Zurich Bay Holdings Pty Ltd v ATM Enterprises Pty Ltd [No 3] - [2011] WADC 221

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION: PERTH

CITATION: ZURICH BAY HOLDINGS PTY LTD -v- ATM ENTERPRISES PTY LTD [No 3] [2011] WADC 221

CORAM: DEPUTY REGISTRAR HEWITT

HEARD: 12 DECEMBER 2011

DELIVERED : 16 DECEMBER 2011

FILE NO/S: CIV 1899 of 2006

BETWEEN: ZURICH BAY HOLDINGS PTY LTD
Plaintiff
AND
ATM ENTERPRISES PTY LTD
First Defendant
MURRAY PADDISON
Second Defendant

Catchwords:

Practice and procedure - Objections to taxation - Turns on its own facts

Legislation:

Rules of the Supreme Court 1971, O 66 r 53(1)

Result:

Objection not allowed

Representation:

Counsel:

Plaintiff:     Mr S Forbes
First Defendant            :     Mr M T S Rennie
Second Defendant        :     Mr M T S Rennie

Solicitors:

Plaintiff:     Jackson McDonald
First Defendant            :     HFM Legal
Second Defendant        :     HFM Legal

Case(s) referred to in judgment(s):

Mossensons (a firm) v Coast Line Associates, (Unreported, WASCA, Library No 970661, delivered 2 December 1997)

DEPUTY REGISTRAR HEWITT: In this matter the plaintiff succeeded and was awarded the sum of $18,474.34 together with interest on that sum of $4,975.26 under the terms of a judgment by Judge Scott dated 31 March 2011. By reason of the low amount of the judgment, there was immediate controversy as to the appropriate scale of costs, the unsuccessful party contending that the plaintiff's costs should be limited to the relevant Magistrates' Court Scale and the plaintiff's advancing a contrary position. That matter was heard by Judge Scott who delivered a decision on 24 June 2011 providing that the first defendant pay 85% of the plaintiff's costs of the action under the Supreme Court Scale of costs.
Pursuant to those orders, the plaintiff brought in a bill of costs which was listed before me for taxation on 14 November 2011. At the conclusion of the taxation, at the first defendant's request, I abstained from signing the allocatur permit it to bring in objections. Those objections were filed on 21 November 2011 and are as follows:
1.The defendants object to items numbers 41 (getting up for trial) and 57 (hearing in relation to costs).
2.The plaintiff claimed $46,332.00 and $6880.50 respectively for these items and they have been provisionally allowed at $36,332.00 and $4,000.00 respectively.
3.The learned taxing officer erred in principle in allowing $36,332.00 in that;
(a)The plaintiff was unable to provide sufficient detail about the nature and duration of the work involved in getting up and when it occurred. The dates of the work are important given that the action commenced in September 2006 and went to trial in August and December 2010.
(b)Save for the expert evidence, the matter was a relatively straightforward contractual claim, although the plaintiff also unsuccessfully ran Trade Practices Act claims.
(c)The length of the trail (4 days) is not a good indicator of the complexity and amount of work involved in getting up as a sizeable amount of trial time was taken up in cross‑examination of the plaintiff's witnesses on the question of quantum, argument on the admissibility of evidence and an application by the defendants to amend their defence. See, for instance, T 124 to 134 and 266 to 285 (nearly 2 hours of argument on proposed amendments to defence), T 159 to 172 (approximately 26 minutes of argument on the admissibility of Matthew Caruso's statement) and T 318 to 338 (just over an hour of argument on the admissibility of Murray Paddison's statement).
(d)The plaintiff called 4 lay witnesses and 1 expert. It also obtained a statement from one further lay witness who did not attend trail – apparently due to illness. The lay witnesses were Matthew Caruso, James Lim, Bradley Jones and Athel Major.
4.Matthew Caruso was the asset manager of the plaintiff and had dealings on behalf of the plaintiff with Murray Paddison of the first defendant.
5.Matthew Caruso's statement ran to 109 paragraphs, with numerous documents attached. 18 paragraphs were ruled inadmissible by the trial judge. Most of those paragraphs related to disallowed proposed amendments to the statement of claim. Most of the admissible evidence related to factual matters and was not of any great complexity.
6.James Lim was the contracts manager for the plaintiff. He was called in support of the plaintiff's claim for loss of profit. His initial witness statement was only 10 paragraphs long and annexed several documents, most of which he prepared shortly after the proceedings were commenced. Although the annexures would have involved substantial work by him, the preparation of the initial witness statement by the plaintiff's solicitors would have been relatively simple and straightforward. The plaintiff filed a supplementary witness statement of Mr Lim which expanded on his initial statement but which would not have involved a great deal of work.
7.Athel Major and Bradley Jones were called to formally prove Westrac's quote for the cost of a replacement cabin after the defendants declined to consent to the tender of the quotes without formal proof. Their witness statements were relatively short but included lengthy annexures in the form of computer generated quotes from Westrac.
8.The defendants only called 2 lay witnesses, Murray Paddison, Peter Andrews (to prove an invoice for mounts which the plaintiff required formal proof of) and an expert.
9.Mr Paddison's witness statement was 87 paragraphs long. After objections by the plaintiff, he filed a supplementary statement of 20 paragraphs expanding on his qualifications and the work involved in repairing the cabin and cost of same.
10.The expert evidence was reasonably technical but not exceptionally so.
11.In short, the getting up was relatively straightforward, and the amount allowable should be reduced to reflect that fact.
12.Both parties filed written submissions and supplementary submissions.
13.The costs issues were reasonably technical and undoubtedly involved a substantial amount of research which, generally, is not allowable. The plaintiff was awarded 60% of the costs of the costs argument. The learned taxing officer's allowance of $4,000.00 equates to an allowance of approximately $6,660.00 had the plaintiff been allowed 100%. In the defendants' respectful submission this is excessive for a purely costs argument, particularly given the amount of the judgment.
The objections were listed for hearing before me on 12 December 2011 at which time I heard argument in relation to the objections. As a preliminary to hearing the objections, I requested counsel appearing for the plaintiff to reiterate the basis of its claim for getting up the case, that being the first of the items the subject of objection. Originally the plaintiff sought $46,332.00 for that item of which I allowed $36,332.00 less the 15% deduction provided for in Judge Scott's orders.
The basic contention which advanced by the first defendant is that the matter was not complex and the amount of work said to have been occupied by the plaintiff's solicitors in preparing the matter for trial is not justified in light of firstly, the contentions in issue and secondly, the eventual quantum of the claim.
In regard to the second of those propositions, I take the view that the trial judge considered whether or not the Supreme Court Scale of costs should be applicable and he decided that it should. As a consequence, in my view the appropriate way to tax the present bill is that which applies in all taxations, namely to ascertain the tasks which were required to be done, by whom it was appropriate those tasks be performed, a reasonable time for the performance of those tasks and an appropriate allowance for them. In order to assist me in re‑evaluating those matters, I requested counsel for the plaintiff to remind me of the various aspects for which claim was made.
Briefly put, it is claimed that some 35 hours were spent in taking instructions from and preparing a proof of evidence for Mr Caruso, the person instructing the plaintiff and a person having personal knowledge of the details of the relevant transaction. In this case it was ordered that evidence‑in‑chief be given by way of witness statements, and as the costs committee has recently recognised in its 2010 determination, that adds significantly to the task faced by lawyers when they are preparing a case for trial. A Mr Rossi, an expert engaged by the plaintiff was proofed and that proof including conferences with him and conferences between experts and counsel and the like is said to have taken 19.1 hours. Other lesser players in the proceedings were Mr Lim whose proof took 4 hours, Mr Jones 2.9 hours and Mr Collis whose proof took 3 hours, although he was not called having become difficult to locate at the relevant time. It is said, and I accept, that significant portions of the evidence of Mr Caruso were held to be inadmissible at the trial. Although those aspects of the case were significant, they were not overwhelming, and in my view would not have impacted hugely on the time which was taken to prepare his proof of evidence.
In addition there was a task of preparing bundles of documents for submission to the court which I am told took 16.9 hours and was performed by a clerk, conferences with counsel, taking something in the vicinity of 10.1 hours, perusal of relevant documents and the detail necessary to evaluate them from the perspective of preparation of trial, 15.4 hours. There were additionally said to have been 52 hours spent in correspondence with the defendant's solicitors as part of the process of preparing it. In total I was told that 98 hours was spent by a junior practitioner, 49 hours by a senior practitioner and 16 hours by a clerk.
Additionally there was the task of briefing counsel which occupied something in the order of 7.4 hours. If one applies appropriate hourly rates to the time which was taken by the various personnel who undertook these tasks within the lawyers representing the plaintiff, they total something in the order of $50,000.
In detailed answer, therefore, to the grounds of objection:
(a)in my view the plaintiff has provided sufficient detail to justify the work which was undertaken. It is true the work was undertaken over three scales but the bulk of it was undertaken in the 2008 and 2010 scales.
(b)although the case was not unusually complex, I think it, as all cases do, had its own particular complications and I would not regard it as being relatively straightforward.
(c)I do not regard the length of trial as being a particularly reliable touchstone for the complexity of a case, nor do I think that the amount of time which the defendant occupied in cross‑examining the plaintiff's witnesses or arguing the admissibility of evidence or proposed amendments to the defence are a particularly relevant matter in judging the proper allowance for getting up case.
(d)I accept the plaintiff called four lay witnesses and one expert, that is part of the task which I took into account when assessing the matter.
(e)After deduction I consider the amount allowed to be a proper allowance for getting up and a reflection of the hours reasonably spent and recognition of the seniority of those who (appropriately) undertook those tasks.
The remainder of the objections on getting up case in my view do not constitute argument but are simply included to reinforce the foregoing propositions and do not require separate attention.
In order for a defendant to succeed on an objection, it is necessary to show that the amount allowed is one which could not be reached by a taxing officer applying correct principles. (Rules of the Supreme Court 1971 O 66 r 53(1). Mossensons (a firm) v Coast Line Associates, (Unreported, WASCA, Library No 970661, delivered 2 December 1997) I do not consider that the defendant has satisfied that onus. What has emerged is the fact that counsel representing the first defendant and I have a different view about the reasonableness of the allowance which has been made, he calling for a greater deduction than that which I thought to be appropriate.
The next item under challenge is item 57 which is the claim for costs in relation to an agreement as to the cost orders. Put simply, in my view there was a substantial amount of work which was undertaken in regard to that hearing, the plaintiff filed at least two sets of submissions, the argument on the issue took approximately two hours and the amount in issue in so far as costs were concerned was considerably greater than the amount of the judgment and it was therefore of great importance to both sides. The impression that I have received on reviewing the materials which are on the file is that the parties were unsparing in their efforts to present and argue their various positions in relation to that issue. For that reason I consider the allowance which I made on that item, namely $4,000.00, after deduction of a proportion pursuant to the order of the judge is an appropriate allowance and I am not inclined to revise it.
In summary therefore I consider that neither of the objections has been made out.
This decision going against the objector I award the plaintiff the costs of the objection. Four hours at a senior practitioner's rate were claimed but I consider three hours at the rate for counsel to be the proper basis of award which amount s to $1,021 which shall be added to the bill. I shall sign my allocatur upon issue of these reasons for decision.