ChongHerr Investments Ltd v Titan Sandstone P/L

SUPREME COURT OF QUEENSLAND

CITATION: ChongHerr Investments Ltd v Titan Sandstone P/L [2007] QCA 278

PARTIES: CHONGHERR INVESTMENTS LTD ACN 054 161 821 (applicant/appellant) v TITAN SANDSTONE PTY LTD ACN 105 299 223 (respondent)

FILE NO/S: Appeal No 10600 of 2006 / SC No 9145 of 2006

DIVISION: Court of Appeal

PROCEEDING: General Civil Appeal - Further Order

ORIGINATING COURT: Supreme Court at Brisbane

DELIVERED ON: Judgment delivered 25 May 2007 / Further Order delivered 24 August 2007

DELIVERED AT: Brisbane

HEARING DATE: 1 May 2007

JUDGES: de Jersey CJ, Keane JA and Philippides J / Judgment of the Court

ORDER: The Appellant's costs are fixed: / (a) for the proceedings at first instance $ 8,000.00 / (b) for the appeal $30,000.00 / Total: $38,000.00

CATCHWORDS: APPEAL AND NEW TRIAL – APPEAL - PRACTICE AND PROCEDURE – QUEENSLAND – POWERS OF COURT – COSTS – where respondent ordered to pay appellant's costs of appeal and trial –where respondent disputed costs as quantified by costs assessor – whether appeal reasonably required services of two counsel – whether input tax credit applies to solicitor's professional fees – whether solicitors' attendances can be claimed under both Sch 1 Item 16 and Sch 1 Item 1 of the UCPR / Uniform Civil Procedure Rules 1999 (Qld), r 685(2), Sch 1 / Supreme Court of Queensland Practice Direction 3 of 2007 / Hennessey Glass and Aluminium Pty Ltd v Watpac Australia Pty Ltd [2007] QDC 57, approved / Stanley v Phillips (1966) 115 CLR 470, cited

COUNSEL: P O'Shea SC, with S Moody, for the appellant / L D Bowden for the respondent

SOLICITORS: Hemming + Hart for the appellant / James Byrne & Rudz for the respondent

1. THE COURT: On 25 May 2007, this Court made orders allowing the appellant's appeal and ordering that the respondent pay the appellant's costs of the proceedings at first instance and in this Court.

2. On 8 June 2007, the appellant advised the respondent pursuant to Practice Direction 3 of 2007 that D G Thomson Cost Assessors estimated the appellant's costs for the proceedings below were $8,282.07 and $32,555.41 for the appeal.

3. On 13 July 2007, the respondent said that, in its view, $7,560 was appropriate for the appellant's costs of the proceedings at first instance and $10,000 was appropriate for the appeal.

This Court's power

4. The parties have now exchanged written submissions. The appellant seeks to have the total costs payable to it fixed at $38,174.69, as against an assessed amount of almost $41,000. The respondent submits that an amount of $19,778.75 should be recovered by the appellant.

5. It is to be noted that the power of the Court to fix costs, and so to obviate the need for any further process of costs' assessment, is conferred by r 685(2) of the Uniform Civil Procedure Rules 1999 (Qld) ("the UCPR") and regulated by Practice Direction 3 of 2007.

6. In relation to the exercise of the power conferred on this Court by r 685(2) of the UCPR, it is relevant that the issues in question are in short compass and concern matters of broad principle. It is also relevant that the respondent does not advance any reason why this Court should not exercise the power to fix costs. There is, therefore, no good reason why this Court should allow the quantum of costs to be fixed in the traditional way rather than to exercise the power conferred by r 685(2) in order to save further delay and expense. Importantly in this regard, the assessment by D G Thomson Cost Assessors provides this Court with grounds to be confident that, subject to the particular items in dispute, the items claimed by the appellant were reasonably incurred and reasonable in amount.

The items in dispute

7. The principal claim by the appellant which is disputed by the respondent is the claim to recover the costs of representation on the appeal by junior and senior counsel. In this regard, the ultimate question is whether the case reasonably required the services of two counsel.¹

8. The case involved a commercial dispute of considerable importance to the parties. It involved issues of law of some difficulty relating to the interpretation of a "sub-lease" of a mining lease. The appellant had lost at first instance. In such circumstances, considerations of prudence amply justified the appellant's decision to employ two counsel for the purposes of the appeal. It cannot fairly be said that the engagement of two counsel by the appellant was an unnecessary luxury. In our experience, the appellant's decision was in conformity with the general practice in Queensland as to employing two counsel.

9. The next item in dispute relates to the respondent's contention that the appellant's claim in respect of the proceedings at first instance should be reduced by a GST input tax credit applicable to the professional costs incurred by the appellant at first instance. We agree with the views of McGill DCJ in Hennessey Glass and Aluminium Pty Ltd v Watpac Australia Pty Ltd² that the necessity to give credit for an input tax credit applies not to solicitors' professional fees, but to outlays which attract GST.

10. The next items in dispute concern letters and attendances by the appellant's solicitors. The respondent asserts that some items of correspondence referred to in the assessment do not fall within Sch 1 Item 17 of the UCPR; but this assertion is in the nature of a petty quibble. The respondent also asserts that the appellant's solicitors' attendances are exhaustively dealt with by Sch 1 Item 1 of the UCPR so that they cannot be claimed separately under Sch 1 Item 16; but this assertion ignores the introductory words of Sch 1 Item 1: "In addition to an amount that is to be allowed under another item …". These words clearly contemplate that the remuneration recoverable under Sch 1 Item 1 is in addition to the specific items addressed in the Schedule.

Conclusion

11. The amount claimed by the appellant is less than the amount assessed. The appellant is entitled to a proper indemnity for the costs reasonably incurred by it in litigation in which its legal position was vindicated. The Court should not diminish that entitlement by an adherence to regressive views or practices calculated to cast much of the financial burden of litigation onto those whose rights have been vindicated by the courts. The fundamental principle is that the successful party should not have been put to the expense of litigation, and it should be indemnified in respect of the costs which it has reasonably incurred in order to establish rights contested by the unsuccessful party.

12. In this case, the amount of the appellant's claim has been quantified on the standard basis by a qualified costs assessor whose assessment is largely unchallenged. For this Court to impose some further reduction upon the amount actually sought by the appellant on the basis of that assessment would be to engage in unwarranted and unprincipled speculation.

13. Accordingly, we fix the appellant's costs:

(a) for the proceedings at first instance$ 8,000.00

(b) for the appeal$30,000.00

Total$38,000.00

Footnotes

1. Stanley v Phillips (1966) 115 CLR 470 at 478 – 480. ↩

2. [2007] QDC 57 at [140]. ↩