ZGTeek Pty Ltd v Michael Lurie and Associates

ZGTeek Pty Ltd brought an action against Michael Lurie and Associates, seeking a review of costs taxed by a taxing officer. The central issue was whether the taxed costs were so excessive as to manifest an error in principle. The case was heard in the Supreme Court of Western Australia. The dispute arose from the interpretation of the indemnity costs provision in the loan agreement between the parties, which stipulated that the losing party would indemnify the winning party's costs, including reasonable taxation costs.

The legal issues before the court involved determining whether the grounds for reviewing the taxed costs differed from the grounds of objection presented to the taxing officer. Specifically, the court had to consider whether the onus of proof lay with the party seeking to challenge the taxed costs and whether the excessiveness of the taxed costs could be established without cross-examining the practitioner's affidavits or presenting additional evidence. The court also had to determine if there was an error in principle, as outlined in Australian Coal & Shale Employees Federation v The Commonwealth and Mossensons (A firm) v Coastline Associates, and if so, whether this error was so significant that it manifested a manifest error in principle.

The court found that the grounds for review differed from those of objection and that the onus of proof rested on the party charged with the costs to show an error in principle. It was established that the taxed costs were excessive and that no taxing officer, acting reasonably, could have taxed the particular item in the amount in question. The court relied on the principle that an error in principle may occur both in determining whether an item should be allowed and in determining how much should be allowed. The court concluded that the taxed costs were so excessive as to manifest an error in principle. The court reserved the matter for further hearing on final orders.