Shields, Isaac John Mackay , Geoffrey Neil Keith Shields, Norma Rose Shields and James Isaac Keith Shields v The Official Receiver in Bankruptcy and the Official Trustee in Bankruptcy
[1995] FCA 757
•18 Sep 1995
IN THE FEDERAL COURT OF AUSTRALIA )
BANKRUPTCY DISTRICT ) No NG 408 of 1995
OF THE STATE OF NEW SOUTH WALES )
ON APPEAL FROM HIS HONOUR JUSTICE MOORE IN NB 209 OF 1992
BETWEEN:ISAAC JOHN MACKAY SHIELDS
First applicant
GEOFFREY NEIL KEITH SHIELDS
Second applicant
NORMA ROSE SHIELDS
Third applicant
JAMES ISAAC KEITH SHIELDS
Fourth applicant
AND:THE OFFICIAL RECEIVER IN BANKRUPTCY
First respondent
THE OFFICIAL TRUSTEE IN BANKRUPTCY
Second respondent
CORAM: RYAN, FOSTER & LINDGREN JJ
PLACE: SYDNEY
DATE: 18 SEPTEMBER 1995
MINUTES OF ORDER
THE COURT ORDERS:
That the appeal be dismissed.
That the applicants pay the respondents' costs of the appeal, including reserved costs.
NOTE: Settlement and entry of orders is dealt with in O 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA )
BANKRUPTCY DISTRICT ) No NG 408 of 1995
OF THE STATE OF NEW SOUTH WALES )
ON APPEAL FROM HIS HONOUR JUSTICE MOORE IN NB 209 OF 1992
BETWEEN:ISAAC JOHN MACKAY SHIELDS
First applicant
GEOFFREY NEIL KEITH SHIELDS
Second applicant
NORMA ROSE SHIELDS
Third applicant
JAMES ISAAC KEITH SHIELDS
Fourth applicant
AND:THE OFFICIAL RECEIVER IN BANKRUPTCY
First respondent
THE OFFICIAL TRUSTEE IN BANKRUPTCY
Second respondent
CORAM: RYAN, FOSTER & LINDGREN JJ
PLACE: SYDNEY
DATE: 18 SEPTEMBER 1995
REASONS FOR JUDGMENT
THE COURT: This is an appeal against an order of a single judge of the Court refusing an application for review of a taxation of costs carried out as a result of an order of Burchett J determining an application by James Isaac Keith Shields and Isaac John Mackay Shields against the Official Trustee in Bankruptcy. Burchett J ordered that:
The application for interlocutory relief be dismissed.
The costs of the application, including reserved costs, be paid by the applicants.
A bill of costs as between party and party was prepared and taxed and allowed by a Registrar of the Court in the sum of $2,870.05. An application in respect of that taxation was made to the Court by the two original applicants, James Isaac Keith Shields and Isaac John Mackay Shields and, somewhat curiously, by two other persons, Geoffrey Neil Keith Shields and Norma Rose Shields who had been debtors in the bankruptcy proceedings but were not liable to pay any amount as the result of the order and taxation of costs. Accordingly, the appeals by those persons must be dismissed, whatever be the outcome of the appeal on the merits by the two original applicants before Burchett J.
Essentially two grounds were relied on at first instance and repeated by Mr Isaac Shields who appeared in person on the hearing of this appeal. The first was that the facility afforded by the Bankruptcy Act to a party who has retained a solicitor to recover the costs of doing so is discriminatory because no similar facility is available to an unrepresented party. Secondly, Mr Shields contended that those items in the taxed bill which related to the preparation of the bill itself and to attendance on its taxation were not properly recoverable. In that context he drew attention to the following items:
"13-02-95Item 10: Drawing Bill of Costs (10 Folios) $50.00
13-02-95Item 14: Photocopying Bill of Costs
(7 pages x 7) $49.00
13-02-95Item 14: Ordinary letter to client
enclosing Bill of Costs
13-02-95Item 27: Attendance by Clerk at Federal
Court registry to file Bill of Costs $19.00
Item 14: Ordinary letter to first
Applicant Enclosing Bill of Costs
by way of service $14.00
Item 14: Ordinary letter to second Applicant
Enclosing Bill of Costs by way of service $14.00
Item 10: Drawing Affidavit of Service of
Bill of Costs on First Applicant (2 Folios) $10.00
Item 10: Drawing Affidavit of Service of
Bill of Costs on Second Applicant (2 folios) $10.00
Item 14: Photocopying Affidavit of Service
of Bill of Costs on First Applicant
for filing (6 pages x 3) $18.00
Item 14: Photocopying Affidavit of Service
of Bill of Costs on second Applicant for filing
(6 pages x 3) $18.00
Item 25: Attendance by Solicitor on taxation
of costs $72.00
Item 10: Drawing Certificate of Taxation
(1 Folio) $ 5.00
Item 32: Ordinary letter to client enclosing
copy of Certificate of Taxation $14.00
Item 32: Ordinary letter to First Applicant
enclosing by way of service Certificate
of taxation $14.00
Item 32: Ordinary letter to second Applicant
enclosing by way of service Certificate
of taxation $14.00
Item 14: Photocopying Certificate of Taxation
(1 page x 3) $ 3.00"
The distinction between the professional fees and disbursements of a legal practitioner which are comprehended by the concept of "costs" as used in rules of court and cognate legislation on the one hand, and compensation for loss incurred by litigants on the other, is of very considerable antiquity. As Mason CJ and Brennan, Deane, Dawson and McHugh JJ who comprised the majority of the High Court in Cachia v Hanes (1994) 179 CLR 403 observed at 410:
"It has not been doubted since 1278, when the Statute of Gloucester 1278 (UK) 6 Edw I c 1 introduced the notion of costs to the common law, that costs are awarded by way of indemnity (or, more accurately, partial indemnity) for professional legal costs actually incurred in the conduct of litigation. They were never intended to be comprehensive compensation for any loss suffered by a litigant. As Coke observed of the Statute of Gloucester, the costs which might be awarded to a litigant extended to the legal costs of the suit, "but not to the costs and expences of his travell and losse of time" Coke, Second part of the Institutes of the Laws of England (1797), p 288. See also Howes v Barber (1852), 18 QB 588, at p 592 [118 ER 222, at p 224]; Dowdell v Australian Royal Mail Steam Navigation Co (1854), 3 El & Bl 902, at p 906 [118 ER 1379, at p 1381]."
Their Honours went on to observe at pp 414-415 that the restrictive basis upon which party and party costs are awarded is a matter of policy which may be debated but ultimately the resolution of the debate must be left to those entrusted with the statutory power of making or amending the relevant rules. Even more so is this Court, as an intermediate court of appeal, constrained to take the same approach. As the High Court has noted in the passage to which we have just referred, there are powerful arguments against Mr Shields' view that the present rules embody an unjust discrimination against litigants in person. However, even if we were to consider Mr Shields' contention preferable as a matter of policy, we could not give effect to that view while the Bankruptcy Rules remain in their present form.
Rule 162(1) of the Bankruptcy Rules provides:
"Subject to this rule and except where otherwise ordered, in all proceedings solicitors are entitled to charge and be allowed costs as set forth in Schedule 3."
Rule 163 provides, so far as is relevant:
A bill of costs shall be filed before it is taxed.
...
Where a bill of costs, not being a bill referred to in subrule (2), is filed, the taxing officer shall appoint a date, time and place for the taxing of the bill.
When the taxing officer appoints a date, time and place for the taxing of a bill -
(a)the taxing officer shall give notice of the date, time and place so appointed to the person who filed the bill; and
(b)the person who filed the bill shall cause a copy of the bill and notice of the date, time and place so appointed to be served -
(i)if the bill relates to a proceeding in which a sequestration order was made or relates to a bankrupt - on the trustee of the bankrupt; or
(ii)in any other case - on each other party to the proceeding, not less than 5 days before the day appointed for taxing the bill."
The scheme of that Rule makes it clear that the presentation of an itemised bill of costs is a prerequisite to the recovery of costs in relation to proceedings under the Act. The amount recoverable for each of the permissible items is set out in Schedule 3 to the Rules. Each of the items of which the appellants complain, with the exception of those for drawing and photocopying the bill of costs itself, is expressly comprehended within the description of one or other of the matters enumerated in that Schedule. The short question which remains is whether the bill itself is "a necessary document not otherwise provided for" within Item 9 of the Schedule. Since the bill of costs is specifically provided for by r 161 and, as we have already noted, is a prerequisite to the recovery of costs, it is clearly a necessary document within the scheme of the Rules which is not otherwise provided for in Schedule 3.
It is a matter of policy whether a legislative provision should allow recovery from another party of an amount for a solicitor's time and expense in preparing a bill of fees and disbursements when the similar expense of preparing a bill, invoice or memorandum of fees is usually absorbed as overheads by practitioners of other professions or trades. As we have already observed, we cannot overturn the policy presently enshrined in the Rules and the Schedule which form part of them.
Accordingly, the appeal by James Isaac Keith Shields and Isaac John Mackay Shields must also be dismissed. The order of the Court is that the appeal be dismissed with costs.
I certify that this and the preceding five (5) pages are a true copy of the reasons for judgment of the Court
Associate:
Date:
Mr Isaac John Mackay Shields appeared in person.
Solicitor appearing
for the respondents: Ms S Nash
Hearing date: 18 September 1995
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