OCEAN FOODS INTERNATIONAL PTY LTD (ACN 009 334 730)

Taxation of costs - Application to lift scale of costs based on unusual difficulty, complexity and importance of case - Turns on own facts

Legal Practice Act 2003 (WA), s 215

Alpine Holdings Pty Ltd v Warwick Entertainment Centre Pty Ltd [2004] WASC 53

Australian Rugby Union Ltd v Hospitality Group Pty Ltd [1999] FCA 1061; (1999) 165 ALR 253

Briggs v Glentham Pty Ltd, unreported; FCt SCt of WA; Library No 930223; 21 April 1993

Buyquick.Com Ltd v Foxgold Pty Ltd [2004] WASC 180

Collins v Westralian Sands Ltd (1993) 9 WAR 56

Cruickshank v Producers Markets Co-op Ltd [1960] WAR 184

Delstrat Pty Ltd v Bond [2004] WADC 158

DPP v Y, unreported; CCA SCt of WA; Library No 980080; 27 February 1998

Ex parte Mullaloo Progress Association Inc [2003] WASCA 293(S)

Linto v West [2000] WASC 165

Mann v Carnell [1999] HCA 66; (1999) 201 CLR 1

McConnell v Nationwide News Pty Ltd, unreported; SCt of WA; Library No 920670; 10 December 1992

McLean v Kerville, unreported; FCt SCt of WA; Library No 6455; 1 October 1986

Middleton v Middleton [2000] WASC 278

Re Juson Pty Ltd (1992) 8 WAR 13

SDS Corp Ltd v Pasdonnay Pty Ltd [2004] WASC 26(S2)

Taylor v Serious Fraud Squad [1998] UKHL 39; [1999] 2 AC 177

Verdell Pty Ltd v F & G Nominees Pty Ltd [2003] WASCA 290

Way v Swan Television (1991) 5 WAR 323

Wayella Nominees Pty Ltd v Cowden Ltd [2003] WASC 210

1 MASTER SANDERSON: By memorandum of consent orders filed 29 July 2004, the plaintiff and the defendants settled this action. The plaintiff's action against the first and second defendants was dismissed, as was the first defendant's counterclaim against the plaintiff. Orders 2 and 4 of the memorandum were in the following terms:

"2. The First and Second Defendants pay the Plaintiff's costs of the Action including any reserved costs, to be taxed if not agreed, such liability to be joint and several with the Plaintiff to have liberty to apply to the Court to increase the Supreme Court Cost Scale limits; the First and Second Defendants reserve their position to object to the increase of the Supreme Court Costs Scale limits.

...

4. The First Defendant pay the Plaintiff's costs of the Counterclaim, including any reserved costs to be taxed if not agreed with the Plaintiff to have liberty to apply to the Supreme Court to increase the Supreme Court Cost Scale limits; the First and Second Defendants reserve their position to object to the increase in the Supreme Court Costs Scale limits."

2 By chamber summons dated 5 January 2005, the plaintiff applied for an order increasing the Supreme Court costs scale limits. This application was made under s 215 of the Legal Practice Act 2003 (WA). That section is in the following terms:

"215. Effect of determination

(1) Subject to sections 221 and 241 of this Act and section 14 of the Legal Aid Commission Act 1976 -

(a) the taxation of bills of costs of legal practitioners, as between legal practitioner and client or party and party; and

(b) any other aspect of the remuneration of legal practitioners the subject of a determination,

is regulated by a legal costs determination in force under section 210.

(2) Despite subsection (1), if a court or judicial officer is of the opinion that the amount of costs allowable in respect of a matter under a legal costs determination is inadequate because of the unusual difficulty, complexity or importance of the matter, the court or officer may do all or any of the following -

(a) order the payment of costs above those fixed by the determination;

(b) fix higher limits of costs than those fixed in the determination;

(c) remove limits on costs fixed in the determination;

(d) make any order or give any direction for the purposes of enabling costs above those in the determination to be ordered or taxed.

(3) Nothing in subsection (1) is to be construed as limiting the power of a court, a judicial officer or a taxing officer of a court to determine in any particular case before that court or judicial officer the amount of costs allowed.

(4) If a legal costs determination is in force under section 210 in respect of any business referred to in section 210(2), any other subsidiary legislation fixing or purporting to regulate the remuneration of legal practitioners in respect of that kind of business is of no force or effect."

3 It was the plaintiff's case that the scale of costs allowable in this case was inadequate because of the unusual difficulty, complexity or importance of the matter. On behalf of the defendants it was said that there was nothing to take this case out of the ordinary and that it was inappropriate to make the orders sought.

4 The starting-point in this application is to consider the nature of the plaintiff's claims against the defendant. Working from the statement of claim, the position can be summarised in this way. The plaintiff, a British citizen, is a civil engineer and business adviser and from about 30 October 1990 until 18 May 1999 he was a director of the first defendant. For almost that entire period he was also an employee of the first defendant. The first defendant carries on an aquaculture business in Albany, Western Australia. The second defendant was, at all material times, acting as a director of the first defendant. By their defence, the first and second defendants admit that the plaintiff was a director of the first defendant. They deny that he was an employee of the first defendant.

5 Paragraphs 4 to 7 of the statement of claim plead an oral contract of employment entered into between the plaintiff and the first defendant. In their defence, the first and second defendants repeat their denial that the plaintiff was an employee of the first defendant. There is no positive case put by the defendants against the plaintiff. For instance, in par 5 of the statement of claim, the plaintiff says that it was an express term of the contract that the first defendant would pay the plaintiff a monthly salary of $4500. Paragraph 5 is denied in the defence, but no alternative explanation is offered as to why (if, in fact, it was the case) the plaintiff received $4500 per month from the first defendant.

6 Paragraphs 7 through to 10 of the statement of claim plead the termination of the plaintiff's employment by the first defendant. It is alleged that this was a breach of the contract between the plaintiff and the first defendant and the plaintiff makes a series of claims. The defendants admit that the plaintiff was removed as a director of the first defendant on a specified date, but allege that the removal was entirely proper. They deny the plaintiff is entitled to any damages for breach of contract.

7 It is worth pausing at this point to say that there is nothing in the pleading so far as the employment contract claim is concerned that is either unusually difficult, complex or of particular importance. (No doubt, the claim was important to the plaintiff; but no important legal principle is involved in the claim as pleaded.) True it is that the plaintiff had to prove an oral contract. But to do so all he would need to do is to give evidence himself as to the negotiations which led to the contract and then lead evidence which would establish that such a contract was in existence. For instance, he would have been able, presumably, to have led evidence that he was paid the sum of $4500 per month during the currency of the contract. The claim is quite simple and straightforward.

8 Paragraphs 11 through to 16 then plead a cause of action in defamation by the plaintiff against the second defendant. In par 11, it is alleged that on 5 March 1999 at Albany the second defendant in the presence and hearing of a third party spoke words to the effect that the plaintiff had stolen money from the first defendant and that he was a thief. The claim is pleaded out in the usual way, with particulars of identification given and the allegation that the statements were defamatory particularised.

9 In their defence, the defendants do not deny that, give or take one or two words, the statements alleged by the plaintiff to be defamatory were uttered. They do dispute that the statements had the meaning alleged by the plaintiff. They go on to claim qualified privilege and, relevantly, justification. So far as the justification plea is concerned, what the defendants say is that the plaintiff did take funds from the first defendant's accounts which he was not authorised to withdraw. It follows, of course, that if the defendants were to make out that defence, they had to establish that the funds were taken and that they were taken without proper authority.

10 The remaining paragraphs of the statement of claim plead what the plaintiff says were a further six defamatory utterances by the second defendant. It is unnecessary to deal with any of these in detail. It is sufficient if I say that all relate to the original allegation made by the defendants against the plaintiff. That means, then, although there were alleged by the plaintiff to be seven defamatory utterances, they all relate to the same matter and the defence in each case is largely the same. So far as justification is concerned, the same material would be relevant for each complaint. That is to say, the plaintiff would not have had to prepare a separate case for each of the seven matters complained of, nor would he have had to have met a different defence to each of those claims.

11 Once again, it is difficult to see that any of these causes of action are unusually difficult, complex or are matters of legal importance. The plea of defamation is quite straightforward and relatively simple in what is a notoriously difficult area to plead properly.

12 In support of his application, the plaintiff filed a lengthy affidavit by Waqas Naseem ("Mr Naseem"). Mr Naseem is a solicitor in the employ of the plaintiff's solicitors. Appearing as annexure WN 19 to Mr Naseem's affidavit is a draft of the plaintiff's bill of costs for taxation. The draft bill puts the plaintiff's costs at $205,438.17. Of that amount, a sum of $103,489.70 is claimed for getting up the case for trial. It is really the allowance for getting up for trial which is at the heart of this application. Appearing as Sch A to the annexure is a calculation of how the amount appearing in the draft bill for getting up is calculated. During the course of his submissions, counsel for the defendants submitted that the methodology used in that schedule is incorrect. To explain that submission, it is necessary to say something more about the way that the plaintiff's solicitors have purported to calculate the costs claimed for getting up.

13 This action was commenced in 1999. Since its commencement, there have been three determinations on costs by the Legal Costs Committee. One was made in 1999, another was made in 2002 and a third was made in 2004. Under the 1999 determination, the amount allowable for getting up a case for trial was $27,000, under the 2002 determination, the amount was $31,300 and under the 2004 determination, the amount is $34,100. The plaintiff's solicitors say that the work done on getting up the case for trial during the currency of the 1999 determination amounted to $27,567. That is $567 more than the scale fee applying at the time. They say that the work done during the currency of the 2002 determination was $66,325.90. That is $35,025.90 more than the scale allowance. The amount claimed for getting up under the 2004 determination is $9596.40. That is well short of the scale allowance. It is important to note that what the plaintiff's solicitors have done is assume that the scale applying from time to time covers the work done during that particular period. Counsel for the defendants submitted that this was an error of principle. It was his view that there was one allowance available for getting up and as the 2004 determination presently applied, the limit that could be claimed was $34,100. While counsel for the plaintiff did not accept that there was an error of principle, he nonetheless submitted that, in the circumstances of this case, the scale should still be raised to allow an upper limit of $103,489.30 to be claimed for getting up. Counsel accepted that on taxation, the plaintiff may not succeed in convincing the taxing officer that the full amount claimed should be allowed. He nonetheless submitted that the case satisfied the requirements of s 215 of the Legal Practice Act 2003 and the scale ought be increased.

14 In my view, the amount available to a party for getting up a case for trial is the amount specified in that item as at the date the bill is assessed. In this case, then, the scale allowed for getting up for trial is $34,100. It matters not when the getting up was actually done. It may be that the taxing officer, mindful that most of the work of getting up was done at a time when the determination provided a lower amount for getting up than presently applied would take that into account in taxing the bill. But that is a matter for the particular taxing officer dealing with a particular bill of costs. There is no basis for claiming costs as the plaintiff has done.

15 In any event, I am not satisfied that this is a matter which warrants the scale being lifted. As I have indicated above, the plaintiff's claim is not one of great complexity. It is true that the plaintiff had to meet a defence which alleged that the plaintiff had taken unauthorised payments from the first defendant. But that was a matter where the defendants carried the evidentiary onus. While it was doubtless necessary for the plaintiff's solicitors to carefully analyse their clients' books and records, it can hardly be said to be a matter of great complexity. The hours spent by the plaintiff's solicitors are set out in the schedule to the chamber summons. Almost all of the work undertaken was undertaken by junior practitioners. That is hardly surprising. This does not seem to have been a deeply complex case. For that reason, there is nothing to take it out of the ordinary and no warrant for making the order sought.

16 I would dismiss the plaintiff's chamber summons. The plaintiff ought pay the defendants' costs of the summons, including reserved costs.