Supreme Court of WA|1999-07-21|Before: Mr P, Murray J

Cibc Wood Gundy Australia Ltd & Anor v Icl Australia Pty Ltd [1999] WASC 93 (21 July 1999)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : CIBC WOOD GUNDY AUSTRALIA LTD & ANOR -v- ICL AUSTRALIA PTY LTD [1999] WASC 93

Costs - Review of taxation - Action commenced in 1986 and concluded in 1998 with judgment for first defendant - Limit on taxed costs imposed by Rules of Supreme Court O 66 r 16 removed by repeal of rule by at least February 1992 - Limit does not continue to govern taxation either generally or in respect of costs incurred prior to repeal

Carr v Finance Corporation of Australia Ltd [1982] HCA 43; (1982) 150 CLR 139

Dobree & Ors v Hoffman, unreported; SCt of WA; Library No 950674; 11 December 1995

Esber v Commonwealth (1992) 172 CLR 430

Hancock v Edgell Birdseye (Ulverstone) Division of Petersville Industries Ltd, unreported; SCt of Tasmania; 19 February 1998

Jackman v Dandenong Sewerage Authority (No 2) (1967) 20 LGRA 413

Mraz v The Queen (No 2) [1956] HCA 54; (1956) 96 CLR 62

NCA (Brisbane) Pty Ltd v Simpson (1986) 70 ALR 10

Oshlack v Richmond River Council [1998] HCA 11; (1988) 152 ALR 83

Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45; (1981) 147 CLR 589

R v Dunwoodie [1978] 1 All ER 923

Timmerman v Choy, unreported; SCt of Victoria; 6 November 1995

Walhala Goldmining Co v Mulcahy (1871) 40 LJPC 41

Wohl v The King Ex parte King Won and Wah On (No 2) [1927] HCA 16; (1927) 39 CLR 266

Yew Bon Tew v Kenderann Bass Mara [1983] 1 AC 553

1 MURRAY J: This is an application under the Rules of the Supreme Court 1971 (WA) O 66 r 55 to review a taxation of costs. I set out in Monitronix Ltd v Michael (1992) 7 WAR 195, 197-8 the general principles governing that process in which I am directed to consider whether the taxing officer "has made an error in principle". If I should so conclude, I may make any order necessary to rectify the error. I am satisfied that the matter raised, if the applicant's contention about it is correct, would constitute an error in principle.

2 This litigation was commenced in 1986. It only came to trial before me on 23 and 24 March 1998. It was then an action between the first and third plaintiffs against the first defendant. I shall refer to the first and third plaintiffs as "the plaintiffs" and the first defendant as "ICL". I was required to try the issue of liability. The conclusion to which I came was that the plaintiffs' claims should be dismissed. I gave judgment accordingly on 5 May 1998. I awarded costs to the successful party and reserved liberty to apply for any particular orders as to costs.

3 ICL made such applications which came before me on 14 July 1998. The second order sought is relevant for present purposes. It was that: "The limits fixed by O 66 r 16 (repealed 7 February 1992) of the Supreme Court Rules not apply to the taxation of the first defendant's costs." That application was opposed by the plaintiffs, but the matters they raise in the present proceedings were not argued. They opposed the application on its merits.

4 I did not, however, deal with the merits, taking the view that, O 66 r 16 having been repealed by amendments to the rules made and published in the Government Gazette of 7 February 1992, p687, the limits to the amounts which could be awarded on taxation of costs formerly provided by the rule would not apply to this taxation. I said I would not make the order sought in par 2 of the application because it was not necessary to do so. I took that view, as I then said, because:

"...it seems to me that the process of repeal of O 66 r 16 results in the effect which that order would obtain from the court. In my view O 66 r 16 formerly applied to the process of taxation and the final outcome of that process. And so whilst it continued in operation until its repeal, it conditioned the process of taxation unless the limits were interfered with or removed. Once that rule was repealed it seems to me to be clear that it prospectively removed the limit, in relation to any of the periods formerly dealt with in the rule, from the process of taxation which would thereafter occur, and it seems to me that an order in terms of par 2 is unnecessary. The view I take is that those limits will no longer apply to condition the process of the taxation of the first defendant's costs."

5 ICL brought in its bill and costs were taxed in the sum of $50,299.98. If the former O 66 r 16 continued to govern this taxation, it was, so far as material in the following terms:

"Subject to the provisions of these rules and to the provisions of the Legal Practitioners Act 1893 permitting a solicitor to make a written agreement as to costs with his client -

(1) The costs of or in relation to a party to an action or other proceeding (inclusive of counsel fees but exclusive of other disbursements) -

(a) recoverable by one party from another party; or

(viii) the sum of $21,800 where the action or other proceeding is commenced on or after 1 January 1986."

And so it can be seen that the costs as taxed in this case were well in excess of the limit of the amount which could be allowed on taxation if the former r 16 continued to govern that process.

6 The allocatur was not signed and on 25 November 1998 the plaintiffs filed and served their written objection to the award of costs in excess of the sum of $21,800 on the ground of the continued application of O 66 r 16(1)(a)(viii). The taxing officer, Registrar Powell, reviewed his taxation under O 66 r 53 and r 54. He gave a carefully reasoned decision on 22 January 1999 holding that the award should stand. He took the view that the plaintiffs were precluded from raising their objection by reason of an issue estoppel arising out of my decision given on 14 July 1998 in the terms to which I have referred above. However, in case he was in error in that view, he went on to consider whether and if so when O 66 r 16 had been repealed and in the event, concluding that that had occurred, he asked himself the question whether the repeal had operated retrospectively so that it would not affect the taxation of ICL's bill of costs. He concluded that the rule had been repealed, that it was a procedural rule, and that it could only operate (had it not been repealed) upon the fixing of the obligation to pay costs by my judgment given on 5 May 1998 subsequent to the repeal taking effect. With respect, it seems to me that all those conclusions are correct.

7 As to the question of issue estoppel, it is sufficient I think to refer to the classic statement of the distinction between issue estoppel and res judicata by Dixon J in Blair v Curran [1939] HCA 23; (1939) 62 CLR 464 at 531-3. At 531 Dixon J described an issue estoppel as arising in the following way:

"A judicial determination directly involving an issue of fact or of law disposes once for all of the issue, so that it cannot afterwards be raised between the same parties or their privies. The estoppel covers only those matters which the prior judgment, decree or order necessarily established as the legal foundation or justification of its conclusion, ... ."

8 In this case the estoppel would in my opinion arise not only out of the effective order that the relief claimed in par 2 of ICL's application should not be granted, but also out of the actual ground upon which that decision was based as expressed in the extempore reasons I then gave and to which I have referred above. No matter how full, or indeed incomplete, the argument for the parties was at that time, the fact remains that I declined to make the orders sought upon the specific ground of the non-application to the taxation process of the relevant limit contained in the former r 16, the asserted continued application of which is the precise ground of the plaintiffs' objection to the taxation of costs.

9 As to the merits, however, I should say something. Firstly there is no doubt that r 16 has been repealed. I have quoted the Government Gazette in which that act of repeal was published. Decisions of the District Court suggest on the contrary that r 16 was effectively repealed on the publication of the first Determination of the Legal Costs Committee constituted by the Legal Practitioners Act 1893 (WA) s 58M. That occurred on 15 July 1988. The cases are Baker v Vlietman, unreported; District Court of WA; 31 October 1994 per Commissioner Macknay QC (as his Honour then was) and Homewood v State Government Insurance Commission, unreported; District Court of WA; 7 February 1996 per Sadlier DCJ. However, those decisions take the view that r 16 continued in effect by reason of its adoption by the Legal Costs Committee's first Determination published on 15 July 1988 until its final repeal by the Gazette of 7 February 1992.

10 Under the Supreme Court Act 1935 (WA) s 167(1)(d) and (da) the rule making power of the Judges of the Supreme Court is preserved to regulate matters relating the costs of proceedings where those costs are or are not the subject of a determination by the Legal Costs Committee under s 58W of the Legal Practitioners Act. So the rule making power is preserved despite the making of a costs determination which, however, when made, regulates in its terms the taxation of bills of costs of practitioners as between solicitor and client or party and party: Legal Practitioners Act s 58ZB(1). By s 58ZB(2) where such a determination is in force "any other subsidiary legislation fixing or purporting to regulate the remuneration of practitioners in respect of that kind of business shall be of no force or effect."

11 In my opinion the rules within O 66, to the extent that they regulate "matters relating to the costs of proceedings" as provided in the Supreme Court Act s 167(1), as opposed to such rules (if any they may be) which themselves directly fix or purport to regulate the remuneration of legal practitioners, would remain in force and effect. Specifically O 66 r 16 did not in my opinion directly fix or purport to regulate the remuneration of practitioners. It did no more than impose a limit on the process of taxation or allowance of costs. As such it was no more, in my view, than a rule regulating a matter relating to costs, being the total sum which might be fixed or allowed on taxation or otherwise as the recoverable professional costs.

12 In Anfrank Nominees Pty Ltd v Connell (1991) 6 WAR 271 at 277-8 Malcolm CJ, with whom Nicholson and Wallwork JJ agreed, commented that the first and second Determinations of the Legal Costs Committee gazetted on 15 July 1988 and 6 October 1989, because of the provisions of the Legal Practitioners Act s 58ZB(2), deprived the Fourth Schedule to the Rules of the Supreme Court, by reference to which formerly costs were fixed, of legal force and effect, except to the extent that those Determinations incorporated the Fourth Schedule by reference and amended it. But that is quite a different matter from the proposition that the Rules of the Supreme Court within O 66 dealing with costs were repealed by such Determinations. In the result therefore, I would take the view that after the process of costs determination commenced, those rules continued in their effect and it was not necessary to conclude that they did so because they were adopted or given effect by reference in the various costs determinations.

13 I note however that the Committee itself, at least at one time, appears to have taken a different view. When it reported its third Determination dated 27 March 1991 it included the statement:

"The Committee also considers and hereby determines that the limits formerly contained in O 66 r 16 and adopted in the 15 July 1988 Determination should not apply to proceedings commenced on or after 1 April 1991."

It is entirely unnecessary for present purposes to consider the legal effect of that "Determination".

14 What is clear is that, whether on 1 April 1991 or 7 February 1992, r 16 was repealed. On either date this action had been commenced, but not brought to judgment. For the plaintiffs it is argued that they (and indeed ICL) were from the commencement of this litigation conducting it upon the basis that they had a vested right in respect of costs that in the absence of a special order they could not be exposed to an award of costs in an amount greater than $21,800. That right, they argue, flowed from the institution and prosecution of the action in the context of the Rules of Court as they then were. They argue that the repeal of r 16 removing the limit could not take effect retrospectively so as to deprive them of that right, there being no express or necessarily implied retrospectivity in the form of the repeal, and the limit imposed by r 16 being described as more than a merely procedural rule.

15 Reliance was placed upon the decision of the Full Court in Nelson v Trevlyn Pty Ltd, unreported; FCt SCt of WA; Library No 970680; 8 December 1997. That was an application for leave to appeal from a decision of the District Court on a preliminary question of law stated to the trial Judge in an action for damages for personal injuries brought by passengers in an aircraft which was involved in an accident. The award of damages was governed by limits prescribed by regulations made under the Civil Aviation (Carriers Liability) Act 1961 (WA). At the date of the accident the amount so limited by the regulations was $180,000. Later, and before judgment, the Act itself was amended so as to increase the maximum sum which might be awarded to $500,000. It was held that the change effected to the law by the amendment of the section was "plainly substantive" rather than merely procedural, because it affected rights or liabilities which the existing law had defined by reference to an award of damages to be made for injury or death resulting from an accident. It is but a short step from such a view to the conclusion that the limit upon the capacity to recover, or the liability of the defendant to pay such damages was defined by reference to the occurrence of the accident and the suffering of the injury, and so changes to the law thereafter could not be allowed to affect the content of that right and liability without clear indication of a requirement for the law to be given a retrospective operation, but that in my view, is not this situation.

16 Here ICL's right to costs and the plaintiffs' liability therefor, did not vest or accrue at the earliest until judgment was given on 5 May 1998. There is I think a respectable argument that it is impossible to speak of the existence of a right or liability affected by the operation or repeal of r 16 until the amount of costs awarded is quantified, in this case by the process of taxation when, for the first time, it can be seen whether the award made would be governed by the limit prescribed by r 16 if operative. The mere institution of the proceedings could not, in my opinion, of itself be regarded as vesting in the plaintiffs the right not to be subjected to costs greater than a particular amount if they were ultimately to lose their action. It is sufficient for present purposes that I conclude that at the time of the repeal of r 16, whenever that was, it was not the case that, contrary to the Interpretation Act 1984 s 37(1)(c) the repeal affected without the contrary intention appearing "any right, interest, title, power or privilege created, acquired, accrued, established or exercisable or any status or capacity existing prior to the repeal".

17 The question under that provision and under the common law is really whether there is an accrued right or liability which is adversely affected by the repeal, in which case, the law will not be construed to have that effect unless the intention clearly emerges that it should be so construed because, it is said, if it takes away or adversely affects an accrued right or liability, then that is to give the process of repeal a retrospective operation. And so the repealed law is preserved in effect to make good the right or impose the liability which has already accrued. A right or liability will be regarded as having already accrued if it has, as in Nelson, been brought to that state by reference to past facts, matters or events. On the other hand, changes made to practice or procedure in relation to the enforcement or establishment of rights are regarded as not adversely affecting such rights in their substance. So to allow the statutory change its effect is not to give it retrospective operation. As it is sometimes put, "No suitor has any vested interest in the course of procedure": per Mellish LJ in Republic of Costa Rica v Erlanger [1876] 3 ChD 62 at 69.

18 The distinction is with respect much better explained than by my attempt, by the High Court in Rodway v R [1990] HCA 19; (1990) 169 CLR 515 at 518-9 as follows:

"The rule at common law is that a statute ought not be given a retrospective operation where to do so would affect an existing right or obligation unless the language of the statute expressly or by necessary implication requires such construction. It is said that statutes dealing with procedure are an exception to the rule and that they should be given a retrospective operation. It would, we think, be more accurate to say that there is no presumption against retrospectivity in the case of statutes which affect mere matters of procedure. Indeed, strictly speaking, where procedure alone is involved, a statute will invariably operate prospectively and there is no room for the application of such a presumption. It will operate prospectively because it will prescribe the manner in which something may or must be done in the future, even if what is to be done relates to, or is based upon, past events. A statute which prescribes the manner in which the trial of a past offence is to be conducted is one instance. But the difference between substantive law and procedure is often difficult to draw and statutes which are commonly classified as procedural - statutes of limitation, for example - may operate in such a way as to affect existing rights or obligations. When they operate in that way they are not merely procedural and they fall within the presumption against retrospective operation. But when they deal only with procedure they are apt to be regarded as an exception to the rule and, if their application is related to or based upon past events, they are said to be given a retrospective operation provided that they do not affect existing rights or obligations."

19 It has long been said that provisions in respect of the power to award costs to a party are procedural. Galvin v Forests Commission of Vic [1939] VicLawRp 42; [1939] VLR 284 is a decision of the Full Court of Victoria applying a statute giving a Workers' Compensation Board a new power to award costs in proceedings before it, in a case which was commenced before the statutory enactment, but decided after it had come into effect. As the Full Court said at 297-8:

"...the section having been brought to our attention, in our opinion, it determines the matter. Unless it be held not to be retrospective and, therefore, not to affect pending proceedings, it plainly gives the Board power to award costs. Two cases of high authority decide that legislation giving or regulating a power to award costs is retrospective, in that it affects not substantive rights but merely procedure (Freeman v Moyes [1834] EngR 716; [1834] 1 Ad & El 338; Wright v Hale [1860] EngR 1191; [1860] 30 LJ (Ex) 40). The distinction is well established."

20 For my part, with respect, I prefer the view expressed by the High Court in Rodway. One may speak of retrospectivity in relation to procedural matters and costs, but in truth, enactments effecting changes in such areas operate prospectively and in doing so they adversely affect no accrued right or liability. The former O 66 r 16 operated at the point when liability to pay costs was fixed in respect of a sum of money, or at the earliest when the liability to pay costs to be taxed was fixed by judgment. It then imposed a limit upon the award which could be made. By the time that point in this litigation had arrived, r 16 had been repealed. It follows that that repeal, operating entirely prospectively, removed the limit in relation to this costs order and the process of taxation. I can detect no error in principle on the part of the taxing officer. The plaintiffs' application to review the taxation should be dismissed with costs to be taxed.

Practitioners Act 1893

Aviation (Carriers Liability) Act 1961

Cibc Wood Gundy Australia Ltd & Anor v Icl Australia Pty Ltd [1999] WASC 93

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Cibc Wood Gundy Australia Ltd & Anor v Icl Australia Pty Ltd [1999] WASC 93 (21 July 1999)

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