Quarmby v Oakley and Harper (No 3) - [2014] TASSC 50

[2014] TASSC 50

COURT: SUPREME COURT OF TASMANIA

CITATION: Quarmby v Oakley and Harper (No 3) [2014] TASSC 50

PARTIES:  QUARMBY, Alan
  v
  OAKLEY, Barrie Graeme

QUARMBY, Alan
v
HARPER, Noel Geoffrey

FILE NOS:  155/2002, 171/2002
DELIVERED ON:  8 September 2014
DELIVERED AT:  Hobart
HEARING DATES:  30 June and 8 September 2014
JUDGMENT OF:  Holt AsJ

CATCHWORDS:

Procedure – Costs – Taxation – Review – Principles applicable – In general – Order that plaintiff pay the costs of the action and defendants pay costs of unsuccessful counterclaim – Plaintiff only entitled to costs to the extent that costs increased by reason of the failed counterclaim.

Supreme Court Rules 2000 (Tas), r 868.
Saner v Bilton (1879) 11 Ch D 416, applied.
Aust Dig Procedure [648]

REPRESENTATION:

Counsel:
           Plaintiff:  In person
           Defendant:  Gunson Williams
Solicitors:
           Plaintiff:  In person
           Defendant:  T J Williams

Judgment Number: [2014] TASSC 50
Number of paragraphs: 17

Serial No 50/2014
File Nos 155/2002, 171/2002

ALAN QUARMBY v BARRIE GRAEME OAKLEY
ALAN QUARMBY v NOEL GEOFFREY HARPER

REASONS FOR JUDGMENT HOLT AsJ
(Edited version of judgment delivered orally) 8 September 2014

The plaintiff has applied for a review of a taxation of his bill of costs.
The plaintiff by two actions had sued the two defendants. The defendants filed counterclaims. The actions and the counterclaims were heard together. All of the plaintiff's claims were dismissed. The counterclaims of the defendants succeeded in part, other parts of the counterclaims were dismissed.
The plaintiff was ordered to pay the defendants' costs of the actions and the defendants' costs of counterclaims insofar as they were successful. The defendants were ordered to pay the plaintiff's costs of defending the defendants' counterclaims insofar as they had been dismissed.
The defendants brought in a joint bill of costs. When that bill was taxed the plaintiff was yet to bring in his bill of costs. Certificates of taxation issued in favour of each of the defendants.
Subsequently the plaintiff brought in a joint bill of costs in pursuance of the costs order in his favour. The bill ran to 316 items and totalled $70,339.10.
The plaintiff wanted the taxing officer to simply award a lump sum rather than tax the bill on an item by item basis.
The taxing officer proceeded to tax the bill on an item by item basis. At the end of the first day of the taxation only items numbered 1 – 67 of the bill had been reached. The first 40 items related to work undertaken before the defendants had introduced any of the claims in their counterclaims which were ultimately dismissed. No amount was allowed for these items. Some of the other items in the first 67 items considered by the taxing officer did relate to the failed parts of the counterclaims, but were not solely attributable to the counterclaims. Allowances were made taking into account that the items were not wholly attributable to the failed counterclaims. The total allowed in favour of the plaintiff, up to and including item 67 of his bill, was $314.
The total claimed in items 1 – 67 had been about $6,000. The balance of the bill submitted by the plaintiff was for about $64,000 and was yet to be considered by the taxing officer. A few days later the taxation resumed. Upon the resumption the plaintiff advised the taxing officer that it was not possible to specifically attribute on an item by item basis work relating to the failed counterclaims. The taxing officer, accordingly, disregarded the balance of the items claimed on the bill and taxed the plaintiff's costs in the sum he had arrived at in respect of the first 67 items, namely the sum of $314. He awarded the costs of the taxation to the defendants and assessed those costs. The plaintiff lodged an objection and the taxing officer dismissed the objection, giving written reasons. A certificate issued resulting in the plaintiff being liable to pay to the defendants an amount of about $2,600.
Following the issue of the certificate, the plaintiff applied for a review on the grounds stated in his notice of objection to the taxing officer.
In summary, the grounds, so far as I am able to understand them, are as follows:
1The taxing officer, instead of conducting the taxation consistently with the costs order made, conducted the taxation as if the taxing officer had a discretion, unfettered by the terms of the judge's orders as to costs.
2The taxing officer erred in requiring the plaintiff to directly attribute items claimed in respect of the failed counterclaims before any allowance would be made in respect of them.
3The taxing officer failed to allow costs, charges and expenses necessary or proper for the defence of the failed parts of the counterclaims.
The Court will intervene where the taxing officer has proceeded on a wrong principle, and the Court may intervene where a discretion has not been correctly exercised. Although there were several grounds of objection, and similarly several grounds on the review, such grounds having been separately stated, there is one basic underlying theme, namely that the taxing officer should have undertaken an apportionment exercise based on the totality of the costs of the parties.
Where a plaintiff's claim is dismissed with costs and the defendant's counterclaim is dismissed with costs, the plaintiff is to pay the general costs of the action, and the defendant is to pay the costs of the proceedings insofar as they have been increased by reason of the failed counterclaim. The authority for this proposition is Saner v Bilton (1879) 11 Ch D at 416. This principle, as to how costs consequent upon orders of the type made by the trial judge in the present case are to be taxed, has not been abrogated or modified by any of the rules of court in Tasmania.
The application of the principle set out in Saner v Bilton generates complexity, and so judges sometimes make a percentage order so that the parties are entitled only to a specified percentage of their costs. The form of the costs orders made by the trial judge in this case were advantageous to the defendants. They were entitled to the costs of the action generally, and were subject only to an order requiring them to pay the costs of the plaintiff, which the plaintiff could demonstrate were increased by reason of the failed counterclaims. A percentage or apportionment order, such as an order, for example, that the plaintiff pay 90% of the defendants' costs, and the defendants pay 10% of the plaintiff's costs, or such other apportionment as may have been appropriate, would have simplified the conduct of the taxation. It may have produced a result which was more just so far as the parties were concerned, and would have potentially produced a significantly better result for the plaintiff.
The result, however, was that the taxing officer had no authority to assess costs on a percentage or apportionment basis. The taxing officer, regardless of the complexity of so doing, was required by the terms of the order made by the trial judge to identify the particular work relating to the failed counterclaims which had increased the costs of the plaintiff, and then to assess the amount of any such increase. That is what the taxing officer was doing, and had done in relation to the first 67 items on the bill, until the plaintiff advised him that he could not make the necessary attributions on the balance items claimed in the bill on an item by item basis.
The taxing officer, by insisting that the plaintiff show on an item by item basis the cost increase because of the unsuccessful counterclaims, did not act on a wrong principle. There was no miscarriage of any discretion. The taxing officer did not possess a discretion to tax the bill on a percentage or apportionment basis.
Of the 67 items in the bill which were taxed, there is no contention by the plaintiff that the taxing officer erred in disallowing any particular item or part of an item for failure by the plaintiff to satisfy him that the item was in whole or in part attributable to the failed counterclaims.
For these reasons, the order is that the application to review is dismissed.