Appellant v First Respondent Second Respondent

Appellant v First Respondent Second Respondent - [2009] VSC 91 - VSC 2009 case summary — Zoe

[23]

"Argument was addressed to me on the general topic of the attitude which ought to be adopted, on an application such as the present, to decisions of the taxing officer on questions of quantum. No doubt there are to be found, in some of the cases on the subject, statements to the effect that the discretion of a taxing officer will not be interfered with by a judge unless the taxing officer has erred on a question of principle, and not at all on a mere question of quantum; see, for example, Alsop v Lord Oxford; Re Catlin; In the Estate of Ogilvie; Coon v Diamond Tread Co. So, too, there are to be found in many of the cases decided upon the wider question as to the proper attitude of a court of appeal to any judgment given in exercise of a discretion, statements appearing to limit the function of the appellate court to correcting errors of principle. Yet in that wider area it is clear that such statements are not exhaustive. I shall not repeat the references I made in Lovell v Lovell to cases of the highest authority which appear to me to establish that the true principle limiting the manner in which appellate jurisdiction is exercised in respect of decisions involving discretionary judgment is that there is a strong presumption in favour of the correctness of the decision appealed from, and that that decision should therefore be affirmed unless the court of appeal is satisfied that it is clearly wrong. A degree of satisfaction sufficient to overcome the strength of the presumption may exist where there has been an error which consists in acting upon a wrong principle, or giving weight to extraneous or irrelevant matters, or failing to give weight or sufficient weight to relevant considerations, or making a mistake as to the facts. Again, the nature of the error may not be discoverable, but even so it is sufficient that the result is so unreasonable or plainly unjust that the appellate court may infer that there has been a failure properly to exercise the discretion which the law reposes in the court of first instance: House v The King. So, too, in my opinion, the exercise of the jurisdiction to review a taxation of costs is subject to no narrower limitation than that which was stated by Bovill CJ and Brett J in Hill v Peel: - 'A very wide discretion must necessarily be left to the taxing officer, which must be exercised by him after a careful consideration of the particular circumstances of each case; and where, after properly considering the matter, the master has arrived at a decision, it lies upon those who impeach his decision to satisfy the Court that he is wrong. Where a principle is involved, the Court will always entertain the question, and, if necessary, give directions to the master; but, where it is a question of whether the master has exercised his discretion properly, or it is only a question as to the amount to be allowed, the Court is generally unwilling to interfere with the judgment of its officer, whose peculiar province it is to investigate and to judge of such matters, unless there are very strong grounds to shew that the officer is wrong in the judgment which he has formed'.

I take it to be true that the decision of the taxing officer as to quantum is generally speaking final, and that it must be a very exceptional case in which the Court will even listen to an application to review such a decision: In the Estate of Ogilvie. But the authorities as a whole (not omitting to notice White v Altrincham UDC, do not establish as an absolute proposition that a judge will never review a taxing officer's decision on a question of quantum only. Swinfen Eady LJ said in Slingsby v Attorney-General, after quoting the passage from Ogilvie's Case to which I have referred: 'The decision of the taxing master is not absolutely final, even on a question of quantum'; and so it has been held several times in Victoria, where the view has been accepted for many years that a taxing officer's decision on quantum will be corrected if the judge concludes that 'he has clearly made a mistake': In Re Melbourne Parking Station Ltd; House v Life Insurance Co of Australia Ltd; Dwyer v National Trustees Executors & Agency Co of Australasia Ltd (No 3); Carrazzo v Weyman; McCoughtry v Schrick; see also, Russo v Russo. I respectfully adopt the summary of the law on this matter which was made by Jordan CJ, with the concurrence of Harvey CJ in Eq and Street J, in Schweppes' Ltd v Archer. His Honour said: - '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: Western Australian Bank v Royal Insurance Co; Clark, Tait & Co v Federal Commissioner of Taxation, 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'."[8]

[40]

16 As an alternative argument, the appellant contended that I should examine individual items in the bill and compare them with the amounts payable under the costs agreement. Specifically, I was referred to amounts in the bill for facsimile transmission (outgoing) and the receipt of facsimile transmissions. The items claimed and allowed in the bill (pursuant to the Supreme Court Scale) were $33 and $34 for each transmission and receipt. Under the costs agreement, outgoing facsimiles were to be charged $5 for the first page and $1 per subsequent page, and incoming facsimiles were to be charged $1 per page. It was contended by the appellant that many of the faxes would have been only a few pages and so should have been allowed at amounts significantly less than $33 or $34. The answer to this is that the principle that the respondents should recover in costs no more than their liability to their own solicitor does not mandate a line-by-line analysis of a party/party bill to see whether a particular item has been allowed at more than the same item might have been claimed under a costs agreement. The indemnity principle is "not to be applied rigidly". It is to be applied "flexibly and reasonably".[36] The very fact that the costs are calculated differently will lead, from time to time, to the possibility of different amounts being allowed in respect of the same matter. The shortfall involved in ordering party/party costs rather than solicitor/client costs is not to be exacerbated further by reducing individual amounts below the party/party scale merely because the particular way in which a costs agreement provides for the calculation of those costs produces an item from time to time that is costed at an amount less than the same would be costed on a party/party basis. It is to be remembered that the scale in the Rules only contains 48 items[37] and therefore some steps that might be taken by a solicitor do not receive any allowance under the scale.[38] There may be many reasons why a solicitor would agree to charge for some items referred to in the scale at an amount lower than the scale where he or she will also be charging the client in respect of amounts not mentioned in the scale. Provided that the client has a liability to the solicitor for an amount equal to or greater than the party/party bill, the indemnity principle is not necessarily infringed. In this case, having considered the appellant's arguments, I do not find that the indemnity principle has been infringed.

[45]

"32. All these items are claimed pursuant to the relevant scale of $33.00 and $34.00 for the transmission of documents by the solicitor for the Respondents to the Appellant by facsimile.

33. The previous Taxing Master allowed facsimiles as a matter of course on the basis that this had become the normal mode of communication and transmission of documents in modern litigation. Facsimiles have the advantage over ordinary mail by establishing an exact date and time of receipt and transmission.

34. The written submission of the Appellant mounts an argument that email also has the characteristics of being 'instantaneous, reliable, simple to use, does not impose a transmission charge and generates an electronic record of transmissions made. The technology is modern convenient and superior to facsimile machines'. By implication it is put that emails should have been sent instead of facsimiles. The scale of costs provides for letters and facsimiles but no email. The Respondents' written submission merely states that the previous Taxing Master consistently held that facsimiles between solicitors for the parties ought ordinarily be allowed on party and party taxation and that 12 of the 13 items were facsimiles to the Appellant and one to the Court.

35. It is correct that Appellant's objection relates to 13 facsimiles sent to him in the course of the litigation before Balmford J and the Court of Appeal. During the same period however the Appellant sent 23 facsimiles to the solicitor for the Respondents (items 19, 63, 84, 88, 91, 99, 117, 138, 140, 144, 153, 158, 160, 164, 169, 173, 175, 178, 182, 185, 187, 201, & 203). The solicitor for the Respondents also received 6 facsimiles from the Court (54, 64, 164, 168, 186, & 200) and sent 3 to the Court in return (items 58, 77 & 207). These figures underscore the conclusion that the use of facsimiles is one of the normal modes of communication in modern litigation. The question is whether it was necessary or proper for the Respondent to have sent these 13 facsimiles in the course of this litigation to the Appellant, in circumstances where the Appellant has chosen to communicate by facsimile with them. In my view the items objected to are proper and there is no variation on review."

[48]

"37. These items relate to perusing and scanning documents. A perusal is a scale item (items 25 & 26). 'Scanning' is the term to describe a lesser amount allowed pursuant to the discretion to allow a lesser sum referred to in scale item 26. At the initial hearing on 17 August 2007 the Appellant submitted that the Respondents must produce time sheets or proof that the documents were read. I ruled at that time that the existence of such documentation was not necessary in order for me to consider what to allow for perusal and scanning of documents. The Appellant sought to re-open and re-argue this issue at the resumed hearing on 10 October 2007. I allowed the production of any supporting documentation on that date as I took the view that while the existence or otherwise of such documents was not critical to the allowance or otherwise of perusal items, the documentation, if it included time spent on the activity, could assist in whether to allow the perusal rate (higher) or a lower allowance for scanning.

38. The written submission of the Appellant contains two headings - 'Respondents' failure to produce file notes on 17 August 2007' and 'Allowance on the perusal rate erroneous'. The Appellant argues a denial of procedural fairness on the basis that as a result of me changing the ruling made on 10 October 2007, (that is, to one in the Appellant's favour), the Respondents gained an advantage on 17 August 2007 to the extent that having failed to produce the file notes on that day I should have disallowed the items claimed for perusal or scanning on that day. The flaw in this argument is that a ruling was made by me on 17 August 2007. The Respondents merely raised an objection to production on 17 August 2007 and that objection was upheld by me on that day.

39. As an alternative to this submission that I should disallow all claims for perusals or scanning that were not supported by file notes on 17 August 2007, it is submitted that an hourly rate instead of a perusal or scanning rate should have been allowed. The example of item 167 is given where a file note of 40 minutes was said to have been produced and the perusal rate of $1,835.20 was claimed at the perusal rate for 496 folios - ie 4,960 words. I exercised my discretion on this item to allow half the sum claimed on the basis that scanning rather than perusal was proper. The submission was made that there was no valid reason to allow a scanning rate.

40. In summary the Respondents' written submission is that proof was tendered at the taxation that this work was performed in relation to these items (comprising affidavits, exhibits and a draft Summary of Proceedings Issues and Facts). Affidavit material was prepared on behalf of the Respondents and therefore it is inconceivable the solicitor for the Respondents did not peruse or scan the Appellant's material, and to find otherwise would be to hold that the case was conducted negligently.

41. In my view even the absence of a file note altogether would not be conclusive on the point and the time recorded on a particular file note is also not definitive. The quantum of the scale item is pegged at a sum to recognise that a document is read more than once. The fact that it is read more than once does not have to be established. A solicitor may be charging their client on a scale basis so there would be no point in recording how long it took on each occasion the document was read. The point of including a perusal/scanning item in the scale is to avoid having to establish all the time spent in looking at each document on each occasion it is looked at and charging the Taxing Master with a responsibility to assess whether on each occasion it was necessary or proper to do so. This is the rationale behind a folio rate - that is a 'once and for all' allowance in a lump sum. If it were intended that perusal of documents is to be assessed on a time basis, then there would be no perusal rate in the scale and all work would be assessed on a time basis. This point is underscored by scale item 27 where the scale item for 'examining a document or checking a proof or print or examining an appeal book' is on a time basis. This is the exception however, the general rule is that quantification of the costs of perusal of a wide range of specified documents (notably including affidavits) per folio is the norm (see scale items 25 and 26).

42. In effect I am being asked to assume that the document was not read in the absence of a file note or to only allow a time spent rate when there was one. This is not an acceptable argument and is inconsistent with the scale. The rulings made on taxation are not altered on review."

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Judgment (112 paragraphs)

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Cases Cited (6)