Practice - Practice under the Rules of the Supreme Court 1971 of Western Australia - Scope for appeal of decisions made at taxation - District Court Appeal Scale 2010 item 11(b) - Scope for recovery at common law - Scope of authority of Legal Costs Committee - Test of recovery under r 19 of the Rules of the Supreme Court - Onus on beneficial party

Legal Profession Act 2008

Anfrank Nominees v Connell (1991) 6 WAR 271

Collins v Westralian Sands Ltd (Unreported, WASC, Library No 930171, 31 March 1993)

1 DEPUTY REGISTRAR HARMAN: The appeal was determined and according to the associate's record, the respondent was ordered to pay 'the appellant's disbursement costs of the appeal to be taxed if not agreed'. To date no order has been extracted.

2 The appellant's bill was taxed and on 7 February 2011 she lodged a 'Notice of Appeal'. As O 66 of the Rules of the Supreme Court 1971 amounts to a code and does not provide for an appeal, there is no scope for her to appeal. Rule 53(1) provides for review and specifies that a notice of objection will provide the grounds and reasons for any objection. The appellant's notice provides grounds and reasons for objection for only the first of 12 matters that she specifies. It relates to the determination that she pays the respondent's costs of the taxation.

3 Prior to filing the notice the appellant had sent a letter dated 5 February 2011 in which she canvassed some of the reasons why she objected to the 'outcome' of the taxation. I consider that there is sufficient in the letter to be constituted as grounds and reasons for objection to the disallowance of at least her claim to photocopies, the subject of item 4 of the notice. As the matter may proceed further; as the appellant is not represented; and as it may be that a judge would do so I will consider item 4 of the notice along with the relevant part of the letter as a sufficient objection.

4 As to that item, the appellant states that the amended claim for photocopying was not objected to and should have been allowed in the reduced amount of $12.

5 After hearing the submissions of the parties and from the defendant that I was required to make a determination, I was satisfied that I was required to make a determination and as a result the claim was disallowed.

6 Although the grounds of objection do not extend to the merits, because somehow future consideration of her objection may be broadened I will canvass my reasons for its disallowance.

7 I acknowledge that the appellant may have spent some amount on photocopying documents however under the order she carried the onus of persuasion that she was entitled to recover the amount she claimed or any amount at all.

8 In the process of reaching the decision that the appellant had not discharged the onus I considered the scope for recovery provided by the order. Rule 19 provides for recovery of necessary payments and expenses. It is expressed to be in addition to the scope of recovery provided by any relevant scale.

9 Item 11(b) of the District Court Appeal Scale 2010 is novel. It is as follows:

As between party and party, a party may be allowed disbursements incurred by that party except insofar as they are of an unreasonable amount or have been unreasonably incurred, so that subject to the above exceptions, that party is fully reimbursed for its disbursements."

10 Against the datum provided by the common law item 11(b) would amount to a significant change. According to the common law the test of recovery for services under the usual order for costs is necessity. As such an order would facilitate recovery of disbursements there is no logical reason to consider that the same test would not apply. The rules are silent as to the test of recovery for costs however as I have recorded, r 19 provides that the common law test applies to disbursements. The common law test was established by Smith v Buller (1875) LR19Eq 473. Although in Anfrank Nominees v Connell (1991) 6 WAR 271, Malcolm CJ determined that Smith v Buller did not apply to item 13 of the Fourth Schedule, he was content to refer to the common law position by reference to it.

11 In other jurisdictions the common law position has been ameliorated to the extent that recovery may be had for 'proper' or 'reasonable' costs. Not so in Western Australia. In relatively recent times some pronouncements may be taken to have indicated a movement away from the test of necessity. Some impetus for movement was provided in the reasons for decision of Ipp J in Collins v Westralian Sands Ltd (Unreported, WASC, Library No 930171, 31 March 1993). In that case he canvassed features of the reasons of Malcolm CJ in Anfrank Nominees. At page 10 he cited text from the reasons of the Chief Justice as follows:

By O 66 r 11(2), the position is that unless there is an agreement in writing between a solicitor and his client pursuant to s 59 of the Legal Practitioners Act the fees allowed under the scale in the Fourth Schedule apply both as between party and party and solicitor and client.

12 He then continued, that in the absence of a costs agreement,

... in this State there should be no difference between the items and amounts allowed under a party and party bill of costs and those under a solicitor and client bill of costs.

13 It is noteworthy that his Honour makes no reference to the different tests that would apply in the different provisions for recovery but that is not surprising as the issue presented before the court had nothing to do with recovery under an order for costs but whether there was justification for above scale recovery. So far as I am aware the proposition that Ipp J's observation would establish any change in the common law has not seriously been put. That is not to say that submissions to which I am regularly exposed are not sprinkled with references to that observation and are replete with at least inferences that would suggest that the test of necessity has been diluted.

14 It takes little imagination to consider that where recovery was sought under the usual order for costs, item 11(b) would countenance a different test of recovery for disbursements than that which would apply to services. In my opinion its closing words tend to suggest that the beneficial party would not bear an onus. It is because of the significance of the change that would be introduced by item 11(b) that it is appropriate to consider its proper impact.

15 The District Court Appeal Scale 2010 is part of a determination of the Legal Costs Committee. The legislative foundation for the Committee's determinations is provided by s 275 the Legal Profession Act 2008 (WA) which commences:

The Legal Costs Committee may make legal costs determinations regulating the costs that may be charged by law practices in respect of [and at that point certain fields of work are enumerated].

16 As item 11(b) of the scale is expressed only to have application to party and party recovery and not to the costs that may be charged by law practices, in my opinion it is patent that it is beyond the scope of the Committee's authority. To the extent that by item 11(b) the Committee purports to change the scope for recovery at common law, or to provide additional scope for recovery as countenanced by r 19, for it is not supported.

17 As a result the scope for recovery by the appellant was limited to necessary payments and expenses incurred in the conduct of the litigation. As an afterthought perhaps I should add that under the common law, when it comes to assessment of quantum, the test is reasonableness. Obviously my assessment of the claim did not reach the point of its application.

18 The appellant was unable to specify how any component part of the claim would be established as having been necessary. Contrary to r 36 she had not and at taxation she did not vouch for the claim: there was there no invoice, receipt or other paper to substantiate any expenditure. Accordingly I considered that the appellant comprehensively failed in the task of responding to the onus.

19 I would add that the same considerations applied in the case of the disallowance of other items in the appellant's bill with the exception of the claim for legal advice. It was beyond the scope of the order.

20 As to item 1 of the notice, it is supported by material specified on the first page of the notice. On that page, after recording that she had recovered the cost of transcript and hearing costs, the appellant continues that I granted the respondent's application for the costs of the taxation.

21 Order 66 r 1 of the Rules of the Supreme Court provides discretion to award the costs of proceedings. It applies to the process of taxation. The appellant failed in the task of justifying her claims, measured both by the proportion of claims upon which she failed and the proportion of the total amount sought that she recovered, to such an extent that I considered there was sufficient merit in the respondent's application to give it the costs of the taxation.

22 Because the appellant's letter may enhance the scope of any later review I will consider the other question that she canvassed that bears upon recovery for the costs of taxation. It is that the respondent recovered its costs of 24 January 2011 when the bill had been before another Deputy Registrar. The costs of that day were reserved. It is unclear what issue the appellant may have with the determination that the respondent would recover the costs of that day. Be that as it may it could only boil down to the determination that the respondent would have the costs reserved.

23 I accept that where costs are reserved it is unusual that someone other than the person who did so would determine where they would lie. However it was my view that that it had been intended that I would make that determination. My reasoning was that both the other Deputy Registrar and I were engaged in the same process; that he had directed that the process be dealt with by me; that there was no indication that the Deputy Registrar had expected that he would determine the costs after the conclusion of the process; and significantly, that in my opinion the subject costs would be relatively minor.

24 The only issue canvassed by the parties was which of them had revealed the respondent's offer in relation to costs. The reasons that I chose not to call for evidence in order to resolve that question reflected the likely cost of engaging in such an exercise in order to determine the truth and its proportion measured by the value of the subject costs. Firstly, as there was no indication that the Deputy Registrar had actually embarked on the process of taxation, the period of time that the parties had been before him was likely to have been relatively short. Secondly it was my opinion that because the taxation had been re-listed within a short period of time the component of the respondent's claim for preparation would not be thrown away: thereby as a whole, recovery for preparation would not be significantly enhanced. Thirdly that there was reason to consider that the result may not be conclusive absent cross-examination.

25 The onus was on the respondent. Ultimately I reflected on what had transpired before me. I also considered that as much as it may have been evident that on 24 January 2011 the result had simply followed upon the revelation of the offer, there remained the prospect that in part it had been informed by the level of disputation that I take to be the case, had been displayed before the Deputy Registrar. And that as I had considered appropriate, he had considered that the result on the question of costs would be informed by the more fundamental question of the extent to which the appellant had been successful in the taxation. On the single issue that was aired by the parties I reflected upon the proposition that the respondent would not have raised the issue of the reserved costs at all had it not considered that it would recover.

26 In light of those considerations I have trouble with the proposition that awarding the reserved costs to the respondent reveals a circumstance that would warrant the description 'error in principle'.

27 Before I conclude I note from the letter that the appellant has difficulty with the fact that I concluded the taxation by balancing the results achieved by each of the parties. Scope to so do is provided by O 66 r 7 of the Rules of the Supreme Court.