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[2009] VSCA 126
General information, not legal advice.
Court of Appeal (Vic)
2009-06-10
ASHLEY and REDLICH JJA
Original judgment source is linked above.
Statutes - Interpretation - Costs - County Court - Whether judge empowered to fix witness expenses - Whether exercise of discretion to fix witness expenses miscarried - County Court Act 1958, ss 78A(1), 78(1), 33.
1 The first respondent, Robert Wood, brought a proceeding against the appellant, Tony Astbury, (conveniently, 'the employer') and the second respondent, David Lewis, (conveniently, 'the grazier') claiming damages for personal injuries sustained in an incident whilst shearing a llama/alpaca on or about 31 December 2002. The matter came on for hearing in the County Court at Warrnambool in June 2008. After the trial had proceeded for some seven days, a compromise was reached. Most of the matters which needed to be reflected in orders by the Court were agreed. Concerning costs, it was agreed that the defendants should pay the plaintiff's costs including reserved costs to be taxed in default of agreement on County Court scale D.
2 The judge was informed that there were two costs issues which required a decision. The first of them was the quantum of fee on brief for senior counsel. There were competing submissions about that matter, the judge resolved them, and no issue arises on the appeal in that connection.
3 The second question concerned the witness fee which the defendants should have to pay in respect of the attendance of a neurosurgeon, B. The witness had been driven from Melbourne to Warrnambool to give evidence, and after giving evidence been driven back to Melbourne. He had spent some two hours in the witness box, but having account of the length of the journey it was not in debate that he should be compensated for a day's attendance at Court. Again, it was not in debate that it had been proper for the witness to give evidence in Warrnambool, from the witness box, rather than by way of video link.
4 The witness claimed recompense of two kinds. First, he had incurred $660 cost of travelling. It was not in dispute that this cost should be paid by the defendants. Second, he rendered an account to the plaintiff's solicitors in an amount of $8000 plus GST for attending court and giving evidence. This was the area of controversy which was presented for consideration by the judge.
5 Senior counsel for the plaintiff produced the witness's account. He submitted that s 78A(1) of the County Court Act 1958 (Vic) ('the Act') provided that the costs of and incidental to all proceedings were in the discretion of the Court.
Our first argument is that it is a discretion for your Honour which supersedes any rules of court but it will be put against us that the rules provide for, I think it is some $1,800 plus travelling expenses.
...
Here we had a gentleman who had been a former head of the Royal Melbourne Hospital in neurosurgery; the need to call him and to explain to the jury in the articulate way in which he did was important (a) to the plaintiff and (b) important to the disposition of the case. Your Honour will know that [another surgeon's] reports were tendered in evidence and your Honour will know that those reports were not as helpful to the plaintiff and so that is why in our respectful submission, to have [B] attend was crucial to the case. My client is contractually bound in the sum that is being presented and in our respectful submission, it would not miscarry in your Honour's discretion to certify if not for that exact figure, for the substantial amount of it.
7 Pausing for a moment, it is clear that counsel only identified s 78A of the Act as the source of the relevant discretion. He did not submit that the judge was empowered to 'certify' for the witness's expenses under rules of court made pursuant to s 78(1) of the Act, and to so in an amount exceeding the amount set out in Appendix A to the rules.
8 Counsel for the employer referred the judge to the item in Appendix A which deals with witness expenses. He pointed out that the item stated that expenses referable to a witness giving evidence in an expert or professional capacity should not exceed $1,836 per day. He submitted that 'there is no discretion to go beyond $1,836 per day'.[1] But he also stated that 'in other words, there is absolutely no dispute that the maximum amount has to be paid'.
9 Counsel made a submission which addressed the respective functions of s 78A and the scale of costs set out in Appendix A. He said this:
It is our submission that s 78A relates to the costs and as to which party shall bear the costs and secondly, as to what scale is applicable ... It does not relate to the amounts in question. The amounts in question under any scale are governed by schedule A.
The schedule of costs sets out various items where the trial judge has a discretion and particularly one that your Honour would be most familiar with is 'fees to counsel' - item 29. It spells out the discretion that the trial judge has in the circumstances where a higher figure is claimed and it also spells out the discretion that the Registrar has where a higher figure is claimed. There is no such reference in any item to any discretion in relation to witness expenses ...
11 Counsel then reiterated, by reference to s 78(2) of the Act, that -
Section 78A refers to scale and identity and it cannot go beyond the powers that are in other parts of the rules and we say, therefore, that it is not a matter for the defendants that [the witness] has charged a fee that is exceedingly above what is permitted - we say, by the rules of $1,836 per day.
12 In support of his submission that the Appendix A did not permit a witness fee to be allowed beyond $1,836 per day, counsel compared it with the language of Appendix B to Chapter 1 of the rules of the Supreme Court, which gives this court a discretion in respect of the amount to be allowed for a witness's expenses.
13 Counsel summarised his argument, as I understand it, by submitting that:
the plain reading of s 78A, when you combine it with the rules, is that a discretion - for instance, to give a simple example, had it been the intention of the legislature to give the Court a discretion, to then say, well, you have a discretion in relation to counsel's fees but then not include a provision in relation to witness expenses and indeed, your Honour will note that the witness expense provision does not appear in the schedule. It is an entirely different section.
14 Counsel addressed the possibility that the judge might conclude, contrary to his submission, that the judge had no discretion to allow a witness fee beyond the maximum amount set out in Appendix A. I will refer to his submission in that connection later in these reasons.
15 Counsel for the grazier adopted the arguments advanced by counsel for the employer.
16 The judge resolved the dispute by a ruling as follows:
My interpretation of s.78A of the country Court Act is that I do have a discretion to certify for the fee of [B] as being a cost incidental to the proceeding. I think it is not extravagant to say that the evidence given by [B] was one of the finest expositions of the anatomy of the neck and the surgery involved on the plaintiff that I have ever heard and I imagine that counsel would be in agreement as to the clarify (sic) and calibre of his evidence. He made it crystal clear for the jury what was involved in this very complex and serious piece of surgery and he did it with great experience. He has been a practising neurosurgeon for 35 years, 20 of which he was the head of the Royal Melbourne Hospital. For a surgeon of the reputation and calibre and demand of [B] to be required to leave Melbourne at 7 a.m. and not return to Melbourne until 5.30 is to use the vernacular, quite a tall order, it is an entirely different scenario from someone being taken by cab to his rooms at the County Court in Melbourne and giving evidence for half-an-hour or thereabouts. [B] was in the witness box for a very considerable period of time and I believe that in this case, a fee of $8,800 should be certified for as a proper fee, incidental to the overall costs in this case.
17 By leave granted on 18 June 2008, the employer appeals her Honour's 'certification' of the witness's fee. The grounds of appeal which were pursued were as follows:
18 Ground 1 raises a question of statutory construction. According to the appellant's argument, the word 'costs' where used in s 78A(1) of the Act does not include witness expenses. That is because s 78(1), which invests the judges of the County Court with rule-making powers, draws a distinction between costs and witness expenses.
19 This textual argument was not advanced before the learned trial judge, although counsel for the employer did argue that, for a different reason, s 78A was not a source of power to make an order in respect of witness expenses. Neither was it submitted below that her Honour did not have power, whatever be the source, to certify for witness expenses. Indeed, counsel for the appellant rightly conceded that his predecessor's argument below proceeded from the position that the judge did have power to fix the witness's fee.[2] But in argument in this Court, appellant's counsel submitted that a County Court judge has no power, whether pursuant to s 78A(1) or pursuant to the rules of that court, to certify for witness expenses.
20 Counsel submitted that the judge either had power to fix the witness's fee, or she did not. If the latter was the situation, this Court must say so. It mattered not that the issue as now argued had not been raised below. In my opinion, that submission was correct. If the ground was made out, an adverse costs order would be the imperfect remedy.
The History of s78A
1"> 21 Section 78A reads as follows:
(1) The costs of and incidental to all proceedings are in the discretion of the Court and the Court may determine by whom and to what extent the costs are to be paid.
(2) In the due exercise of the discretion conferred by subsection (1), in any proceedings before the Court, the Court may order a legal practitioner to pay the costs of the proceedings or a portion of the costs.
22 In order to understand the scope of the section, and in consequence to better consider the appellant's textual argument, it is necessary, in my opinion, to understand the history of the provision, to examine changes which have been made to the Act and rules made thereunder over the years, and to perceive a difference - and its significance - between s 78A and s 24(1) of the Supreme Court Act 1986.
23 The progenitor of s 24(1) was s 5 of the Judicature Act 1890 (53 and 54 Vict c 44). Brooking J explained in Burns Philip & Co Ltd v Bhagat[3] that s 5 of the 1890 Act was the legislative response to a restrictive reading of a rule of court scheduled to the Judicature Act 1875, and reissued in expanded form as Order LXV r 1 of the Rules of the Supreme Court 1883. By the latter rule it was provided that, subject to the provisions of the Judicature Act and the rules of court, the costs of and incident to all proceedings in the Supreme Court, including the administration of estates and trusts, were in the discretion of the court or judge. It had been held in Re Mills Estate[4] that the rule did not give a jurisdiction to award costs where there had been no jurisdiction before, but only a power to deal with costs in a way that was different to the way in which courts had previously dealt with cases in which there was jurisdiction. Practice altered, it was held, but jurisdiction was not enlarged. That was significant because, before the Judiciary Acts, Chancery always assumed a jurisdiction to award costs, which in practise was exercised on a discretionary basis; whereas common law courts had no jurisdiction to order costs except by statutory warrant.
24 Concerning s 5 of the 1890 Act, Brooking J said this:
It is clear that s. 5 of the Judicature Act 1890 was enacted with the intention of avoiding the effect of the restrictive interpretation adopted in Re Mills' Estate, namely, that the Judicature Act rule did not confer upon the court a jurisdiction which did not previously exist but was intended only to regulate the way in which costs were to be dealt with in cases in which the court already had power to award costs, whether that power was inherent or conferred by statute. Section 5 introduced the words 'and the court or judge shall have full power to determine by whom and to what extent such costs are to be paid'.[5]
It was from the outset accepted that s. 5 of the Judicature Act 1890 was intended to enlarge the jurisdiction over costs.[6]
25 His Honour recognised that the power to award costs conferred by s 5 of the 1890 Act was subject to a limitation. He stated that -
The limitation is contained in a former part of the section, 'subject to the Supreme Court of Judicature Acts, and the Rules of Court made thereunder, and to the express provisions of any statute whether passed before or after the commencement of this Act'.[7]
26 Until 1928, there was no equivalent of s 5 of the 1890 English Act in the Supreme Court Act. There was, however, power conferred upon the judges to make rules, which extended to rules in respect of costs. Section 23 of the Supreme Court Act 1890 provided that the judges might make rules -
(3) Generally for regulating any matters relating to the practice and procedure of the Court or the duties of the officers thereof or the fees to be lawfully demanded by such officers or to the costs of proceedings therein.
27 Rules were made. From early times, they contained a provision exemplified by Order LXV r1 of Chapter I of the 1916 rules -
Subject to the provisions of any Act and these Rules, the costs of an incident to all proceedings in the Court and in Chambers including the administration of estates and trusts shall be in the discretion of the Court or Judge.
28 Section 32(1) of the Supreme Court Act 1928 is the direct ancestor of s 24(1) of the Supreme Court Act 1986. This is what is said:
Subject to the provisions of this Act and to Rules of Court and to the express provisions of any other Act the costs of and incidental to all proceedings in the Court including the administration of estates and trusts shall be in the discretion of the Court or Judge and the Court or Judge shall have full power to determine by whom and to what extent the costs are to be paid.
29 The 1928 Act also contained a rule-making provision. By s 25 the judges were empowered to make rules, inter alia -
(i) Generally for regulating any matters relating to the practice and procedure of the Court or to the duties of the officers thereof or to the costs of proceedings therein.
(f) For regulating or making provision with regard to any other matters which were regulated or with respect to which other provision was made by the Rules of Court in force prior to the commencement of this Act.
30 Rules were made, and amended and revoked from time to time. Despite the enactment of s 32(1), a rule in the form of Order XLV r 1 persisted for quite some time. Indeed, it so remained in Chapter I of the 1957 Rules. It was described in Williams Supreme Court Practice as being 'to similar effect' as the then s 32(1). It may be contrasted with the present rule 63.02.
31 In the event, judges of the Supreme Court were given, by s 32(1), an intendedly ample jurisdiction in respect of costs. But it was circumscribed by any relevant rules of court, which could and did include rules pertaining to costs. Of those rules, more later.
32 The language of s 24(1) of the Supreme Court Act 1986 is slightly different to the language of s 32(1) of the Supreme Court Act 1928. But the gist of the two provisions is the same.
33 Likewise, s 25(1) of the 1986 Act, which empowers the judges to make rules, is largely similar to s 25 of the Supreme Court Act 1928. The power to make rules in respect of costs is subsumed within s 25(1)(a).
34 I referred to rule 63.02 a moment ago. This is what it says:
The power and discretion of the Court as to costs under section 24 of the Act shall be exercised subject to and in accordance with this Order.
35 This rule closely and specifically connects with s 24(1) of the Supreme Court Act. It proclaims itself as being relevant to the limitation which is found in the opening part of the section.
36 I turn to the County Court Act. Until 1986, there was no equivalent of the present s 78A. Throughout the many years before 1986, however, there was a section akin to the present s 78(1), which relevantly reads:
78 Power to make rules of practice
(1) A majority of the judges (other than judges who made an election under section 13A(1), or were appointed under section 13A(3A), before the commencement of section 7 of the Courts Legislation (Judicial Appointments and Other Amendments) Act 2005 or associate judges) for the time being may make rules for all or any of the following purposes -
(a) for regulating any matters relating to the costs of proceedings in the court, and for regulating and prescribing the scales of fees and costs to be paid to counsel and practitioners;
(aa) for prescribing forms and regulating service, procedure and costs with respect to a proceeding in the County Court under Part I of the Instruments Act 1958;
(b) for regulating and prescribing the expenses to be paid to witnesses;
...
37 Section 122 of the County Court Statute 1869 relevantly provided that -
It shall It shall be lawful for any three of the county court judges from time to time and at any time to frame rules and orders for regulating the practice and proceedings in the county court, the form of cases upon appeal to the Supreme Court, and for determining the time within which each appeal shall be prosecuted, and by such rules to provide either a separate procedure for suits under Part II, and for suits under Part III of this Act, or by such rules to provide a procedure under which rights cognizable under Part II, and rights cognizable under Part III, may be disposed of in one and the same suit, and whether such rights are asserted by the plaintiff or by the defendant or by both, and to frame forms of proceeding therein, and to fix the scale of fees and costs to be allowed to practitioners in the said courts, and rules and forms for keeping all registers books entries and accounts by registrars and other officers in the said courts.
38 There was another provision in the County Court Statute 1869 which particularly touched upon the fees to be allowed to practitioners, witness expenses, and the amounts fixed by the scale of costs in respect of those matters. It was s 36. Of that section and its successors, more later.
39 As I have said, s 78A was inserted into the County Court Act in 1986.[8] The Second Reading Speech[9] said almost nothing about the new section. There was fleeting reference[10] to the County Court being invested with power to make costs orders personally against a legal practitioner. That provides an explanation for s 78A(2), but does not explain the much broader language of sub-s (1).
40 Section 78A(1), it will immediately be apprehended, is quite like s 24(1) of the Supreme Court Act in a number of respects. It refers to the costs of and incidental to proceedings, stating that they are 'in the discretion of the Court', and that the Court may 'determine by whom and to what extent the costs are to be paid'.
41 On the other hand, there is a singular difference between s 24(1) of the Supreme Court Act and s 78A of the County Court Act. The latter contains no statutory limitation of the kind first found in s 5 of the 1890 English Act and which now appears in s 24(1) of the Supreme Court Act as follows:
Unless otherwise expressly provided by this or any other Act or by the Rules... ...
42 The importance which has been attached to a limitation of that kind can be seen not only in the reasons for judgment of Brooking J in Burns Philip but in the somewhat different circumstances considered by the High Court in Knight v FP Special Assets Ltd and Others.[11] In the latter case, s 58 of the Supreme Court Act 1867 (Qld) provided that 'The Supreme Court shall have power to award costs in all cases lawfully brought before it and not provided for otherwise that by this section'. A rule of court provided that:
Subject to the provisions of the Judicature Act and these Rules, the costs of and incident to all proceedings in the Court, including the administration of estates and trusts, shall be in the discretion of the Court or Judge ...
43 All members of the High Court agreed that the impact of the rule of court was that s 58 had no application at all.[12] It was not a question of inconsistency. Simply, there was no collision.
44 There being no words of limitation in s 78A(1), the power conferred upon the Court by that sub-section to determine costs in its discretion is, on its face, effectively unconfined.
45 Further, the origin of s 78A suggests that the word 'costs' should be given a liberal meaning, such as would include witness expenses. It would not have served the purpose of s 5 of the English Act of 1890 and its Australian successors if the enlarged power to award costs had been confined by drawing a distinction between costs (including various professional fees) and witnesses' expenses. The intendedly ample power conferred by s 24 of the Supreme Court Act, which applies at least no less in the case of s 78A(1),[13] was remarked upon by JD Phillips JA in Perkins v County Court of Victoria.[14]
46 But then the question arises whether the broad discretion apparently conferred by s 78A is confined in some and what way by some other provision of the County Court Act. There are two candidates: Section 33 of the Act, and s 78(1)(a) and (b) together with parts of Order 63A of the Rules.[15]
47 I have already referred to Section 36 of the County Court Statute 1869, repeated in s 45 of the County Court Act 1890. It was the ancestor of s 33 of the Act, and was in this form:
The fees to be allowed to barristers-at-law and attorneys practising in any county court and the expenses to be paid to witnesses shall be fixed by some scale in the general rules to be framed as hereinafter mentioned; but the costs of employing a barrister or attorney either by the plaintiff or defendant shall not be allowed as costs in the cause in any case in which the amount recovered shall not exceed Ten pounds unless the judge shall allow the same: Provided that attorneys and barristers retained by or on behalf of the party to any suit action matter or proceeding shall be entitled in all cases to maintain an action for the recovery from the persons employing them of the fees fixed by the said rules and of the sums disbursed by them on behalf of their clients, any law usage or practice to the contrary notwithstanding.
48 What was the purpose of s 36 of the 1869 statute and its successors? Why does s 33 remain in the Act? Does it now have any work to do? Does it impinge upon the broad costs discretion conferred upon the Court by s 78A?
49 The answers to those questions seem to be as follows: Under the 1890 Act, (as with the 1869 Statute), as distinct from the rules, there was no general power conferred upon County Court judges to make orders for costs. Rather, a welter of single instances touched upon awards of costs.[16] Sometimes a section provided that costs should be 'allowed' on the County Court scale. Sometimes it was provided that a party should recover 'full costs'. Sometimes a party was able to enter judgment for a sum and costs; and often the judge was given a broad discretion to award costs.
50 Now, it was held in Smith v Victorian Railways Commissioners,[17] Dowling v Victorian Railways Commissioners,[18] see also Weller v Everitt,[19] that upon a taxation of costs no item not provided for by the 'Scales of Costs' could be allowed. I would take it to be a corollary that, upon a taxation, no item of costs could be allowed in an amount beyond that set out in the scales, except to the extent that there was a discretion to allow a larger amount.
51 Thus understood, it seems to me that s 45 of the 1890 Act addressed the situation where, for one reason or another, costs were to be taxed. Then, the fees to be 'allowed' to counsel and solicitors, and the amounts paid to witnesses, were to be as fixed by a scale in rules made under the Act. But the amounts paid to the practitioners were not to be costs in the cause if the amount recovered was small (but subject in the last-mentioned case to the judge deciding to allow them).
52 The section said nothing, as I see it, to inhibit the power of a judge to determine what costs should be paid in cases in which the judge was invested with a discretion to make a determination.
53 Further, whilst the section referred to 'fees', 'expenses', 'costs' and 'sums disbursed', it seems clear that the terms were not used as if each was distinct. So, for instance, the 'fees' of counsel were not to be allowed as 'costs in the cause'. This tells against an argument that pertinent legislation, which has long used language still used today, distinguishes between costs and witness expenses. In one sense, of course, they are different. But it is another thing to say that both are not 'costs' for the purposes of s 78A.
54 Section 33 now has, I think, a very limited utility. It still directs attention to the amounts which are to be allowed to legal practitioners and witnesses in matters which fall for taxation;[20] although whether the section is now really necessary for that purpose may perhaps be doubted. Further, it retains the embargo against fees to practitioners being costs in the cause (subject to contrary order by the court) where the amount recovered is otherwise small. That embargo - subject to the fact that, despite the ravages of inflation, the threshold amount has not altered for 140 years - remains a nominal discouragement to the bringing of silly claims.
55 In the event, I consider that s 33 does not inhibit the discretion conferred upon judges of the County Court by s 78A.
56 I earlier identified s 78(1)(a) and (b) and the rules as the second area of provisions which might possibly impact upon the discretion conferred upon County Court judges by s 78A.
57 There are two ways in which s 78(1)(a) and (b) might be relevant. First, if the subsection led to the conclusion that 'costs' where used in s 78A excludes witness expenses. Second, if the rule-making power, once exercised, confined the application of s 78A.
58 The textual argument raised by the appellant relied particularly upon s 78(1)(a) and (b). Thus far I have addressed the argument by reference to the history of s 78A, and the improbability, as I perceive it, that s 78A or its predecessors drew any distinction between costs and witness expenses; and by reference to the language of s 33 and its predecessors. Now I turn specifically to s 78(1) and its predecessors, and to rules made thereunder.
59 Section 148 of the County Court Act 1890 empowered the County Court judges to frame rules fixing 'the scale of fees and costs to be allowed to practitioners ... and for regulating the expenses to be paid to witnesses ...'. The section fitted in neatly with s 45 of that Act, which, as I have explained, addressed the situation where, for one reason or another, costs were to be taxed.
60 Rules were made pursuant to the power thus conferred. The preface to the rules stated, inter alia, that the judges had fixed a scale of fees and costs, and a scale of expenses to be allowed to witnesses.
61 Order 50 dealt with costs. I should mention paragraphs 428, 432, 435, 445 and 449. Thus -
62 The rules plainly contemplated that a judge might fix the costs. Implicitly, they recognised that various sections of the Act expressly gave the judges that power, and (probably) that a judge retained some general discretion not to order a taxation but rather to fix costs. The rules also empowered a judge, even if a matter was to go to taxation, to make orders which would be reflected in the costs and expenses allowed; see paragraphs 432, 435 and (probably) 449.
63 It is next the case that paragraph 432, dealing with 'the costs of witnesses', appeared within Order 50, headed 'costs'; and that the 'Schedule of Costs' included the item 'witnesses' expenses'. So, although s 45 of the 1890 Act understandably distinguished between 'the fees' to be allowed to barristers and attorneys and 'the expenses to be paid to witnesses' (all were dealt with under the heading 'Attorneys and Counsel - Costs') as did the rule-making provision, s 148, it does not follow that witnesses' expenses were not conceived to fall under the umbrella of costs. It is rather that they were a different kind of item.
64 The separate references to 'the fees to legal practitioners' and 'the expenses to be paid to witnesses' continue to this day; see ss 33 and 78(1)(a) and (b) of the Act, and Appendix A to the Rules. Although the separation of references has its roots in s 36 of the 1869 Statute, ss 45 and 148 of the 1890 Act and the 1891 rules provide a convenient and comprehensive snapshot of the history of the matter. For reasons which I have attempted to explain, far from those sections and rules suggesting that witness expenses were not an item of costs, they suggest the contrary.
65 But, says the respondent, so to conclude is to give a different meaning to 'costs' where used in s 78A and 'costs' where used in s 78(1)(a). That is because, the argument runs, 'costs' in s 78(1)(a) is to be differentiated from witness expenses, which are dealt with in s 78(1)(b).
66 I reject that submission. Section 78(1)(a) and (b) maintain a distinction which has existed at least since 1869; a distinction dependent upon the fact that the items are different, not upon whether witness expenses fall within the general umbrella of 'costs of proceedings'. It is notable that s 78(1)(a) empowers a majority of judges to make rules 'for regulating any matters relating to the costs of proceedings'. Then follows in paragraph (a), conjunctively, reference to 'regulating and prescribing the scales of fees and costs'; and, in paragraph (b), reference to regulating and prescribing the expenses to be paid to witnesses. In my view the section thus confers a general power to make rules regulating costs, and then makes specific provision for 'regulating and prescribing two aspects of costs - practitioners' fees and costs, and witness expenses.
67 I further consider that it is a wrong in principle to pick out the word 'costs' in s 78A(1) so as to divorce it from its context. That sub-section invests the County Court with a discretion as to 'the costs of and incidental to all proceedings.' The discretion is a broad one, as s 78A(2) emphasises. For by that sub-section the court may order a legal practitioner to pay all or a portion of the costs of the proceeding. It is not sensible, I consider, to read 'costs' where used in s 78A(2) not to include disbursements - whether counsel's fees or witness expenses. Further, to give 'costs of and incidental to all proceedings' a broad meaning is consistent, as I said earlier, with the origins of s 78A(1).
68 It would be just as wrong, in my opinion, to read 'costs' where used in s 78(1)(a) divorced from its context. I have already directed attention to the structure of s 78(1)(a) and (b).
69 Finally, even if s 78(1)(a) confined the meaning of 'costs' so as to exclude witness expenses, it would not necessarily follow that 'costs' where used in s 78A(1), having regard to the origins and purpose of that sub-section, should be given an identical meaning.
70 The question which then arises - it is a corollary of the textual argument - is whether the rules confine the discretion invested in the court by s 78A(1), a discretion unconfined by opening words such as appear in s 24 (1) of the Supreme Court Act 1986.
The power and discretion of the Court as to costs shall be exercised subject to and in accordance with this Order.
72 The rule has the force of statute: Pezzimenti v Seamer.[21]
73 There was a predecessor rule to r 63A.02. Order 52 rule 1 of the County Court Rules 1979[22] was in this form:
Subject to the provisions of any Act and these Rules, the costs of and incident to all proceedings in the Court or in chambers shall be in the discretion of the Court or judge.[23]
74 Then, by O 51, r 3(a), a judge was empowered to fix the amount of costs, failing which (r 3(b)) they were to be taxed by the registrar. In respect of taxation, by O 51 r 6(2) a judge was empowered to certify for more than one counsel, and certify as to amount.
75 Two matters may immediately be noted. First, O 52 r 1 was similar to, though not identical with, s 24(1) of the Supreme Court Act. It was not so broad a power as conferred by s 24(1),[24] which specifically empowers the Court to determine by whom and to what extent the costs are to be paid.
76 Second, although there was then no statutory counterpart of s 78A(1), the effect of O52 r 3(a), in combination with O52 r1, was to invest the judge with a power to fix costs and in doing so to exercise a discretion. But where the judge did not do so, there would be taxation by default - in respect of which the judge was empowered to certify for several matters.
77 It appears that O63A replaced O52 in the County Court Rules of Procedure in Civil Proceedings 1989. By that time, of course, s 78A had been inserted into the County Court Act; so any perceived need for the old O 52 rr 1 and 3(a) had largely disappeared.
78 There is no specific linkage between s 78A(1) and rule 63A.02. Compare rule 63.02 of Chapter I of the Rules of the Supreme Court. Nonetheless, I accept that r 63A.02, having statutory force, is capable of impinging upon the general discretionary power to award costs which is conferred by s 78A(1). The question is what it does in this connection, taking as a starting point my conclusions that s 78A is in principle to be given broad application, and that 'costs' in s 78A embraces witness expenses.
79 The extent of the limitation on the power and discretion conferred by s 78A(1) effected by r 63A.02 is that they shall be 'exercised subject to and in accordance with O 63.'
80 By r 63A.01 costs includes disbursements.[25] Whether or not witness expenses are a disbursement, the definition is inclusive; and I have already concluded that 'costs' extends to witness expenses.
81 The default situation is that where a costs order is made against a party, that party is to be entitled to taxed costs.[26] Often enough, the court is not required to make an order for taxation: r 63A.10. The default situation is expressed to be 'subject to this order': r 63A.07(1). Some exceptions are contained within r 63A.07(2), which mirrors r 63.07(2) of Chapter I of the Rules of the Supreme Court. Sub-rule (2) provides that -
Where the Court orders that costs be paid to a party, the Court may then or thereafter order that as to the whole or any part of the costs specified in the order, instead of taxed costs, that party shall be entitled to -
(a) a portion specified in the order of taxed costs;
(b) taxed costs from or up to a stage of the proceeding specified in the order;
(c) a gross sum specified in the order instead of taxed costs;
(d) a sum in respect of costs to be determined in such manner as the Court directs.
82 Paragraph (d), in my opinion, is broad enough to permit the court to decide that it shall itself determine some part of the costs payable. I consider, in point of principle, that it would be inconsistent with the broad discretion conferred by s 78A(1) to read any limitation more widely than the language required. The position is not as clear, in my opinion, as that which existed under O 65 r 23 of Chapter I of the 1957 Rules of the Supreme Court; but it is clear enough.
83 In argument, some reference was made to the opening paragraph of Appendix A to the County Court rules, and to specific functions conferred upon the registrar. But the power given to the Court to deal with costs other than by taxation is not to be confined by reference to scales of costs which have everything to do with taxation.
84 In the event, the judge was empowered to determine the amount of the witness expenses to be paid to B.
85 Ground 2 is an allegation of an error of the last category described in House v The King.[27] It is not an allegation of specific error. It is to be contrasted with grounds 3 and 4, which do allege specific error.
86 Counsel for the respondent, in his submissions below, emphasised the advantage of his client being able to call the witness B in Warrnambool. That advantage was not disputed. Counsel also referred to the need to call the witness 'to explain [the medico-legal issues] to the jury in the articulate way in which he did', there being less favourable medical opinion - it seems from a treating doctor in evidence. Again, counsel noted his client's contractual liability to pay the $8000 plus GST, and he submitted that 'it would not miscarry in your Honour's discretion to certify, if not for that exact figure, for the substantial amount of it.'
87 Counsel for the appellant submitted below, as I have already noted, that the judge could not fix an amount exceeding the maximum amount set out in Appendix A. There was, he said, 'absolutely no dispute that the maximum amount has to be paid'. But if the judge held that she was not confined by the Appendix amount, then, counsel submitted, her Honour was
probably as experienced as - more experienced perhaps than any member at the Bar table - in dealing with medical costs and it doesn't usually form part of our work in this arm of the profession, however the bill we would say is, as I say, extraordinarily high.
88 In the event, counsel for the appellant made no reference to any considerations which might guide the exercise of a discretion - other than that the amount claimed seemed very great. He did not closely address the matters which had been relied upon by the respondent - most particularly the asserted importance and quality of B's evidence. Neither did he make any submission directed to the alleged error which is asserted by ground 3.
89 I have already set out the judge's decision in respect of the witness's expenses.[28] Of the matters which her Honour mentioned, counsel for the appellant accepted that it had not been irrelevant for her Honour to take into account the fact that B had been in specialist practice for a long time, that he was a former head of neurosurgery at a major Melbourne hospital, and that he had been required to leave Melbourne early and would return late. He challenged the factual basis for the judge's assertion that B had been in the witness box for 'a very considerable period of time;' but not the relevance of the length of time over which a witness gave evidence.
90 Counsel's submission in respect of ground 3 was along these lines: the parties had agreed upon an order for party and party costs. Such an order necessarily means that the successful party will be out of pocket. The judge had been obliged to factor that into account when determining the witness expenses for B. Another way of arriving at a conclusion that witness expenses should not have been fixed at $8000 plus GST was that it far exceeded the maximum amount specified by Appendix A.
91 Counsel did not contend, it should be noted, that the parties intended that the judge approach the determination of B's witness expenses on the basis that it was to be guided by their agreement as to an order for party and party costs. Any such submission would not have been tenable.
92 Concerning ground 4, the appellant's submissions appeared to me to vary somewhat in response to questions from the bench. The end point, as I understood it, was a submission that it would always be irrelevant for a judge to take into account, when fixing a witness's fee, the judge's assessment of the quality of the witness's evidence.
93 It is convenient to address the allegations of specific error at the outset. The gist of the appellant's submissions was that these alleged errors explained (though it was unnecessary to do so) how the exercise of discretion had so far miscarried as to reveal, in its result, that it had been attended by error.
94 In my opinion, ground 3 should be rejected. First, the fact that the parties had agreed that the respondent should have an order for party and party costs said nothing about how the court should determine B's witness expenses. Evidently, the respondent had not been prepared to agree to those witness expenses being part of such order. Second, the item in Appendix A addresses the situation where, without reservation, an order has been made for costs to be taxed according to the appropriate scale. That was not this case so far as the witness expenses for B were concerned. Rather, the court was exercising the discretion conferred upon it by s 78A(1) of the Act. Third, it was no more than assertion that a party does not expect to get witness expenses paid in full. Fourth, even if the respondent should have believed that it was unlikely that B's claim for expenses would be allowed in full, the very point of submitting the matter for the judge's decision was to enable the matter to be debated free of the constraint of the scale of costs.
95 I turn to ground 4. Counsel for the respondent submitted that this case needed to be considered in its own circumstances. So considered, the judge had not erred. Counsel did not submit the contrary of the appellant's submission - that is, that the quality of a witness's evidence will always, and necessarily, be relevant to determination of witness expenses.
96 In my opinion, respondent's counsel was correct in submitting that B's claim for witness expense fell to be considered in the circumstances of the particular case. I would be unwilling to lay down a general proposition that determination of the amount to be allowed as witness expenses must disregard the apparent quality, and importance, of the evidence given. So to conclude could work an injustice where, as not infrequently occurs, an interstate or overseas witness - often an expert witness - must be called if a party is to advance that party's interests effectively.
97 The difficulty of the appellant's absolutist position was emphasised when Redlich JA asked what might be done by a judge in the exercise of the assumed discretion if it appeared that a witness's evidence had addressed a relevant issue, but that the evidence had been, colloquially, hopeless. Counsel for the appellant responded that perhaps the judge could take that circumstance into account in deciding whether to allow the witness's expenses.
98 In the present case, the learned judge evidently concluded that the witness, having travelled to a country centre, had given important evidence which was likely to have assisted the jury. Her Honour had the advantage of seeing and hearing the witness in the context of the jury trial. I am not prepared to conclude that her Honour's evaluation was necessarily irrelevant to the exercise of her discretion.
99 That takes me to ground 2. Absent specific error, counsel for the appellant adopted, in effect, the observation made on his client's behalf at trial that 'the bill is...extraordinarily high'. He also submitted that the judge had erred in characterising the length of time that B had spent in the witness box as 'very considerable'.
100 The second of those matters should really be characterised as an allegation of specific error. But nothing turns on it. The witness gave evidence over an approximate two hour period. The judge's characterisation was expressed in language of generality. I would not say that it was wrong.
101 I go to the size of the bill, which was reflected in the amount allowed. That amount well-exceeded the Appendix A maximum. On the other hand, counsel for the appellant at trial remarked that the judge was probably more experienced than those at the bar table 'in dealing with medical costs' - by which he appears to have meant witness expenses for medical witnesses, and by which he implied that judges (contrary to his primary argument) sometimes fixed witness expenses. Her Honour
was not provided with any material which would suggest that to allow the amount claimed would be out of step with witness expenses fixed in other cases - a matter which would in any event be difficult to establish because each case will turn on its own unique facts.[29]
102 I accept that the amount allowed was large. But I cannot say that it discloses latent error in the exercise of the discretion. This is not to say that such a large allowance should be commonplace. Rather, the allowance reflected a particular exercise of discretion in the particular circumstances of the particular case.
104 I have had the considerable advantage of reading in draft the reasons of Ashley JA. I agree that s 78A(1) of the County Court Act 1958 confers a discretion upon the judge to fix a witness's expenses. For the reasons his Honour has given, I also agree that no error has been identified in the manner in which the discretion was exercised. The appeal should be dismissed.
[1] The maximum amount specified was in fact $1,886 per day.
[2] But only up to the maximum amount specified in the Appendix.
[3] [1993] VicRp 13; [1993] 1 VR 203, 210-211.
[5] Burns Philip & Co Ltd v Bhagat [1993] VicRp 13; [1993] 1 VR 203, 211.
[9] Hansard, Council, 19 March 1986, 139 and following.
[12] Ibid 182-183 (Mason CJ, Deane J) 203 (Dawson J), 207-209 (McHugh J).
[13] Because of the circumstance referred to at [44]. But see rule 63A.02, which has a certain confining effect.
[14] [2000] VSCA 171; (2000) 2 VR 246, particularly [8] and [25]. Charles and Buchanan JJA agreed.
[15] Relevant at the time when the matter was dealt with by the trial judge were the County Court Rules of Procedure in Civil Proceedings 1999. They were revoked and replaced by the County Court Civil Procedure Rules 2008, SR 148 of 2008, effective 22 February 2009.
[20] See Arthur v McLeish [1996] VicRp 28; [1996] 1 VR 411, 413 (Tadgell J).
[23] This rule was identical with O 51 r 1 of the County Court Rules 1964.
[24] And its predecessors, and the present s 78A(1) of the County Court Act.
[25] See also Legal Profession Act 2004, s 1.2.1.
[29] Neither was any such material provided to this Court.
Astbury
Wood & Anor [2009] VSCA 126
(1992) 174 CLR 178
(2000) 2 VR 246
(1936) 55 CLR 499