Steicke v Connolly & Co

Case [2017] SASC 99

SUPREME COURT OF SOUTH AUSTRALIA

(Civil)

STEICKE v CONNOLLY & CO

[2017] SASC 99

Judgment of Judge Dart a Master of the Supreme Court

3 July 2017

PROCEDURE - COSTS - TAXATION - PRINCIPLES OF TAXATION

Taxation of costs pursuant to the Legal Practitioners Act 1981 - whether legal practitioner entitled to claim costs - legal practitioner's claim for costs allowed - taxation proceeded on a lump sum basis.

Legal Practitioner’s Act 1981 s 42; Supreme Court Act 1935 s 114; Supreme Court Civil Rules 2006 r 264(5)(a), referred to.
Guss v Veenhuizen (No 2) (1976) 136 CLR 47; London Scottish Benefit Society v Chorley, Crawford & Chester (1884) 13 QBD 872, applied.
Beach Petroleum NI and Claremont Petroleum NI v Malcolm Johnson and Ors [1995] FCA 1250; Cachia v Hanes & Anor (1994) 179 CLR 403; Dobree & Ors v Hoffman (1996) 18 WAR 36; Milne & Ors v Attorney-General for the State of Tasmania & Ors (1956) 95 CLR 460; Oshlack v Richmond River Council (1998) 193 CLR 72; Osborne v Kelly (1999) 75 SASR 392; Rogers v Roche & Ors [2017] QCA 145, considered.

STEICKE v CONNOLLY & CO
[2017] SASC 99

JUDGE DART:

  1. These reasons deal with the fixing of the respondent’s costs of this proceeding by way of a lump sum adjudication.

  2. The applicant sought a taxation of the respondent’s solicitor’s costs pursuant to Section 42 of the Legal Practitioner’s Act 1981.  The action was commenced in 2013.  The subject legal work was itself performed in 2011 and remains unpaid for.

  3. The respondent was required to prepare a long form bill to permit the taxation to proceed.  The amount claimed in the long form bill, based on the Supreme Court Scale, was $32,173.38.  In addition to that, the respondent claimed an entitlement to interest.  On 16 September 2014 I ordered that an interim allocator issue in the amount of $20,054.65, being the invoiced amount.  I did so because it seemed unlikely, in the circumstances, that the applicant would tax off sufficient from the claim in long form bill to reduce the amount due below that figure.  Notwithstanding the issuing of the allocator in 2014, that amount remains unpaid.

  4. On 10 March 2017 the matter was struck out for want of prosecution and the applicant was ordered to pay the respondent’s costs of the action.[1]  The costs order made was that the applicant pay the respondent’s costs of the action on a party/party basis up to and including 16 September 2014 and thereafter on a solicitor and own client basis.  I also directed that the costs be adjudicated on a lump sum basis. [2]

    [1]    Reasons published on 14 March 2017, FDN35.

    [2]    Supreme Court Civil Rule 264(5)(c).

  5. The respondent filed an affidavit on 4 April 2017 setting out her claim for costs.  There have been a number of attendances since that time.  The respondent’s claim for costs is as follows:

    1$14,337.03, being solicitor’s costs on…

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Steicke v Connolly & Co [2017] SASC 99
Case
[2017] SASC 99
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CaseChat Overview and Summary

In the case of Steicke v Connolly & Co, the legal dispute pertains to the taxation of costs under the Legal Practitioners Act 1981, specifically addressing whether a legal practitioner is entitled to claim costs and, if so, the appropriate amount. The court was also tasked with considering the respondent's request for an award of interest on the unpaid invoice from the date it fell due to the date of the interim allocatur. The Supreme Court of South Australia was the venue for this legal adjudication.

The court had to resolve several legal issues, including whether the costs claimed by the legal practitioner were reasonable and justifiable. The applicant contested various aspects of the costs claimed, such as the amount for drawing the long form bill, the hourly rate for the solicitor/client portion of the bill, fees for attending court with counsel, fees for preparing affidavits, and some aspects of the counsel fees. The respondent conceded that the fee for drawing the long form bill was excessive and appeared to be an error.

The court reasoned that the claim for interest was appropriate from the date the invoice fell due. The evidence showed that the applicant had repeatedly assured the respondent of the payment, with no initial objections raised. The issuance of the proceedings on the day before the trial in the Magistrate's Court effectively halted the trial, which was subsequently adjourned. Regarding the costs, the court found that the party/party portion of the claim was allowable in the amount of $7,500, while the solicitor/client portion was deemed allowable at a reduced hourly rate in the amount of $16,500. Counsel fees were mostly appropriate, with a reduction to $21,000 plus GST. The court also allowed the claim for interest in the amount of $4980.87, calculated based on the interest rates provided in the Rules.

The final orders of the court included the allowance of interest from the date the invoice fell due until the interim allocatur, and the setting aside of certain costs as excessive. The court also directed the parties to confer on the form of the final orders.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

The respondent also seeks an award of interest in respect of the period from the date when payment of the subject invoice fell due, to the date on which the interim allocatur was ordered. The power to award interest is found in s 114 of the Supreme Court Act 1935, which provides as follows:114—Interest on judgment debts(1)All money, including costs, payable under any judgment or order shall bear interest at the rate from time to time prescribed by the rules of court.(2)The interest shall be computed from the following times:(a)in the case of money other than adjudicated costs, from the time specified in the judgment or order, and if no time is so specified from the date of the judgment or order;(b)in the case of adjudicated costs, from the date of the certificate of the adjudicating officer by whom the costs were adjudicated or an earlier date specified by the adjudicating officer in the certificate. The provision allows for interest to run from a period prior to the certificate (allocatur) of a taxing officer. In Osborne v Kelly his Honour Doyle CJ said: [13]It is also pertinent to bear in mind that the function of an award of interest on damages prior to judgment has been said to be “to compensate a plaintiff for the loss or detriment which he or she has suffered by being kept out of his or her money during the relevant period.”: MBP (SA) Pty Ltd v Gogic (1991) 171 CLR 657 at 663. I proceed on the basis that the purpose of an award of interest on costs is the same. That is, that interest is awarded to compensate the plaintiff for the fact that the plaintiff has been without the use of the plaintiff's money.[13] (1999) 75 SASR 392 at [32]. In my view, it is appropriate that there be an award of interest from the date that the invoice fell due. The evidence before the Court disclosed the fact that, on a number of occasions, the applicant advised the respondent that she would attend to payment of the invoice. Initially no issues in respect of the invoice were raised. The factual circumstances that led to the issuing of these proceedings was that the respondent issued proceedings in the Magistrate's Court in respect of the unpaid invoice due to the applicant’s failure to pay. That matter was listed for trial. The day before the trial in the Magistrate's Court this proceeding was issued. It had the effect of thwarting the Magistrate's Court trial which was adjourned.Consideration of the issues The applicant raised a number of objections to the claim for costs. They are as follows:1The amount claimed for drawing the long form bill is excessive.2The hourly rate claimed in respect of the solicitor/client portion of the bill is excessive.3Solicitors’ fees for attending at court with counsel are excessive.4Fees for preparing two specified affidavits are excessive.5Some aspects of the counsel fees are excessive. The respondent accepts that the fee for drawing the long form bill of costs is excessive. It appears to be an error. The party/party portion of the respondent’s claim for costs I would allow in the amount of $7,500.

Ratio Decidendi

Legal Principle Established

In my view, it is appropriate that there be an award of interest from the date that the invoice fell due. The evidence before the Court disclosed the fact that, on a number of occasions, the applicant advised the respondent that she would attend to payment of the invoice. Initially no issues in respect of the invoice were raised. The factual circumstances that led to the issuing of these proceedings was that the respondent issued proceedings in the Magistrate's Court in respect of the unpaid invoice due to the applicant’s failure to pay. That matter was listed for trial. The day before the trial in the Magistrate's Court this proceeding was issued. It had the effect of thwarting the Magistrate's Court trial which was adjourned.Consideration of the issues The applicant raised a number of objections to the claim for costs. They are as follows:1The amount claimed for drawing the long form bill is excessive.2The hourly rate claimed in respect of the solicitor/client portion of the bill is excessive.3Solicitors’ fees for attending at court with counsel are excessive.4Fees for preparing two specified affidavits are excessive.5Some aspects of the counsel fees are excessive. The respondent accepts that the fee for drawing the long form bill of costs is excessive. It appears to be an error. The party/party portion of the respondent’s claim for costs I would allow in the amount of $7,500. In respect of the solicitor own client portion of the costs, I accept the submissions of the applicant that the hourly rate charged is excessive and should be reduced to the rate of the Supreme Court Scale. I also accept that some attendances with counsel at Court should be charged at the lower rate on the Court Scale. Having regard to the submissions of the parties, and adopting a broad-brush approach, I would allow that portion of the bill in the amount of $16,500. The next item is counsel fees. All counsel fees were incurred during the period for which the respondent is entitled to costs on a solicitor/client basis. In the main, I accept the appropriateness of the claim for counsel fees. The hourly rate charged by counsel appears to be within the range contemplated by the Guide to Counsel Fees. Again, adopting a broad-brush approach, I would reduce counsel fees to $21,000 plus GST. There appears to be no basis to reduce the claim for counsel fees since 28 March 2017. I would allow those in the amount of $2000 plus GST. The claim for interest is calculated on the interest rates provided in the Rules. As mentioned above, the interest is claimed on the basis of the amount allowed in the interim allocatur from the invoice should have been paid until the awarding of an interim allocatur on 16 September 2014. The interest calculation I allow in the amount claimed, being $4980.87. I will hear the parties in respect to the form of the orders.