Vortech Installation Pty Ltd v Mechanical Project Management Pty Ltd
[2017] WADC 142
•2 NOVEMBER 2017
VORTECH INSTALLATION PTY LTD -v- MECHANICAL PROJECT MANAGEMENT PTY LTD [2017] WADC 142
| DISTRICT COURT OF WESTERN AUSTRALIA | Citation No: | [2017] WADC 142 | |
| Case No: | CIVO:22/2017 | ON THE PAPERS | |
| Coram: | DEPUTY REGISTRAR HARMAN | 2/11/17 | |
| PERTH | |||
| 10 | Judgment Part: | 1 of 1 | |
| Result: | Grounds for review not established | ||
| PDF Version |
| Parties: | VORTECH INSTALLATION PTY LTD MECHANICAL PROJECT MANAGEMENT PTY LTD |
Catchwords: | Taxation Objection to taxation Turns on its facts |
Legislation: | Nil |
Case References: | Smith v Buller (1875) LR 19 Eq 473 |
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Applicant
AND
MECHANICAL PROJECT MANAGEMENT PTY LTD
Respondent
Catchwords:
Taxation - Objection to taxation - Turns on its facts
Legislation:
Nil
Result:
Grounds for review not established
Representation:
Counsel:
Applicant : No appearance
Respondent : No appearance
Solicitors:
Applicant : Mills Oakley
Respondent : Lavan Legal
Case(s) referred to in judgment(s):
Smith v Buller (1875) LR 19 Eq 473
1 DEPUTY REGISTRAR HARMAN: As the result of amendment that took effect on 29 November 2016, s 43 of the Construction Contracts Act 2004 is in part as follows:
(1) …
(2) A party entitled to be paid an amount under a determination may enforce the determination by filing in the court of competent jurisdiction -
(a) a copy of the determination that the Building Commissioner has certified to be a true copy; and
(b) an affidavit as to the amount not paid under the determination.
(3) On filing under subsection (2), the determination is taken to be an order of the court, and may be enforced accordingly.
2 Prior to that datea party seeking to so enforce a relevant determination had been required to obtain a grant of leave of the court to do so.
3 By its originating summons filed on 1 March 2017 the applicant sought leave to enforce a determination as a judgment.
4 Having filed an appearance the respondent attended on the date of hearing specified in the application. By consent an order was made in the terms of the respondent's minute that provided for further affidavits, submissions and a date for hearing.
5 At the hearing no issue that had been presented for determination was considered. The application was dismissed and the respondent awarded its costs of the action.
6 The respondent's bill of costs was taxed and it has now filed objections.
7 Order 66 r 53 of the Rules of the Supreme Court 1971 provides scope for review as follows:
(1) A party who contends that the Taxing Officer has made an error in principle in allowing or disallowing any item or part of an item in a bill of costs taxed by him may, at any time before a certificate of taxation dealing finally with that item is signed, …
(a) deliver to the other party interested in the allowance or disallowance and carry in before the Taxing Officer, an objection in writing to the allowance or disallowance specifying in the objection on a list, in a short and concise form the items or parts of items objected to and the grounds and reasons for objections …
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1 | 21/3/17 |
| 11(d) | $200.00 |
2 | 17/3/17 – 2/5/17 |
| 11(a) | $11,900.00 |
9 Under the order for costs the respondent was entitled to recover the reasonable cost of services necessarily provided to it for the purposes of the action.
10 Upon application of the test of necessity, recovery under the order was allowed for both the service specified at item 1 and particular parts of item 2; those parts being the memorandum of appearance and the hearing. Having been provided to the end that leave ought not be granted, recovery under the order was disallowed for the balance of the parts of item 2.
11 To the extent that recovery had been allowed, the fee assessed as reasonable was $600. In accordance with convention the result was recorded by taxing off $11,500.
12 The objection to the determinations made in relation to items 1 and 2 is as follows:
1. The respondent objects to the registrar's disallowance of $11,500 on the basis that it is manifestly wrong in view of the following:
1.1 The respondent was the successful party in the action being an application by the applicant for leave to enforce a determination made under the Construction Contracts Act 2004 (WA). The application was dismissed with an order that the plaintiff pay the defendant's costs [sic].
1.2 The costs incurred by the respondent were the result of agreed programming orders between the parties.
1.3 The costs incurred were for:
1.3.1 drafting a memorandum of appearance;
1.3.2 reviewing and considering the applicant's documentation including:
(a) two affidavits in support of its application the first being two pages plus 11 pages of annexures and the second being five pages plus 20 pages of annexures;
(b) written submissions comprising four pages;
1.3.3 the drafting of two affidavits in opposition to the applicant's application the first being 15 pages plus 55 pages of annexures and the second being 6 pages plus 49 pages of annexures;
1.3.4 drafting submissions comprising 13 pages (including research necessary for the preparation of those submissions);
1.3.5 conferral prior to the directions hearing on 21 March 2017 to agree on a minute of proposed orders;
1.3.6 preparation for and attendance at the directions hearing on 21 March 2017;
1.3.7 preparation for and attendance at the substantive hearing on 2 May 2017; and
1.3.8 all other work necessary to bring the matter to the substantive hearing.
1.4 The order for costs was in no way limited. For example, the order did not award only a portion of the costs otherwise payable.
1.5 The costs claimed by the respondent were reasonable even though the registrar dismissed the application on the basis that the application was not required to be made.
14 The only disallowance undertaken in the course of taxation was of recovery for services. The only reference had to $11,500 was for an administrative purpose after the intervening step of valuing services for which recovery had been allowed under the order for costs had been undertaken. There was no disallowance of $11,500.
15 Because the disallowance of parts of item 2 is likely to have substantially accounted for $11,500 being taxed off the claim, I have considered that the respondent may have intended to attribute the contention of manifest error to that determination. The difficulty with what I propose lies in ascertaining whether any of pars 1.1 - 1.5 would identify any error in that determination. In my opinion pars 1.1 - 1.4 do not even raise a complaint regarding the disallowance of services. At par 1.5 the respondent expresses no more than that it considers that the claim in the bill was reasonable. That assertion is hardly to the point; the process of review is confined to determinations of the taxing officer.
16 To the end of further assisting the respondent I have also considered that the words 'disallowance', 'manifestly wrong' and 'reasonable' may be constituted as the objection and the balance would somehow be drawn in support: to the effect that the respondent would propose that the test of recovery for services is that they had been reasonably provided. Before I go any further, what I propose amounts to a level of assistance that might be considered available but not necessarily be accorded to an unrepresented litigant.
17 That necessity is the test of provision of a service or its parts was established inSmith v Buller (1875) LR 19 Eq 473. The ratio of that case did not emerge in a barren landscape. It was decided at a time when the scope of recovery under the usual order for party and party costs had long been a vexed question. Beneficial parties had sought to recover to an extent that may be characterised as an indemnity and adverse parties, to limit the extent their exposure.
18 Although particularly in relatively recent times there has been commentary and what might be characterised as loose language expressed in reasons for decision that may suggest otherwise, I am not aware of any authority that in coming to grips with the question of the scope of recovery under the usual order, addresses the ratio of Smith v Buller and establishes any different result.
19 Without referring to any particular instances, such language is revealed where the test that applies in the context of solicitor and client taxations is portrayed as the test of recovery party and party and also where the scope of recovery is put along the lines that costs have been either 'reasonably and necessarily' or 'reasonably or necessarily' incurred.
20 In the context of considering the question of recovery for services under an order for the costs of an action, applying the first of the latter illustrations is cumbersome but ultimately the qualification would be benign. It takes little imagination to recognise that the second would fatally compromise the true test of recovery.
21 On a plain reading the respondent's objection is insufficient to establish a basis for review of the determinations made at taxation. To the extent that I have contemplated the respondent had intended to object I am not persuaded that the test applied to recovery for services under the order was incorrect.
22 It follows that I do not consider that the objection engages with the limited scope of jurisdiction provided by O 66 r 53(1) to review the determinations made upon taxation of items 1 and 2.
23 Because the determination of quantum of the fee recoverable for the services that were allowed was not a significant feature of the taxation, I consider that it is unlikely that upon any interpretation of the objection it would be taken as referable to that determination. Be that as it may, I will record that to the extent that there may be scope for judicial review of a quantum determination, the respondent does not contend that no taxing officer acting reasonably could have ever so determined.
24 I have been asked to provide the grounds and reasons for decision by reference to the objection and any special facts or circumstances relating to the decision.
25 As for pars 1.1, 1.4 and 1.5, there is nothing to add.
26 As for par 1.2 I accept that the services that were disallowed were provided in accordance with the procedural order. Section 43 of the Act rendered the provision of such services unnecessary. At all material times the respondent's solicitor had actually been aware of its amendment. If that had not been the case, the result would have been no different.
27 As for par 1.3, the services specified at par 1.3.6 correspond with item 1 and those specified at pars 1.3.1 and 1.3.7 with the parts of item 2 that were allowed. The balance of the services specified at par 1.3 are the parts of item 2 that were disallowed.
28 The next determination addressed by the respondent's objection was that which relates to item 3 of the bill. It appears as follows:
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3 |
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| 29(a) | $500.00 |
29 At taxation the service provided was allowed. The quantum of the fee recoverable for its provision was determined at $200.
30 The respondent's objection is as follows:
The respondent objects on the basis that the amount disallowed of $300 is not reasonable in light of the fact the respondent was the successful party in the application and is entitled to the costs of preparing its bill of costs.
31 The respondent has correctly identified the test that was applied in determining the quantum recoverable, however $300 was not disallowed; it was simply taxed off the claim in order to record the result.
32 To characterise itself as the successful party in the application is an interesting proposition. Be that as it may, as much as the fact that a party had been successful in an action would have no bearing upon the assessment of the quantum of the fee recoverable for services provided to that end, it could not have any bearing on services provided to the end of recovery of the fee.
33 Although the respondent was given the costs of the action, the benefit accorded is limited by the scope of the action. The process specified in the item is not within the scope of the order. Recovery of the costs of the process of taxation is subject to the discretion of the taxing officer. A beneficial party has no entitlement to recover such costs.
34 The respondent did recover under the claim made in the bill.
35 The objection does not express any allegation of error. In my opinion it does not enliven the jurisdiction established by r 53(1).
36 To the extent that there may be scope for judicial review of a quantum determination I only note that the respondent does not contend that no taxing officer acting reasonably could have ever so determined.
37 The respondent has asked for the grounds and reasons for decision by reference to the objection and any special facts or circumstances relating to the decision.
38 Both in relation to this item and the claim for the taxation itself, the applicant submitted that the measure of the respondent's failure in recovering fees claimed under item 2 of the bill was so significant that recovery by the respondent of its costs of the process of taxation could not be justified. The applicant maintained that the claim made at item 2 was for far more than could objectively be justified by the context in which the order was made, particularly because at all material times the respondent's solicitor had been aware that the court had no jurisdiction to adjudicate upon the issues raised in the proceeding.
39 Although I agreed with the propositions that grounded the submission I considered that the respondent should recover for the service. Consideration of what was a reasonable fee for its provision took into account the context in which the order had been made and the standard that applies in applying the test of reasonableness. As for the context, it was appropriate to consider that the solicitor with the conduct of the file had understood and reflected upon the impact of what had been communicated to the parties at the hearing regarding the scope of recovery. Otherwise application of the standard resolves to the proposition that what is reasonable for provision of a service is determined on the basis that it had been provided in an efficient manner by a competent practitioner with conduct of the file.
40 The extent of recovery for provision of the service reflected its limited success on the taxation of its bill not the bill that was filed.
41 The respondent's last objection is taken to the determination made in relation to item 4 of the bill, claimed as follows:
Item number | Date | Detail | Scale Item | Amount |
4 |
| 29(b) | $297.00 |
42 The claim was disallowed upon the exercise of discretion.
43 The respondent's objection is as follows:
The respondent objects on the basis that amount disallowed of $297 is not reasonable in view of the fact the respondent was the successful party in the application and is entitled to its costs of attending the taxation.
44 To characterise itself as the successful party in the application is an interesting proposition. Be that as it may, as much as the fact that a party had been successful in an action would have no bearing upon recovery for services provided to that end, it could not have any bearing on services provided to the end of recovery for those services.
45 The benefit accorded by the order for costs was limited by reference to the scope of the action. The issues presented for determination upon taxation of the bill of costs did not emerge in the action. The process specified in the claim is not within the scope of the order. Recovery of the costs of the process of taxation is subject to the discretion of the taxing officer. A beneficial party has no entitlement to recover such costs.
46 The objection does not express any allegation of error. In my opinion it does not enliven the jurisdiction established by r 53(1).
47 As for the grounds and reasons for the determination, in the process of taxing the claim the applicant submitted that the result of taxation would justify not only non-recovery by the respondent but also recovery by the applicant of its costs of the taxation.
48 I was satisfied that upon the order being made the respondent had been given an explicit caution as to the scope of recovery. The purpose of that caution was to facilitate agreement in circumstances where it was likely that the costs of taxation would exceed the costs recoverable under the order.
49 It was open to consider that had the respondent addressed the question of recovery under the order with a measure of objectivity there would have been no need for taxation.
50 By the measure of its claim at item 2 the respondent had been largely unsuccessful. In my opinion that was a more significant consideration than that the respondent was the beneficial party. In the result the applicant was successful in persuading me that the respondent should not recover the costs of the taxation.
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