Strachan Thomas v Clough No. Scgrg-96-2239 Judgment No. S6536

[1998] SASC 6536

STRACHAN THOMAS v CLOUGH

Full Court
Coram: Cox Prior and Williams JJ

Williams J

This is an appeal by Mr Clough against a Master’s order dated 24 July 1997 whereby he refused the application of the present appellant to set aside an allocatur dated 13 January 1996.  The allocatur (signed by the Registrar of the Supreme Court) records that the respondents’ bill costs as against the appellant has been taxed pursuant to a request made to the Court on 25 November 1996 and allowed at $8909.68.

The respondents Strachan Thomas are legal practitioners, who at the relevant time, were practising in partnership in Adelaide.  Mr Thomas of that firm was instructed by the appellant, a Queensland solicitor to conduct a District Court action concerning an aircraft accident on behalf of Mr Clough’s lay client Wilson.

The respondents treated the appellant as being personally responsible for their costs. They prepared a Bill of Costs in taxable form and lodged it at the Supreme Court for taxation pursuant to the Legal Practitioners Act. After experiencing difficulty with serving a copy of the Bill on the appellant by registered post the respondents faxed a copy of the bill to Mr Clough on 2 December 1996.

The copy Bill as served contained an endorsement in the following terms:
"TAKE NOTICE that under Rule 101.09(7) you are required within fourteen days of the service of this Bill upon you to file and serve a Notice of Dispute setting out each of the items which you contest.  If you fail to do so, you may be deemed to have admitted liability for any item for which you have not given such Notice of Dispute."

The respondents verified service by affidavit.

The appellant did not file a Notice of Dispute in accordance with the rule quoted in the notice.  In the absence of any formal step by the appellant, the Court’s taxing officer taxed the Bill (without any participation by the appellant) and the abovementioned allocatur then issued.

Being dissatisfied with the Taxing Master’s decision the appellant by an application dated 18 June 1997 sought to have the allocatur set aside and a further order that the taxation be reconsidered pursuant to RSC 101.19.  That rule enables a Master to "reconsider" all or some items in a bill of costs in respect of which an allocatur has been signed.  A party who is dissatisfied with the outcome of the Master’s "reconsideration" may thereafter apply to a Judge in Chambers under RSC 101.21 for an order to "review" the taxation in respect of any item.

The review procedure is dependent upon a notice of dispute having been filed.  The procedure which the appellant followed was incorrect.

RSC101 sets out a series of steps leading to the taxation of a solicitor’s Bill of costs and thereafter confers upon a dissatisfied party who has complied with the rules a right (as abovementioned) to further challenge the disputed items before a Master and then before a Judge.  The rule (as a first step) provides for the lodgement and service of the bill which must contain the endorsement in accordance with RSC 101.09(4) which draws attention to the procedural steps which may next be taken.  These steps are set out in the following sub-rules of RSC101.09:

1. Where a person who is liable to pay costs is served with a bill of costs he shall within fourteen days of such service file and serve on all other persons interested in the taxation a notice of dispute setting out each of the items in the bill which he contests.

1. Where a person liable to pay costs fails to give a notice of dispute pursuant to subrule (7) above the taxing officer taxing the bill of costs may in his discretion on the taxation allow any such item without further investigation into it."

The first step in disputing a bill of costs involves the filing of the notice of dispute following which the Court will give notice to each interested party of an appointment for taxation (RSC101.09(5)).  However, the Registrar need not give notice under this rule where no notice of dispute has been given and the taxation may proceed ex parte under RSC101.09(8).  The rules confer no right to dispute a bill of costs or to challenge an amount allowed upon the allocatur in the absence of notice of dispute being filed.

In effect, the present appellant is in the position of a party against whom a judgment has been obtained in default of a requisite procedural step.  However, in this case the signing of the allocatur was not a formal step taken as of course; the bill of costs will have been the subject of some scrutiny by the taxing officer in the exercise of the discretion conferred by sub rule (8) abovementioned.
         By his application of 5 June 1997 the appellant (in addition to seeking that the allocatur be set aside) should have sought an extension of time within which to file a notice of dispute.  In fact a draft notice of dispute appears as an exhibit to an affidavit sworn by the appellant on 6 May 1997 in support of that application.

The appellant is a Queensland solicitor who claims to have misunderstood the South Australian procedure for taxation of solicitors’ bills.  He has apparently overlooked the procedural requirements of which he was given notice.  He has given an explanation for his delay upon the basis that he had concentrated his attention upon other aspects of the case which appeared to be more pressing.  In my view, the material disclosed in the appellant’s affidavits is sufficient for the Court to extend an indulgence to him - upon appropriate terms.  It is relevant to the exercise of the Court’s discretion that the matter involves a dispute between an interstate solicitor and his South Australian agents.

The appellant acknowledges in a general way his instructions to the respondents but he disputes almost every one of the 232 items in the bill upon the grounds that the work was not authorised by him  It is not surprising that the Master, in refusing to set aside the allocatur, expressed the view that the draft notice of dispute "seems to contain on the face of it many absurdities which suggest what I see to be the case namely that he [Mr Clough] is simply clutching at straws."  Nevertheless the respondents can be adequately protected against the possibility which concerned the Master by the moulding of an order to meet the circumstances.

Despite the criticism which might be made as to the appellant’s conduct the convenient and just course is to treat the applicant as having now properly brought before the Court an application to extend time to file a notice of dispute as part of the application to set aside the allocatur.  RSC3.04 may be treated as the basis of the application.  The appellant has intimated that if required he would be prepared to pay money into court.

In my view, as a term of the taxation being reopened, the appellant should be required to pay into Court to the credit of this matter and to abide further order the amount of $8909.68 (as mentioned in the allocatur) together with a further amount ($1000) by way of security for the costs thrown away and costs yet to be incurred.  Subject to the payment of these monies into Court within 28 days from today I would propose that the appeal be allowed and there be orders setting aside the allocatur and extending for 28 days from today the time for filing a notice of dispute in terms of the draft abovementioned.  The appellant should pay to the respondents the costs thrown away.

Cox J

I would allow this appeal on the condition and in the terms proposed by Williams J.  I agree with his Honour’s reasons.

Prior J

I agree with the reasons published by Williams J and with the orders proposed.