R v Hanrahan - [2006] WADC 74

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION: PERTH

CITATION: R -v- HANRAHAN [2006] WADC 74

CORAM: MCCANN DCJ

HEARD: 12 APRIL 2006

DELIVERED : 18 MAY 2006

FILE NO/S: CIV 1650 of 2003

BETWEEN: JOHN PETER PAUL SMITH by his Next Friend RONALD KEVIN SMITH
Plaintiff
AND
MARK ALSTON HANRAHAN
Defendant

Catchwords:

Practice and procedure - Costs - Special order as to getting up case for trial - Turns on own facts

Costs - Taxation of solicitor-client costs of next friend

Legislation:

Legal Practice Act 2003, s 210(2), s 215(1) and (2), s 221, s 222, s 232, s 235
Legal Practitioners Act 1893, s 58W, s 58ZB, s 59, s 66, s 66A
Public Trustee Act 1941, s 37

Rules of the Supreme Court, O66, r 24(3), r 47(1)

Result:

Special order made - Limit for getting up case for trial lifted to $94,664.83

Representation:

Counsel:

Plaintiff:     Mr C Phillips
Defendant:     Mr J R Brooksby
Amicus Curiae              :     Ms N Oldfield on behalf of the Chief Executive Officer of the Department of Attorney General

Solicitors:

Plaintiff:     Chris Phillips
Defendant:     Greenland Brooksby
Amicus Curiae              :     State Solicitor

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

Collins v Westralian Sands Ltd (1993) 9 WAR 56
Esther Investments Pty Ltd v Markalinga Pty Ltd (1992) 8 WAR 400
Featherstone (by his next Friend Angela Featherstone) v Weststar Engineering Pty Ltd & Ors [1999] WADC 139
Halligan v Lawson (1993) 9 SR (WA) 166
Penfold v Quinn [2000] WADC 115
SDS Corporation Ltd v Pasdonnay Pty Ltd & Anor [2004] WASC 26 (S2)
Smith by his Next Friend Ronald Kevin Smith v Hanrahan [2006] WADC 20
Steeden v Walden [1910] 2 Ch 393

Case(s) also cited:

Schmidt v Gilmore [1998] WAR 219

MCCANN DCJ: By summons dated 7 March 2006 the plaintiff by his next friend ("the plaintiff") seeks the following orders:
"1.The Defendant to pay $45,533 to the Public Trustee on the same terms as the settlement sum.
2.The Defendant do pay the Plaintiff's costs of the action including independent counsel's fees to be taxed.
3.Pursuant to O 66, r 11 SCR and the Determinations of the Legal Costs Committee 1996 and following, and s 215 of the Legal Practitioner's Act the limit set for item 16 in the 2004 Legal Costs Determination 'Getting up Case for Trial' is increased to $94,664.83.
4.The Defendant pay the Plaintiff's costs of interrogatories delivered by the Plaintiff to the Defendant.
5.The Solicitor and Client Bill of Costs of the Plaintiff and of the Next Friend, Ronald Kevin Smith of and incidental to the conduct of this action be taxed under the Rules of the Supreme Court, order 66, rule 24 on the Costs Determination in force from time to time except in the case of the fees of Chris Phillips which are to be taxed on the basis of the terms of the Client/Lawyer Agreement for costs between the Plaintiff and/or the Next Friend and his Solicitor dated 21/10/99 as amended 1/7/00, 14/9/01 and 3/12/04, subject to the Taxing Officer's discretion as to the reasonable rates and items allowable.
6.The Next Friend, Ronald Kevin Smith be indemnified out of the funds from the judgement sum held by the Public Trustee on behalf of the Plaintiff for costs reasonably and properly incurred by him of and incidental to the institution and conduct of this action and the Public Trustee do pay the Solicitor and Client Costs of the Plaintiff and/or the Next Friend as taxed from the moneys held on behalf of the Plaintiff.
7.The costs of this application be paid by the Defendant to the Plaintiff.
8.On payment by the Defendant of the amount set out in Order 1 and the Plaintiff's costs the Defendant be discharged from any further liability in this action.
9.The parties have liberty to apply on any issue."
The application comes before the Court as follows. By orders made on 1 July 2005 Her Honour French DCJ approved the compromise of the plaintiff's action whereby the defendant agreed to pay the plaintiff the sum of $1,325,000 ("the settlement sum") in addition to agreed special damages. I have set out further details of the action below. The plaintiff's application for an order that the defendant pay the plaintiff's costs of the action to be taxed (including the costs of independent counsel) was adjourned sine die with liberty to apply. The plaintiff's summons is brought pursuant to that liberty to apply and is supported by an affidavit of Christopher Leigh Phillips sworn on 7 March 2006. The plaintiff is seeking orders in relation to party‑party costs (pars 2, 3, 4 and 7) and solicitor-client costs (pars 5 and 6). The purpose of par 1 of the application is set out in par 10 below.
The Public Trustee sought and obtained leave to be heard. Ms N Oldfield provided a written outline of submissions and also appeared on behalf of the Public Trustee.

Summary of the proceedings

The plaintiff's action arose from a traffic accident on 21 January 1998. The plaintiff was crossing Old Coast Road at Eaton near Bunbury in Western Australia when he was struck by a motor vehicle driven by the defendant. The plaintiff suffered severe and irreversible brain injuries. He has significant mental disabilities including severe and permanent dementia and cognitive deficit causing memory loss, inability to communicate, inability to self‑care and aggressive and inappropriate behavioural problems. The plaintiff has resided in a secure ward at Graylands Hospital since July 1999 and will remain in that ward for the balance of his life.
On 16 June 2000 the plaintiff's next friend in this action, Ronald Kevin Smith, was appointed his administrator pursuant to an administration order made under s 64(1) of the Guardianship and Administration Act 1990. In accordance with the Court's orders, the settlement sum (less disbursements) will be held on protective trust for the plaintiff by the Public Trustee.
Initially the plaintiff was represented by Mr David Smith and the plaintiff's injuries were not believed to be severely debilitating. However he suffered a brain haemorrhage and underwent further operations, resulting in the significant disability that he now suffers. Mr Phillips took over the conduct of the plaintiff's claim in June 1999.
A summary of the proceedings in this Court is set out in Mr Phillips' affidavit. There was a substantive issue between the parties in relation to contributory negligence on the plaintiff's part. At an early stage apportionment was agreed between the parties on a 50 per cent : 50 per cent basis. However, I understand that an issue then arose as to whether the agreement was binding and ultimately the matter was compromised on the basis of a 40 per cent reduction for contributory negligence. The issue in relation to contributory negligence required investigations to be made, and evidence gathered, in relation to the circumstances of the traffic accident and the parties' degree of fault.
As I understand it, the principal issues in relation to quantum were as follows. First, the nature and degree of the plaintiff's pre‑accident mental capacity and, in particular, whether he suffered any impairment due to alcoholism. Second, the assessment of quantum (and ultimately the agreement in relation to the same) was complicated by regular escalations in the cost of the plaintiff's care at Graylands Hospital. Third, the parties were in dispute as to the plaintiff's life expectancy.
Mr Phillips has set out the lengthy course of the settlement negotiations (including pre‑trial conferences) in his affidavit and I do not intend to repeat what he said. A listing conference took place on 29 November 2004 and the matter was listed for trial in June 2005. Settlement in relation to liability was achieved after an informal conference between the parties in April 2005 and the settlement in relation to quantum was achieved after another informal conference on 19 May 2005. Thus, the matter settled a short time before the trial was scheduled to commence. The settlement was subject to the approval of the Court and the resolution of an issue concerning the damages that should be awarded to the plaintiff for administration, management and investment fees and charges incurred by the Public Trustee in respect of the plaintiff's protective trust. The plaintiff's application for leave to compromise his claim was filed on 27 June 2005 and was supported by an affidavit which annexed numerous documents. This included documents obtained from the WA Police Service's file, medical reports and other documents in relation to quantum, witness statements in relation to quantum, correspondence between the parties' solicitors and three opinions of independent counsel, namely Mr Mark Herron, dated 18 February 2003, 10 May 2005 and 30 May 2005.
The orders made by her Honour Judge French on 1 July 2005 included liberty to apply for a determination of the damages payable in respect of the Public Trustee's fees and charges for the administration and management of the plaintiff's trust. That matter was heard by myself on 8 September 2005 and judgment was delivered on 24 February 2006 whereby the plaintiff was awarded the sum of $48,533 (Smith by his Next Friend Ronald Kevin Smith v Hanrahan [2006] WADC 20). I proposed that an order be made that the damages be paid to the Public Trustee on the same terms as the settlement sum and the plaintiff seeks an order in those terms in par 1 of the chamber summons.
I propose to deal firstly with pars 2, 3, 4 and 7 of the chamber summons, that is to say, with the plaintiff's application in relation to party‑party costs. There is no dispute that the plaintiff is entitled to the costs of the action, including the reasonable costs of independent counsel. The issues are whether the statutorily prescribed limit upon the amount that can be allowed for getting up case for trial should be increased, and whether the plaintiff should be entitled to the costs of interrogatories that he administered to the defendant.

Taxation of party‑party costs – relevant principles

Pursuant to s 58W of the new repealed Legal Practitioners Act 1893 ("the 1893 Act") and s 210(2) of the Legal Practice Act 2003 ("the 2003 Act") a Legal Costs Committee could make "legal costs determinations" regulating the remuneration of legal practitioners in respect of, inter alia, contentious business carried out by practitioners in, or for, the purpose of proceedings before the District Court. Pursuant to s 58ZB of the 1893 Act and s 215(1) of the 2003 Act, and subject (relevantly) to s 59 of the 1893 Act and s 221 of the 2003 Act, the taxation of bills of costs of legal practitioners as between solicitor and client or party and party was regulated by any legal cost determination in force. Section 215(2) of the 2003 Act provides as follows:
"Despite subsection (1), if a court or judicial officer is of the opinion that the amount of costs allowable in respect of a matter under a legal costs determination is inadequate because of the unusual difficulty, complexity or importance of the matter, the court or officer may do all or any of the following –
(a)order the payment of costs above those fixed by the determination;
(b)fix higher limits of costs than those fixed in the determination;
(c)remove limits on costs fixed in the determination;
(d)make any order or give any direction for the purposes of enabling costs above those in the determination to be ordered or taxed."
Determinations of the Legal Costs Committee relevant to this matter have been in force since 1 February 1997. New determinations were made from time to time with effect from 1 July 1999, 1 June 2002 and 1 July 2004. The amount allowed for getting up case for trial and the relevant item numbers under the scales of costs were as follows:
·1 February 1997‑30 June 1999: (item 13): $27,000.
·1 July 1999‑31 May 2002: (item 13): $27,000.
·1 June 2002‑30 June 2004: (item 13): $31,300.
·1 July 2004‑the present: item 16: $34,100.
So far as interrogatories are concerned (which I understand from Mr Phillips' affidavit were first administered in or about November 2001), pursuant to the Legal Practitioners (Supreme Court) Contentious Business Report 1999, a maximum allowance of $1,350 was fixed under item 10(a) of the scale of Costs. Pursuant to O 66, r 47(1) of the Rules of the Supreme Court, the position is that the plaintiff's right to the costs of interrogatories are reserved for the consideration of the trial judge and in the absence of a trial such costs are in the discretion of the taxing officer. Since there has not been a trial in this matter (or at least not in relation to the issues canvassed by the interrogatories) it is my view that the question of the costs falls within the discretion of the taxing officer and it is not necessary for me to decide that issue.
Referring to the party and party costs of getting up for trial, in my view the plaintiff's right to his costs will accrue upon the making of the orders in this application (see SDS Corporation Ltd v Pasdonnay Pty Ltd & Anor [2004] WASC 26 (S2) at par 99‑100 per Roberts‑Smith J). Accordingly the 2003 Act applies to the taxation of those costs and unless the plaintiff can obtain a special costs order pursuant to s 215(2) of the Act, the maximum amount that can be allowed on taxation in respect of getting up case for trial is $34,100. It has been held that to obtain a special costs order pursuant to s 215(2) it must be shown that the amount of costs allowable under a legal costs determination is inadequate because of the unusual difficulty, or the complexity, or the importance of the matter (see SDS Corporation Ltd v Pasdonnay Pty Ltd & Anor at [106] per Roberts‑Smith J). It is a matter for judgment of the Court as to whether the amount of work done by the legal representatives of the plaintiff has been reasonably done so as to constitute good and sufficient reason for the making of a special order as to costs (see Esther Investments Pty Ltd v Markalinga Pty Ltd (1992) 8 WAR 400 at 404 per Malcolm CJ). The assessment of a judge making an order for special costs is preliminary and provisional and is not binding on the taxing officer (see Collins v Westralian Sands Ltd (1993) 9 WAR 56 at 64 and 68). It is usual and indeed desirable for an applicant for a special costs order to adduce affidavit evidence addressing the unusual difficulty, the complexity or the importance of the matter (as the case may be), and the inadequacy of the cost limits provided for in the costs scales.

The evidence

Mr Phillips has annexed a number of documents to his affidavit. Annexures A, B, C, D, E and F relate to the solicitor/client agreements that Mr Phillips and the plaintiff's next friend entered into from time to time. Annexure G1 is a draft of the party/party bill of costs for taxation. This claims an amount for getting up case for trial of $94,664.83. That sum includes an allowance for Mr Smith of $6,310 and for Mr Herron of $16,065. Therefore, $72,289.83 relates to getting up performed by Mr Phillips. Annexure H comprises a detailed itemisation of all or the work performed by Mr Phillips on the plaintiff's behalf. Annexure H 2 is a print‑out of all of Mr Phillips' timesheets relating to getting up case. This annexure comprises 48 pages. The amount claimed in respect of each item of work is set out and the total including GST is $72, 289.83. The itemised timesheets are summarised in annexure H 1 as follows:
1.Proofing 11 lay witnesses and actions related thereto: 14.83 hours ‑ $3,933.97
2.Perusing defendant's documents, whether court documents or expert documents or otherwise, but not correspondence: 4.53 hours ‑ $1,290.92
3.Inspecting and considering police file (60 pages) and correspondence with police and related actions: 6.73 hours ‑ $1,526.73
4.Inspecting and considering Graylands Hospital notes (over 200 pages) and correspondence with Graylands and related actions: 4.2 hours ‑ $1,212.14
5.Arrangements for trial program and witnesses for trial and subpoenas, 24 witnesses potentially plus Dr Higham's notes: 25.92 hours ‑ $7,845.04
6.Preparing sundry court documents including preparing special damages schedule and resolving issues with the Health Insurance Commission and the Insurance Commission of Western Australia regarding special damages: 12.73 hours ‑ $3,567.69
7.Briefing counsel (337 pages) and reviewing counsel's advices (121 pages): 37.05 hours ‑ $9,517.41
8.Conferences including telephone conferences with counsel: 14.03 hours ‑ $4,208.88
9.Correspondence and telephone and in‑person conferences and communications with client and advice to client: 39.32 hours ‑ $11,305.61
10.Questioning and instructing experts (8), the Public Trustee, hospitals other than Graylands Hospital, investigators, and related actions: 16.35 hours ‑ $4,521.67
11.Perusing reports of experts and investigators Apgar (18 pages), Howe (1 page), Daly (23 pages), Dival (8 pages), Watson (10 pages), Chan (2 pages), Gurgo (2 pages), Foung (14 pages): 4.77 hours ‑ $1,274.16
12.Communications with defendants by telephone and correspondence including perusing and considering correspondence from defendants: 19.02 hours ‑ $5,739.25
13.Managing file (this includes all items not otherwise specified such as planning, reviewing file, organising sums repayable, assessing damages, reviewing offers, managing costs, dealing with the Guardianship and Administration Board, paying accounts, making notes to file, recording issues to clarify from time to time, searching for evidence, considering whether further discovery should be given and when, considering how to fill gaps in evidence, arranging copying of documents at Court at Perth, cancelling court and all witnesses after issues for trial settled, reviewing issues for trial): 48.8 hours ‑ $13,565.59
14.Research law – 1.92 hours ‑ $618.64
15.Arranging trial as to single issue of Administrative Fees (see also items 10 and 11 re Public Trustee's evidence): 8.28 hours ‑ $2,702.16
Sub total: 254.43 hours ‑ $72,829.86
Less deduction for item 2‑next friend‑ ($540)
Total: $72,289.86
Mr Phillips' solicitor‑client costs and summaries in relation to the same are set out in annexure I. Mr Herron's memoranda of fees are set out in annexures K 1 ($5,500 in respect of the hearings before French DCJ and myself) and K 2 ($19,800 for all other work performed by Mr Herron in relation to various items of the draft bill of costs, including getting up). Annexure K 3 is a letter from Mr Herron to Mr Phillips summarising the work performed by Mr Herron. Annexure L is a letter from Mr Smith to Mr Phillips dated 5 September 2005 which attaches a list of the cost items which Mr Smith believe to be claimable in respect of work which he performed. The itemisation is detailed and the total amount claimed is $6,310.

The merits of the plaintiff's application

The evidence annexed to Mr Phillips' affidavit in relation to getting up the case for trial discloses that an enormous amount of work was performed in relation to this aspect of the matter. There were at least three significant issues between the parties. It was necessary for Mr Phillips to engage in numerous evidentiary enquiries and the preparations for trial were time consuming. In summary the work performed by the plaintiff's solicitors and counsel included proofing witnesses, following up complex medical issues, briefing counsel, providing multiple opinions (including detailed advice in relation to the compromise application) liaising with a large number of witnesses, and assessing the quantum of the plaintiff's damages. The inability of the plaintiff himself to provide instructions on issues such as contributory negligence, his current disability, and the level of his pre‑accident disability necessitated careful and comprehensive preparation on his behalf. I am satisfied on the evidence that the getting up of the plaintiff's case was unusually difficult.

Having considered the material set out in Mr Phillips' affidavit and the affidavit material (including the opinions of counsel) that was filed in support of the application for leave to compromise, I am satisfied that a special costs order should be made pursuant to s 215(2) of the 2003 Act on the ground of the unusual difficulty of this matter increasing the limit allowed under the relevant cost scale for getting up case for trial to $94,664.83. I stress that this is only a provisional view of the matter and only forecloses argument on one issue, that is to say the adequacy of the limit provided in the scale ($34,100). It remains for the taxing officer to form the ultimate view as to what work was or was not reasonable, and the proper allowance to be made for that work.

The plaintiff's solicitor‑client costs

I turn now to the orders sought in pars 5 and 6 of the chamber summons. These relate to Mr Phillips' intention to charge the plaintiff for fees and disbursements on a solicitor-client basis in accordance with the written cost agreements which were entered into by the plaintiff's next friend and Mr Phillips from time to time. For the most part Mr Smith's, Mr Herron's and Mr Phillips' entitlement to remuneration will be covered by the costs payable by the defendant on a party‑party basis, because much of the work which could be properly remunerated pursuant to one or more of the written cost agreements will also be recoverable on a party‑party basis. However, Mr Phillips apprehends that there may be a shortfall between the costs which are allowed on a party‑party basis, and the costs which he contends would be properly payable on a solicitor‑client basis pursuant to the cost agreements. Hence he seeks the orders in pars 5 and 6 of the summons. Meanwhile the Public Trustee seeks rulings on the following issues:
1.Where there is a cost agreement between a solicitor and a next friend, can the solicitor and client costs be taxed pursuant to the Legal Practice Act 2003 in the alternative to taxed pursuant to the scale of fees prescribed by the Rules of the Supreme Court 1971?
2.If the answer to question 1 is Yes, can the solicitor and client costs be agreed?
3.Can the solicitor and client costs be determined pursuant to O 66, r 12(3) of the Rules of the Supreme Court as an alternative to taxation pursuant to O 66, r 24.
The orders which Mr Phillips seeks are similar to the orders made by Blaxell DCJ (as his Honour then was) in Featherstone (by his next friend Angela Featherstone) v Weststar Engineering Pty Ltd & Ors [1999] WADC 139. That matter came before his Honour by way of appeal from certain rulings which were made by a taxing officer during the taxation of the plaintiff's solicitor‑client bill of costs. The plaintiff was a person under a disability and was represented by his next friend who had entered into a cost agreement with the plaintiff's solicitors. One of the grounds of appeal concerned the taxing officer's ruling that this Court had no jurisdiction to tax the solicitor‑client bill of costs because the cost agreement was not binding on the plaintiff. Blaxell DCJ upheld the solicitors' appeal and ruled that the cost agreement was binding on the plaintiff and that the Court had jurisdiction to tax the solicitor‑client bill of costs. His Honour cited the following dicta from the judgment of Eve J in Steeden v Walden [1910] 2 Ch 393 at 399:
"[A plaintiff under a disability]…is prima face liable to indemnify the next friend against costs properly incurred on his behalf, and that such liability ought to, and will, be enforced in all cases where the court is satisfied that the litigation has been prompted by motives of benevolence towards (the plaintiff), and has been conducted in his interest and with diligence and propriety".
Blaxell DCJ stated [par 22] that the "fact that a next friend enters into a cost agreement does not of itself mean that this right to indemnity is lost. The right to indemnity will only be affected if by doing so the next friend has failed to comply with the test in Steeden as set out above". His Honour then cited the decision of Kennedy DCJ (as her Honour then was) of this Court in Halligan v Lawson (1993) 9 SR (WA) 166 as being an example of a case in which a next friend had properly incurred costs on behalf of the plaintiff pursuant to a cost agreement.
In Featherstone Blaxell DCJ held that on the facts it was "clearly in the plaintiff's best interests for the next friend to enter into the relevant cost agreement. There would have been insuperable difficulties in pursuing the action on his own, and given his lack of means and the disbursements that were being incurred, the cost agreement offered the only reasonable means of securing legal representation. Furthermore, his solicitors went to considerable lengths to ensure that his next friend fully understood and appreciated the consequences of the costs agreement prior to asking her to sign it".
Thus, in Featherstone, the plaintiff was held to be liable to indemnify the next friend for costs incurred pursuant to the costs agreement and those costs were taxable in this Court.
Returning to the matter before me, I am satisfied that this litigation has been prompted and conducted by the next friend out of motives of benevolence towards the plaintiff and has been conducted in his interests and with diligence and propriety, to use the test in Steeden. Accordingly, in my opinion, the next friend is entitled to be indemnified out of the plaintiff's property (and, in particular, the settlement sum) for the costs that the next friend has incurred in this matter.
I am also satisfied that it was in the plaintiff's best interests for the next friend to enter into the costs agreements with Mr Phillips. In that regard, I take into account the following factors.
-Each agreement was in a form approved by the Law Society of Western Australia.
-The range of hourly rates chargeable pursuant to the agreements (to a maximum of $330 including GST) was reasonable.
-Mr Phillips provided the next friend with regular updates and revisions of his estimated liability for costs, and the likely recoverability of the same. That information included Mr Phillips' view that he expected approximately two‑thirds of the total costs payable pursuant to the agreements to be recoverable on a party‑party basis. I say nothing as to the accuracy of that estimate, but point it out to underline that the next friend was clearly informed that there might be a significant differential between the costs which the plaintiff recovered from the defendant and the total of the costs which were payable by the next friend on the plaintiff's behalf.
-As I have said, the conduct of the plaintiff's case involved an extensive amount of work. In such a case it is not unreasonable for a legal practitioner to only agree to act on behalf of a plaintiff who might not otherwise be able to afford legal representation on the basis that the solicitor‑client costs will be subject to a cost agreement. There are safeguards to ensure that any costs ultimately payable by the plaintiff out of his own funds (that is in addition to any amount recovered from the defendant) are reasonable (see pars 33 and 34 below).
-The next friend has voiced no concern in relation to the conduct of the plaintiff's affairs by Mr Phillips or any of his legal advisors and no challenge was made to the reasonableness of the cost agreement pursuant to s 59(5) of the 1893 Act 1893 or s 222 of the 2003 Act.
Accordingly, in my view it is appropriate that the plaintiff's legal fees (the amount which the next friend will be indemnified out of the plaintiff's trust) be charged in accordance with the cost agreements which lawfully prevailed from time to time between Mr Phillips and the next friend.
It follows that the Public Trustee can be obliged to disburse the appropriate amount to the next friend or at the next friend's direction (i.e. to the solicitor).
I turn now to the first two issues raised by the Public Trustee, namely whether the solicitor‑client costs can be taxed in accordance with the cost agreement pursuant to the 2003 Act (in the alternative to being taxed pursuant to the relevant cost scales), and whether they can be agreed without recourse to taxation.
Order 66, r 24 of the Rules of the Supreme Court contemplates that the costs must be taxed. It provides (inter alia) that:
"(3)Except as provided by paragraph (4), the costs payable to a solicitor by or on behalf of a plaintiff who is a person under disability or from any money recovered by or on behalf of a person under disability in any proceedings to which this Rule applies being the costs of or incidental to those proceedings or consequent thereon, must be taxed; and no costs shall be charged or retained by the solicitor of any plaintiff in respect of those proceedings except the amount of such taxed costs.
(4)This rule does not apply where the plaintiff's solicitor does not claim additional costs against his client over and above the party and party costs, as ascertained by taxation or the agreement of the defendant, payable to the client in the proceedings".
Section 37 (5) of the Public Trustee Act 1941 appears to contemplate that taxation of costs must occur in every case. It provides as follows:
"Nothing in this section shall prejudice the lien of a solicitor for any costs which have been allowed by a taxing officer of the Supreme Court or the Magistrate's Court as solicitor and client costs. No costs other than those allowed in such taxation shall be payable to any solicitor".
Section 37 relates to the investment of moneys under the control of the Public Trustee or subject to any order of the Court in relation to the Public Trustee (see subs (1)). It has been held that s 37(1) of the Public Trustee Act only applies to moneys which the Court retains under its continuing supervision and control and does not affect the Court's powers pursuant to the provisions of the Rules of the Supreme Court which deal with the disbursal of moneys awarded to a person under a disability (see par 33 of my earlier Reasons for Decision). In my view sub‑section (5) is only intended to apply to the moneys referred to in sub‑section (1). Accordingly sub‑section (5) is of limited assistance in the matter before me.
Section 59(1) of the 1893 Act and s 221 of the 2003 Act entitled a solicitor to make a cost agreement with a client. Section 59(5) and s 222 of each Act permit the Supreme Court to review a cost agreement and if it considers the agreement to be unreasonable to reduce the amount payable under the agreement or cancel the cost agreement. Section 66 of the 1893 Act and s 232 of the 2003 Act provided that a person charged with an itemised bill of costs may require the same to be taxed by a taxing officer of the Supreme Court. Section 66A of the 1893 Act and s 235 of the 2003 Act directed that when taxing an itemised bill of costs, the taxing officer must give effect to any cost agreement made as to the costs specified in the bill.
In my view, nothing in the legislative arrangements pursuant to either the 1893 Act or the 2003 Act prevented a next friend from entering into a cost agreement with a solicitor on behalf of a person under a disability and for the costs payable to the solicitor there‑under to be subject to the taxation provisions of the Acts. The Acts provided two significant safeguards for both the next friend and the person under a disability, namely the right to have the reasonableness (and hence the enforceability) of the cost agreement determined by the Supreme Court, and the right to have any bill rendered pursuant to the cost agreement to be taxed.
Therefore, in my view, the first question asked by the Public Trustee can be answered in the affirmative, that is to say the plaintiff's solicitor‑client costs in this matter can be taxed pursuant to the 2003 Act in accordance with the cost agreements between Mr Phillips and the next friend, but the taxation must take place in the Supreme Court in accordance with the procedures provided in that Act (see ss 230‑235) which confer rights upon the client similar to those which prevailed under the 1893 Act, or pursuant to o 66, r 24(3) of the Rules of the Supreme Court, to which I now turn.
The second question raised by the Public Trustee is whether the solicitor and client costs can be agreed between the next friend and/or Public Trustee on the one hand and the solicitor on the other. This Court has held on at least three occasions that effect must be given to O 66, r 24(3) of the Rules of the Supreme Court and that a solicitor's costs in excess of party‑party costs must be taxed. (See Halligan v Lawson (supra) per Kennedy DCJ at p 171, Featherstone v Weststar Engineering Pty Ltd (supra) at par 7 and Penfold v Quinn [2000] WADC 115 per Yeats DCJ at par 10). In Featherstone, Blaxell DCJ held as follows (par 25):
"[W]here there has been a costs agreement between the next friend and the plaintiff's solicitor ss 58ZB and 59 of the Legal Practitioners Act have the combined effect of requiring that the relevant solicitor‑client costs be taxed in accordance with that agreement. The right of the person charged (under s 66 of the Legal Practitioners Act) to have solicitor‑client costs taxed by a taxing officer of the Supreme Court does not in any way impinge upon the jurisdiction of the District Court under O 66, r 24(3)".
So, under the 1893 Act, the requirement to have the solicitor‑client costs taxed pursuant to O 66, r 24(3) was not affected in any way by the provisions of the 1893 Act. These cases all pre‑dated the repeal of the 1893 Act and its replacement with the 2003 Act. The issue which arises is whether the former requirement to have costs in excess of party‑party costs taxed was affected by the legislative changes.
Section 215(4) of the 2003 Act provides that if a legal cost determination is in force under s 210 in respect of business in this Court, "any other subsidiary legislation fixing or purporting to regulate the remuneration of legal practitioners in respect of that kind of business is of no force or effect". In my opinion this provision does not apply to, or affect, the application of O 66, r 24(3). That rule imposes a requirement upon a solicitor for a person under a disability to have his costs taxed. It is not a provision which fixes the remuneration of the legal practitioner; nor does it regulate the actual remuneration. It needs to be borne in mind that s 215 of the 2003 Act is a provision concerned with the regulation of the quantum of remuneration paid to legal practitioners. Order 66, r 24(3) is concerned with a different matter, that is to say the safe‑guarding of the interests of persons under a disability by ensuring that the amounts payable on their behalf are supervised by the Court. This is consistent with the historical, supervisory role of the Court referred to in par 31 of my earlier Reasons for Decision. Accordingly, in my view, the force and effect of O 66, r 24(3) was not affected by the repeal of the 1893 Act and the enactment of the 2003 Act. Therefore, in my view the second question raised by the Public Trustee should be answered in the negative, that is to say, the solicitor‑client costs payable by the plaintiff can not be agreed and must be taxed in this Court, unless the plaintiff elects to exercise his right to taxation of the costs in the Supreme Court pursuant to the 2003 Act.
A countervailing view was postulated for the Court's consideration in the Public Trustee's submissions. It is to the following effect:
"If a person holding funds as trustee for a [person under a disability] (for example, the Public Trustee) is approached by the …next friend for payment of recovered legal costs incidental to proceedings undertaken on behalf of the [person under a disability], then the Public Trustee would prima facie be obliged to indemnify him. If those costs were claimed pursuant to a costs agreement then the Public Trustee could have the agreement reviewed and/or the costs taxed pursuant to the Legal Practice Act 2003. If, however the Public Trustee were satisfied that the costs were reasonably incurred pursuant to the costs agreement, then the Public Trustee could pay those costs pursuant to the Legal Practice Act 2003 without requiring taxation pursuant to O 66, r 24".
In my view, this submission ought not be accepted for the following reasons. The submission appears to accept that o 66, r 24(3) of the Rules of the Supreme Court, is not ultra vires the 2003 Act and must be given effect. Moreover, the provisions of the 2003 Act, which provide for the review of cost agreements and/or the taxation of costs were also contained in the 1893 Act. As I have said, it has been held on several occasions in this Court that it is still necessary for the costs to be taxed under o 66, r 24(3) (see par 36 above). Although it is correct to state that the Public Trustee as the plaintiff's protective trustee is required to indemnify the next friend, the indemnity is out of the plaintiff's funds.
Accordingly, in answer to questions 1 and 2 raised by the Public Trustee in respect of the summons before me, any costs claimed from the plaintiff in addition to any party‑party costs that may be paid by the defendant must be taxed, and such taxation must be in accordance with the cost agreement between Mr Phillips and the next friend.
I move on now to the third issue raised by the Public Trustee, namely whether the solicitor‑client costs can be determined pursuant to O 66, r 12(3) as an alternative to taxation pursuant to O 66, r 24. In my view, this question is purely hypothetical since the plaintiff's application does not seek to have costs awarded on a lump sum basis. Accordingly, it is not necessary for me to answer this question.

Conclusion

For these reasons I am prepared to make orders in terms of pars 1, 2, 3, 5, 6, 7and 9 of the plaintiff's application. I am not satisfied that there is any need for an order in terms of par 8.