Re Freehill Hollingdale & Page's Bill of Costs

[1997] QSC 78

IN THE SUPREME COURT

OF QUEENSLAND  Misc. No. 10606 of 1996

Brisbane

Before the Hon. Mr Justice Lee

[Re Freehill Hollingdale & Page's Bill of Costs]

IN THE MATTER of the Legal Practitioners Act 1995

- and -

IN THE MATTER of a Bill of Costs between Messrs Freehill Hollingdale & Page against J A Pty Ltd and/or Otterton Investments Pty Ltd

- and -

IN THE MATTER of an agreement for lease between J A Pty Ltd and Otterton Investments Pty Ltd and Sam Coco Pty Ltd

- and -

IN THE MATTER of other miscellaneous matters

REASONS FOR JUDGMENT - W C LEE J

Judgment delivered 08/05/1997

CATCHWORDS:     COSTS - TAXATION - Right of third parties to taxation of a Bill of Costs - Whether Court order required, or whether third party may apply for appointment to Taxing Officer as of course.

SOLICITORS - COSTS - TAXATION - Right of third parties to taxation of a Bill of Costs - Whether Court order required, or whether third party may apply for appointment to Taxing Officer as of course.

WORDS & PHRASES - "Reference to taxation" - ss.7, 8, 13 Legal Practitioners Act 1995, R.S.C. O.91 rr.39, 88.

ss.7, 8, 13 Legal Practitioners Act 1995 considered.

COUNSEL:Mr G. Robinson for the applicant

Mr. K.A. Barlow for the respondent

SOLICITORS:          Melville McGregor for the applicant

Freehill Hollingdale and Page for the respondent

HEARING DATE:    17th March, 1997

IN THE SUPREME COURT

OF QUEENSLAND  Misc. No. 10606 of 1996

Brisbane

Before the Hon. Mr Justice Lee

[Re Freehill Hollingdale & Page's Bill of Costs]

IN THE MATTER of the Legal Practitioners Act 1995

- and -

IN THE MATTER of a Bill of Costs between Messrs Freehill Hollingdale & Page against J A Pty Ltd and/or Otterton Investments Pty Ltd

- and -

IN THE MATTER of an agreement for lease between J A Pty Ltd and Otterton Investments Pty Ltd and Sam Coco Pty Ltd

- and -

IN THE MATTER of other miscellaneous matters

REASONS FOR JUDGMENT - W.C. LEE J.

Delivered the 8th day of May, 1997

This application seeks to alter a practice which the Taxing Officer of this Court states has been adopted for many years, with respect to the taxation of a Bill of Costs at the instance of a third party, i.e. a party not chargeable with the bill. The Taxing Officer refused to tax the bill without an order of the Court referring the bill to taxation pursuant to s.8 of the Legal Practitioners Act 1995 ("the Act"), whereas the applicant contends that it was entitled to merely obtain an appointment for taxation pursuant to s.7 of the Act, without an order of the Court.

By miscellaneous summons filed 21st February 1997, the applicant, Sam Coco Pty Ltd, seeks the following orders:-

"(1)The decision of the Taxing Officer that the applicant, Sam Coco Pty Ltd, could not obtain a taxation as of right be set aside and in lieu thereof there be an order directing the Taxing Officer to tax the bill of the respondent's solicitors, Freehill Hollingdale & Page;

(2)In the alternative, that the Court refer the Bill of Costs of Freehill Hollingdale & Page for taxation;

(3)Such further or other orders as to the Court seems appropriate."

The application is brought pursuant to the inherent power of the Court to supervise its officers.  No substantive submissions were made by the respondent, Freehill Hollingdale & Page (solicitors for the lessor, Otterton Investments Pty Ltd, the party chargeable with the bill), who simply left the matter to the Court.  This was the same approach before the Taxing Officer.  Before me, the respondent sought a certificate under the Appeal Cost Funds Act 1973 should the application be successful.  Reference will be made to that application subsequently.

The applicant is the lessee of premises and was, in accordance with the lease, obliged to pay the lessor's legal costs associated with the preparation of the lease and certain other costs which had been incurred by the respondent on behalf of the lessor. No material was placed before the Taxing Officer concerning the terms of the lease but he acted on the assumption that the lease contained a term obliging the applicant to pay the relevant costs. The relevant agreement has now been exhibited before me. Clause 9.3 thereof makes the position clear. The applicant, not being the party chargeable, is nevertheless "liable to pay" the bill within the meaning of s.13 of the Act: Re Gray [1901] Ch. 239; Re Negus [1895] 1 Ch.73.

From the affidavit of Stephen Mark Cardwell, a solicitor for the respondent, filed on 14th March 1997, and the affidavit of Douglas John McGregor, solicitor for the applicant, filed 21st February 1997, the following chronology appears:-

1. Bills were progressively delivered by the respondent to the lessor from 7th April 1994.  The final bill was delivered on 31st July 1996.  The total claimed was $15,102.25.

1. On or about 3rd April 1996 the lessors served on the applicant a notice to remedy breach of covenant pursuant to 1.24 of the Property Law Act, by paying to the landlords the amount of $13,496.50 on account of the lessors' costs.  This is part of the above costs.

1. On or about 20th November 1996, following certain disputes between the applicant and the lessors, the solicitors for the respondent served a "renewed" notice to remedy breach requiring the tenant to pay the sum of $15,102.25 on account of the landlord's legal costs and expenses for the period 20th January 1994 to 31st July 1996.  Annexed thereto was an unsigned photocopy of a Bill of Costs "which was provided by way of explanation of the lump sum bills which had been delivered to the landlords for that period". That annexure is in identical form to the Bill of Costs filed in this Court.  The bill is directed to the lessor as the party chargeable.

1. On 13th December 1996 the solicitors for the applicant filed the unsigned copy of the bill in the Court to which was attached in the correct form, the appointment for directions which was set for 22nd January 1997: 0.91 r.40.

1. On 20th January 1997, the applicant filed detailed objections to various items in the bill.

1. On 22nd January 1997 the parties appeared before the Taxing Officer who ruled that he did not have jurisdiction to proceed.

1. On 29th January 1997, the Taxing Officer delivered his reasons for decision (Exhibit "DJN2" to the affidavit of Mr McGregor).

It will be noticed that the unsigned bill delivered on 20th November 1996 accompanied by the renewed Form 7, was not subscribed by the respondent in accordance with the requirements of s.5 of the Act (formerly s.22 of the Costs Act 1867). This means that strictly it was not a "bill" within the meaning of the Act such that the solicitor could not sue their client to whom it was directed, for the fees and costs contained within it. However, it is clear from the decision of White J. in Re R.G. Kilner & Black's Bills of Costs [1997] 1 Qd.R. 188 that the requirement of subscription of the bill itself by the solicitor rendering it may be waived by the client if the client seeks taxation. See Her Honour's judgment at 197 and the reference to Re Gedye (1851) 14 Beav. 56; 51 E.R. 208, and In re Pender (1846) 8 Beav. 299; 41 E.R. 868. Her Honour also pointed out the distinction between the provisions of s.5 of the Act (s.22 of the Costs Act 1867) and the Solicitors Act (Eng) of 1843 (6 and 7 Victoriae Ch.73).  The English Act allowed the subscription-

"...to be on the bill itself or 'be enclosed in or accompanied by a letter subscribed in a like manner referring to such bill.'"

The latter provision does not appear in the Queensland legislation which requires the bill itself to be subscribed.  It is not sufficient that the "renewed" notice to remedy breach, which accompanied the bill, was subscribed by the solicitors and referred to the attached bill.  However, it is clear from the above authorities and also Young  v.  Walker (1847) 16 M & W 446; 153 E.R. 1264, that the requirement of subscription is for the benefit of the client and may be waived by the client. There is no reason why the third party, liable to pay the bill (but who is not the client chargeable with the bill) may not also waive the requirement of subscription. It has done so by filing the bill for taxation and seeking an appointment for directions on 13th December 1996, by filing objections on 20th January 1997, by appearing before the Taxing Officer on 22nd January 1997 and arguing that the Taxing Officer should proceed with the taxation, and by this application.

The applicant's primary submission was that under s.13 of the Act (formerly s.30 of the Costs Act 1867), the applicant third party (being a party not chargeable with the bill), has the same rights in every respect of taxation as those of a solicitor's own client (the party chargeable with the bill) viz. the right simply to seek an appointment for taxation without an order of a Judge where the appointment was sought within one month of delivery of the relevant bill. It was further submitted that the alleged identical rights of a third party were recognised in the Solicitors Act 1843 (Eng) which was, so the submission proceeded, identical in all relevant respects with the Costs Act 1867 and the Act, both of which followed the 1843 Act. In these circumstances, it was submitted that the Taxing Officer was bound to tax the bill as he would have been obliged to do had the client lessor filed the bill and not the third party lessee.

It should be observed that the respondent lessor in this case did not avail itself of the procedure for obtaining, pursuant to s.7 of the Act, taxation of bills within one month of delivery of the last bill to it on 31st July 1996 claiming a total of $15,102.25, without an order of a Judge. Nor was any such attempt made by the applicant with respect to the demand in Form 10 delivered to it on or about 3rd April 1996 claiming the sum of $13,496.50 on account of the total costs of the lessor. However no such time problem would now appear to exist with regard to the detailed bill delivered 20th November 1996 (the subscription of which has been waived), because it was filed in the Court on 13th December 1996, well within the one month period after it was delivered.

Before considering the English legislation referred to, it is appropriate to consider the current Queensland legislation.

Section 13 of the Act provides as follows:-

"Third parties applying for taxation

13.(1)Where any person not the party chargeable with any such bill within the meaning of sections 5 to 12 shall be liable to pay or shall have paid such bill either to the attorney the attorney's executor administrator or assignee or the trustee of the attorney's estate or to the party chargeable with such bill as aforesaid it shall be lawful for such person the person's executor administrator or assignee or the trustee of the person's estate to make such application for a reference for the taxation and settlement of such bill as the party chargeable therewith might make.

(2)And the same reference and order shall be made thereupon and the same course pursued in all respects as if such application was made by the party so chargeable with such bill as aforesaid.

(3)However, in case such application is made when under the provision herein contained a reference is not authorised to be made except under special circumstances it shall be lawful for the court or judge to whom such application shall be made to take into consideration any additional special circumstances applicable to the person making such application although such circumstances might not be applicable to the party so chargeable with the said bill as aforesaid if the person was the party making the application." (emphasis added)

It was said that the words in s.13(1), reinforced by the words in s.13(2), (both of which were contained in s.30 of the Costs Act 1867), clearly supported the applicant's contention. The relevant words are:-

"...it shall be lawful for such person...to make such application for a reference for the taxation and settlement of such bill as the party chargeable therewith might make."

It may immediately be noted that what is authorised in s.13(1) is the making of "such application for a reference for the taxation and settlement of such bill as the party chargeable therewith might make", and that s.13(2) provides that "the same reference and order shall be made thereon and the same course pursued in all respects as if such application was made by the party...chargeable...", which prima facie suggests an application to and order by the Court or a Judge. Section 13 does not by its terms authorise any other method by which a third party (i.e. a person not chargeable with the bill) may apply for or seek taxation of a bill. However, as the Taxing Officer pointed out in his reasons, it is necessary to refer to other sections of the Act to see precisely what rights were granted by the legislation to a party chargeable with the bill (i.e. the lessor in this case).

Sections 7 and 8 of the Act provide:-

"Taxation of bills within a month

7.(1)Upon the application of the party chargeable by such bill within such month an appointment for taxation of the same may be obtained as of course and without order of a judge -

(a)from the master in equity in case the whole of the business contained in such bill shall have been transacted in the Supreme Court in its equitable jurisdiction or in any matter of lunacy or shall relate to conveyancing business; and

(b)from the judge in insolvency in case of the whole of such business contained in such bill shall have been transacted in the Supreme Court in its insolvency jurisdiction; and

(c)from the prothonotary of the Supreme Court in every other case including criminal business and though the business or part of the business contained in such bill shall not have been transacted in the Supreme Court.

(2)And thereupon such bill and the demand of such attorney executor administrator trustee or assignee shall be taxed and settled by such officer without any money being brought into court.

(3)And the Supreme Court or a judge thereof shall restrain such attorney or executor administrator or assignee of such attorney or the trustee of the attorney's estate from commencing any action or suit touching such demand pending such taxation and the costs of such taxation shall as hereinafter provided be paid according to the event of such taxation. (emphasis added)

Taxation after 1 month

8.(1)In case no such application as aforesaid shall be made within such month as aforesaid then it shall be lawful for the Supreme Court or a judge thereof either upon the application of the attorney or the executor administrator or assignee of the attorney or the trustee of the attorney's estate whose bill may have been so delivered sent or left as aforesaid or upon the application of the party chargeable by such bill, with such directions and subject to such conditions as the court or judge making such reference shall think proper to refer such bill and the demand of such attorney or executor administrator or assignee of such attorney or the trustee of the attorney's estate thereupon to be settled and taxed by such officer of the court as aforesaid and in case any such reference as aforesaid shall be made on the application of the party chargeable by such bill then without any money being brought into the court.

(2)And such court or judge may restrain such attorney or the executor administrator or assignee of such attorney or the trustee of the attorney's estate from commencing or prosecuting any action or suit touching such demand pending such reference upon such terms as shall be thought fit.

(3)However, no such reference as aforesaid shall be directed upon an application made by the party chargeable with such bill after a verdict shall have been obtained judgment signed or a writ of inquiry executed in any action for the recovery of the demand of such attorney or executor administrator or assignee of such attorney or the trustee of the attorney's estate or after the expiration of 12 months after such bill shall have been delivered sent or left as aforesaid except under special circumstances to be proved to the satisfaction of the Supreme Court or a judge thereof to whom the application for such reference shall be made." (emphasis added)

Section 7 allows an application only by the party chargeable with the bill to obtain on prompt application within one month of the delivery of the bill, an appointment for taxation without an order of the Court. This is the same period of one month during which the solicitor cannot sue to recover any such costs: s.5. Section 7 contemplates that the bill has not been paid and gives a prompt opportunity to the party chargeable to have the bill taxed before payment. Section 7(3) provides that the Court shall restrain the solicitor from suing for the costs pending the taxation. 

On the other hand, where the party chargeable has not made the application within one month pursuant to s.7, s.8 allows both the attorney or the party chargeable to apply to the Court for an order to refer the bill "to be settled and taxed by such officer of the Court as aforesaid...". Where the application is made by the party chargeable, the party chargeable is not obliged to bring any money into Court. The subsection empowers the Court or Judge "making such reference" to impose "such directions and subject to such conditions as the Court or a Judge making such reference shall think proper". Section 8(2) gives the Court the discretion whether or not to restrain the solicitor from suing for the costs pending such reference. Section 8(3) forbids the directing of a reference upon the application by the party chargeable in the circumstances there set out "except under special circumstances...".

Without limiting the general power of the Court or a Judge to otherwise order taxation of a bill, ss.7 and 8 thus give the party chargeable with the bill, two means of procuring a taxation:-

(i)Within one month by directly obtaining on application to the appropriate officer, an appointment for taxation without an order of the Judge; and

(ii)After one month by application to the Court "to refer such bill and the demand...to be settled and taxed...".

Section 8 confers a right on the party chargeable, to apply to the Court for an order "to refer" the bill to taxation. That a "reference" to taxation involves an order of a Judge seems to be implied in various rules of the Supreme Court: O.91 r.88, O.91 r.39. Section 8(1) refers to "the Court or a Judge making such reference...", so that the "reference" mentioned in s.13(1) has the same meaning, i.e. a reference to taxation made by order of the Court or a Judge to whom application is made pursuant to s.8(1).

Section 9 of the Act, which deals with costs of taxation, also draws a distinction between "appointment" or "a reference". Section 9(2) refers to "any appointment or a reference as aforesaid...obtained or made upon the application of the party chargeable". It is clear from s.7(1) that the appointment for taxation is obtained as of course within one month by the party chargeable whereas a reference is obtained pursuant to an order of the Court or a Judge upon application made pursuant to s.8(1).

Prima facie therefore, s.13(1) of the Act, in conferring upon a third party the right to "make such application for a reference for the taxation and settlement of such bill as the party chargeable therewith might make" appears to be conferring on a third party the power to apply to the Court pursuant to s.8 for an order that the bill be referred to taxation. Section 13(2), by providing that "the same reference and order shall be made thereupon and the same course pursued in all respects as if such application was made by the party so chargeable with such bill...", does not appear to provide otherwise but rather seems to reinforce this construction. So also does s.15 which empowers the Court or a Judge thereof to order the attorney, for the purpose of "any such reference upon the application of the person not being the party chargeable...", to deliver to the party making the application, a copy of the bill.

It may also be noted that s.13(1) allows a third party (not being the party chargeable with the bill) who is "liable to pay or shall have paid such bill" to apply for a reference to taxation and settlement of the bill as the party chargeable therewith might make. There appears to be no express power under the Act for a third party, liable to pay but who has not paid the bill, to apply to the Court within one month for an order for a reference although it would be strange if a third party, liable to pay the bill but who has not paid it, could not apply to the Court within 30 days for an order to refer as can be done after one month: s.8(1). If the third party has paid the bill, there seems to be no such restriction. Section 16 of the Act provides that payment of any bill shall in no case preclude the Court or a Judge referring such bill for taxation "if the special circumstances of the case shall in the opinion of such Court or a Judge appear to require the same...". See also s.13(3). In addition, the Court has an inherent power to order that a bill be taxed, independently of the Act: see e.g. Storer & Co.  v.  Johnson & Weatherall (1890) 15 A.C. 203 per Lord Halsbury L.C. at 206; per Lord Watson at 208; Lord Morris concurring.

Does the history of previous legislation justify the approach contended for by the applicant? It is not entirely accurate to submit that the Act (or the Costs Act 1867) is similar in all relevant respects to the Solicitors Act (Eng) of 1843 although many of the provisions are identical.  Apart from the difference referred to by White J. in R.G. Kilner & Black's Bills of Costs (supra) as to the requirement of subscription, s.37 of that Act provided that upon the application only of the party chargeable by such bill within one month of its delivery, the Court or any Judge thereof was:-

"...required, to refer such Bill, and the Demand of such Attorney or Solicitor, Executor, Administrator, or Assignee, thereupon to be taxed and settled by the proper Officer of the Court in which such Reference shall be made, without any money being brought into Court; and the Court or Judge making such Reference shall restrain such Attorney or Solicitor, or Executor ...from commencing any action or suit...pending such Reference;"  (emphasis added)

That provision simply did not allow even the party chargeable with the bill to obtain an appointment for taxation within one month without an order of the Court as is provided in s.7 of the Act. Nevertheless, it was submitted by the applicant that this provision entitled a client, within one month of receiving a bill from his solicitor, to apply to the Court for an order to tax which order the client was entitled to as of right. It was said that this provision was a pointer to a longstanding right of the party chargeable which right was also by virtue of s.38 of that Act, also conferred on a third party who it was said was entitled to the same right, including the right under the Act, s.7, to obtain a taxation within one month by simply obtaining an appointment from the Taxing Officer.

However, a comparison of the first part of s.37 of the 1843 English Act with that part applying where a taxation was sought after one month, shows that what the party chargeable was entitled to as of right under the first part was the right to have the bill taxed without any money being brought into Court and without any submission to pay: see In re Brockman [1909] 2 Ch. 170 and in particular the judgment of Cozens-Hardy M.R. at 174 where the Master of the Rolls, after referring to the "striking difference" in the practice in the Chancery Division as compared with the Kings Bench Division, analysed the effect of s.37 of that Act. If the client applied for taxation within one month, the Court was required to restrain the solicitor from commencing or prosecuting any action pending the reference for taxation (which is identical to s.7(3) of the Act). Even so, this did not mean that an order as of right was always automatically granted.

Under the second part of the section where no application was made within one month of delivery of the bill, it was provided that:-

"...it shall be lawful for such Reference to be made as aforesaid, either upon the application of the Attorney or...or upon the Application of the Party chargeable by such Bill, with such Directions and subject to such Conditions as the Court or Judge making in such Reference shall think proper; and Court or Judge may restrain such Attorney...from commencing or prosecuting any action...pending such Reference, upon such Terms as shall be thought proper."

(emphasis added)

The essential difference was that under the second part of s.37, there was no such absolute right for an order to have the bill taxed and settled without any payment being brought into Court and without any submission to pay.  The section simply made it "lawful" for the Court to refer the bill to taxation with such directions and subject to such conditions as the Court thought proper, which could include a direction that a payment be brought into Court: in re Brockman at 174. The Court was also given a discretion whether or not to restrain the solicitor from suing for the costs as does s.8(2) of the Act. Section 7 of the Act, as with the first part of s.37 of the English Act, does not require any payment into Court whereas the second part of s.37 of the English Act, unlike s.8(1) of the Act, contains no such restriction, and such a condition could be imposed.

Chapter 38 of the English Act dealt with taxation upon application of a third party, being a party not chargeable with the bill.  It was provided that it was lawful for such person (who was liable to pay or who shall have paid the bill),:-

"...to make such Application for a Reference for the Taxation and Settlement of such Bill as the Party chargeable therewith might himself make, and the same Reference and Order shall be made thereupon, and the same Course pursued in all respects, as if such Application was made by the Party so chargeable with such Bill aforesaid".

Then follows a proviso in identical terms to s.13(3) of the Act. That proviso, as does s.13(3), recognises the right of a third party to apply to the Court or a Judge where special circumstances exist. See also s.41 of the 1843 Act and s.16 of the Act. Whatever were the actual rights conferred upon a third party by the English Act, a third party, as well as the party chargeable, always had to obtain an order of the Court, even what was referred to as an order "as of course". There was no right to obtain a taxation by mere appointment without an order of the Court as in s.7 of the Act.

It seems that the Costs Act 1867 and now the Act drew a clearer distinction between the methods by which a party chargeable with a bill may seek a taxation and those available to a third party, than was provided for in the English Act. The party chargeable is given the express right to obtain an appointment without an order of a Judge providing he applies within one month of its delivery, being the one month period after delivery of a bill during which a solicitor is prohibited from commencing and maintaining any action for recovery of any such fees. The client is given a month to make up his mind whether he wishes to have the bill taxed or not. If he takes no steps to obtain an appointment for taxation within that time, and he wishes to have it taxed outside that time, an application to the Court is necessary pursuant to s.8.

In the case of a third party, the Queensland legislature obviously contemplated that substantial issues could arise on an application by a party claiming to be a party not chargeable with a bill but legally liable to pay, and which would be beyond the jurisdiction of the Taxing Officer to resolve.  This might involve a construction of an agreement, and questions of whether an applicant, not being the party chargeable, was liable to pay the bill.  Persons liable to pay fall within numerous categories.  In Halsbury's The Laws of England, 1st ed., vol.26, para.1289 at 783 the following appears:-

"Persons liable to pay include a purchaser, a lessee, a mortgagor, or his trustee in bankruptcy, or a subsequent encumbrancer, as regards a vendor's, lessor's or mortgagee's costs, a person obliged to sue in the name of another, as regards the nominal plaintiff's costs, any party to a compromise, as regards the costs which he has agreed to pay or which, being payable out of a fund, fall upon his share, and generally any person who is legally liable to pay the bill as such.  On the other hand, application for taxation cannot be made by a ratepayer, though the bill is payable out of the rates, or by a person who has voluntarily paid the bill."

Numerous authorities are cited in support of the foregoing.  In para.1293 the following appears:-

"If the application is made by a third person as being the person liable to pay or having paid the bill, the Court may take into consideration any additional special circumstances applicable to the person making application: Re Dickson (1856) 8 De G.M & G 655; 44 E.R. 543; Re Masse (1845) 8 Beav. 458; 50 E.R. 180."

The foregoing was in accordance with the proviso to s.38 of the English Act which conferred rights on third parties and is broadly the equivalent of s.13(3) of the Act. This indicates that applications by third parties not infrequently required the Court to consider additional special circumstances which would render the application inappropriate under the first part of s.37 but would be a "special" application either under the second part of that section or under the proviso to it. So also with the Queensland Act.

It is also clear that on applications for an order "as of course", the application was strictly required to contain full materials and all relevant circumstances between the parties to enable the Court to decide whether or not the application should be granted:  Re Winterbottom (1851) 15 Beav. 80; 51 E.R. 466; Re Gedye (1852) 15 Beav. 254; 51 E.R. 535; Re Holland (1854) 19 Beav. 314; 52 E.R. 371; Re Ingle (1855) 21 Beav. 275; 52 E.R. 865; Re Collyer-Bristow (1899) 81 L.T. 110. There are many examples of the Court setting aside "orders as of course" for taxation which were irregularly obtained including those obtained by a third party: see e.g. In Re Grundy, Kershaw & Co (1881) 17 Ch.D. 108; In Re Robertson (1889) 42 Ch.D. 553.

Furthermore, para. 1295 of Halsbury states that payment of a bill is prima facie admission of its correctness, requiring a strong case to entitle a client to taxation.  Para. 1297 states that where the right to taxation depends upon special circumstances, the application should not be made for an order of course under the first part of s. 37, but for a special order.  Various examples are given where a special order should be applied for, one of which included the circumstances where the bill had been paid.  An order as of course was not appropriate in such cases.  These include applications by a third party under s. 38:  In Re Massey; Re Jones (1845) 8 Beav. 479; 50 E.R. 188; Re Winterbottom;  In Re Dickson;  Re Hurst & Capes [1908] 1 K.B. 982.

Section 38 of the English Act conferred a right of taxation on a third party providing that the third party "shall be liable to pay or shall have paid such bill", and empowered the third party to make "such Application for a Reference for the Taxation and Settlement of such Bill as the Party chargeable therewith might himself make,...and the same Course pursued in all respects, as if such Application was made by the Party so chargeable...".  If the third party had not paid the bill, he could presumably apply to the Court for an order "as of course" pursuant to the first part of s. 37.  However, if the third party had paid the bill, it also became a matter of a "special" application under the English legislation and for that reason was required to be the subject of an application to the Court as the party chargeable was also obliged to do, because "...the same Course" shall be "pursued in all respects, as if such Application was made by the Party so chargeable...". 

In material respects, s.13(1), (2) of the Act are identical to ss. 37 and 38 of the English Act so that if a third party has paid the bill, then a "special" application to the Court is necessary and taxation cannot be obtained by mere appointment. This is reinforced by s.13(3) and s.16 of the Act. However, the legislature in Queensland has obviously grouped into one category, the situation where the third party is merely "liable to pay" but has not paid the bill, and a third party who "shall have paid the bill", all of which are required to be brought before the Court for an order to refer.

Mr Robinson, Counsel for the applicant, referred to a decision of Shepherdson J. in George Conomos' Bill of Costs (O.S. No. 832 of 1995, 22nd December 1995, unreported) and the decision of Thomas J. in the matter of Re Moore (No. 8383 of 1996, 1st November 1996, unreported).

In George Conomos, Shepherdson J. was concerned with an opposed application by a lessee that a bill be referred to taxation, outside the one month period. Such an order was eventually made pursuant to s.25 of the Costs Act 1867 (s.8 of the Act). It appears that an attempt had earlier been made or foreshadowed by the lessee to have the taxation proceed pursuant to an appointment without an order of the Court or Judge (s.24 of the Costs Act 1867 - s.7 of the Act). The respondent in that matter advised the applicant that a Court order was necessary and the applicant's solicitors accepted that s.30 of the Costs Act precluded the applicant from lodging the bill direct with the Taxing Officer.  His Honour referred to the various provisions and said (p.4) that:-

"...quite obviously s.30 refers to earlier provisions in the Costs Act of 1867 and these earlier provisions deal with the taxation of costs against the party charged with the bill."

At p.5 His Honour continued:-

"In my view, when s.30 refers to provisions herein before contained it includes each of ss.22, 24 and 25 and also refers to s.29 which deals with the form of application for taxing. By s.30, persons such as the applicant can avail themselves of the same rights given under earlier provisions of the Costs Act to the party charged with the bill."

His Honour expressed the view that the applicant's solicitor erred in accepting that s.30 of the Costs Act precluded the applicant from lodging the bill direct with the Taxing Officer within one month after delivery and so obtaining appointment for taxation without an order of the Court. The Taxing Officer in the current case concluded that His Honour's remarks upon the construction of the statute did not form part of the ratio of the case (the application before His Honour was in fact pursuant to s.25). The taxing officer referred to what he regarded as a long history of orders for references to taxation obtained by third parties from the Supreme Court or a Judge thereof. I respectfully agree with the Taxing Officer's conclusion in this regard.

In the matter of Moore, Thomas J. was concerned with an application for delivery of a bill in taxable form and for its reference to taxation.  Mrs Moore had paid the solicitors' bill which purported to cover a body corporate's legal costs of and incidental to her consideration of her request for the consent of the body corporate to assign her rights to a third party under her management and letting agreement.  She paid the solicitors' bill in full under protest and requested a bill in taxable form which met with no response.  His Honour at p.3 said:-

"Mrs Moore is not the client chargeable with the bill, but by virtue of her promise she made herself liable to pay certain costs, and she has in fact paid the bill to the attorney. She is therefore, under s.13(1) of the Legal Practitioners Act 1995 (formerly s.30 of the Costs Act 1867), entitled to the same rights of reference to taxation as a client would have been.  She is prima facie entitled to have the bill presented and taxed." (emphasis added)

The solicitors sought to oppose this application for a bill in taxable form and His Honour made the order.  It is clear that His Honour's comments set out above at p.3 do not deal with the point at issue in the current application, as Mr Robinson conceded.  Indeed, His Honour simply said that the third party was "entitled to the same rights of reference to taxation...".

In the result, the Taxing Officer was correct in his decision. The third party being a person not chargeable with the bill but who is liable to pay it and has not paid it or in circumstances where he has paid it, is not entitled to obtain a taxation upon a mere appointment obtained from the Taxing Officer pursuant to s.7(1) of the Act. He must apply to the Court either pursuant to s.8(1) or, if he wishes to apply within one month, to apply under other provisions of the Act or pursuant to the inherent jurisdiction of the Court. Accordingly the application to set aside the Taxing Officer's decision is dismissed.

Nevertheless, the alternative orders sought in para.(2) of the summons should be granted.  There should be an order referring the Bill of Costs to taxation.  I will hear submissions on the form of the order.

If it is thought desirable that a third party should be able to obtain an appointment for taxation without an order of the Court or a Judge, this could be achieved by a simple amendment or by conferring jurisdiction on the Taxing Officer by the way of rule.  It may be appropriate to limit any such procedure to cases where there is no dispute between the parties as to the existence of an agreement for payment of the costs by the third party, or the construction of it.  See e.g. per Vaughan Williams L.J. (dissenting) in Re Hirst & Capes at 992.  Nevertheless, relevant material would in that event still need to be placed before the Taxing Officer, and possibly some distinction might be necessary in cases where a third party is "liable to pay" the bill but has not paid it and cases where the bill has been paid.

This leaves the question of costs. In this regard, the solicitors for the respondent solicitors sought an order that a certificate be granted pursuant to s.15 of the Appeal Cost Funds Act.  It is clear from the decision of the Brisbane City Council  v.  Feron Enterprises Pty Ltd [1976] 8 Qd.R. 332 that the purpose of the fund is not to provide legal assistance to parties in the broad sense, nor to promote litigation, but to relieve litigants from the costs of an appeal where the tribunal below acted upon a mistaken view of the law not encouraged or urged upon it by the parties seeking the relief. See the discussion on this and other cases in the unreported decision of White J. in Re Cooke - B.C. 9506004, 17th July 1995, unreported.  Her Honour referred to a decision of Connolly J. in George Conomos & Associates  v.  Fingold Resources Pty Ltd (No. 2) [1988] 2 Qd.R. 636 and concluded that the hearing by the Chamber Judge pursuant to O.86 r.8 from an order of a Master, was in the nature of an appeal. Her Honour in Re Cooke concluded that the reference with which she was dealing from the Taxing Officer was sufficiently in the nature of an appeal to fall within s.15 of the Act. I adopt with respect Her Honour's decision and conclude that this particular hearing was in the nature of an appeal so as to fall within s.15 of the Appeal Cost Funds Act.

However, the applicant lessee has failed to have the Taxing Officer's decision set aside.  As the respondent did not oppose the order sought by the applicant but made no submissions before me (consistent with the stance taken before the Taxing Officer), it will be necessary to have further submissions on this question.

The application to set aside the decision of the Taxing Officer is dismissed.  I will hear submissions on the form of the order referring the Bill of Costs of Freehill Hollingdale & Page to taxation.  I will also hear argument as to costs.