Ross v Ross
[1999] WASC 180
ROSS & ANOR -v- ROSS & ORS [1999] WASC 180
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [1999] WASC 180 | |
| Case No: | CIV:2302/1995 | 1 JULY 1999 | |
| Coram: | MASTER BREDMEYER | 24/09/99 | |
| 11 | Judgment Part: | 1 of 1 | |
| Result: | Application allowed | ||
| PDF Version |
| Parties: | RAYMOND ARTHUR ROSS BERNADINE ROSS CLIVE MICHAEL ROSS JENNIFER ROSS CLYDE LYNDON ALLEN CARINE INGA ALLEN MARK PHILLIP CHRISTIE |
Catchwords: | Procedure Costs Taxation of trustee's costs and solicitors costs |
Legislation: | Trustees Act 1962 s 50(1) |
Case References: | Giannanelli v Wraith (No 2) (1991) 171 CLR 592 Pamplin v Express Newspapers Ltd [1985] 2 All ER 185 Pryles & Deftros (A firm) v Green [1999] WASC 34 Re Lavey; Ex parte Cowan & Cowan [1921] 1 KB 344 Bowen Buchbinder Vilensky v Banning & Anor, unreported; FCt SCt of WA; Library No 960325; 20 June 1996 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- BERNADINE ROSS
Plaintiffs
AND
CLIVE MICHAEL ROSS
JENNIFER ROSS
First Defendants
CLYDE LYNDON ALLEN
CARINE INGA ALLEN
Second Defendants
MARK PHILLIP CHRISTIE
Trustee
Catchwords:
Procedure - Costs - Taxation of trustee's costs and solicitors costs
Legislation:
Trustees Act 1962 s 50(1)
(Page 2)
Result:
Application allowed
Representation:
Counsel:
Plaintiffs : Ms A Castle
First Defendants : In person
Second Defendants : No appearance
Trustee : Mr L F A Nixon
Solicitors:
Plaintiffs : Arthur Metaxas
First Defendants : In person
Second Defendants : No appearance
Trustee : Phillips Fox
Case(s) referred to in judgment(s):
Giannanelli v Wraith (No 2) (1991) 171 CLR 592
Pamplin v Express Newspapers Ltd [1985] 2 All ER 185
Pryles & Defteros (A firm) v Green [1999] WASC 34
Re Lavey; Ex parte Cowan & Cowan [1921] 1 KB 344
Case(s) also cited:
Bowen Buchbinder Vilensky v Banning & Anor, unreported; FCt SCt of WA; Library No 960325; 20 June 1996
(Page 3)
1 MASTER BREDMEYER: This is a reserved decision on the taxation of costs. The plaintiffs and the first defendants were in dispute over a house built by them at 29 Whitfield Terrace, Winthrop. They agreed, prior to trial, that the house should be sold. On 27 August 1997 Master Sanderson appointed Mark Phillip Christie, who is a valuer, as the trustee to sell the house. He made some attempts to do so but without success. He was removed from that role by a further order of Master Sanderson made on 11 December 1997. He was replaced as trustee by Mr John Hayes. Mr Christie has submitted his costs as trustee to the Court for taxation. They amount to $10,700.78. He engaged solicitors Phillips Fox and I am also asked to tax their costs of $5482.50.
2 As I have said Mr Christie was appointed as trustee to sell the property by an order dated 27 August 1997. The relevant part of that order so far as it concerns him reads as follows:
"2. The land referred to in the statement of claim as 29 Whitfield Terrace, Winthrop be sold free from the encumbrances of such of the encumbrancers as shall consent to the sale and subject to the encumbrances of such of them as shall not consent. The sale be conducted by private treaty but if there is no unconditional contract for the sale of the property by 30 October 1997 then the property be sold by public auction to be held on or before 15 December 1997.
3. The land be sold subject to the Law Society's general conditions for the sale of land.
4. Mark Phillip Christie of 22 Altona Street, West Perth ("the trustee") have conduct of the sale and be authorised to instruct an agent and/or auctioneer for that purpose.
5. The reserved price of the said land be such amount as determined by the trustee with the consent of the plaintiffs and the first defendants or failing such agreement, to be fixed by the Court.
6. The agents and/or auctioneer's remuneration be fixed in accordance with a scale of charges of the Real Estate Institute of Western Australia Incorporated or at such lesser amount as the trustee may negotiate.
7. Each party have liberty to bid at the sale.
(Page 4)
- 8. The net proceeds of sale, after payment of what shall be due to any encumbrancer or encumbrancers according to their priorities and of all other proper costs, charges and expenses of the sale be paid into court to the credit of this action to abide further order.
9. At the time of payment into court, an affidavit by the trustee be filed exhibiting a statement certifying the result of the sale and expenses incurred in connection therewith."
3 As stated above, Mr Christie was replaced as trustee by Mr Hayes by court order made on 11 December 1997. By further order made by me on 12 June 1998 I added two further orders to those made by Master Sanderson on 11 December 1997 namely:
"3. The professional fees (as approved by Master Bredmeyer at the rate of $150 per hour) and expenses of Mr Christie as trustee are to be paid out of the proceeds of sale of the property and are to be assessed by a Registrar.
4. The legal costs of Mr Christie are to be taxed and paid out of the proceeds of sale of the property."
4 The Registrar to whom this task was given declined to tax the trustee's costs as he said he did not know the basis for taxation. I am disappointed in the Registrar's decision. I consider that when ordered to tax costs he should do so. The judgment of Parker J in Pryles & Defteros (A firm) v Green [1999] WASC 34 delivered on 21 May 1999 should ensure that this decision does not occur again. It was not, of course, available to the Registrar when I made my order in June 1998. In the circumstances the task has fallen to me.
5 The trustee's file and his solicitor's file were not initially produced to me and on 21 May I called for their production under O 66 r 44 and I referred to relevant cases: Pamplin v Express Newspapers Ltd [1985] 2 All ER 185 and Giannanelli v Wraith (No 2) (1991) 171 CLR 592. The two files were produced and initial reference to a claim for privilege in respect of any legal advice given to Mr Christie, was not pursued. Mr Christie has filed an affidavit sworn 12 June 1998 in support of his bill of costs.
6 Seaman at 66.11.16 states:
(Page 5)
- "Trustees bills of costs out of funds. The taxation of a trustee's costs on a solicitor and client basis for payment out of a fund does not entitle him to the same indemnity as on a taxation between a solicitor and his own client but the taxing officer will take a liberal view in allowing amounts which are clearly not excessive and have been honestly incurred: Re Lavey Ex parte Cowan & Cowan [1921] 1 KB 344 at 354."
7 A summary of the costs sought on taxation by the trustee is as follows:
Chargeable Time
(64.5 Hrs @ $150.00 per hour) $9623.00
Expenses
ArchiCentre Building Advisory service report No. D44535
Invoice - 15.10.97 $300.00
Invoice - 12.12.97 $260.00
Facsimiles, letters, photocopies $ 80.00 $640.00
Valuation Fee
Unpaid Valuation Fee Invoice No. I11737 $515.00
TOTAL $10,778.00
8 Mr Christie has provided a computer sheet showing his time costing of 64.5 hours.
9 Mr and Mrs Clive Ross have made a number of objections to the trustee's charges. Soon after his appointment, Mr Christie got his partner, Mr Brendan Gorringe, to value the property for which he charged $1030. The bill was split between Mr and Mrs Raymond Ross and Mr and Mrs Clive Ross. The former paid their $515. The latter did not. Mr Clive Ross' first objection is as to that valuation charge. I consider it was reasonable to have the property valued but it was unreasonable and unnecessary to have it valued by Mr Gorringe and that the charge is clearly excessive. Where a trustee is a qualified valuer he should not normally engage another qualified valuer. See s 50(1) of the Trustees Act 1962 which I quote:
(Page 6)
- "50. (1) A trustee may, for the purpose of giving effect to the trust, or any of the provisions of the instrument (if any) creating the trust or of this Act or any other Act, from time to time ascertain and fix the value of any trust property, or of any property that he is authorized to purchase or otherwise acquire, in such manner as he thinks proper; and where the trustee is not personally qualified to ascertain the value of any property he shall consult a duly qualified person (whether employed by him or not) as to that value; but the trustee shall not be bound to accept any valuation made by any person whom the trustee may consult."
10 Mr Ross has tendered two quotes from other qualified valuers that they could have valued the house for $200 and $250 respectively. I consider $250 a reasonable fee and will allow $250 for the valuation of the house. It was not a particularly difficult task for Mr Christie to value the house. He was a qualified valuer. Moreover, in this case, he received detailed submissions from three real estate agents in the area which included their estimates of a reasonable selling price.
11 Mr Clive Ross' second objection is as to the quality of work done by Mr Christie. Mr Christie was required to advertise the property for sale by private treaty and get an unconditional contract for sale of the property by 30 October 1997. If he failed in that he was to sell the property by public auction to be held on or before 15 December 1997. Mr and Mrs Clive Ross' objection is that Mr Christie did not follow these orders. He did not list the property with a private agent for sale by 30 October and he did not attempt to sell it by public auction on or before 15 December 1997. I consider this objection is unfounded. All the beneficiaries of a trust can sanction breaches or departures from the terms of the trust. Mr Christie was trustee to sell the property in accordance with the court order and the beneficiaries of that trust were Mr and Mrs Raymond Ross and Mr and Mrs Clive Ross. All of those parties were keen to purchase the property themselves and to avoid the expense of real estate agents fees. Mr Christie thereupon decided to conduct a "Dutch auction" between the two Ross brothers and their wives inviting either of them to make an offer and then putting that offer to the other one, and if he did not counter with a better offer, the first offer would be accepted. I consider that the beneficiaries of this trust consented to this departure from the court order and they thus approved the breach of trust. I also consider the fact that this "Dutch auction" process extended beyond the first deadline of 30 October 1997 was of no great moment because he was endeavouring to obtain a sale from two keen prospective purchasers. I consider that the
(Page 7)
- court would have readily extended the deadline. The court order required him to obtain an unconditional contract for sale. The offers made on behalf of both Ross brothers and their wives were for conditional sales but, again, I consider that the brothers sanctioned that departure from the court order and sanctioned what would otherwise be a breach of trust. All of the offers by the Ross brothers were made "subject to finance". So Mr and Mrs Clive Ross cannot now complain about those departures from the trust as set out in the court order. I consider that the method adopted by Mr Christie to produce a sale was sanctioned by the key parties, the beneficiaries of the trust, and that no complaint can now be made about that method. Both Ross brothers submitted offers subject to finance and they thereby, tacitly at least, consented to the departure from the court order. As it turned out, it would be better if Mr Christie had followed the court order especially in relation to getting unconditional offers for sale. The best offer which he got and accepted on 13 October 1997 was from Mr and Mrs Raymond Ross which required a deposit of $146,000 to be paid within 14 days and for $460,000 which was conditional on obtaining $260,000 loan finance from AMP within 14 days after acceptance and to obtaining a builders and structural engineers certification within the same period. Mr and Mrs Raymond Ross failed to pay the deposit (he paid half) and to meet the two special conditions.
12 Ms Castle, for Mr and Mrs Raymond Ross, challenged many of the costs as excessive.
13 I have taxed the trustee's costs. In doing so I accept and have tried to follow the principle established in Re Lavey; Ex parte Cowan & Cowan [1921] 1 KB 344. Nevertheless, where I have considered the charge unreasonable or excessive, or not properly documented, I have reduced it or disallowed it.
14 I need to explain my reduction on the unpaid valuation fee invoice. As previously advised the trustee's charge for the valuation of his colleague was $1030. $515 of this has been paid by the plaintiffs and $515 is charged as a disbursement to the trustee's bill. I have reduced this by $780 to give effect to my ruling.
15 The total of the trustee's fees and disbursements as allowed by me comes to $9038.
16 I am also required to tax the trustee's legal costs. The costs claimed between 13 November 1997 and 10 March 1999 are $5842.50 plus disbursements of $680, total $6522.50. These costs fall into two periods.
(Page 8)
- The first is between 13 November 1997 when instructions were first given and 11 December 1997 when Mr Christie was replaced as trustee by court order. The legal work was done in that period by Mr Iain Freeman, a partner with Phillips Fox. The costs for that period total $2452.50 excluding disbursements. The second period starts in January 1998 and involved preparing a bill of both the trustee's costs and the solicitors costs for taxation and an affidavit in support. That affidavit annexed, inter alia, the 1992 recommended scale of fees and charges for valuers put out by their Institute. The work included a court appearance on 12 June 1998 obtaining two orders approving Mr Christie's rate of pay of $150 per hour etc as described earlier in this judgment. No chamber summons was prepared. The orders were obtained on the plaintiffs' chamber summons prepared by Mr Metaxas and filed on 21 November 1997. The court appearance was a brief one in General Chambers. The charge claimed for that work totals $3390 excluding disbursements.
17 In the first period the work included taking instructions from Mr Christie in a conference with him and perusing a number of papers which he left with Mr Freeman. Mr Freeman then drafted a long letter of advice to him on 13 November 1997. Mr Freeman did not draft any chambers summons or any affidavit.
18 On 21 November 1997 Mr Metaxas for the plaintiffs drafted a notice of motion seeking the court's direction to sell the property to his clients for $445,000 and filed an affidavit in support of this. On that date the application was adjourned to a special appointment and programming orders were made which did not involve the trustee. Mr Freeman did not attend the court of 21 November. His client, however, showed him the papers and Mr Freeman attended the court on 8 December 1997 on the plaintiffs' same notice of motion and got leave to appear to represent the trustee. The matter was not contested. The hearing was adjourned to 10 December 1997.
19 On 10 December 1997 Mr Freeman attended the court again on the plaintiffs' notice of motion and the application was adjourned to 11 December 1997. On that day Mr Metaxas obtained an order that Mr Christie be replaced as trustee by Mr John Hayes and further orders were made about the sale of the property. That application was not opposed. Mr Freeman did not attend the court on that day. So, in summary, Mr Christie was replaced as trustee by the court within a month or so of giving instructions. Both plaintiffs and defendants wanted him replaced and, as Mr Metaxas for the plaintiffs already had a chamber summons before the court, there was no need for Mr Christie's solicitors
(Page 9)
- to prepare a court application and an affidavit in support. The replacement order was obtained by the plaintiffs' solicitor on his chamber summons. In addition to the long letter of legal advice mentioned, on 1 December 1997 Mr Christie submitted to Mr Freeman a draft letter which he proposed to send to Mr Metaxas for his consideration. Mr Freeman corrected one sentence in that letter and that was communicated by telephone. On 3 December 1997 Mr Christie submitted a draft letter which he proposed to send to Mr Raymond Ross. Mr Freeman vetted that draft and deleted one and a half lines of it and communicated that amendment to Mr Christie by telephone.
20 There are no notes on the file of conferences or phone calls in or out. Only correspondence is on the file and court papers. Much of the correspondence referred to in the bill, particularly from 1998 onwards, is not on the file.
21 No retainer agreement was entered into between the trustee and his solicitors and I consider the appropriate scale of costs initially is item 911 of the Solicitors' Remuneration Order 1991 which states:
"charges applicable
By a practitioner - according to the nature and importance of the work and any ad valorem instruction free allowable but not exceeding $235 per hour."
22 With effect from 1 October 1998, that order was replaced by the Legal Practitioners' (Solicitors' Costs) Determination 1998 and the relevant item there is Item 6:
"ATTENDANCES AND PERFORMANCE OF WORKWHERE ITEMS 1-5 DO NOT APPLY, AND TRAVEL
Ref Practitioner Maximum Rate
($ per hour)
Attendances and performance of work where items 1-5 do not apply, and travel, and including time otherwise necessarily spent where no other charges apply
601 Junior Clerk $65 per hour
602 Senior Clerk $150 per hour
603 Articled Clerk $130 per hour
604 Restricted Year Practitioner $175 per hour
605 Practitioner (less than 5 years) $200 per hour
606 Practitioner (5 years or more) $280 per hour
(Page 10)
Travel
607 Travel is to be calculated in the same manner as items 601 to 606, with a maximum of 8 hours in any one day."
23 Mr Nixon, who argued the taxation before me for the trustee, said that the solicitors costs were based on time units of six minutes. The units expended are not stated in the bill. The actual time spent on a task is not stated in the bill or elsewhere. He said he did not know the hourly rate charged for Mr Freeman's services but I consider from internal evidence it is $260 per hour. I say that because a simple telephone attendance, which I assume to be charged at one unit of six minutes, is charged at $26. The legal work in the second part of the bill was largely performed by Mr Nixon who is a salaried solicitor with Phillips Fox at this time of about six years' standing. He was admitted as a practitioner in England in 1991 and as a practitioner in this State in December 1997. I take it that his work is charged out initially at $120 per hour. I say that because a simple telephone attendance, which I assume to be a one six minute unit, is charged out at $12. From 21 April 1998 I think his work was charged out at $130 per hour and from 23 November 1998 at $150 per hour. Ms June Eaton, a solicitor admitted in July 1997, drafted the bill of costs whilst Mr Nixon was on leave. She charged $165 per hour for her time.
24 I consider time charging is authorised by the two costs determinations mentioned and it is appropriate in this case. Under the 1991 determination the maximum allowable is $235 an hour, whereas Mr Freeman's time was charged at $260 an hour. It should be scaled back to $235 per hour. Although Mr Nixon was a practitioner of 5-6 years experience in England, he was admitted here in December 1997 when he commenced work on this file he was a restricted year practitioner. Under the 1998 determination with effect from 1 October 1998 he was entitled to charge up to $175 per hour. I do not consider his varying hourly rate of $130 and $150 per hour as excessive. I consider $130 per hour an appropriate rate for Ms Eaton.
25 I do not consider unit charging appropriate in this case where no costs agreement permitting it was signed. I have no evidence from Mr Nixon or anyone else whether in this bill real time was rounded up to the next six minute unit, or rounded down to the last six minute unit. The real time spent on tasks has not been given to me, neither are there any notes on file of phone calls, conferences or taking instructions, from which I might be able to estimate the time involved or a reasonable charge
(Page 11)
- for the work. As mentioned above, much of the correspondence in and out, all the subject of costs charged, is not on file. Where I have considered the time taken or charged for the work excessive, or the work unnecessary, I have taxed off various sums.
26 Ms Castle, for the plaintiffs, made a number of objections to items in the bill as unreasonable and I agree with that. For example, I refer to this item:
"13/11/97 Conference file supervision with Peter Beekink $104"
- I consider that fee is unjustified. It does not relate to work done for the client. That is one of seven similar entries mentioned by Ms Castle and I have disallowed each of them. Ms Castle raised other objections to what appear to be excessive or unnecessary charges and I have on the whole accepted those objections and made a number of deductions.
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