Court of Appeal (WA)|2014-11-04|Before: Mitchell J

SOIA -v- BENNETT [2014] WASCA 204 (4 November 2014)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

Rules of the Supreme Court 1971 (WA), O 66 r 32, O 66 r 42, O 66 r 43, O 66 r 53, O 66 r 54, O 66 r 55, O 66 r 56

Australian Coal and Shale Employees' Federation v Commonwealth [1953] HCA 25; (1953) 94 CLR 621

Crisp v Mossensons (Unreported, WASC, Library No 970302, 18 June 1997)

Glew v Shire of Greenough [No 2] [2008] WASCA 75

Rankilor v Circuit Travel Pty Ltd [2012] WASCA 155

Re Lawrence; Ex parte Goldbar Holdings Pty Ltd (1994) 11 WAR 549

Soia v Bennett [No 5] [2012] WASC 289

Soia v Bennett [No 5] [2012] WASC 289 (S)

ZGTeek Pty Ltd v Michael Lurie & Associates [2012] WASC 419

(This judgment was delivered extemporaneously on 23 October 2014 and has been edited from the transcript.)

1 On 5 February 2014 the Court of Appeal dismissed two appeals by the appellants and allowed a cross-appeal by the respondent. The appeals were against a decision of a commissioner of this court who dismissed an action brought by the appellants against the respondent,[1] and ordered that the appellants pay 50% of the respondent's costs of the action.[2] The first appeal (CACV 108 of 2012) was against the order dismissing the action. The second appeal (CACV 8 of 2013) was against the order that the appellants pay 50% of the respondent's costs of the action. The respondent cross-appealed in CACV 8 of 2013. The Court of Appeal dismissed both appeals and allowed the cross-appeal, effectively substituting an order that the appellants pay the respondent's costs of the action which was the subject of the appeals.

2 The Court of Appeal ordered that the appellants pay the respondent's costs of the appeals and the cross-appeal. On 3 June 2014 a registrar of this court taxed those costs. Costs of $57,157.97 were allowed in CACV 108 of 2012, and costs of $44,931.59 were allowed in CACV 8 of 2013. The registrar ordered that any application for a review of the taxations be filed and served by 17 June 2014.

3 On 17 June 2014 the appellants filed and served a document in both CACV 108 of 2012 and CACV 8 of 2013, which was amended during the course of the day. The final version of the document was entitled 'Appellant's Amended Submissions Seeking Review of Taxation' (Review Submissions). Paragraph 1 of that document read:

The appellants maintain their general objection to the allowances sought in each of the Bills of costs that were the subject or [sic] previous written objections made on the basis that there hase [sic] been doubling up and duplication of work by Mr Ebbs and Ms Onofaro, save for the items that were conceded and/or withdrawn by the Respondent or which were otherwise agreed and seek a review of the allowances made in both Bills of Costs for Taxation on the basis that:

1.1 There has been doubling up and duplication of work done by Mr Ebbs and Mrs [sic] Onofaro.

1.2 The respondent conceded doubling up and duplication in relation to attendances, when it was obvious and apparent and it would have been fool hardy [sic] not to concede but did not concede in other instances where it ought to have been conceded.

1.3 It is an error of law to require a respondent to a bill of costs for taxation to be put to a 'proof positive' requirement of showing that there has been doubling up and duplication of work done by the taxing party, where it is obvious on the face of the bill of costs itself.

1.4 Mr Ebbs claimed that he and Ms Onofaro performed different work tasks but did not proceed to give one single example of breakdown in taks [sic] performed by them. On the face of the Bill of Costs itself, Mr Ebbs and Ms Onofaro performed exactly the same work.

1.5 The taxing officer has inherent jurisdiction and discretion to infer doubling up and duplication of work.

4 Paragraphs 2 - 8 of the Review Submissions put forward a number of general legal propositions. Paragraphs 9 - 10 read as follows:

9.1 there be opportunity for further objection.

9.2 more be taxed off the bills

9.3 errors of principle be rectified.

10.1 state the ground and reason of her decision on each objection so that the practitioner may apply to a judge for a review.

10.2 grant a stay of proceedings.

5 Also on 17 June 2014, the respondent's solicitors sent an email to the appellants' solicitors indicating that the Review Submissions did not comply with the Rules of the Supreme Court 1971 (WA) (Rules) (specifically O 66 r 53(1)) with respect to the review of a taxation. The respondent's solicitors also expressed the view that the appellants could not simply object to the entirety of the bill on the basis that there has been 'doubling up and duplication of work by Mr Ebbs and Ms Onofaro', particularly in circumstances where a number of items in the bills did not include work undertaken by both practitioners. Mr Ebbs and Ms Onofaro were the two legal practitioners who undertook the principal solicitorial work on the appeal.

6 On 22 July 2014 the registrar who had conducted the taxation dealt with the 'review application' on the papers, and produced written reasons for decision. She noted that, given the nature of the review requested, the respondent elected not to file any submissions in reply to the request for review. After referring to the background facts and some general principles, the registrar quoted par 10 of the Review Submissions. She characterised this as the appellants seeking 'a review in very limited terms'. She said:

Given that the taxations were recorded, I can see no better way of stating why I made the decisions I did in the taxation than to provide the parties with a transcript of the taxation. The transcript sets out my reasons for making each decision on each objection as requested on the review.

7 The registrar then incorporated the transcript into her reasons and indicated that, having read the transcript, she could find no errors of principle in her decisions and determined that the bills should stand as taxed.

8 On 23 July 2014 the registrar signed certificates of taxation in each of CACV 108 of 2012 and CACV 8 of 2013 in the amounts previously taxed.

9 By chamber summonses filed in both matters on 6 August 2014, the appellants seek orders that the decisions of the registrar 'be reviewed as to the items or parts of items disputed by the appellants in that taxation'.

10 Order 66 of the Rules contains a number of provisions in relation to costs. In these reasons a reference to a rule is to the rule appearing in O 66 of the Rules.

11 Rule 32 provides for the taxation, allowance and certification of costs ordered to be paid by the court. Rule 42 prescribes the content of bills of costs, including a requirement that a bill of costs be prepared so as to show clearly 'items consecutively numbered, together with a reference to the item in the scale to which the item in the bill relates'. The reference to the 'scale' is relevantly to a costs determination made under the Legal Profession Act 2008 (WA).

12 Rule 43 provides that the decision of the taxing officer on all questions of fact shall be final.

13 Rule 53(1) provides:

A party who contends that the taxing officer has made an error in principle in allowing or disallowing any item or part of an item in a bill of costs taxed by him may, at any time before a certificate of taxation dealing finally with that item is signed, or at such earlier time as may, in any case, be fixed by the taxing officer -

(a) deliver to the other party interested in the allowance or disallowance and carry in before the taxing officer, an objection in writing to the allowance or disallowance specifying in the objection by a list, in a short and concise form, the items or parts of items objected to, and the grounds and reasons for the objections; and

(b) thereupon apply to the taxing officer to review the taxation in respect of those items or parts.

14 Rule 54(1) and r 54(2) provide:

(1) Upon an application under rule 53 to review the taxation, the taxing officer shall reconsider and review his taxation in relation to the objections, and he may, if he thinks fit, receive further evidence in respect of the objections.

(2) If so required by a party, the taxing officer shall state in his certificate of taxation or by reference to the objection, the ground and reason of his decision on the objection, and any special facts or circumstances relating to his decision.

15 Rule 55 provides for the review jurisdiction that the appellants have now sought to engage, while r 56 provides for the evidence to be considered in the review. Those rules provide:

(1) If a party is dissatisfied with the certificate of the taxing officer as to any item or part of an item objected to under rule 53 of this Order, he may, within 14 days from the date of the certificate, or such other time as the Court, or the taxing officer at the time he signs his certificate, allows, apply to a judge in chambers for an order to review the taxation as to that item or part of an item.

(2) The judge, if of opinion that the taxing officer has made an error in principle, may thereupon make such order to rectify the error as the judge thinks just.

(3) The certificate of the taxing officer is final and conclusive as to all matters which have not been objected to in accordance with these rules.

No further evidence on review except with leave

An application under rule 55 to a judge to review the taxation shall be heard and determined by the judge upon the evidence which has been brought in before the taxing officer, and further evidence shall not be received upon the hearing of the application unless the judge otherwise directs.

Has the court's review jurisdiction been properly engaged?

16 The chamber summonses seek a review 'as to the items or parts of items disputed by the appellants in that taxation'. Cast in those terms, the application extends beyond the kind of application provided for in r 55(1). Rule 55(1) only authorises a dissatisfied party to apply to a judge in chambers for an order to review the taxation as to items or parts of items 'objected to under r 53'. As I will mention, the Review Submissions do not make clear which items, or parts of items, were the subject of objection. However, it is apparent that not all items objected to at taxation were the subject of the objection in the Review Submissions. The applications by chamber summonses are not authorised by r 55 to the extent that they seek a review extending beyond the items described in the Review Submissions.

17 It is then necessary to identify which items were objected to under r 53. This is an important question for two reasons. The first reason is that the making of an objection under r 53 is the foundation for the existence of my power under r 55. If no objection is made under r 53 then no application may be made under r 55.[3] Secondly, the effect of r 55(3) is that, in a review under r 55, the certificate of the taxing officer is final and conclusive as to all matters 'which have not been objected to in accordance with these Rules'.

18 In submissions before me, counsel for the appellants identified the following items as being subject to the application for review under r 55:

(1) items 2, 3, 5 and 6 in the 'Respondent's Bill of Costs' filed in CACV 108 of 2012;

(2) items 2, 3 and 5 under the heading 'Appellants' Costs Appeal', and items 1, 2 and 5 under the heading 'Respondent's Cross Appeal', in the respondent's bill of costs filed in CACV 8 of 2013.

19 My capacity to deal with those items under r 55 turns on whether they were objected to under r 53.

20 As regards item 6 in the appeals and item 5 in the cross-appeal (counsel fee on hearing), I am satisfied that those items were not caught by the objection contained in the Review Submissions. The items objected to in the Review Submissions were those to which objections were made on the basis that there had been 'doubling up and duplication of work by Mr Ebbs and Ms Onofaro'. No items or work by Mr Ebbs or Ms Onofaro was claimed in item 6 in the appeals or item 5 in the cross-appeals.

21 The Review Submission is the only document to which the appellants point as an objection made under r 53 and in accordance with the Rules. In my view, the Review Submissions do not bear that character at all.

22 An objection referred to in r 53 is an 'objection in writing to the allowance ... specifying in the objection by a list, in a short and concise form, the items or parts of items objected to, and the grounds and reasons for the objections'. By reference to the chapeau to r 53, it is clear that the grounds and reasons must be that the taxing officer made an error in principle.

23 I am unable to discern, from the Review Submissions, the items or parts of items to which objection is taken. There is no list at all, and no specification of the relevant items or parts of items to which the objection relates. A requirement that a document 'specify' a matter is ordinarily a requirement that the matter be unambiguously identified and made clear in the document itself.[4] The review document does not specify any items or parts of items in this sense. Rather, it refers to the appellants maintaining:

[T]heir general objection to the allowances that were the subject [of] previous written objections made on the basis that there [has] been doubling up and duplication of work by Mr Ebbs and Ms Onofaro, save for the items that were conceded and/or withdrawn by the respondent or which were otherwise agreed.

24 Even if a review and analysis of the court file and the transcript of the taxation might enable conclusions to be reached as to the items or parts of items which were the subject of the objection, the Review Submissions clearly do not specify those items.

25 Further, the Review Submissions do not, in terms, indicate that the registrar made an error in principle in allowing any particular item or part of an item in the bills of costs. Paragraphs 1.1, 1.2 and 1.4 contain assertions that there has in fact been a doubling up and duplication of work. Those assertions do not identify any error of principle by the registrar. Paragraphs 1.3 and 8 say that it is an error of law to impose a certain requirement on a respondent to pay a bill of costs, but do not, in their terms, allege that the registrar made such an error. No arguable error of principle by the registrar in conducting the taxation is identified in any other paragraph.

26 Rule 53(1) does not impose an onerous burden on a party seeking to object to an allowance made on the taxation of a bill of costs. It would not have been difficult to specify, for example, that objection was made to the allowances for items 2 and 3 of the bill of costs in CACV 108 of 2012 on the ground that, in making those allowances, the taxing officer made an error of principle by requiring the appellants to positively prove that there had been doubling up and duplication of work rather than requiring the respondent to show that costs had been reasonably incurred. That approach would have avoided the uncertainty as to which items or parts of items were the subject of the objections and enabled the alleged error of principle to be identified.

27 The requirements of r 53(1) I have described above are more than merely formal requirements. An objection under r 53(1) defines the scope of the taxing officer's review under r 54 and the judge's powers under r 55. The specification of the items objected to and the ground of objection, in a way that identifies the alleged error of principle, also facilitates the subsequent steps in the objection process. If the written objection clearly identifies the error of principle, then the taxing officer's reasons under r 54(2) can indicate whether the taxing officer has applied that principle. If the taxing officer accepts that the principle has been applied as alleged, the task of the judge reviewing under r 55 may simply be to determine whether the application of that principle was actually erroneous.

28 In the present case, the registrar's approach of incorporating the transcript of the taxation into her reasons has made the resolution of the question of whether she erred in principle more difficult than it might otherwise have been. I do not criticise the registrar for the approach she took, which I consider to be a by-product of the way in which the Review Submissions were formulated. However, the added complexity introduced into these review applications by the approach of the registrar on the 'review' under r 54 illustrates the importance of objections under r 53(1) being made in accordance with the Rules. Because upon a review of a taxation a judge may rectify only errors of principle, it is particularly important that the party seeking review should require the taxing officer to state the ground and reasons of his decision on each objection and equally important that the taxing officer should give clear but concise reasons.[5] This will only be achievable if the objection under r 53 specifies the items or parts of items objected to and the grounds and reasons for the objections, cast in terms of an alleged error of principle.

29 I should not be taken to suggest that every deficiency in an objection purportedly made under r 53(1) will necessarily preclude an effective review under r 55. Each case will need to be decided upon its particular circumstances. In the present case, however, the deficiencies in the Review Submissions are so many and so significant that the Review Submissions cannot, in my view, be regarded as objecting to any items or parts of items 'under r 53' or making an objection 'in accordance with these Rules' for the purposes of r 55. As there is no objection under r 53, I do not have power to make an order rectifying an error of principle under r 55(2). Further, as no matters have been objected to in accordance with the Rules, the certificates of the registrar are, for the purpose of any review under r 55, final and conclusive.

30 For the above reasons the applications for a review under r 55 must be dismissed as incompetent.

31 Even if I had concluded that the applications for review were competent and engaged my powers under r 55(2), I would still have dismissed the application for review for the following reasons.

32 The power conferred by r 55(2) for me to make orders in relation to the taxation is conditioned by the formation of an opinion that the taxing officer has made an 'error of principle'.

33 Errors in principle are to be contrasted with questions of mere quantum. Nevertheless, errors in principle may be made both in determining whether an item should be allowed and in determining how much should be allowed. An error in principle may be inferred from a decision of the taxing officer if the result is such that the discretion appears not to have been exercised at all, or where it has been exercised in a manner that is manifestly wrong.[6]

34 In the present case, the only error of principle which is arguably identified by the appellants' submissions is that the registrar erred in law by requiring the appellants to be put to a 'proof positive' requirement of showing that there has been a doubling up and duplication of work done by the respondent's solicitors, in circumstances where it was obvious on the face of the bills of costs that there has been a doubling up and duplication of work and effort.

35 In my view, the appellants' have not established that the registrar made any error in principle of the kind alleged.

36 In the first place I do not accept that it was obvious on the face of the bills of costs that there had been a doubling up of work and effort by Mr Ebbs and Ms Onofaro. It is true that the bills referred to work being done in relation to the same scale items by both practitioners. However, Mr Ebbs (who appeared before the registrar at the taxation on behalf of the respondent) indicated, in effect, that the bill had been drawn to ensure that there was no doubling up or duplication of work. He indicated, in effect, that there had been a delineation of the different work done on the same items in relation to the matters.

37 In their submissions all parties correctly accepted that the scale does not prohibit teamwork. In many cases in this court, the most efficient and economic manner of doing the legal work may be to assign a junior practitioner (whose costs are allowed at a lower rate) to do the bulk of the 'legwork' under the supervision of a more senior practitioner who settles final documents based on drafts prepared by the junior practitioner. Whether or not that is so will depend on the nature of the particular matter, and it will be appropriate for the taxing officer to consider the reasonableness of adopting that approach in allowing costs claimed on that basis. Given the nature and complexity of the appeals in this case it could not, in my view, be suggested that it was not open to the registrar to take the view that it was reasonable for a more junior and a more senior practitioner to both be engaged in the matter.

38 Given the explanation given by Mr Ebbs and the nature and complexity of the appeals, I do not consider that the fact that the bills of costs indicated both Mr Ebbs and Ms Onofaro did work in relation to the same items means that it was obvious on the face of the bills of costs that there had been a doubling up and duplication of work and effort. The premise on which the appellants' alleged error in principle is based is not made out.

39 Secondly, I do not consider that the transcript indicates that the registrar did put the appellants to 'proof positive' that there had been doubling up. At one point, the registrar did say:

Registrar: But the problem with - Mr Galic, the problem with the submission on doubling up is if Mr Ebbs says it's separate work that was done by people, and they're just two people doing work in relation to the same matter but not doing the same work, why should I not accept that? Because if I do not accept that, it's just saying Mr Ebbs is lying about how the bill has been prepared.

Galic, Mr: Look, the reason you wouldn't accept it, not because he's lying or he's not lying, but because unless my friend can tell you exactly what he did and what Ms Onofaro did, you've got not [sic] way of really knowing. Just accepting on face value - it's not a question of him lying or not.

Registrar: Well, he has prepared the bill on the basis and he says that there is no doubling up. So if he maintains the view that there is no doubling up, what I'm asking you is why should I not accept that?

Galic, Mr: Because on its face, in my submission, seven and a half thousand dollars to prepare an appeal book index for an appeal that didn't - - -

Registrar: But it doesn't mean that there's doubling up. It just means that somebody spent a lot of - two people spent a lot of time working independently on aspects of the matter. They may have spent too much time working but it doesn't of itself prove that they did the same tasks in duplication.

Galic, Mr: Well, the other - one other grounds [sic] that we object on the basis that first, they were doubling up, but secondly, it's excessive. Too much work was done here.

Registrar: Well, I have - - -

Galic, Mr: More than what's reasonable.

Registrar: Well, I think you can argue excessive but I think - unless Mr Ebbs says we did the same work and we both charge for doing the same work, which is not, clearly from the reply to the objections is what his contention is, I'm not going to accept that there was doubling up absent you being able to tell me or point to something, because to do so would be to conduct an inquiry into whether or not the bill that has been put before the court is misleading.

So I can accept your submission that it's excessive but unless Mr Ebbs tells me that the same task was done by two people, I'm not going to accept that there was doubling up.

40 The registrar was not making a decision in this part of the transcript. Rather, she was putting questions and propositions to counsel for the appellants so that he had the opportunity to address them. In any event, where Mr Ebbs indicated that there was no doubling up it was reasonable to ask counsel for the appellants, as the person putting a contrary proposition, why the indication by Mr Ebbs, who was an officer of the court, should not be accepted. It was also reasonable to expect that, where counsel for the appellants made a positive assertion that there had been duplication and doubling up, he would have, and be able to point to, an evidentiary basis for that assertion. Such an expectation does not involve a reversal of the proper burden of persuasion or derogation from the requirement that a party seeking costs in a taxation must demonstrate that the costs claimed were reasonably incurred.

41 Thirdly, the manner in which the registrar actually dealt with the items during the taxation indicates that she did consider whether there had in fact been doubling up and did not proceed on the basis of an absence of 'proof positive' by the appellants. The approach of the registrar is illustrated by the allowances she made on the bill of costs for CACV 108 of 2012:

(a) item 1 (appeal notice and notice of respondent's intention) was for an amount of only $273.90, which was allowed after a detailed explanation of the work done by each practitioner (ts 4 - 5);

(b) the registrar allowed item 2 (appellants' case on appeal/respondent's answer) as a proportion of the maximum assessed by reference to the complexity and the nature of the appeal (ts 16 - 17) with an additional allowance for specific work done by specific practitioners (ts 29 - 30);

(c) the registrar rejected the appellants' argument of doubling up in relation to item 3 (Settling Appeal Book Indexes) by reference to her conclusion as to the amount of work that was actually required (ts 44);

(d) Item 4 (Application in an Appeal) was disallowed (ts 29);

(e) The allowance made in relation to item 5 (Preparation of Case for Appeal) was assessed by reference to the nature and complexity of the case and (I infer, as part of what the registrar said was indistinct) the work that would have been required (ts 33);

(f) Items 6 (Counsel Fee on Hearing) and 7 (Instructing Legal Practitioner Attending Appeal) each claimed the work of only one practitioner;

(g) Ms Onofaro's claimed time was taxed off item 8 (attending on reserved decision), so that only the attendance of counsel and Mr Ebbs was allowed (ts 38);

(h) the registrar taxed off part of the amount claimed for item 9 (drawing bill of costs) by reference to the overlap in the work three practitioners undertook (ts 39);

(i) the registrar only allowed for the attendance and preparation by Mr Ebbs in relation to item 10 (Taxation of Costs) (ts 44 - 45); and

(j) items 11 and 12 (Copying and Disbursements) did not concern any alleged 'doubling up'.

42 It can be seen from the registrar's reasons expressed in the transcript that she did not simply reject claims of doubling up on the basis it had not been proved by the appellants. Rather, she considered what work had been reasonably undertaken and made allowances according to the evidence, including in the case of some items by taxing amounts off where she considered appropriate by reason of the overlap in work undertaken by different legal practitioners.

43 Therefore, the appellants have not established that the registrar made the error in principle they allege. If I did not consider that the application for review under r 55 should be dismissed as incompetent then I would have dismissed the application on the basis that the alleged error in principle was not established.

44 In relation to item 6 in both appeals and item 5 in the cross-appeal, counsel for the appellant also asserted an error of principle, that the registrar did not take sufficient account of the fact that Dr Schoombee and Mr Ebbs had appeared at the trial, which was said to go to reasonableness. As I have indicated, it is clear that the items which are said to be the subject of this objection in principle were not items originally objected to in the Review Submissions. In any event, I am not persuaded that the registrar did not take sufficient account of that fact or that the amounts allowed for those items are otherwise shown to be unreasonable.

45 In relation to the balance of the items objected to in this review application, it is also said that the registrar, in exercising her discretion, did not give sufficient weight to the number of fee earners who were engaged in the representation of the appellants. For the reasons I have indicated in dealing with the first alleged error of principle, I do not accept that submission. The manner in which the registrar dealt with particular items to which objection was taken showed that she did take and pay significant account of the number of practitioners who had been engaged on different items and was attuned to the question of whether there had been an unnecessary overlap. Again, I am not persuaded that the items as allowed by the registrar were unreasonable.

46 It is unnecessary for me to determine, therefore, whether it is open to the appellants to add new grounds of objection in respect of items which have previously been objected to under r 53.

47 I note the decision of Commissioner Sleight in ZGTeek Pty Ltd v Michael Lurie & Associates [2012] WASC 419 suggests that new grounds may be introduced. I have some reservations about that conclusion for myself, but given the way I have resolved the application, it is unnecessary in this matter to resolve that question.

Inherent jurisdiction to set aside a costs certificate

48 The appellants do not seek to invoke the inherent jurisdiction I have to set aside a taxation certificate if it is proper to do so, and so I need consider that matter no further. However, my provisional view would be that I would not have been inclined to exercise that discretion on the grounds relied on by the appellants.

49 For the above reasons the applications in each matter will be dismissed.

[1] Soia v Bennett [No 5] [2012] WASC 289.

[2] Soia v Bennett [No 5] [2012] WASC 289 (S).

[3] Glew v Shire of Greenough [No 2] [2008] WASCA 75 [18]; Australian Coal and Shale Employees' Federation v Commonwealth [1953] HCA 25; (1953) 94 CLR 621, 626.

[4] See Re Lawrence; Ex parte Goldbar Holdings Pty Ltd (1994) 11 WAR 549, 554, 556 - 557.

[5] Crisp v Mossensons (Unreported, WASC, Library No 970302, 18 June 1997), 14.

[6] Rankilor v Circuit Travel Pty Ltd [2012] WASCA 155 [75] - [77].

Australian Coal and Shale Employees' Federation v Commonwealth

At a glance

Court

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Judgment (93 paragraphs)

SOIA -v- BENNETT [2014] WASCA 204 (4 November 2014)

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Legislation Cited (1)

Cases Cited (2)