Taplin v Amaca Pty Ltd

[2020] SADC 3

DISTRICT COURT OF SOUTH AUSTRALIA

(Civil: Appeal Against a Master's Decision)

TAPLIN  v  AMACA PTY LTD

[2020] SADC 3

Judgment of His Honour Judge Dart

16 January 2020

PROCEDURE - COSTS - APPEALS AS TO COSTS

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - TAXATION AND OTHER FORMS OF ASSESSMENT - PRINCIPLES OF TAXATION OR ASSESSMENT - FAIR, JUST, REASONABLE, NECESSARY, PROPER ETC

Appeal – adjudication of costs – validity of appeal – interstate Senior Counsel – whether reasonable or necessary to retain interstate Senior Counsel – appropriate allowance for counsel fees.

Held:  Appeal dismissed.

Dust Diseases Act 2005  ; District Court Civil Rules 2006 r 17, r 264, r 271, r 274, r 276, r 278; Supreme Court Civil Rules 1987 r 101.16, referred to.
Catto & Ors v Hampton Australia Ltd (In liq) & Ors [2008] SASC 231; Dalgety Australia Operations Ltd v F F Seeley Nominees Pty Ltd (No 2) (1988) 49 SASR 75; Players Pty Ltd (in liq) & Ors v Clone Pty Ltd [2019] SASC 186, applied.
Adelaide (SA Pools & Spa) Manufacturing and Installation Pty Ltd & Ors v Westcourt General Insurance Brokers Pty Ltd [2016] SASC 60; Australian Coal and Shale Employees Federation v The Commonwealth (1953) 94 CLR 621; Mannix Electrical Pty Ltd v Belport Pty Ltd [2019] SASC 159, considered.

TAPLIN  v  AMACA PTY LTD
[2020] SADC 3

JUDGE DART:

1. These reasons deal with an appeal from a decision of a District Court Master in respect of issues arising on the adjudication of costs.  The underlying proceeding was a matter arising under the Dust Diseases Act 2005, which proceeded to trial before his Honour Judge Gilchrist.[1]  The matter further proceeded to the Full Court[2] and then to the High Court.[3]

   [1]    Latz v Amaca P/L (formerly James Hardie & Co P/L) [2017] SADC 56.

   [2]    Amaca Pty Ltd v Latz [2017] SASCFC 145.

   [3]    Amaca Pty Ltd v Latz [2018] HCA 22.

2. The final costs order was that the defendant (Amaca) was to pay the plaintiff (appellant) costs of trial on a party/party basis.  The costs in respect of the appeal to the Full Court and High Court have been resolved.

3. The trial judge certified the matter suitable for Senior Counsel.  No issue arises in respect of that certification.  The issues in dispute between the parties are whether it was appropriate to retain interstate Senior Counsel, what rates should be allowed for Senior Counsel and whether it is appropriate to allow disbursements in the form of travel costs for interstate Senior Counsel.  The Master held that it was not necessary to brief interstate counsel.

   The validity of the appeal

4. A preliminary issue was taken in respect of the validity of the appeal.  The defendant says that the appeal is invalid because there was no judgment or order to appeal from.  The Master delivered written reasons for his decision, but has not made any orders in respect of those matters. 

5. A party has an appeal as of right from a judgment given by a Master of the Court to a Judge of the Court.[4]  The contention of the respondent is that there is no judgment from which the plaintiff could appeal and therefore the appeal is invalid. 

   [4]    District Court Civil Rules 2006, rule 17.

6. In the ordinary course, an adjudication of costs has a separate regime from the normal appeal process.  In respect of an adjudication, the following rules are relevant:

   276—Adjudication by Master

   If costs are adjudicated by a Master, the Master will, in the first instance, make a provisional order for the payment of costs or any other amount found to be payable on the adjudication (a provisional costs order).

   …

   278—Review of provisional costs order

   (1)A party who is dissatisfied with a provisional costs order may, within 14 calendar days after the date of the order, apply for review of the order by a Master.

   …

   (5)A party who is dissatisfied with the decision on review may, within 14 calendar days of that decision, apply for a further review by a Judge.

7. As the rules specify, ordinarily it is necessary to ask the Master who conducted the adjudication to review his or her decision.  Once that review is completed, there is a further review, not appeal, to a Judge of the Court.  The plaintiff has not pursued the review process.  The plaintiff says there is no provisional costs order made in respect of the issue before the Court.  It is also said that this appeal raises a matter of principle arising on the adjudication. 

8. The issue of the distinction between an appeal and a review was considered by the Full Court in Catto & Ors v Hampton Australia Ltd (In liq) & Ors.[5]The principal judgment was written by White J, with whom Vanstone and Anderson JJ agreed.  His Honour said:[6]

   Finally, my opinion is that the review process contemplated by r 278 was inappropriate as a means of review of the issues in dispute between the present parties.  The review process is best adapted to a review of decisions concerning the actual quantification of claimed costs.  It is adapted to the correction of mistakes, errors or oversights which have occurred in the detailed adjudication process.  That explains why r 278 contemplates, rather unusually, a first stage review by the original decision-maker.  In my opinion, the process is not well adapted to the review of decisions on issues of principle decided under r 271(6).  I do not mean by this to indicate that the review process would be inappropriate if the adjudication of the whole of the defendants’ Schedules of costs had been completed, and the issues of principle were some of several to be determined on the review.

   [5] [2008] SASC 231.

   [6]    Catto & Ors v Hampton Australia Ltd (In liq Ors [2008] SASC 231 at [27].

9. Rule 271(6) gives the Court a general power to resolve issues between the parties on an adjudication.  The paragraph referred to above indicates that, in respect of the matter of principle, an appeal is the appropriate process. 

10. I am satisfied that it was appropriate for the plaintiff to pursue an appeal in lieu of a review on the question of principle.  The question still arises, however, as to whether or not there has been a judgment from which to appeal.  The term “judgment” is defined in both the Supreme and District Court Civil Rules.  In the Supreme Court it is defined as follows:

    judgment includes an order or direction;

11. In the District Court there is a slightly different definition, which is as follows:

    judgment means a judgment, order or decision;

12. I set out the different definitions as to the meaning of judgment because, in the Catto judgment, there was considerable discussion about whether the Supreme Court Master had made a relevant order from which there could be an appeal.  The District Court definition appears to be wider and there only needs to be a decision rather than an order.

13. The parties conducted a detailed argument before the Master.  He subsequently delivered a 20 page document headed “Reasons for decision”.[7]  It is clearly a decision for the purpose of the definition of judgment.  It follows that there is a judgment for the purpose of r 17 and that an appeal lies from the judgment.

    [7]    Decision No 14 of 2019, 24 May 2019.

    The issue on the appeal

14. The approach to reviewing the decision of a taxing officer is subject to a degree of restraint.  In Australian Coal and Shale Employees Federation v The Commonwealth his Honour Kitto J said:[8]

    I take it to be true that the decision of the taxing officer as to quantum is generally speaking final, and that it must be a very exceptional case in which the Court will even listen to an application to review such a decision: In the Estate of Ogilvie.[9] But the authorities as a whole (not omitting to notice White v. Altrincham U.D.C.),[10] do not establish as an absolute proposition that a judge will never review a taxing officer's decision on a question of quantum only. Swinfen Eady L.J. said in Slingsby v. Attorney-General,[11] after quoting the passage from Ogilvie's Case[12]to which I have referred: "The decision of the taxing master is not absolutely final, even on a question of quantum"; and so it has been held several times in Victoria, where the view has been accepted for many years that a taxing officer's decision on quantum will be corrected if the judge concludes that "he has clearly made a mistake": In re Melbourne Parking Station Ltd.;[13] House v. Life Insurance Co. of Australia Ltd.;[14] Dwyer v. National Trustees Executors & Agency Co. of Australasia Ltd. (No. 3);[15] Carrazzo v. Weyman;[16] McCoughtry v. Schrick;[17] see also, Russo v. Russo.[18] I respectfully adopt the summary of the law on this matter which was made by Jordan C.J., with the concurrence of Harvey C.J. in Eq. and Street J., in Schweppes' Ltd. v. Archer.[19]  His Honour said: - "In appeals as to costs, the principles to be applied are these. The Court will always review a decision of a Taxing Officer where it is contended that he has proceeded upon a wrong principle, for the purpose of determining the principle which should be applied; and an error in principle may occur both in determining whether an item should be allowed and in determining how much should be allowed. Where no principle is involved, and the question is, whether the Taxing Officer has correctly exercised a discretion which he possesses and is purporting to exercise, the Court is reluctant to interfere. It has undoubted jurisdiction to review the Taxing Officer's decision even where an exercise of discretion only is involved, and will do so freely on a proper case, using its own knowledge of the circumstances: Western Australian Bank v. Royal Insurance Co.;[20] Clark, Tait & Co. v. Federal Commissioner of Taxation,[21] but it will in general interfere only where the discretion appears not to have been exercised at all, or to have been exercised in a manner which is manifestly wrong; and where the question is one of amount only, will do so only in an extreme case".[22]

    [8] (1953) 94 CLR 621 at 628.

    [9] (1910) P, at p 245.

    [10] (1936) 2 KB 138.

    [11] (1918) P 236, at p 239.

    [12] (1910) P, at p 245.

    [13] [1929] VicLawRp 2; (1929) VLR 5, at p 89.

    [14] [1930] VicLawRp 27; (1930) VLR 165.

    [15] [1940] VicLawRp 64 (1940) VLR 366.

    [16] [1944] VicLawRp 41; (1944) VLR 207.

    [17] [1947] VicLawRp 49; (1947) VLR 342.

    [18] [1953] VicLawRp 12; (1953) VLR 57.

    [19] (1934) 34 SR (NSW) 178; 51 WN 71.

    [20] (1908) 7 CLR, at p 388.

    [21] [1931] HCA 26; (1931) 47 CLR 142, at pp 145-146.

    [22] (1934) 34 SR (NSW), at pp 183, 184; 51 WN, at p 73 . (at p 629).

15. The Master was called upon to make a decision as to whether or not to allow the claim for interstate counsel.  Arguably that involved the exercise of a discretion.  The approach to appeals in respect of discretionary decisions was explained by Doyle J in Adelaide (SA Pools & Spa) Manufacturing and Installation Pty Ltd & Ors v Westcourt General Insurance Brokers Pty Ltd where his Honour said:[23]

    Before addressing the appellants’ submissions in relation to these issues, it is relevant to observe that the decision of the Master was a discretionary one, such that the appeal is subject to the principles in House v The King.[24]   Accordingly, the appellant must establish that the Master acted on a wrong principle, allowed extraneous or irrelevant matters to guide or affect him, mistook the facts or did not take into account some material consideration.  Alternatively, the appellant must establish that the result embodied in the orders made is, upon the facts, unreasonable or plainly unjust, such that it can be inferred that there has been a failure to properly exercise the relevant discretion despite the precise nature or source of the error not being identifiable.

    [23] [2016] SASC 60 at [22].

    [24] House v The King (1936) 55 CLR 499 at 504-505.

16. Relevantly here, the costs were awarded to the plaintiff on a party/party basis.  That is defined in the rules as follows:

    264—Basis for awarding costs

    …

    (2)As a general rule, however, costs are awarded as between party and party (that is, on the basis that the party entitled to the costs will be reimbursed for costs reasonably incurred by the party in the conduct of the litigation to an extent determined by reference to the scale of costs in force, under these Rules or the old rules, when the costs were incurred).

17. In conducting an adjudication of costs, a Master is given some guidance in the rules.  In particular:

    274—General provisions about adjudication upon costs

    …

    (3)The following general principles will be applied—

    (a)costs will be allowed so far as they are necessary and reasonable but not so far as they result from over-caution, negligence or mistake;

    (b)the necessary and reasonable costs of procuring evidence reasonably required for the presentation of a party's case will generally be allowed;

    (c)if the same solicitor or firm of solicitors represents two or more parties to an action—costs will not be allowed separately for each party but on the basis of the aggregate work necessary and reasonable for the representation of both or all parties;

    (d)if proceedings are adjourned because of the default of a party—the party should bear the costs and, if proceedings are adjourned because of the default of a party's lawyer—the lawyer should bear the costs.

18. The first question to be determined on the appeal is whether the Master was correct in holding that it was not necessary or reasonable for the presentation of the plaintiff’s case to retain interstate counsel.  The briefing of interstate counsel usually brings additional expense by way of higher daily and hourly fees and the addition of travel and accommodation expenses.  On an adjudication the Court is dealing with the question of whether it is appropriate to pass those additional costs on to the unsuccessful party.

19. In his reasons for judgment the Master said:[25]

    88    I accept that Mr Semmler and Mr Tzouganatos had acquired knowledge and experience.  However, I do not consider that that factor establishes that it was reasonable or necessary or proper for the presentation of the plaintiff’s case in accordance with the decisions of Beasley, Stanley, Phillips and FF Sealey set out above.  I return to this question in consideration of the appropriate rate for counsel noting that the standing and experience of the particular counsel is a factor, as is the need to recognise specialist knowledge. 

    …

    94    I conclude that issues of complexity and the significance and importance of the case are not sufficient to justify an allowance for interstate counsel.  Dalgety v FF Seeley (1988) was argued in a similar context and the practice of the taxing masters in South Australia has followed that decision in cases involving many complex and important questions of law.

    [25] Reasons for decision of Master Keith, 24 May 2019, FDN39.

20. The starting point in a consideration of whether it was reasonable or necessary to retain interstate Senior Counsel is Dalgety Australia Operations Ltd v F F Seeley Nominees Pty Ltd (No 2) where Bollen J said:[26]

    A substantial matter of principle in this review is whether the defendant could recover charges, fees and expenses occasioned by the briefing of an eminent counsel from Sydney.  One must be slow to make general pronouncements.  In this case I hold that it was not necessary for the attainment of justice or to defend the defendant’s rights to brief counsel who resided and had his chambers out of Adelaide.  Just like any other city in Australia we have counsel here who could well have handled any case.  That is to say, solicitors could find in chambers in Adelaide several counsel who could handle any one type of case.  I go so far as to say that, in my opinion, solicitors briefing counsel whose chambers are out of Adelaide for a case in the Supreme Court of South Australia should not expect to recover costs on taxation in excess of that payable for counsel, if counsel with chambers in Adelaide were given the brief.  No doubt the rate case or rare situation to the contrary may occur.  In my opinion, that case or situation would need to be rare and exceptional.

    [26] (1988) 49 SASR 75 at 87.

21. Recently in Players Pty Ltd (in liq) & Ors v Clone Pty Ltd Master Norman said:[27]

    In relation to the use of interstate counsel, Dalgety Australia Operations Ltd v FF Seeley Nominees Pty Ltd (No 2) (1988) 49 SASR 75 is a leading authority. The general position is that interstate counsel will not be allowed on a party/party basis unless it could be affirmatively proven that there are no South Australian barristers capable of handling the matter, and the fact that interstate counsel come from a jurisdiction where fees are higher is not a good ground for allowing higher fees for an argument in a South Australian court: see also Walker v Law Society of Tasmania [1991] Tas R 121. The Court should be alert to the orders made as to certification for counsel, eg for interstate counsel, or for two senior counsel or not. An interim allocatur hearing is not the appropriate occasion on which to determine contentious matters such as these.

    [27] [2019] SASC 186 at [166].

22. It is apparent from these two authorities that, if a party chooses to brief interstate counsel, that the costs allowed on a party/party basis will usually be the fees to be allowed for local counsel.

23. The Master considered the relevant authorities, the factual circumstances of this matter and decided it was not necessary or reasonable to retain interstate Senior Counsel.  The Dalgety decision is a decision made under the 1987 Supreme Court Civil Rules.  That required a Master to allow such charges and expenses as appear to have been necessary or proper for the attainment of justice, except where those fees were increased through over-caution or by payment of special fees to counsel or special charging expenses.[28]  The Master correctly noted that the general principles now provide that costs should be allowed so far as they are necessary and reasonable.

    [28] Supreme Court Civil Rules 1987, r 101.16.

24. The Master, in determining the rate to be allowed for the fees for retaining Senior Counsel, made two decisions.  The first was whether it was necessary or reasonable to retain interstate Senior Counsel in the matter.  He found not.  The second decision was to fix the amount to be allowed on a party/party basis for Senior Counsel fees.  The second decision involved the exercise of the discretion.  The first decision was more of an evaluative decision.  The nature of the decision may affect the role of an appellate court.

25. In Mannix Electrical Pty Ltd v Belport Pty Ltd[29] his Honour Doyle J was considering the correct approach on appeal in relation to an evaluative decision.  His Honour said:[30]

    36    The court’s anterior conclusion or decision as to whether the threshold requirement has been made out is not discretionary.  However, in recognition of the evaluative nature of the issue, and the context and manner in which it is to be determined, it has been held that appellate intervention in respect of this issue is governed by the principles in House v The King.  As Macfarlan JA explained in Cornelius v Global Medical Solutions Australia Pty Ltd:[31]

    Whilst the decision whether or not to grant security is discretionary, the threshold decision as to whether the power to do so exists is not discretionary in the strict sense of that word as it does not result from the judge making a choice after consideration of a number of factors (see Dwyer v Calco Timbers Pty Ltd [2008] HCA 13; 234 CLR 124 at [37] - [40]; Finch v Telstra Super Pty Ltd [2010] HCA 36; 242 CLR 254 at [29]; Coal & Allied Operations Pty Ltd v Australian Industrial Relations Commission [2000] HCA 47; 203 CLR 194 at [19]). Rather, the outcome is determined by the findings of fact that the judge makes. Nevertheless, it has features warranting the application on appeal of the same principles as are applicable to appeals from discretionary decisions. To succeed on appeal against a discretionary decision, an appellant must establish material error in the making of a finding of fact upon which the decision is based, in the taking or not taking into account of material factors or in some other matter of principle. If no specific error can be established, error may be inferred if the decision is "unreasonable or plainly unjust" (House v The King [1936] HCA 40; 55 CLR 499 at 505). These bases of challenge differ from those applicable to an ordinary, all grounds appeal where the appellate court, whilst giving respect and weight to the conclusions of the trial judge, must give effect to its own views (Warren v Coombes [1979] HCA 9; 142 CLR 531 at 551 - 2), subject to limitations applicable where questions of credit are involved (Fox v Percy [2003] HCA 22; 214 CLR 118 at [28] - [29]).

    The decision here on the threshold question involved an evaluation of a significant amount of financial and other information. Bearing in mind particularly that the assessment was necessarily conducted upon a preliminary basis and on limited materials (see [16] above), it was one in relation to which views could reasonably differ. As in the instance of a decision as to whether a member of a superannuation scheme was unlikely ever to engage in "gainful Work", there were "factors to be examined which [were] difficult to weigh, impressions to be formed, and judgments to be made" (Finch v Telstra Super Pty Ltd at [29]). Like the jurisdictional question of whether an applicant for an order under the Family Provision Act 1982 was left without provision for his or her proper maintenance, education and advancement in life (Singer v Berghouse [1994] HCA 40; 181 CLR 201 at 212) and the apportionment of responsibility in employment accidents (Tarabay v Leite [2008] NSWCA 259 at [29] - [31]; Jones Lang LaSalle (NSW) Pty Ltd v Taouk [2012] NSWCA 342 at [84]), the principles in House v The King in my view govern appellate review of the present threshold question.

    37    It is appropriate that I follow this approach.  That said, as the decision in relation to the threshold issue is not a discretionary one, I would prefer to describe the appeal as one governed by principles akin to those in House v The King.  In other words, where the decision under appeal is one involving an evaluative assessment in relation to which views could reasonably differ, or an area of decisional freedom, then the identification of error in that decision must take account of this.  In such circumstances, the identification of error requires more than that the appellate court would have reached a different decision.  It requires a conclusion that the judge below’s evaluative assessment miscarried in some way, or that the decision was outside of the area of decisional freedom reposed in that judge.[32]

    [29] [2019] SASC 159.

    [30] Mannix Electrical Pty Ltd v Belport Pty Ltd [2019] SASC 159

    [31] Cornelius v Global Medical Solutions Australia Pty Ltd (2014) 98 ACSR 301 at [22]-[23].

    [32] Coal & Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194 at [19]; Dwyer v Calco Timbers Pty Ltd (2008) 234 CLR 124 at [37]-[40].

1. On this appeal I propose to approach the question of whether the decision of the Master that it was not necessary or reasonable to retain interstate counsel as being one governed by principles akin to those in House v The King.

   The grounds of appeal[33]

   [33] Plaintiff’s Notice of Appeal filed 12 June 2019, FDN42.

2. The plaintiff pursues a number of grounds of appeal.  They are as follows:

   6.The Master erred in principle and the proper exercise of his discretion in concluding that it was not reasonable for the plaintiff to engage interstate junior and senior counsel in order to properly present his case to the court [at 88], by finding:

   (a)     [at 84 and 88] the acquired knowledge of counsel did not establish that it was reasonable for the plaintiff to engage interstate counsel;

   (b)     [at 85] the timing of the decision to brief interstate counsel was based on “comfort”;

   (c)     [at 86 and 87] the “saving” from briefing interstate counsel was “hypothetical”;

   (d)     [at 89] the importance of the case did not establish it was reasonable for the plaintiff to engage interstate counsel;

   (e)     [at 90] the conduct of the trial did not support an allowance for interstate counsel;

   (f)     [at 94] the significance, importance and complexity of the case were not sufficient to justify an allowance for interstate counsel;

   (g)     [at 102] local counsel could have conducted the matter appropriately.

   7.The Master erred in failing to find on the evidence that the factors enumerated in paragraph 1(a) to 1(g) when viewed collectively, established the reasonableness of the plaintiff’s decision to engage counsel from interstate.

   8.The Master erred in failing to have regard to the evidence before him of the nature and volume of documents relevant to the case.

   9.[at 42 and 56] The Master erred in characterising the findings (as to counsel fees and certification) of his Honour, Judge Gilchrist as being made in the context of an award of indemnity costs.  (Latz v Amaca Pty Ltd (formerly James Hardie & Co Pty Limited)(No 2) [2017] SADC 91 at [14 to 19] of his Honour’s reasons.)

   10.[at 101] The Master erred in setting the daily and hourly rates for senior counsel without adequate regard to the circumstances of the case or the evidence before him of comparable South Australian market rates for senior silk, which decision was manifestly inadequate.

3. The Court is not here strictly dealing with the decision of the plaintiff to retain experienced Senior Counsel to conduct the case.  A party may retain any counsel he or she may desire.  The question that the Court has to resolve is whether, in the particular circumstances of this case, it is appropriate to visit the additional costs of briefing interstate counsel on the defendant.  The Master considered all of the relevant authorities and decided that it was not necessary or reasonable, for the purpose of obtaining justice for the plaintiff, to retain interstate Senior Counsel.  He considered that there were appropriate local Senior Counsel who could have been briefed by the plaintiff.

4. The plaintiff refers to seven findings of the Master which are said to collectively point to an error in the exercise of the discretion by the Master.  The plaintiff wishes to dispute the findings of the Master.  However, each appears to be a conclusion that was reasonably open to him.  It does not appear that the Master acted on a wrong principle or allowed extraneous or irrelevant matters to influence his decision.  Nor does it appear on the facts that the result of the order was unreasonable or plainly unjust, such as it may be inferred there had been a failure to properly exercise a relevant discretion.  There is no proper basis on which to find error in respect of the decision of the Master in finding that it was not necessary or reasonable to engage interstate Senior Counsel.

5. I do not think that the Master’s reference to the comments of Judge Gilchrist about counsel fees are of great moment.  They do not affect the overall correctness of his decision.

6. The second matter to be determined is the quantum to be allowed.  The fixing of quantum is a discretionary matter.  The Master allowed Senior Counsel fees on the basis of a $5000 daily fee and an attendance fee of $600 per hour.  The trial commenced on 1 May 2017 and concluded on 5 May 2017.  The present Guide to Counsel Fees commenced operation on 1 July 2017.  It is a guide, not a scale, but the fact that it commenced after the trial may be a matter of some relevance.  Even in respect of the new guide, the allowance made by the Master is at the top end of the scale. 

7. The plaintiff says that the Court should have regard to the fact that local Senior Counsel charge more than the amount allowed.  The fact that local counsel may have charged more on a solicitor/client basis is not necessarily relevant to the question of party/party costs.  I am not satisfied there was any error in the discretion exercised by the Master in fixing the allowance for Senior Counsel fees.  In any event, it is a decision of the type referenced to in Australian Coal and Shale Employees Association as one which should only be interfered with in an extreme case.  This is not such a case.

8. The appeal is dismissed.