior to the issue of the final certificates. No submissions were advanced to justify allowing the review to extend beyond the contents of the notices of objection. There was nothing in the additional matters put by the plaintiff which would cause me to think that he would or might suffer an injustice if confined to his objections. Accordingly, I decline to deal with the other matters.
The application to review in each of the two actions is dismissed.
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