Wagdy Hanna and Associates Pty Limited v Gavagna (No 2)
[2017] ACTSC 4
•13 January 2017
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Case Title: | Wagdy Hanna and Associates Pty Limited v Gavagna (No 2) |
Citation: | [2017] ACTSC 4 |
Hearing Date: | 17 March 2016 |
DecisionDate: | 13 January 2017 |
Before: | Mossop AsJ |
Decision: | See [52] |
Catchwords: | COSTS – Review of Registrar’s assessment of costs – Court Procedures Rules 2006 (ACT), r 1855 – Where Registrar had reconsidered earlier assessment of costs – Whether counsel’s fees should have been awarded on the basis of there being a “fee on brief plus refresher” – Whether GST recoverable in relation to the professional costs where party is a self-represented solicitor – Whether the agreement between the parties went to liability for the costs of assessment or only the quantum of those costs – Whether amount permitted for defendant’s expert was excessive |
Legislation Cited: | Court Procedures Rules 2006 (ACT), rr 1722, 1734, 1811, 1835, 1852, 1854, 1855 Federal Court Rules 2011 (Cth), r 40.34 Uniform Civil Procedure Rules 1999 (Qld), r 742 |
Cases Cited: | Australian Coal & Shale Employees’ Federation v The Commonwealth [1953] HCA 25; (1953) 94 CLR 621 Bechara trading as Bechara and Company v Bates [2016] NSWCA 294 Wagdy Hannah and Associates Pty Ltd ACN 008 647 541 v Steven Gavagna [2014] ACTSC 97 |
Parties: | Wagdy Hanna and Associates Pty Limited (ACN 008 647 541) (Plaintiff) Steven Gavagna (Defendant) |
Representation: | Counsel K E Hubert (Plaintiff) M Dudman (Defendant) |
| Solicitors Capon & Hubert Lawyers (Plaintiff) Mills Oakley (Defendant) | |
File Number: | SC 284 of 2007 |
MOSSOP AsJ:
Introduction
The plaintiff brought a claim against the defendant alleging a contract with him. The final hearing of the claim occurred on 13 and 14 February and 9 and 10 October 2012. That claim was dismissed with costs on 21 May 2014: Wagdy Hannah and Associates Pty Ltd ACN 008 647 541 v Steven Gavagna [2014] ACTSC 97.
The assessment of those costs took place on 18, 19 March 2015, 1, 28, 29 April 2015, 23, 24, 25, 26 June 2015. The plaintiff and defendant were legally represented during the course of this assessment. On 26 June 2015 the Acting Deputy Registrar ordered that a certificate of assessment pursuant to r 1835 of the Court Procedures Rules 2006 (ACT) (CPR) be issued in the sum of $129,025.18. That included the costs of the assessment of $28,535.
The orders made on that day have not been perfected. However, the bench sheet dated 26 June 2015 provides:
1.Apply 10% uplift to bill – professional costs [which I take it to be a reference to an amount for care and skill rather than an uplift in the sense referred to in the Legal Profession Act 2006 (ACT)]
2. Certificate of assessment pursuant to rule 1835 (CPR) in the amount of
$134,050.57$129,025.18·total amount of bill including 10% uplift - $100,490.18
·costs of assessment (party/party)
-$28,500- $23,475
-$5060.39 (disbursements)- $5,060
By application in proceeding filed in July 2015 the plaintiff applied for reconsideration of the Acting Deputy Registrar’s decision of 26 June 2015. On 29 October 2015 the Acting Deputy Registrar gave her decision on reconsideration which included her reasons for that decision. The effect of that decision was that a certificate of assessment would be issued for the amount of $129,014.28, which was the amount at which the bill was originally assessed less $10.90. The plaintiff was ordered to pay the defendant’s costs of the reconsideration which were assessed in the sum of $800.
By application in proceeding filed 12 November 2015 the plaintiff applied pursuant to r 1855 of the CPR for review by the Court of the Acting Deputy Registrar’s decision. It is this application with which I am now dealing. The application was heard on 17 March 2016 by which time the plaintiff was again represented by a solicitor different to the solicitor which had represented it during the costs assessment. At the time of the hearing the Court of Appeal had reserved its decision on an appeal from the dismissal of the plaintiff’s substantive claim. Had that appeal been successful it would have altered the position in relation to costs. On 17 March 2016 I dismissed an application for a stay of the orders of Harper M made on 21 June 2014 until after the decision of the Court of Appeal. I considered it more appropriate to address any question of a stay at the point when a decision could be delivered on the application for review. The Court of Appeal delivered its decision dismissing the appeal on 25 November 2016: Wagdy Hannah & Associates Pty Ltd v Gavagna [2016] ACTCA 64. The delivery of that decision has eliminated any need for a consideration of the stay of the orders which I will make.
The regime for costs assessment, reconsideration and review
Following an assessment of costs the Registrar is obliged to issue a certificate of assessment for the amount at which a bill of costs has been assessed: r 1835(1) of the CPR. When it is signed, sealed and filed by the Registrar it operates as if the certificate were an order of the Court: r 1835(6). However, subject to some presently irrelevant exceptions, the Registrar cannot sign a certificate until the end of 14 days after the day the assessment is made unless the parties agree: r 1835(2). If the procedure for reconsideration of a decision of the Registrar under r 1852 is invoked then the Registrar must not sign the certificate of assessment “until after the reconsideration procedure ends”: r 1835(4). If, on the other hand, the reconsideration procedure under r 1852 is not invoked then the Registrar is obliged to sign and file the certificate of assessment: r 1835(5).
Rule 1852 permits a party to apply for reconsideration of a decision of the Registrar by giving notice to the Registrar no later than 14 days after the day the assessment was made: rr 1852(1)-(2). The applicant for reconsideration must file with the notice a statement of objection which:
(a)gives the number of each item on the bill of costs to which the decision objected to relates; and
(b)briefly states the reasons for each objection identifying any issue of fact or law the applicant considers the Registrar must consider to make a decision in favour of the applicant: rr 1852(3)-(4).
If the applicant for reconsideration is the party liable to pay the costs then the applicant cannot include in the statement of objection any objection not previously taken or sought to be taken: r 1852(6).
The other party may file a reply to the statement of objection which itself must state specifically any issue of law or fact that the party filing the reply considers the Registrar must consider in order to make a decision in favour of the party: rr 1853(1)-(2).
The Registrar is then obliged to reconsider a decision objected to having regard to the statement of objection as well as any reply and give reasons for the decision on reconsideration: r 1854(1). Once that is done the Registrar is obliged to issue a certificate of assessment in accordance with the decision on reconsideration and, subject to review by the Court under r 1855, a certificate of assessment so issued is final: rr 1854(1)(c), 1854(2).
Rule 1855 provides that a party dissatisfied with the decision of the Registrar on reconsideration under r 1854 may apply to the Court to review the decision. The application must give the number of each item in the bill of costs to which the decision objected to relates, state the grounds for objecting to the decision and the reasons for the grounds as well as the decision sought from the Court in relation to each objection: r 1855(2). On a review a party must not present evidence or raise any ground of objection not stated in a statement of objection or raised before the Registrar unless the Court otherwise orders: r 1855(4). The powers of the Court on the review are set out in r 1855(5) as follows:
(5) On the review, the court may—
(a) exercise all the powers of the registrar in relation to the items of the bill of costs under objection; and
(b) amend or set aside the registrar’s decision; and
(c) return any item in the bill of costs to the registrar for reconsideration, whether with or without directions to the registrar; and
(d) make any other order it considers appropriate.
Unless the Court otherwise orders the review does not operate as a stay of the Registrar’s decision: r 1855(6). Notwithstanding this provision it appears that no attempt was made to enforce the Acting Deputy Registrar’s decision pending the determination of the application for review.
Rule 1855 is relevantly similar to r 742 of the Uniform Civil Procedure Rules 1999 (Qld). That rule also contains a prohibition on the Court receiving further evidence and confines a party to grounds of objection relied on below. In these two respects it is similar to r 40.34 of the Federal Court Rules 2011 (Cth). The nature of the “review” provided for by the latter rule was considered by Edelman J in Cassimatis v Australian Securities and Investments Commission [2016] FCA 131; (2016) 334 ALR 350 (Cassimatis). His Honour (at [12]-[16]) considered that the hearing was a modified form of hearing de novo which confined the evidence to that which was relied on below and permitted regard to be had to the conclusion reached by the registrar having regard to the registrar’s experience and knowledge of the circumstances. His Honour adopted the statement of Kitto J in Australian Coal & Shale Employees Federation v The Commonwealth [1953] HCA 25; (1953) 94 CLR 621 at 628 who adopted the following passage from Schweppes’ Ltd v Archer (1934) 34 S.R. (NSW) 178:
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 … 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.
There appears to be a difference in approach between that adopted by Edelman J in Cassimatis and that adopted by Kirby J in Sanders v Snell (No 2) (2000) 174 ALR 53 (Sanders). In Cassimatis, Edelman J attempts to reconcile his approach with that of Kirby J at [16]. It is not necessary to attempt to reconcile these two decisions or to consider whether the explanation of Sanders in Cassimatis is the correct method of reconciliation. It is sufficient for the purposes of the present application to adopt the same approach as articulated by Edelman J.
Orders sought on review
The application for review identified five aspects of the Acting Deputy Registrar’s decision which the plaintiff sought to be varied. They were articulated as follows:
1. The fees allowed for Steven Gavagna be reduced by $3426.21.
2. The fee on brief allowed by Acting Deputy Registrar Mutharaga [sic] for Graeme Blank of Counsel on 14 February 2012, 9 October 2012 and 10 October 2012 claimed as part of item 548 in the Defendant’s bill of costs be reduced from $2,397, $2,485 and $2,485 (ex GST) to $1,598, $1,665 and $1,665 (ex GST) respectively.
3. No allowance should be made in the Defendant’s costs for any GST unless the Defendant can demonstrate that he has actually paid GST.
4. The costs of assessment of $28,535 be reduced to nil.
5. Fees allowed for the expert report be reduced from $11,118.78 to $2887.50.
The application set out extensive grounds in support of the application which were, in effect, written submissions. The defendant filed written submissions and both parties made oral submissions at the hearing on 17 March 2016. I will deal with each of the plaintiff’s contentions separately.
I note that the material available to me did not include all of the exhibits that were before Harper M. Nor did it include any material that was considered during the course of the nine day costs assessment. Although appeal books must have been prepared for the purposes of the appeal to the Court of Appeal these were not made available to me for the purposes of this review. It is for that reason that I permitted some documents referred to by the parties to be tendered. The limited material before the Court did, however, make it more difficult for the plaintiff to succeed on some aspects of its submissions.
Ground 1: Fees for Steven Gavagna
This was not pressed by the plaintiff at the hearing.
Ground 2: Counsel’s fees
The plaintiff contended that counsel’s fees should have been awarded on the basis of there being a “Fee on brief” which included preparation and the first day of the hearing followed by fees for subsequent days being amounts on a “refresher basis”. The plaintiff referred to the decision of Higgins J in Bennett v Seaman (1993) 117 ACTR 1 (Bennett).
In Bennett Higgins J said (at 9-10):
It has been traditional that a brief fee includes preparation and not less than the first five hours of hearing. Subsequent days are allowed at the refresher rate, traditionally not more than two-thirds of that fee. Junior counsel’s fees should, normally, not exceed two-thirds of senior counsel’s fees in the same matter.
It should be emphasised that these guidelines may be departed from in the proper exercise of the taxing officer’s discretion.
As to the rate at which counsel’s fees are to be allowed, the registrar annually publishes a list of fees which will normally be allowed to counsel for various services on a party and party taxation. That list is, again, a norm which may be varied above or below the figure so recommended in the proper exercise of a taxing officer’s discretion.
...
In my view, it is immaterial whether counsel choose to charge a daily rate plus preparation for a brief fee (including preparation) for the first day and a lower rate for refreshers thereafter.
In Magna Alloys and Research Pty Ltd v Coffee (No 2) [1980] VR 97 at 105, Fullagar J took the view that, however counsel may have “remodelled” their charges, the reasonableness of the fees charged should be judged against the “old established principles”.
It was concluded in that case that a fee charged for 10 hours’ preparation should have been included in the brief fee. That conclusion was not so expressed as to amount to an opinion that in all cases up to 10 hours preparation’ should be regarded as included in the usual fee on brief.
Rather, it was his Honour’s view that the fees actually charged should be compared with the traditional method of charging and, in the circumstances of the case, a judgment made as to whether the usual level of brief fee, and thus of refreshers, should be increased to reflect additional preparation time whether before or during the hearing.
The taxing officer clearly has a discretion, in my view, as to whether to allow a separate preparation fee as part of the allowance of counsel’s fees. However, the usual fee on brief provides a standard as to what, usually, will be regarded as a reasonable fee in the circumstances.
His Honour then quoted from the judgment of Ashley J in Prudential Finance Ltd v Davandar Nominees Pty Ltd [1992] 1 VR 468 at 473-474. In that judgment Ashley J summarised the principles to be applied in terms with which Higgins J agreed. Those principles, which are too lengthy to set out in full, included:
4. In exceptional cases (which may be of many and greatly differing kinds) involving many days and often weeks work, the taxing master has a wide discretion to allow on party and party taxation preparation fees fixed at a daily rate: Magna Alloys [and Research Pty Ltd the Coffee (No 2) [1980] VR 97] at 112.
It is my clear impression that cases in which it will be proper to allow preparation fees at a daily rate on party and party taxation are likely to be more common, numerous and less “exceptional” in consequence than was the case a decade ago. In a variety of areas of practice the last decade has seen the emergence of new and complex work. Within established areas of practice the last decade has seen litigation of unprecedented individual scale, with attendant complexity.
5. As with other cost items, the question whether separate preparation fees should be allowed by the taxing master on a party and party basis is whether such fees were necessary or proper to be incurred … The answer to that question is not provided by the mere fact that, pursuant to an agreement between counsel and his instructing solicitors, a daily preparation fee is agreed to apply to however many days preparation is in fact undertaken … The question is: would it be necessary or proper for a reasonably prudent man, endeavouring to get justice, but endeavouring to get it without undue expenditure of money to incur the expense in question?
I observe that the trend identified in item 4 above towards cases warranting the allowance of preparation fees at a daily rate has only increased in the 15 years since Ashley J summarised the relevant principles.
The decision of the Acting Deputy Registrar on this point was as follows:
25.The eighth ground of review raised by the plaintiff is in respect of counsel’s fees and simply reiterates the written submissions in the plaintiffs further objections to bill of costs filed on 25 March 2015.
26. These arguments were dealt with at great length during the assessment and each individual item on counsel’s bill was analysed on its merit and significant reductions were made in respect of objections allowed in full or in part in relation to the items in question.
27.I considered the calculation of each and every charge by counsel on an item by item basis and considered the issue of a refresher fee in detail during the costs assessment. I determined that the refresher fee, as argued by the plaintiff, does not apply in these circumstances given a brief fee was not charged by counsel. Instead, counsel for the defendant charged preparation fees and hearing fees separately. I determined that refresher fees did not apply to days claimed by the plaintiff. I allowed all four hearing days to be recovered but adjusted the amount to the amount reflected in the Registrar’s Guidelines for Counsel’s fees for the relevant periods.
28. The plaintiff has not raised any further argument other than that which had already been raised during the course of the costs assessment, noting that each individual fee was assessed by cross-checking it with the defendants file a as well as the items in the bill of costs.
In my view, there is no rule derived from authority or otherwise that would require counsel’s fees to be assessed on the “fee on brief plus refresher” basis. It is clearly within the scope of the assessing officer’s discretion to permit separate amounts for preparation. There is now a significant discontinuity between the approach articulated as the “traditional” approach as at 1993 and the approach to be adopted in relation to fees incurred in 2012. Having regard to the limits on the scope of argument presented in the present case it is not appropriate that I attempt to articulate any general principle. It is sufficient to determine this case on the basis that notwithstanding the statements made by Higgins J in Bennett, there was no error of principle on the part of the Acting Deputy Registrar in dealing with the matter in the manner that she did. So far as the exercise of discretion in relation to the quantum is concerned, that is a matter upon which I place weight upon the assessment made by the Acting Deputy Registrar. I therefore conclude that the decision reached by the Acting Deputy Register in relation to counsel’s fees should not be varied.
Ground 3: GST
The plaintiff contended that no allowance should be made in the defendant’s costs for any GST unless the defendant could demonstrate that he has actually paid GST.
The defendant submitted that the issue of whether a successful party is entitled to seek reimbursement of GST as a party/party costs depends on whether that party is entitled to an input tax credit. If, on the one hand, the successful party is registered for GST and has an entitlement to an input tax credit for GST paid on their legal costs then the party cannot claim an amount for GST as a party/party costs. If on the other hand the successful party is not registered for GST or not entitled to an input credit for the GST then the party can claim GST paid on legal costs as a party/party expense. The defendant contended that this was a consequence of GST ruling 2001/4 and submitted:
As the Defendant was not registered for GST he is able to claim GST paid on his legal costs as a party/party expense as he is not entitled to an input tax credit.
The reasons of the Acting Deputy Registrar provided as follows:
24. I do not have any evidence before me that the defendant did not pay any invoices to Goodman Law nor that he did not pay for disbursements in respect of the matter. Accordingly, I will not allow the objection to deduct 1/11th from the total professional costs allowed and from the total disbursements allowed.
In oral submissions the plaintiff accepted that disbursements had been paid, but submitted that there was no evidence of any fees agreement or invoices from Goodman Law (the defendant’s legal practice) to the defendant or evidence of any payment. I indicated to the parties that unless they wished to prove otherwise I would proceed on the basis that there was no such evidence. Each party indicated that it was content for me to proceed on that basis.
Therefore the factual basis upon which I determine this issue is:
(a)The defendant is not personally registered for GST;
(b)He conducts his legal practice through a company wholly owned by him;
(c)There is no evidence that any tax invoice has been issued by the company to him; and
(d)There is no evidence that he has paid any amount to the company.
In those circumstances, it is appropriate to include GST on cost amounts?
Rule 1722(2) of the CPR provides that the costs under the prescribed scale of costs for work done are inclusive of any GST payable in relation to the work. However, r 1722(3) provides that the cost payable to a party are reduced by the amount of any input tax credit for GST to which the party is entitled in relation to the party’s costs.
I accept that in relation to a usual case in which the party has retained a solicitor the question is not whether a bill has been issued, but rather whether a liability exists: CSR Ltd v Eddy [2008] NSWCA 83; (2008) 70 NSWLR 725 at [48]-[52]. However, in the present case the claim for costs does not appear to be based on a liability on the defendant’s part, but instead on the basis of the exception to the general rule that a self-represented person may not recover costs provided by the line of authority following London Scottish Benefit Society v Chorley (1884) 13 QBD 872 (Chorley). That case held that a solicitor who acted for himself in litigation was entitled to the same costs as if he had engaged another solicitor to do the work except for items such as obtaining instructions or attendances, which were unnecessary because the solicitor was his own client.
This exception was recognised by the High Court in Guss v Veenhuizen (No 2) [1976] HCA 57; (1976) 136 CLR 47 at 51 as being established by the authorities. The exception was described by the majority judges in Cachia v Hanes (1994) 179 CLR 403 (Cachia) as “somewhat anomalous” (at 411) and as a “limited and questionable exception” which provided no basis for overturning the general principle that a self-represented person was not entitled to compensation for their time involved in the conduct of litigation (at 413). Notwithstanding the disparagement of the exception in Cachia (and the subsequent decisions collected in Bechara trading as Bechara and Company v Bates [2016] NSWCA 294 at [28]) it remains the basis upon which, in the absence of any liability to another entity, the defendant may recover his costs.
So far as the defendant himself is concerned, it does not appear to me to be appropriate to include an amount of GST where the costs are recoverable not by reason of the provision of any service but instead as compensation for expenditure of time and effort even if that compensation is quantified by reference to an amount which might have been incurred as a liability if such a service was provided. This approach appears to be consistent with the decision of Mortimer J in Beling v Sixty International SA (No 2) [2015] FCA 355 at [64].
So far as the time and effort of employed solicitors and clerks are concerned, Chorley itself extended the principle to recovery of costs incurred when the work was done by the solicitor’s clerk (see Chorley at 875, 877) and, in my view, there is no difference in principle when the work is done by an employed solicitor
The fact that for commercial reasons the defendant is permitted to conduct his practice through a wholly owned company does not undermine the fact that he is acting on his own behalf. I consider that notwithstanding the interposition of a practice company, for the purposes of the principle in Chorley the defendant should be treated as though he was acting on his own behalf without the interposition of that entity.
Therefore, in my view, GST is not recoverable in relation to the professional costs allowed to the defendant. The position is different in relation to disbursements where it is clear that a GST requirement has been or is required to be paid. The result is that the assessment of the Acting Deputy Registrar must be amended so as to exclude the GST component from solicitors’ costs but not from disbursements.
Ground 4: Costs of costs assessment
The plaintiff contended that it should not be required to pay the costs of the costs assessment. The plaintiff contended that although the quantum of the costs for the cost assessment had been agreed, that did not involve any acceptance that the plaintiff should be liable for that amount. The defendant submitted that the agreement as to costs of the assessment included a compromise of the entitlements of the defendant and involved an agreement that the plaintiff was liable for the costs of the assessment.
The decision of the Acting Deputy Registrar on this point was as follows:
17.I will deal with the fourth, fifth and seventh grounds of review together as they relate to items which were subject to an agreement reached between the parties on the final day of the costs assessment.
18.It is unclear from the plaintiff’s notice for reconsideration on these three grounds of review those items that are being subjected to specifically. The notice, however, makes reference to items 530, 531, 532, 533, 535, 536 and 540 and argues that these items duplicate the costs allowed for Blackstone Legal Costing.
19.An agreement was reached between the parties on the final day of the hearing as to the reasonable party/party costs of assessment. This agreement was endorsed by me on 26 June 2015.
20.The fees agreed by the parties on the final day of the cost assessment include a reduction to the fees actually charged for drafting the bill of costs and reflected the time spent by the defendant solicitors in relation to the preparation of the bill of costs and preparing for the costs assessment.
21.Accordingly, none of items 530-545, per se, were allowed on assessment due to the agreement between the parties as to the total costs of assessment in the amount of $28,535. This amount includes those items claimed in items 530-545 as well as the invoice of Blackstone Legal Costing. The plaintiff has not provided me with sufficient reason as to why it would be appropriate to review the quantum of costs that was subject to an agreement between the parties.
22. The plaintiff objects to costs allowed for travel and accommodation costs for Mr Dudman to attend on the assessment as although the defendant was entitled to engage a costs consultant from Sydney, the extra costs incurred in doing so are not fair and reasonable party/party costs. Again these costs formed part of the agreement between the two parties in respect of the total cost of assessment being $28,535. Again, the plaintiff has not provided me with sufficient reason as to why it would be appropriate to review the quantum of costs that was subject to an agreement between the parties.
The issue raised by the plaintiff is whether or not the agreement between the parties extended to an agreement as to liability for the costs of assessment or only the quantum of those costs reserving an entitlement to contend that they should not be payable or that only a proportion of those costs should be payable.
No additional evidence was called. While there was some attempt in submissions by the parties to go into what was actually said to the Acting Deputy Registrar about the nature of the agreement, there was no transcript or other proper evidence about what was said.
The reasons are not entirely clear as to whether the award of costs was based upon an agreement as to liability as well as quantum or as to quantum only. They appear to me to be more consistent with there having been an acceptance that the costs of assessment formed part of the costs of the proceedings and then an agreement as to the quantum of those costs.
Rule 1734(1) provides that the costs of proceedings include the costs of preparing a bill of costs and attending the assessment of costs. That is subject to r 1809 which is not presently relevant. There was no evidence of any offer to settle under r 1811 which might have protected the position of the plaintiff in relation to the costs of the assessment. Rule 1834, which qualifies the capacity of the registrar to allow costs of preparing a bill of costs or attending the assessment where the bill of costs was reduced by 15% or more, did not apply because that rule is limited to circumstances where cost is payable out of a fund or estate or from the assets of a company in liquidation. Thus even if the agreement between the parties amounted solely to an agreement as to quantum, no proper reason has been advanced why the defendant would not be entitled to the costs of the assessment. The fact that the amount assessed was substantially less than that which was claimed in the bill of costs does not, in the absence of offers to settle the question of costs, require a departure from the approach identified in r 1734.
In the light of the material before me it appears to be appropriate to confirm the Acting Deputy Registrar’s decision on this point.
Ground 5: Fees for expert opinion
The plaintiff contended that the amount permitted for the defendant’s expert architect, Mr Rihs, was excessive in that:
(a)it involved a rate which was substantially higher than that charged by the plaintiff’s architect;
(b)it involved the expert spending a significantly greater amount of time preparing his report and giving evidence than that spent by the plaintiff’s expert witness;
(c)it was not reasonable for the defendant to have engaged an expert from outside Canberra; and
(d)the terms of the report included matters not relevant to any issue between the parties and went beyond what was required to meet the plaintiff’s expert evidence.
In relation to this last point the plaintiff referred to remarks by Harper M during the course of the proceedings about the lack of relevance of an estimate by Mr Rihs of the market value of the work done by the plaintiff to any issue between the parties.
The defendant submitted that the defendant was obliged to engage an expert to respond the plaintiff’s case. He also submitted that the rates charged were not unreasonable and that the reasonableness of securing an expert from outside of Canberra was demonstrated by those entries in the bill of costs demonstrating the search undertaken by the defendant to secure an appropriate expert.
The decision of the Acting Deputy Registrar on this issue was:
29.The ninth ground of review raised by the plaintiff objects to costs allowed in respect of the expert report prepared by Mr Gerald Rihs or RIHS Architects. The items raised in this ground of review, again, revisit issues which were dealt with at length during the costs assessment.
30.It was acknowledged at the assessment that Mr Rihs’ report went beyond that of the plaintiff’s expert report prepared by Mr Martin. I made the determination during the costs assessment that it was fair and reasonable for the defendant’s expert to look beyond the evidence considered by the plaintiff’s expert in order to arrive at an opinion as to what may have been missing from the plaintiff’s plans and designs.
31.Further, I determined that it was reasonable to engage an interstate expert for this purpose and was satisfied that efforts have been made either defendant to locate a suitable local expert. Accordingly, it was fair and reasonable to engage an interstate expert and the experts travel time and expenses were similarly fair and reasonable.
32.The plaintiff does not raise anything in respect of this argument other than what was already raised in their further supplementary notice of objections to defendant’s bill of costs filed on 23 June 2015. I note that the arguments raised in the notice of reconsideration are simply a regurgitation of written submissions in plaintiff’s further supplementary notice of objections. Accordingly, I maintain my view that the expert fees claimed by the defendant are fair and reasonable.
33.It must be said that the objections filed by the plaintiff on 10 February 2015, 25 March 2015 and 23 June 2015 do not take me any further than the matters considered exhaustively during the nine day assessment. Limited additional information has been submitted by the plaintiff that takes the objections much further than those considered, and ruled upon, during the assessment.
The parties put in evidence before me:
(a)a document containing an explanation of the time spent and activities undertaken by Mr Rihs;
(b)an extract of the transcript relating to the cross-examination of the plaintiff’s expert, Mr Martin;
(c)a copy of the report of Mr Rihs.
Item 48 in sch 4 of the CPR provides that disbursements are to be “allowed to the extent that they have been properly and reasonably incurred and paid”.
The matters raised by the plaintiff do not raise any question of principle, but instead seek a different exercise of discretion than that of the Acting Deputy Registrar. Having regard to the conclusion reached by the Acting Deputy Registrar I do not consider it appropriate to reach any different conclusion to that reached by her. In relation to the particular arguments put forward by the plaintiff my reasons are as follows:
(a)The rate charged by the defendant’s architect, while substantially higher than that charged by the architect retained by the plaintiff, is not so high as to indicate that it was not properly and reasonably incurred and paid. I do not accept that a mere comparison of the architects’ formal qualifications should lead to the conclusion that the rate charged by Mr Rihs was not a disbursement properly or reasonably incurred by the defendant.
(b)The amount of time spent by Mr Rihs in receiving instructions and preparing the report appears to be rather high. However, in the absence of identification of the briefing material provided and an explanation as to precisely what was involved in the preparation of the report I do not consider it appropriate to reach a conclusion different to that reached by the Acting Deputy Registrar, namely that the disbursement was reasonably incurred and paid. So far as the time involved in travel and attendance at court is concerned, it is clear that those amounts were reasonably incurred and paid.
(c)While the plaintiff contended that there were other identified architects with relevant experience who practised in Canberra there was no evidence that those persons were available to be instructed by the defendant at the relevant time or that the fees charged by those persons would have been less than in fact charged by Mr Rihs. I therefore do not consider that the reference to the possibility of engaging Canberra-based architects provides a basis for concluding that the incurring of the disbursements for Mr Rihs was not proper and reasonable.
(d)The fact that Mr Rihs’ report was not limited to only matters responsive to the report served by the plaintiff is not a matter which indicates in this case that the disbursement was not properly and reasonably incurred. So far as the plaintiff referred to the remarks of Harper M, in the absence of the transcript of the proceedings, it is not possible to place weight on the extract that was in the plaintiff’s written submissions because it is not possible to assess the context in which it was made and hence whether or not it should be given weight in relation to costs in the light of its admission into evidence. The fact is that the report was in evidence. There is no evidence that any part of it was not admitted or its use limited. The contents of the report were referred to in some detail in the Master’s judgment ([113]-[115], [124]) and the evidence as to the market value of the work done by the plaintiff specifically accepted by the Master at [140]. In those circumstances, having regard to the content of the report, I am satisfied that the fees for its preparation were properly and reasonably incurred.
Conclusion and Orders
The plaintiff has succeeded in relation to its argument as to the recoverability of GST, but has otherwise not succeeded on the application for review. In order to give effect to my decision I will permit the parties to engage in the mathematical exercise of excluding from the assessed costs the amounts allowed for GST on professional costs (as opposed to disbursements). I will also hear the parties on costs. I then contemplate making orders:
(a)setting aside the decision of the Acting Deputy Registrar made on 29 October 2015;
(b)directing the Registrar to issue a certificate of assessment in an identified amount; and
(c)as to costs.
The orders of the Court are:
1. The proceedings are listed on 2 February 2017 at 10.00am for the making of final orders.
2. The parties are to confer and attempt to agree on the amount that, consistently with these reasons, should be the subject of a certificate of assessment.
3. The parties are to provide an agreed or competing figure for the amount of the costs certificate to my associate by email no later than 4pm on 1 February 2017. Any agreed figure may be accompanied by an explanation of how it is arrived at. In the event that the figure is not agreed each party’s proposed figure is to be accompanied by written submissions not longer than two pages explaining the party’s calculation.
4. The parties are to provide to my associate by email written submissions not longer than three pages on costs by 25 January 2017 and any written submissions in reply no longer than two pages by 4pm on 1 February 2017.
| I certify that the preceding fifty-two [52] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Associate Justice Mossop. Associate: Date: 13 January 2017 |
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