Titan, J. v Romano & Co
[1990] FCA 618
•02 NOVEMBER 1990
Re: JOZEF TITAN
And: ROMANO and CO
No. ACT G69 of 1989
FED No. 618
Costs
COURT
IN THE FEDERAL COURT OF AUSTRALIA
AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY
GENERAL DIVISION
Gallop(1), Neaves(1) and Foster(1) JJ.
CATCHWORDS
Costs - solicitor/client costs - solicitor's claim for recovery - assessment of reasonableness of items in bill of costs - method of assessment - reference of disputed items to taxing officer
Hullock on Costs, 2nd Ed. pp 93-497
Saddington: Taxation of Costs Between Parties, pp 30-31
Woolf v Trebilco (1933) VLR 180
Pince v Beattie (1863) 32 LJ Ch 734
Woolf v Snipe (1933) 48 CLR 677
Re Chapman (1882) 10 QBD 54
Re Harrison (1886) 33 Ch D 52
In re Park; Cole v Park (1883) 41 Ch D 326
Ex parte Ditton; In re Woods (1880) 13 Ch D 318
Lumsden v Shipcote Land Company (1906) 2 KB 433
Jones and Son v Whitehouse (1918) 2 KB 61
Purins v Philcox (unreported decision of the Full Court of South Australia, 19 March 1979)
Law Chambers v Mobitel (1981) 29 SASR 316
HEARING
CANBERRA
#DATE 2:11:1990
Appearance for the Appellant: Mr Jozef Titan
Counsel for the Respondent: Mr C. Whitelaw
Solicitors for the Respondent: Romano and Co.
ORDER
The appeal be allowed with costs.
The judgment of the Supreme Court of the Australian Capital Territory be set aside and in lieu thereof the appeal to that Court be allowed with costs.
The judgment of the Magistrates Court be set aside.
The special claim be remitted to the Magistrates Court for further hearing and determination.
NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
JUDGE1
This is an appeal against the decision of a Judge of the Supreme Court of the Australian Capital Territory dismissing the appellant's appeal to that court from a decision of the Magistrates Court, Canberra.
In 1976 the appellant was injured in an accident which gave rise to a workmen's compensation claim. On 9 April 1980 he was injured in a motor vehicle accident which gave rise to common law proceedings in the Supreme Court.
In relation to the common law proceedings he first consulted the respondent solicitors on 27 July 1982. Until October 1985 the respondent performed professional work in relation to the appellant's common law claim. Some time about July or October 1985 the appellant's retainer of the respondent was terminated by the appellant. He subsequently retained the legal firm of Gallens (as it was then known) to pursue his common law claim. Gallens contacted the respondent to request that the appellant's file and other relevant papers be released. The respondent declined to release this material until their fees and disbursements assessed at $6,911 had been paid. The statement of costs dated 1 December 1985 assessing that figure was not in taxable form.
Some discussion ensued between the respondent and Gallens concerning the quantum of the costs. A legal costs consultant assessed the respondent's profit costs at $4,159.85. No agreement was reached and the respondent commenced proceedings by way of special claim in the Magistrates Court, Canberra, on 18 July 1986. The amount then claimed for costs was $5,627.29. The special claim came on for hearing in the Magistrates Court on 2 March 1987 when it was adjourned on terms agreed between the parties. The respondent agreed to file a bill of costs in taxable form for taxation by the Registrar of the Supreme Court. The appellant accepted that course and undertook to pay the amount of costs and disbursements taxed and allowed by the Registrar. An itemised bill of costs was prepared and served upon the appellant on or about 21 April 1987. The taxation was ultimately listed for 17 December 1987.
By letter dated 11 November 1987 to the Registrar of the Supreme Court the appellant withdrew his application for taxation. At that stage the respondent's special claim to recover the sum of $5,627.29 from the appellant had been set down for hearing in the Magistrates Court. On 1 March 1988 the special claim was heard in the Magistrates Court and reserved for judgment on 4 March 1988. The respondent was non-suited because the itemised statement of costs and disbursements had not been delivered by the respondent to the appellant one month before the action was brought as required by s.110 of the Legal Practitioners Ordinance 1970 and consequently, the respondent had to rely on the bill of costs dated 1 December 1985. The Magistrate held that that bill did not contain sufficient particulars to enable the appellant to consider having the bill of costs taxed.
The respondent's itemised bill of costs prepared by a firm of costs consultants was served personally upon the appellant on 4 March 1988. The total amount claimed in the bill of costs was $4057.95.
By letter dated 16 March 1988 the appellant informed the respondent that he did not intend to apply to the Registrar of the Supreme Court to have the bill taxed until he received from the respondent "documentation of the work that you did in relation to my 1976 accident".
The respondent thereupon instituted fresh proceedings by way of special claim in the Magistrates Court, Canberra, on 19 July 1988 to recover the sum of $4057.95. In that action the appellant filed a defence raising the following matters:
"1. I consulted you about injuries sustained in two separate accidents in 1976, the other in 1980.
2. No provision of documentation in relation to July 1976 accident.
3. You are charging me for your time spent on the 1976 claim as well as on the 1980 claim.
4. Misconduct medical reports not paid.
5. Has paid for medical reports.
6. Any work performed subsequent to July 1985 was without the authority of myself and against my instructions.
7. The amount claimed is generally excessive.
8. Has offered $2,000.
9. The special claim against me by Romano and Co. should be deleted."
The respondent's special claim ultimately came on for hearing in the Magistrates Court on 12 July 1989. In the course of the hearing the Magistrate enquired of the appellant whether he was prepared to have the respondent's bill of costs taxed. He endeavoured to crystallise the situation for the benefit of the appellant, who was unrepresented. He explained to the appellant that he faced the problem that if the respondent satisfied the requirements of the Legal Practitioners Ordinance 1970 and there was some evidence that the amount claimed was reasonable in the circumstances, judgment would quickly be entered against the appellant for the full amount claimed. The appellant replied to the effect that he was prepared to accept that result but declined the opportunity to have the respondent's costs taxed.
The hearing then proceeded and, there being evidence that the costs as set out in the bill of costs were reasonable, the Magistrate had regard to a concession of a deduction of $750 from the total claimed and entered judgment for the respondent for $3,307.95 together with interest and costs.
In the course of his oral reasons for judgment the Magistrate said.
"The simple fact is that a bill of costs has been prepared in taxable form, that that bill of costs has been served upon the defendant. The defendant has declined his right to have that bill of costs taxed and many of the matters that he has raised today were matters that could have been canvassed by the taxing master in relation to the prepared bill. That opportunity has now been lost to Mr Titan for reasons that he has explained to me, but which I do not clearly understand. That is to say, I understand what he says to me but I do not necessarily understand the significance of them in relation to the bill of costs. But it is clear that as far as Mr Titan is concerned, the conflict concerning the instructions was to him very significant and he has taken a stand on that conflict that has led to him giving up his rights under the provisions of the Ordinance. Evidence has been given by Mrs Romano as an experienced practitioner of the court that, she says, the bill is fair and reasonable and the work was all done pursuant to her instructions. Evidence has also been given by Mr Clapham, an experienced practitioner, that in his view accepting the work to have been done, the items and the costings of them are fair and reasonable."
The appellant appealed to the Supreme Court of the Australian Capital Territory. The four grounds of appeal argued were:
(1) costs improperly incurred;
(2) misconduct;
(3) the amount claimed is generally excessive; and
(4) the bill of costs is not in order with the Legal Practitioners Ordinance.
In dismissing the appeal the Judge of the Supreme Court of the Australian Capital Territory said:
"Grounds 1, 3 and 4, in my view, are clearly untenable in the light of the Magistrate's findings. In relation to ground 2, however, the appellant relied on Order 65, Rule 8, which does not seem to have received any attention in the Magistrates Court and was not relied upon by the appellant there. The provisions of that rule may be taken to be incorporated in these reasons. It appears that there may well be situations in which, where solicitors sue for costs and disbursements, the client is entitled to claim by way of set-off some misconduct on the part of the solicitors which may be taken into account in either reducing or extinguishing their right to claim fees. That misconduct does not necessarily relate to the services performed by the solicitors which gave rise to the charge for costs and disbursements. ...
In my view, it is inappropriate to allow this particular issue of misconduct, or alleged misconduct, on the part of the respondents to be raised at this stage of the proceedings. Accordingly, the appeal is dismissed.
The appeal to this Court from the decision of the Supreme Court of the Australian Capital Territory was instituted by Notice of Appeal dated 20 December 1989. The grounds of appeal and the orders sought as set out in the Notice of Appeal are:
Grounds
2. The learned Chief Justice was wrong in law in holding:
(a) that in the appeal conducted pursuant to the rules of the Supreme Court of the Australian Capital Territory Order 65 Rule 8 no fresh evidence was allowed to be given;
(b) that in an appeal to the Supreme Court the issue of misconduct of the respondent could not be prevented (sic) in defence because this issue had not been argued as a defence in the lower court. This decision is unjust because in the lower court, Magistrate Somes would not allow the issue of misconduct to be argued in defence;
(c) in the matter of the taxation of the bill of costs, the learned Chief Justice was wrong in that he agreed with Magistrate Somes that the opportunity has been lost to the appellant to have the bill of costs taxed, while at the same time he stated that he did not understand the reasons why the appellant was unwilling to have the bill of costs taxed.
3. The learned Chief Justice wrongly exercised his discretion because:
(a) he did not allow the appellant to present all the evidence he wished to present in defence and in agreeing with Magistrate Somes while not clearly understanding the appellant's defence;
(b) he did not instruct the appellant to apply for direction for the conduct of the appeal while making a judgment without clear understanding of the appellant's case;
(c) he upheld Magistrate Somes' findings when he knew that the respondent had supplied the defendant's solicitors with evidence damaging to the appellant's claim;
(d) he upheld the ruling that the appellant must pay the respondent's account whether or not the appellant is successful in his claim for Third Party Compensation. Order Sought
(a) that this appeal be allowed;
(b) that the judgment of the learned Chief Justice be set aside;
(c) that the whole evidence be allowed to be presented;
(d) that the respondent pay the costs improperly incurred;
(e) that the respondent pay the appellant's costs;
(f) such other orders as the court thinks fit."
At the hearing of the special claim in the Magistrates Court, the hearing of the appeal in the Supreme Court of the Australian Capital Territory and the hearing of the appeal to this Court the appellant was unrepresented. The task of each court has been made more difficult by that very circumstance. A further difficulty which confronted this Court was that, notwithstanding his positive assertions that he fully comprehended the course of proceedings, the appellant demonstrated a lack of command of English. There is no reason to doubt that this same difficulty was present in the course of the proceedings in the Magistrates Court and the Supreme Court of the Australian Capital Territory.
The fact that the appellant appealed to the Supreme Court of the Australian Capital Territory and has appealed from that Court to this Court gives rise to serious doubt whether he fully understood the course of the proceedings in the Magistrates Court. As previously stated, the appellant rejected the Magistrate's proposal that the respondent's bill of costs be taxed. The Magistrate thereupon explained to the appellant that in those circumstances and, subject to the evidence to be adduced, it was likely that judgment would be entered against the appellant for the full amount claimed. Subject to the concession of $750, that duly happened. In his appeal to the Supreme Court and again to this Court, the appellant has raised by his respective grounds of appeal the very factors which might properly have been raised on a taxation of costs. Yet, at all material times, the appellant has expressly declined the opportunity to have the respondent's costs taxed.
The matter which has caused this Court most concern is the question whether the Magistrate was correct in his approach to the assessment of the amount to which the respondent was entitled. He did not embark upon any item by item assessment of the reasonableness of the respective amounts claimed in the bill of costs. He proceeded on the basis that taxation had been declined and that the appropriate way to determine the special claim was to act upon evidence of the work having been done and the reasonableness of the amount charged as a global sum for that work. The Supreme Court of the Australian Capital Territory found no fault with that approach and, subject to the appellant raising a ground of misconduct by way of fresh evidence, dismissed the appellant's appeal accordingly.
Section 110(1) of the Legal Practitioners Act 1970 (as it is now to be cited) provides:
"110. (1) ... a solicitor is not entitled to institute proceedings in a court for the recovery of costs or disbursement for, or in respect of, work of a professional nature until the expiration of a period of one month after he delivers to the person from whom he claims the costs or disbursements an itemised statement of those costs or disbursements."
Section 111 confers upon a person to whom a statement of costs and disbursements has been delivered the right to give notice to the Registrar of the Supreme Court and to the solicitor by whom the statement was delivered that he wishes to have the amount payable by him determined by taxation. Notice must be given within one month or such further time as the Registrar allows (s.111(1)). A person is not entitled to give notice after judgment has been entered in proceedings for recovery of costs and disbursements or any part thereof (s.111(2)). The Registrar shall not allow further time for the giving of notice under sub-s.(1) unless he is satisfied that it was not practicable for notice to be given within one month after the delivery of the statement (s.111(4)).
It is to be noted that the Act does not confer upon the solicitor any right to taxation of his bill. In this respect the Act may be contrasted with other legislation, e.g. Supreme Court Act 1986 (Vic), s.72.
The origins of the above legislation regulating solicitors and their bills of costs to clients go far back in English legal history. The Statute 3 Jac. I., c.7, sec. 1, required the delivery to the client of a signed bill before the solicitor or attorney was permitted to charge the client with fees or charges; and by 2 Geo. II., c.23, sec.23, and afterwards by 6 and 7 Vict. c.73, ss.37-43, no attorney or solicitor was permitted to commence or maintain any action for the recovery of any fees charges or disbursements until the expiration of one month after the delivery of his bill to his client; and upon submission by the party chargeable to pay such sum as should appear due on taxation, he might have the bill referred "to be taxed and settled by the proper officer of the Court" - see Hullock on Costs (2nd ed.), pp 493-497 (Woolf v Trebilco (1933) VLR 180 per Lowe J. at p 190). Courts were soon called upon to consider whether the requirements of this legislation could be evaded by a special agreement for payment by a lump sum. At first it was thought that the special agreement barred the client's right to taxation, but later it was held that it was contrary to public policy to allow the validity of an agreement between solicitor and client for greater reward than the solicitor would get on taxation (Pince v Beattie (1863) 32 LJ Ch 734). The history of modern legislation was expounded to some extent in Woolf v. Snipe (1933) 48 CLR 677.
The costs claimed relate to proceedings in the Supreme Court of the Australian Capital Territory. The respondent was entitled to charge and be allowed professional costs in accordance with the scale in the Fourth Schedule to the Rules of the Supreme Court (Order 65, r.7(1)). The scale applies equally to solicitor and own (1882) 10 QBD 54; Re Harrison (1886) 33 Ch D 52; Saddington: Taxation of Costs Between Parties, p 30-31).
In the Magistrates Court and in the Supreme Court it seems to have been assumed that where the person to whom the statement had been delivered does not pursue his right to have the costs and disbursements taxed, he loses his entitlement to dispute the reasonableness of the solicitor's charges on the trial of an action by the solicitor to recover them. The Magistrate proceeded to determine the special claim on the basis that the appellant had disentitled himself to dispute the reasonableness of the respondent's costs. The Supreme Court adopted the same approach.
It seems clear that whatever might have been the practice of the common law courts prior to In re Park; Cole v. Park (1889) 41 Ch D 326, at least since that case the courts have accepted that the reasonableness of solicitors' charges can be disputed on the trial of an action by a solicitor to recover them.
In In re Park a firm of solicitors carried in, in an administration action, a bill of costs. Stirling J. treated the matter as if an action at law had been brought upon the bill. More than 12 months had elapsed since the delivery of the bill; no special circumstances were shown and no objection had been made to the account. Stirling J. held that the executor was not estopped from disputing items in the bill. It was further held that, the disputed items having been identified and the court having been satisfied that they required investigation, it was appropriate that the matter be referred to the taxing master, being the officer of the court who in the ordinary course was charged with that class of the court's business, not for the purpose of having the bill taxed but for the purpose of inquiring into the disputed items and reporting to the court whether those items were fair and proper to be allowed and, if so, in what amounts. The Court of Appeal affirmed the decision. At p 338 of the report, Cotton L.J. said:
"The solicitors are bringing in a claim against the estate of the deceased client, and that claim is to be dealt with as if it was an action at law. If it were so, of course, the fact of the testator's having had those bills of costs so long without making any objection is prima facie evidence in favour of their being right, but it is nothing more than prima facie evidence, and if any objection were taken that objection would have to be considered, and the matter would have to be dealt with upon hearing the evidence on both sides, unless it could be referred to the Taxing Master who is the usual and proper person to decide whether costs are reasonable."
In an earlier case, Ex parte Ditton; In re Woods (1880) 13 Ch D 318 at pp 320-1, Cotton L.J. said:
"But taxation is not the only way in which the client is entitled to protect himself. No doubt, in an ordinary case, a Judge and a jury would not go through the items of a solicitor's bill, which would be much better dealt with in the Taxing Master's office. In the present case there are really only these items in dispute, and they all involve the same principle, and, a solicitor not having any statutory right to have the proper amount of his charges ascertained in one way only, I think that the Registrar was entitled to deal with the case as he did, taking the advice of the Taxing Master."
As a result of those cases a practice developed in England of determining the reasonableness of a solicitor's bill of costs by reference to a taxing master. This course was adopted as the most convenient one. In Lumsden v. Shipcote Land Company (1906) 2 KB 433 it was held that the Court had jurisdiction to refer a solicitor's bill of costs to a taxing master to ascertain the amount payable. Vaughan Williams L.J. said (at p 437) that in that case the bill should have been referred for taxation not under s.37 of the Solicitors Act 1843 which provided for taxation of solicitors' bills of costs, but on a reference to ascertain the amount for which judgment ought to be entered.
Stirling J. agreed and said (at p 438) that the Court had power by virtue of its general jurisdiction to ascertain, by reference to its officer, the proper amount to be paid to the plaintiff for his services. He said it was within the jurisdiction of the Court to order that the items of a claim be gone into before a referee and in that case there was power to ascertain through a taxing master the proper amount of remuneration. He referred to the fact that there is no difference in principle between a case where a solicitor seeks to recover costs and an action to recover the amount due for work and labour done in any other case. Fletcher Moulton L.J. also agreed and said that the case was one of a reference to a skilled tribunal after verdict to ascertain the correct amount of compensation due.
An action on a solicitor's bill of costs should be dealt with "in the same way as an action on an ordinary tradesman's bill containing a number of items" (In Re Park, supra, per Stirling J. at p 333).
In re Park was followed in Jones and Son v. Whitehouse (1918) 2 KB 61. Pickford L.J. held that the defendant in that action was not entitled to have leave to defend as to the whole bill and to have the whole bill taxed. He held that if the defendant could specify certain items as being extravagant and thus show a plausible ground of defence as to them he could have those items, and those items only, taxed, but not the whole bill. He further held that though there is no right to have the bill taxed under the Solicitors Act 1843 the Court may still under its general jurisdiction order any of the items to be inquired into. Warrington L.J. was of the same opinion and expressly followed In re Park.
It follows that, in our opinion, the Magistrates Court and the Supreme Court were wrong in the way they determined the reasonableness of the respondent's bill of costs. Having failed to exercise his right to have the bill taxed under s.110 of the Legal Practitioners Act 1970 and having declined to accept the opportunity for taxation which the Magistrates Court extended to him, the appellant did not retain a right to require that the Magistrates Court proceed, in effect, to tax the bill item by item. On the other hand, he did not by reason of those circumstances, lose his right to contest particular items in the bill.
The question for decision by this Court is how to determine the reasonableness of the respondent's bill of costs. If the respondent's special claim had been brought by way of ordinary writ of summons in the Supreme Court of the Australian Capital Territory, the trial judge would no doubt have adopted the most convenient course, namely to refer the reasonableness of the bill of costs to the Registrar of the Court for taxation and then to enter judgment in accordance with the certificate of taxation of the taxing officer. Order 36, r. 3 and 4 of the Supreme Court Rules provide for directions by a Judge for any necessary inquiries or accounts to be made or taken.
The respondent's special claim, however, was not brought in the Supreme Court, no doubt for the good reason that the amount claimed was well within the monetary limitations of the jurisdiction of the Magistrates Court.
The Magistrates Court, Canberra, has an extensive civil jurisdiction pursuant to the Magistrates Court (Civil Jurisdiction) Act 1982. Part XVIII - Costs provides a machinery for taxation of bills of costs. Under s.240 a Magistrate may, if he thinks fit, fix the amount of the costs in any proceedings and, where he does not, the costs of the proceedings shall be taxed by the Clerk. There follow appropriate provisions conferring entitlement to taxation and facilitating enforcement of the court's orders. Those provisions relate, of course, to the taxation of bills of costs in respect of proceedings instituted in the civil jurisdiction of the Magistrates Court. It would be convenient to be able to utilise those provisions and the powers of the Clerk under those provisions to tax the respondent's bill of costs. In our opinion, the following provisions of the Magistrates Court (Civil Jurisdiction) Act 1982 provide for such a course to be followed:
"6. (1) In any proceedings that the court has jurisdiction to hear and determine-
(a) the court may grant such relief, redress or remedy as the Supreme Court has power to grant in an action of a like nature in that court, and for that purpose the court may make such orders as the Supreme Court has power to make in the like circumstances; and
(b) ...
(2) For the purpose of the exercise by the court of its power under sub-section (1) in any proceedings-
(a) a magistrate constituting the court shall, in addition to any other powers conferred on him under this Ordinance, have all the powers and authority of a Judge of the Supreme Court in an action of a like nature in that court; and
(b) the clerk, bailiff or other appropriate officer of the court shall, in relation to those proceedings, discharge any duties that a correspondending officer of the Supreme Court would discharge in relation to such an action in accordance with the practice and procedure of that court.
(3) In discharging a duty referred to in sub-section (2), the clerk, a bailiff or other officer of the court, as the case requires, shall comply with this Ordinance and any order of the court."
A similar situation to that which confronted the Magistrate in respect of the respondent's special claim has previously arisen in the Local Court of South Australia. In Purins v. Philcox (unreported decision of the Full Court of South Australia, 19 March 1979) Judge Mohr (as he then was) in the Local Court, referred the question of the quantum of a bill of costs to a taxing master of the Supreme Court by directing that an enquiry be made by a special magistrate pursuant to r.260 of the Local Court Rules and nominating a master of the Supreme Court as such special magistrate. This was done, of course, by voluntary arrangement with the master and was a practical step to resolve the difficulty in the case.
In Law Chambers v Mobitel (1981) 29 SASR 316 at 319, King C.J. acknowledged the ingenuity of that course, but suggested a more formal procedure for determining the amount of a solicitor's bill of costs where the solicitor sues in the Local Court. He said that, having determined the question of liability under a contract of retainer, the Local Court should give the defendant an opportunity of taking an adjournment for a reasonable time to enable him to seek a taxation of the bill pursuant to the legislation to that effect; if the defendant does not take the adjournment or does not apply for taxation within the period of the adjournment, the Local Court would be entitled to treat that, on the principles discussed by Stirling J in In Re Park, supra, as an acceptance on his part of the correctness of the bill and as sufficient evidence that it is a reasonable and proper bill; the Local Court would enter judgment accordingly; if the bill were taxed, the Local Court would enter judgment for the amount of the master's certificate.
There is difficulty in adopting that course in the Magistrates Court because of the time provisions in the Legal Practitioners Act 1970. As previously mentioned, a person to whom an itemised statement of costs and disbursements has been delivered may within one month after the delivery of the statement or within such further time as the Registrar allows, give notice that he wishes to have the amount payable by him determined by taxation (s.111(1)). The Registrar shall not allow further time for the giving of notice unless he is satisfied that it was not practicable for notice to be given within one month after the delivery of the statement (s.111(4)). As a practical reality it is very probable that the period of one month after the delivery of the itemised statement would have expired by the time the Magistrates Court came to determine the reasonableness of the solicitor's bill, and only the Registrar of the Supreme Court, not the Magistrates Court, has power to extend time. Therefore, the suggested course of giving the client an opportunity of taking an adjournment for a reasonable time to enable him to seek a taxation of the bill would not seem to offer a practical solution. The fact that the appellant did not take the adjournment or apply for taxation would not seem to provide a satisfactory basis for a conclusion that he accepted the reasonableness of the bill.
In the present case, the appellant has never accepted the respondent's bill as reasonable and proper and his refusal to have the bill taxed does not give rise to any inference that he has. His refusal to accept taxation, as proposed by the Magistrate, his appeal to the Supreme Court and appeal to this Court, all indicate that he still disputes the reasonableness of the bill.
In our opinion, the Magistrates Court should have approached the matter by requiring the appellant to identify the items in the bill of costs which he disputed and the grounds on which he relied. If the Court were satisfied that those items, or some of them, warranted investigation, two courses would have been open. The Court could, of course, have received material relevant to the items in dispute and itself adjudicated thereon. Alternatively, the Court could have referred the disputed items to the Clerk of the Court as a referee for inquiry and report to the Court whether those items were fair and proper to be allowed and, if so, in what amount. The report of the Clerk would then have come before the Court for final adjudication.
We have not dealt with the appellant's ground of appeal No. 2(b) relating to alleged misconduct by the respondent. The ground of appeal was not fully argued before this Court and it is unnecessary for the purpose of disposing of the appeal to deal with the substance of the claim of misconduct. In our view, however, the Magistrates Court should have regard to any evidence on the subject as it is relevant under O.65 r.8 of the Supreme Court Rules and give the matter such effect and weight as seems appropriate.
The appeal is allowed with costs. The judgment of the Supreme Court of the Australian Capital Territory is set aside and in lieu thereof it is ordered that the appeal to that Court be allowed with costs, that the judgment of the Magistrates Court be set aside and that the special claim be remitted to the Magistrates Court for further hearing and determination.
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