Coal & Allied Operations Pty Ltd v Crossley [2023] NSWCA 182 | Case summary

Court of Appeal (NSW)|2023-07-20|Before: Leeming JA, Stern JA

Background

Mr Crossley's claim against Coal & Allied was in the District Court's "Compensation jurisdiction" (formerly, its "Residual jurisdiction"), which was created upon the abolition of the Compensation Court, and it was also a "coal miner matter". The claim was resolved by orders made by consent on 28 August 2020. The orders involved a confirmation that Coal & Allied was liable to make weekly payments, an agreed redemption in the amount of $50,000 for specified injuries (which was granted the following day), and the following costs order: "Employer to pay worker's costs, (2) qualifying fees and an advice on evidence".
It was common ground that cl 131 of the Workers Compensation Regulation 2016 (NSW) (titled "Special provision for matters involving coal miners") applied, displacing the provisions in that regulation relating to costs, and preserving the effect of regulations made under s 59(1)(a) of the Legal Profession Uniform Law Application Act 2014 (NSW). Section 59(1)(a) authorised local regulations to make provision for fixing "fair and reasonable costs for legal services", and cl 25(2) and Schedule 2 of the 2015 Regulation, which are summarised at the commencement of these reasons, purported to be regulations which did just that. In short, although the legislative regime is somewhat convoluted, the costs were "fixed costs", rather than what is now the more familiar form of assessed costs.
Mr Crossley and Coal & Allied failed to reach agreement as to the costs the latter was obliged to pay pursuant to the District Court order. Mr Crossley's solicitors rendered a bill of costs, the total of which was $115,800.90. A large component was the cost of "scanning" more than a thousand pages of documents. There seems to have been no dispute that it was appropriate for those documents to be scanned and (so it seems) sent to experts retained by Mr Crossley's solicitors (this Court was told without objection that there were pre-existing medical conditions which affected his claim). The dispute was that Mr Crossley's solicitors claimed they were entitled to $36 per page scanned, that being what the sub-item says.
The descriptions and dollar amounts for the disputed amounts in the bill included, by way of example: Scan forms 252.00 Scan 56pp 2,016.00 Scan 54pp 1,944.00 Scan 124pp 4,464.00 Scan 530pp 19,080.00
And so on. There were 21 items of "scan" pages and forms in the bill. The total amount claimed for scanning 1434 pages was some $51,624, from which 10% was subtracted in accordance with cl 25(3) of the 2015 Regulation. This was work done for a workers compensation claim that settled for $50,000, and in respect of which Mr Crossley made an offer of $25,000 to settle the total costs.
The dispute went to assessment. A costs assessor certified an amount of $28,196.87. He expressed the view that the dispute should have been settled. He recorded that before the bill had been sent for assessment, Mr Crossley had offered to accept $25,000 plus GST, Coal & Allied had offered to pay $22,000 plus GST and then, after the application for assessment had been filed, offered $23,500 plus GST, noting that the correspondence recording those offers "shows that both parties knew what this claim was really worth". In what he described as "somewhat extraordinary circumstances", he considered that no costs of the assessment should be awarded to either party.
Mr Crossley's application for review was allowed, principally because of some arithmetical errors. The result was an assessment in the amount of $40,839.44. Both the assessor and the costs review panel considered the amounts charged for scanning documents not to be fair and reasonable and rejected some 90% of that aspect of the claim.
Mr Crossley appealed to the District Court pursuant to s 89 of the Legal Profession Uniform Law Application Act. The only issue in the appeal was the charge for scanning documents. The primary judge recorded that "Mr Lynch made it clear that the appeal was restricted to 21 items which related to scanning of documents": at [6]. Because the review panel had awarded $6,083.10 for scanning, and Mr Crossley sought more than $46,000, the appeal exceeded the statutory threshold in s 89(1)(a) of $25,000 and lay as of right (the regime is described in Amirbeaggi v EB [2023] NSWCA 108 and need not be summarised here). There was no dispute as to the correctness of the characterisation by Mr Crossley's solicitors of that aspect of the work done as "scanning".
The primary judge allowed the appeal, finding that Mr Crossley was entitled to charge $36 per page for scanning documents. I shall return to the precise orders made at the conclusion of these reasons.
Coal & Allied thereafter commenced proceedings in this Court's supervisory jurisdiction, pursuant to s 69 of the Supreme Court Act, contending that the District Court judgment disclosed error of law on the face of the record, and should be set aside. The summons was allocated to the Court of Appeal, in accordance with s 48 of the Supreme Court Act.
This Court is not hearing and determining an appeal by way of rehearing. It is determining, in an exercise of the original jurisdiction of the Supreme Court of New South Wales, whether there are errors of law on the face of the record of a District Court judgment which allowed an appeal from a costs review panel. In Craig v South Australia (1995) 184 CLR 163; [1995] HCA 58 the High Court stated that the record did not for this purpose include the reasons of the inferior court. That was promptly overturned by the insertion of s 69(4) of the Supreme Court Act. It is also clear that the certificate issued by the review panel (which was the originating process for the appeal in the District Court) is part of the record. However, a question which was neglected by the parties, but which is not free from difficulty, is whether the reasons of the review panel (as opposed to the certificate issued by it) or the original assessment are part of the record. The reasons of both the costs assessor and the review panel were tendered by Coal & Allied without objection. Different views were expressed by this Court on that question in Ahern v Aon Risk Services Australia Ltd [2021] NSWCA 166 at [22]-[27], [99]-[122] and [126]-[159]. It is unnecessary to summarise the different views, and in the absence of any submissions on a point on which nothing turns, it would be inappropriate to attempt to resolve it. In setting out the background above, I have relied upon some matters stated in the reasons of the costs assessor and the review panel (notably, the exchange of offers and counter-offers to settle the dispute and the extracts from the bill of costs). However, no part of the reasoning resolving Coal & Allied's summons turns on anything going beyond the decision and reasons of the District Court.
In this Court, Coal & Allied advanced a series of arguments aimed at restoring the approach taken by the assessor and the review panel, whereby the total amount of costs ordered was subject to a requirement familiar in other costs regimes that it be fair and reasonable. Those submissions were all ultimately driven by the proposition that if Mr Crossley was entitled to some $46,000 for "scanning" documents in a relatively straightforward coal miner claim, there must be some other means available to reduce the costs to make them fair and reasonable. However, only during the hearing of its summons in this Court did Coal & Allied accept an invitation from the Bench to argue that, as a matter of construction, the regulation might not bear its literal meaning, and thereafter an amended summons was filed seeking relief on the basis that there was an error of law on the face of the record in construing the charge for scanning as $36 rather than $3.
The proper construction of the regulation is the starting point of resolving this dispute. An error as to the proper construction of the regulation is an error of law, and also an error of law on the face of the record having regard to s 69(4) of the Supreme Court Act. It follows that if the reference to $36 is a mistake, and should be read as a reference to $3, then all of the other arguments fall away. If Mr Crossley's solicitors were authorised to charge $3 per page, rather than $36 per page, then they were entitled to charge $4,302 (less 10%) instead of $51,624 (less 10%) for the scanning, which is less than the $6,083.10 allowed by the review panel as fair and reasonable. Accordingly, I turn immediately to the construction of the regulation.

The construction of the regulation

In its entirety, Part 1 of Schedule 2 is as follows: Schedule 2 Costs for legal services in workers compensation matters Part 1 Schedule of costs No Item Amount 1 Preparing process Drawing/typing/checking originating process, notice of appeal to the court, notice of application for leave to make an appeal to the court, or third or subsequent party notice $56 2 Preparing other documents Drawing/typing/checking any document, including any notice of subpoena or document necessarily or properly filed or delivered to another party or to counsel or the court, but excluding a certificate of readiness, per page $17 Drawing/typing/checking certificate of readiness where required $39 If the certificate of readiness is special or necessarily long, such allowance as the registrar thinks proper, not exceeding per page $17 3 Letters (including drafting, typing and checking) Short letter (up to one folio in length) $17 Circular, being identical (save for address details) with any other letter $8 Any other letter, per folio $17 4 Telephone calls Not requiring skill $14 Requiring skill or legal knowledge: (a) not more than six minutes $20 (b) more than six minutes - per six minute unit after the first $14 5 Perusal of documents Perusal of court documents (being any document filed in court), per page or part of a page $15 Perusal of other documents, including correspondence, per folio $5 Where it is not necessary to peruse but it is necessary to scan a document, per page $36 6 Copying Being a photographic reproduction, carbon or other copy of a document including copies for use in court, copies of doctors' reports for use on hearing, sending or receiving facsimile transmission, including the time reasonably spent by an Australian legal practitioner or clerk in preparing, sorting and collating such documents for copying, per page $1 7 Attendance Time reasonably spent by a legal practitioner (not being time spent at a conciliation conference) including travelling, waiting time, other than work referred to in items 1-6 inclusive, per quarter hour or part of a quarter hour $35 Time spent by an Australian legal practitioner at a conciliation conference, per hour or part of an hour $250 Time reasonably spent by a clerk including travelling, waiting time on work other than work referred to in items 1-6 inclusive, per six minute unit $4 8 Specific skill, care and responsibility Where any individual item merits any particular skill or attention an additional allowance is to be made in addition to any general allowance under item 9 9 Skill, care and responsibility Such sum as may be reasonable, having regard to all of the circumstances of the case and in particular to the following: (a) the complexity of the matter (b) the difficulty or novelty of the questions involved in the matter (c) the skill, specialised knowledge and responsibility involved and the time and labour extended by the Australian legal practitioner concerned (d) the number and importance of the documents prepared and perused, however brief (e) the general care and conduct of the Australian legal practitioner concerned having regard to his/her instructions and all relevant circumstances, including the preparation for hearings generally and for hearing of taxation/assessment of a bill of costs specifically 10 Disbursements Any disbursement necessarily incurred is to be allowed except in so far as any such disbursement is of an unreasonable amount or has been unreasonably incurred and any doubts which the taxing officer/costs assessor may have as to whether any disbursement was reasonably incurred or was reasonable in amount are to be resolved in favour of the receiving party 11 Definitions An allowance under items 1, 2 and 3 includes any file copy. In this Part: folio means 100 words. page means a page typewritten or printed and which is a page of a nature or kind usual for the particular document and includes part of a page.

(Notes omitted.)

One of the consequences of the Subordinate Legislation Act 1989 (NSW) is that most rules will be automatically repealed five years after made, a period which may be extended: see ss 10 and 11. It is not unusual therefore for rules to be remade in the same, or substantially the same, terms. And in fact the predecessor of Part 1 of Schedule 2 of the 2015 Regulation was Part 1 of Schedule 3 of the Legal Profession Regulation 2005 (NSW). It was in identical terms, including the rates in item 5 of $15 per page for perusing court documents, $5 per folio for perusing non-court documents and $36 per page for scanning documents which did not require perusal.
However, the predecessor of Part 1 of Schedule 3 of the Legal Profession Regulation 2005 was Part 1 of Schedule 2 of the Legal Profession Regulation 2002 (NSW). It was in almost identical terms. Items 1-4 and 6-11 were at all times identical. However item 5 had two major differences.
In the form it took immediately before its repeal and replacement by the 2005 Regulation, item 5 was as follows: 5 Perusal of documents Perusal of Court documents (being any document filed in court), per page or part of a page $15 Perusal of other documents, including correspondence, per folio $5 Where it is not necessary to peruse but it is necessary to scan a document, per page $3

It will be seen that all entries remained identical, save for one. The $3 per page for documents which were not necessary to peruse but were necessary to scan rose to $36 per page upon the enactment of the 2005 Regulation.
The text immediately following the scale fee for scanning pages was the heading for item 6 which read "6 Copying". It is tempting to think that if the text of one regulation was copied and pasted to comprise the new regulation, the "6" in the title "6 Copying" was inadvertently incorporated into the previous item, so that "$3" became "$36".
The foregoing paragraph is, in fact, a little more than pure speculation. Coal & Allied sought a short period to make further submissions on the question of construction first raised at the hearing, and by its submissions filed on 21 July 2023 pointed out that item 4 of Schedule 1 of the Legal Profession Amendment (Transitional Provisions) Regulation 2002 (NSW), with effect from 22 November 2002, was as follows: Schedule 2 Costs for legal services in workers compensation matters Omit "$56" from Item 5 of Part 1. Insert instead "$5".
That came about because Part 1 of Schedule 2 of the Legal Profession Regulation 2002, in the form it was originally made on 30 August 2002, and which remained in place for some 11 weeks until 22 November 2002, took the following form: 5 Perusal of documents Perusal of Court documents (being any document filed in court), per page or part of a page $15 Perusal of other documents, including correspondence, per folio $56 Where it is not necessary to peruse but it is necessary to scan a document, per page $3

Coal & Allied also pointed out that immediately prior to the commencement of the 2002 Regulation on 30 August 2002, the equivalent scale of fees had been found in Part 1 of Schedule 2 of the Legal Profession Regulation 1994 (NSW). With one exception, that was identical to the form its successor took after 22 November 2002 (save for renumbering), and in particular, item 6 "perusal of documents" prescribed $15 for perusal of each page of court documents, $5 for perusal per folio of non-court documents, and $3 per page for scanning documents which did not require perusal. The exception was that a new sub-item within item 7, namely $250 per hour for a legal practitioner at a conciliation conference, had been included.
As indicated, the alteration from $5 to $56 in August 2002 was corrected a few months later by an amending regulation. No such amending regulation has been made in relation to the alteration from $3 to $36 in the same item upon the enactment of the 2005 Regulation.
Coal & Allied sought leave to amend its summons to add a ground that the District Court "made an error of law on the face of the record in failing to construe the [$36 amount in item 5] as an absurdity and ought to have construed the Item as allowing $3 per page of scanning".
Mr Crossley also sought and was granted leave to supply submissions on the construction of the sub-item. In his written submissions dated 31 July 2023, Mr Crossley contended that the case was not a "simple grammatical drafting error" within the meaning of what was said in Taylor v The Owners - Strata Plan 11564 (2014) 253 CLR 531; [2014] HCA 9 at [38], and that reading "$36" as "$3" was unavailable because the terms were "too much at variance". He referred to the two cases of mistake mentioned during the hearing, New South Wales Crime Commission v Kelly (2003) 58 NSWLR 71; [2003] NSWCA 245 and Day v Harness Racing New South Wales (2014) 88 NSWLR 594; [2014] NSWCA 423, and maintained that the circumstances in the present case were relevantly different, because there was no evidence of mistake, the sub-item as drafted was not without function and it was prepared by the Parliamentary Counsel's Office. The submissions also contrasted the correction of an erroneous cross-reference in State of New South Wales v Kaiser (2022) 108 NSWLR 476; [2022] NSWCA 86, and said that reading $36 as $3 did not fall within a principle that required a provision to be "unintelligible, absurd, totally unreasonable, unworkable or totally irreconcilable with the plain intention shown by the rest of the statute". The submissions concluded with the proposition that "Where text can operate according to its terms and without conflict with its context there is no need to construe the text other than as written, in such cases there is no issue about its construction".
The submissions also made the point that an amount of $36 had been in place for many years, but a review was underway and the sub-item might shortly be replaced, with the result that the systemic issue upon which Coal & Allied relied might not be as significant as had been thought.

Consideration

There has been for many years a schedule within New South Wales regulations specifying scale rates for legal services provided by solicitors. In the form that schedule has taken since at least 1994, the classes of work and the amounts for that work have remained almost unchanged, despite the repeal and remaking of the regime in 2002, 2005 and 2015 (although the categories of cases to which the scale applies have shrunk over that period). At all times the rates for items 1-4 (preparing process, drawing documents with special provision for certificates of readiness, drafting letters (short, circular and longer), telephone calls (not requiring skill, or if skill depending on their length)) have been set at rates of $56 per process, $17 per page, $39 per certificate unless it is long in which case at a rate not exceeding $17 per page, $17 per short letter, $8 per circular, $17 per folio for longer letters, $14 per telephone call not requiring skill, $20 per telephone call requiring skill which is less than six minutes and $14 per six minutes for longer calls involving skill. Likewise, at all times the rates for subsequent items have been identical, save for the inclusion of a special rate of $250 for conciliation conferences after 2002.
Aside from the new $250 sub-item for conciliation conferences, there are only two exceptions to this repeatedly repealed and re-enacted identicality of rates over the last 30 years. The first of these is that the rate for perusal of documents other than court documents had been $5 per folio from 1994 until 29 August 2005, was $56 per folio from 30 August 2005 until 21 November 2005, and then returned to $5 per folio. Evidently, the stated rate of $56 per folio was a mistake which was rapidly corrected.
The remaining exception is the sub-item in item 5 for scanning, which was $3 per page from 1994 until 2005, and has thereafter been $36 per page. No amending regulation has been made.
I am certain that the $36 is a mistake.
I start with the text. Whatever the meaning of "scan" be (I shall return to this at the conclusion of these reasons), it is plain on the face of the regulation that the "scanning" work for which the $36 per page rate applied was of lesser importance than "perusal" which at all times could be charged at $15 per page or $5 per folio. That is the inevitable consequence of the words "not necessary to peruse but it is necessary to scan". It would be irrational if less demanding work were charged at a higher rate than more demanding work, but that is the effect of the entries in item 5 if $36 per page is the rate for scanning documents. That is suggestive of a mistake.
Secondly, this is confirmed when regard is had to the previous forms of the scale of costs. The irrationality of a rate of $15 per page for perusal and $36 per page for scanning is removed in the earlier forms of the schedule which prescribed $15 per page for perusal and $3 per page for scanning. The $3 rate became $36 at a time when no other rate altered. There is nothing to suggest that when all other aspects of legal practice including not merely reviewing other documents but also drafting, telephone calls, copying and attendance have remained identical, there was any rational basis for increasing one line item by a factor of 12. That is compelling evidence of a mistake.
Thirdly, the purpose of the schedule was to fix "fair and reasonable" rates for legal services. It is impossible to contend that a fair and reasonable rate of $3 per page in 2004 for scanning a document that did not call for perusal can be reconciled with a fair and reasonable rate of $36 per page in 2006 for scanning a document that did not call for perusal. At least one of those two markedly divergent rates for the same work is not fair and reasonable.
Fourthly, if $3 per page was fixed as a "fair and reasonable" charge for scanning a document in 2004, it must be doubtful whether a charge of $36 per page for scanning a document in 2006 (or 2020) could be "fair and reasonable" for identical work, when none of the other items of legal work had changed at all. That is to say, on the construction applied by the primary judge, there is at least a question mark over the validity over the sub-item in the Schedule, which is only authorised by s 59(1)(a) of the Legal Profession Uniform Law Application Act insofar as it makes provision for fixing "fair and reasonable costs for legal services". The Schedule is an "instrument" and should be construed as operating so as not to exceed the power conferred by the Act under which it was made: Interpretation Act 1987 (NSW), ss 3 and 32(1).
Those considerations also show, contrary to Mr Crossley's submission, that this is not merely a case where there is a mistake, but also that the mistake is one that produces a result which is irrational, absurd, and irreconcilable with the purpose of the items in the schedule.
It is true that the error whereby $5 became $56 was rapidly picked up and corrected by an amending regulation in 2002, something which has not occurred in the last 18 years, during which time the $36 has been repealed and remade. But that does not mean that as a matter of construction this Court is precluded from correcting a second obvious error in item 5.
Courts are empowered to correct obvious drafting errors in all legal documents, including primary and delegated legislation. In Director of Public Prosecutions (Nauru) v Fowler (1984) 154 CLR 627 at 630; [1984] HCA 48 a unanimous High Court considered a Nauru statute which provided that the relevant court shall: [I]f it allows an appeal against conviction, either quash the conviction and direct a judgment and verdict of acquittal to be entered or, if the interests of justice so require, order a new trial.
The judgment observed that read in its "strict grammatical sense", there was a mistake, because in all cases where an appeal against conviction is allowed, including where a retrial is ordered, the conviction must be quashed. The High Court said that "if the strict grammatical sense of the words is adhered to it would lead to an absurdity" and that in those circumstances, "the court is entitled to attribute to the provision the meaning which it was obviously intended to have", and proceeded on the basis that "either" was to be understood as preceding "direct a judgment" rather than preceding "quash the conviction".
In Day v Harness Racing New South Wales at [78], "cobalt chloride" in a regulation was construed as "cobalt" because it was an obvious drafting error which produced a nonsensical result (because it is nonsensical to speak of a concentration of dissolved "cobalt chloride", but rather concentrations of cobalt ions and chloride ions).
The errors in Fowler and Day v Harness Racing New South Wales were semantic or conceptual, but in both cases it was obvious that there were errors and it was obvious what was intended to have been stated. The proper construction of the provisions was one in which the relevant errors were corrected.
There was no novelty in the course adopted in those decisions. Substantially the same reasoning was applied by Denman LCJ speaking for the Court of Queen's Bench in R v Wilcock (1845) 7 QB 317 at 338; 115 ER 509 at 518, where the question was the effect of an amending statute correctly describing a statute's long title, but incorrectly stating its year as the 13th as opposed to the 17th year of the reign of King George III. The Lord Chief Justice addressed this concisely: [Liability for the penalty] is assumed to depend on the question whether the Act just alluded to was in these particulars repealed by statute 58 G 3 c 51, which repeals "an Act passed in the thirteenth year" of G 3, entitled, "An Act for" &c; and here is set out the title of statute 17 G 3 c 56, not that of any Act passed in the 13 G 3, nor, we presume, of any other Act whatever. A mistake has been committed by the Legislature; but, having regard to the subject matter, and looking to the mere contents of the Act itself, we cannot doubt that the intention was to repeal the 17 G 3, and that the incorrect year must be rejected.
The Court thus corrected a reference to "13" in 19th century legislation which should have been "17".
In 20th century legislation, Basten and Bell JJA writing for this Court similarly corrected a reference to "subsection (1A)" which should have been "subsection (1)(a)" in Dome Resources NL v Silver (2008) 72 NSWLR 693; [2008] NSWCA 322 at [32].
Both those cases involved correcting numerical references which were obviously and palpably wrong, because in R v Wilcock there was in fact no statute of the description enacted in the 13th, as opposed to the 17th, year of King George III's reign, and in the statute under consideration in Dome Resources NL v Silver there was no subsection (1A). However, in Dome Resources NL v Silver, Basten and Bell JJA referred with approval to Muirhead J's decision in Lindner v Wright (1976) 14 ALR 105. That was a case where a provision in a Northern Territory Fisheries Ordinance referred to "sub-section (3)" but was held to refer to "sub-section (4)". Unlike R v Wilcock and Dome Resources NL v Silver, both sub-sections (3) and (4) existed. Muirhead J identified that this was not a case of ambiguity but a drafting or printing error, and observed that there was a line of cases, including Richards v McBride (1881) 8 QBD 119, which rightly cautioned against concluding that Parliament was mistaken. However, Muirhead J observed that in Richards v McBride there was "no manifest repugnancy or absurdity nor anything so contrary to the intention of the Act as to force us from the grammatical construction of it".
Muirhead J concluded at 111: But whilst I can find no authority directly in point, it seems to me that I am faced not with a gap to be filled, but with a clear mistake and I consider when intention is so clear that to correct that mistake and give force to the sub-section involves not "legislation" but interpretation. I take the view and so hold that s 8A(6) should be read as though "sub-section (4)" was inserted instead of "sub-section (3)" …
Similar reasoning may be seen in the decision of the British Columbia Court of Appeal in Morishita v Township of Richmond (1990) 67 DLR (4th) 609. Section 8 of a by-law passed by a local council referred to s 4, which made no sense. The predecessor by-law had a similar structure, and referred to the equivalent of s 5. Southin JA writing for the Court said at 618 that "I think the only rational conclusion is that the reference to s 4 in the present s 8 is a mistake. The section intended to be referred to is s 5". That approach was endorsed by Professor Sullivan: R Sullivan, Statutory Interpretation (2016, 3rd ed, Irwin Law) at 298.
The position was described by Lord Nicholls in Inco Europe Ltd v First Choice Distribution (a firm) [2000] 1 WLR 586 at 592; [2000] UKHL 15: The court must be able to correct obvious drafting errors. In suitable cases, in discharging its interpretative function the court will add words, or omit words or substitute words. Some notable instances are given in Professor Sir Rupert Cross' admirable opuscule Statutory Interpretation, (3rd ed, 1995), pp 93-105. He comments, at p 103: "In omitting or inserting words the judge is not really engaged in a hypothetical reconstruction of the intentions of the drafter or the legislature, but is simply making as much sense as he can of the text of the statutory provision read in its appropriate context and within the limits of the judicial role." This power is confined to plain cases of drafting mistakes. The courts are ever mindful that their constitutional role in this field is interpretative. They must abstain from any course which might have the appearance of judicial legislation. A statute is expressed in language approved and enacted by the legislature. So the courts exercise considerable caution before adding or omitting or substituting words. Before interpreting a statute in this way the court must be abundantly sure of three matters: (1) the intended purpose of the statute or provision in question; (2) that by inadvertence the draftsman and Parliament failed to give effect to that purpose in the provision in question; and (3) the substance of the provision Parliament would have made, although not necessarily the precise words Parliament would have used, had the error in the Bill been noticed. The third of these conditions is of crucial importance. Otherwise any attempt to determine the meaning of the enactment would cross the boundary between construction and legislation: see Lord Diplock in Jones v Wrotham Park Settled Estates [1980] AC 74, 105.
Lord Nicholls' formulation of principle was approved by French CJ and Bell J in Minister for Immigration and Citizenship v SZJGV (2009) 238 CLR 642; [2009] HCA 40 at [9], and more recently was approved and applied in Ngumi v Attorney General (The Bahamas) [2023] UKPC 12 at [30]-[33]. However, the joint judgment of the majority of the High Court in Taylor v The Owners - Strata Plan No 11564 emphasised at [38] that the question involved a judgment of matters of degree, and at [39] that it was unnecessary to decide whether the three conditions in Inco Europe were "always, or even usually, necessary and sufficient". To be clear, it may be doubted that Lord Nicholls was seeking to formulate a test of what was sufficient, as opposed to what was necessary, before the power to correct an obvious mistake was enlivened. The formulation in Inco Europe naturally invokes a necessary condition ("Before interpreting a statute in this way the court must be abundantly sure of three matters …") and the tenor of the passage as a whole is one of restraint, as opposed to identifying the circumstances in which the power would without more be exercised.
Consistently with the approach enunciated in Taylor v The Owners - Strata Plan No 11564, I am conscious that there are mistakes and there are mistakes, as Jordan CJ said in a different context in Ex parte Hebburn; Re Kearsley Shire Council (1947) 47 SR (NSW) 416 at 420. It is one thing for words to be garbled as they were in the Nauru statue, or for the drafter to misapprehend the nature of cobalt chloride when dissolved, or for a patently incorrect cross-reference to a non-existent statute or subsection to be read as referring to an existent statute or subsection. It is another thing for it to be asserted that there is an obvious drafting error even though the literal meaning is not non-sensical on its face. In the present case, as Mr Crossley emphasised, there is no practical difficulty in applying the literal words of the sub-item.
In cases of mistaken drafting, not uncommonly a powerful factor leading to the conclusion that "something must have gone wrong with the language" is the impossibility of giving a literal meaning to the text. That is not the present case. However, the fact that the sub-item can readily be applied, and costs can readily be calculated on the basis of $36 per page for scanning documents which it is unnecessary to peruse, does not stand in the way of the availability of correcting the mistaken text as a matter of construction. In a case such as the present, what matters is not merely the certainty that $36 is a mistake for $3, but also the fact that reading the sub-item literally is absurd and irrational and irreconcilable to the purpose of the instrument.
It is open to the Court to construe $36 to mean $3 in the very special facts of this case. The same interpretative approach has been seen in the examples mentioned above, when 13 is read as 17, or (1A) is read as (1)(a), or (3) is read as (4). A necessary premise is the conclusion that a mere typographical error has been found in the provision. But that is not sufficient in a case such as the present. Indeed, consistently with the approach stated in Taylor v The Owners - Strata Plan No 11564, I think it is likely that this is a case where the three conditions identified by Lord Nicholls are not sufficient. I would conclude that the power is available in the present class of case if three conditions are satisfied, namely: (a) the court is certain there has been an inadvertent drafting error, (b) the court is well satisfied of what the intended wording was, and (c) if the words as made are read literally, they will be absurd and irrational and irreconcilable to the purpose of the instrument. The significance of the third condition is that while it is clear that a drafting or printing error that substituted $36 (or $366) for $3 can be corrected because of the absurdity and irrationality and irreconcilability with a rate that is "fair and reasonable", it is far from clear that the power would be available if the mistake was to substitute $4 for $3.
That is to say, I do not accept Mr Crossley's submission that the fact that an operation, albeit one which is irrational and absurd and irreconcilable with the purpose of fixing "fair and reasonable costs", can be given to the ordinary meaning of the sub-item charging scanning at $36 per page, denies this Court power to correct the obvious mistake.
In the present case, there has been a simple drafting error by including a "6" with the effect that $3 per page has become $36 per page. It is not merely clear that there has been a typographical error. It is also clear that the $36 was intended to be $3, just as had been the case in the 2002 Regulation and the 1994 Regulation, in circumstances where none of the other items had altered a jot. And it is clear that if the sub-item is applied literally, as it was applied by the District Court, the result is absurd, irrational and is antithetical to a determination of costs which are "fair and reasonable".
Mr Crossley asserted that the third subitem in item 5 was prepared by the Parliamentary Counsel's Office. That is not established by evidence, and may be doubted. The relevant question is whether Part 1 of Schedule 3 of the 2005 Regulation (which was identical to its predecessor save that $3 in the sub-item for scanning was replaced by $36) was drafted by the Parliamentary Counsel's Office. Every other item in the 2005 schedule was identical to its 2002 predecessor. It is possible, but it may be doubted that this was done by Parliamentary Counsel; if as is obvious the intention was to replicate the 2002 schedule, why would Parliamentary Counsel be retained? But in any event, the question before this Court is whether there is power to correct an obvious error, to which question the identity of the person or body which introduced the error is at best peripheral. No matter how skilled the author, legal texts will always contain mistakes, a proposition familiar to any author, any judge and (I infer) any Parliamentary Counsel.
Mr Crossley also submitted that the apparent error in the sub-item was shortly to be reviewed, and might be corrected, and for that reason Coal & Allied should not be granted leave to advance a new point which was said to be of wider importance to the company, transcending the facts of this particular case. However, the question is a pure question of law, and Mr Crossley's position can be adequately protected by making the special costs order proposed below, which was flagged at the hearing. Coal & Allied should be granted leave to amend its summons.
It is true that the point of a scale of costs is to provide a certain and sometimes arbitrary rule to quantify work done by legal practitioners. But that does not mean that the ordinary principles of statutory construction, which permit obvious drafting errors to be corrected, cease to apply. Indeed, because of the nature of a scale, which is just a list of categories of work and rates, it is easy to see how typographical errors may occur, and thus there may be all the more occasion for the application of the principle.
I conclude that this is a rare case where there has been an obvious mistake, and it is obvious what was intended, and if the sub-item is read literally, it will be absurd and irrational and irreconcilable to the purpose of fixing "fair and reasonable" costs. Just as 13 has been construed to mean 17, (1A) has been construed to mean (1)(a), (3) has been construed to mean (4), so too 36 is to be construed as 3.

The meaning of "scanning"

It may also be doubted whether the items described as "scanning" in the solicitors' bill properly answered that description. There is a well-established distinction between "perusing", "scanning" and "examining" documents. "Perusal" has been used to identify the careful reading of documents since at least the nineteenth century. "Scanning" as a category of work remunerated at a lower rate than perusal, for documents which do not require the same level of attention, may be traced back to at least the Legal Profession Regulation 1994. Significantly for present purposes, the distinction precedes by many years modern electronic "scanning" of documents, which is nothing more than obtaining an electronic copy of the document.
Quick on Costs (Thomson Reuters, vol 1) describes the position as follows at [20.1160]: A perusal is a close reading of a document requiring the application of a solicitor's professional skill and knowledge in order to decide what, if any, steps are required to be taken in the client's interest. The term "perusing" has been replaced in a number of scales with the term "reading". Perusal is to be distinguished from scanning and examination. An allowance for scanning, rather than perusal, is made where a close reading of the document or parts of the document is not required. Scanning is a high level review of a document, for the purpose of identification of the contents of the document, but not involving a close reading of the document. It usually attracts a different and lesser rate. … Perusal and scanning are also to be distinguished from "examination". Examples of examination are proofing [an] appeal book, comparing documents, examining the contents of a court book to confirm they accord with the agreed index. Some scales have a specific allowance for "examination", generally on a time basis. (Footnotes omitted.)
A Victorian work, J Ahern, A Weingart and M Johnson, Legal Costs Handbook (1995, LBC Information Services) states at 29: Perusal is the careful reading and detailed consideration of a document, other than one which is prepared by the solicitor; Scanning is the rapid reading of a document or part of a document to ascertain the general content and coverage but is not a detailed consideration of the document; Examination is the inspection of a document to establish its general nature but does not involve a detailed consideration. The very nature of the exercise, unlike perusal and scanning, attracts a fee for time spent.
Another (New South Wales) work, J White, Legal Costing (1988, Blackstone Press) states at 71-72: Where it is not necessary to peruse a document or correspondence in detail, but it is appropriate to scan it in order to determine its relevance or otherwise, you can charge at the scanning or examining rate. This rate is sometimes expressed on a per folio basis or on a per page basis. As an example of the difference between perusal and scanning, a client may come into your office with a problem involving the rights and duties of a director in a company. The client will provide you with a copy of the Memorandum and Articles of Association. It would be necessary for you to scan the company documents in order to determine the relevance or otherwise of each particular clause, and it would be necessary for you to peruse, that is consider in detail, some of those particular clauses. Accordingly, when charging the client, you would charge for perusing some clauses and scanning the rest.
There is no evidence before this Court concerning what precisely was done in respect of each of the 21 items of scanning on the bill of costs, and in any event it was not disputed that the firm had correctly characterised the work done as "scanning". However, it may be salutary to bear in mind, in future cases, that "scanning" for the purpose of the regulations, is quite different from scanning with a modern device so as to create an electronic image of the document. Scanning a document involves reading a document rapidly, with a view to ascertaining its general content, including identifying those parts which need to be read closely. It is not a mechanical process, and the lower rate for "copying" (which, as presently advised, would include the creation of an electronic image) reflects as much. But if Mr Crossley's solicitor's bill has been assessed on the basis that more than a thousand pages of documents have been "scanned" when at best they were merely copied, that is not apparent on the face of the record and in any event would amount to a mere error of fact.

Orders

The result is that the primary judge was correct to allow the appeal, but incorrect to apply $36, as opposed to $3, per page for each contested amount in the bill of costs. Notwithstanding its literal meaning, on its proper construction, the rate prescribed by the sub-item was $3 per page, not $36 per page. This Court is empowered to correct the obvious error by reading $36 as $3.
Ordinarily where an error of law on the face of the record is made out, the decision will be quashed and the matter remitted. However, it is not necessary to remit the matter to the District Court for determination in accordance with law. Still less would it have been appropriate to direct that the primary judge not hear and determine the appeal, as Coal & Allied's summons seeks. While such a power exists, it is to be exercised sparingly: Seltsam Pty Ltd v Ghaleb [2005] NSWCA 208; 3 DDCR 1 at [12]; Pavlovic v Universal Music Australia Pty Ltd (No 2) [2016] NSWCA 31 at [26]-[27]. Nothing in the present case suggests that such a direction ought be made, and indeed this aspect was withdrawn when it was brought to senior counsel's attention. But no remitter is required in any event.
The primary judge directed the Manager Costs Assessment to forthwith issue a Certificate of Determination of Appeal under ss 87 and 89 Legal Profession Uniform Law Application Act, which was annexed to the judgment and reflected calculations to which the parties agreed.
There is only one order which the District Court could have made had the appeal been determined in accordance with the correct construction of the schedule. Where there is only one order available in law, consistent with this Court's reasoning, this Court may make that order rather than remitting the proceeding to the lower court for that order there to be made: see the reasons and earlier decisions in Torbey Investments Corporated Pty Ltd v Ferrara [2017] NSWCA 9 at [97]-[101], to which may be added Freestone Auto Sales Pty Ltd v Musulin [2015] NSWCA 160 at [66]. Torbey Investments was subsequently applied in Young v Royal Society for the Prevention of Cruelty to Animals New South Wales [2020] NSWCA 360 at [52]. The only order available in law resolving the limited dispute raised by Mr Crossley's appeal is that the certificate be re-issued with the amounts allowed by the panel for scanning deleted and replaced by amounts calculated at $3 per page. That order may be made in the proper exercise of this Court's supervisory jurisdiction.
There are some slight discrepancies in the amounts stated in the materials made available to this Court. Further, there will be a need to calculate interest. The parties were able to provide an agreed certificate to be made by the District Court. It should be straightforward for them to reach agreement as to the form of a certificate calculated in accordance with these reasons.
Coal & Allied has succeeded, but only on a basis which was first articulated at the conclusion of its oral submissions in this Court. Further, the amounts at stake are small, compared to the costs of senior counsel who appeared for each side. It was accepted that Coal & Allied's real interest was not the costs payable on the bill rendered by Mr Crossley's solicitors, but the more general issue of the sub-item which may arise in other cases. For those reasons, it is appropriate to depart from the ordinary rule as to the costs of the litigation in this Court, and order that Coal & Allied pay Mr Crossley's costs in this Court; cf Rockcote Enterprises Pty Ltd v FS Architects Pty Ltd [2008] NSWCA 39 at [123], a possibility which was flagged at the hearing, without protest from Coal & Allied.
I propose the following orders:
Grant leave to Coal & Allied to amend its summons in terms of the draft supplied on 26 July 2023.
Set aside order 3 made by the District Court on 8 February 2023.
Direct the parties to file and serve, within 14 days of today, an agreed form of Certificate of Determination of Appeal which should issue in lieu of that issued by the District Court in accordance with these reasons, or in default of agreement, each side to file and serve within 14 days of today forms of certificates for which they contend and short submissions in support, with a view to any remaining dispute being resolved on the papers.
Coal & Allied to pay Mr Crossley's costs in the Court of Appeal.
STERN JA: I agree with the orders proposed by Leeming JA and with his Honour's reasons for proposing those orders.
SIMPSON AJA: I agree with Leeming JA.

Amendments 27 February 2024 - replaced "Wilcox" by "Wilcock" in case citation in cover sheet, [47] and [50]

corrected citation for W Bannehr and A Porter text in cover sheet and [5]
replaced "that" by "than" in the first sub-item under item 7 in table in [20]
replaced "retrial" by "new trial" in quotation in [43]
corrected "nor" and "or" in quotation in [50], so it reads "... repugnancy or absurdity nor anything..."
inserted the words "three conditions are satisfied, namely:" in the 5th sentence of [57]
replaced "subitem 5(3)" by "the third subitem in item 5" in [60] DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 27 February 2024

Legal Profession Amendment (Transitional Provisions) Regulation 2002(NSW)

Legal Profession Regulation 1994(NSW)

Legal Profession Regulation 2002(NSW)

Legal Profession Regulation 2005(NSW)

Legal Profession Uniform Law Application Regulation 2015(NSW)

tion (a firm) [2000] 1 WLR 586; [2000] UKHL 15 Lindner v Wright (1976) 14 ALR 105 Minister for Immigration and Citizenship v SZJGV (2009) 238 CLR 642; [2009] HCA 40 Morishita v Township of Richmond (1990) 67 DLR (4th) 609 New South Wales Crime Commission v Kelly (2003) 58 NSWLR 71; [2003] NSWCA 245 Ngumi v Attorney General (The Bahamas) [2023] UKPC 12 Pavlovic v Universal Music Australia Pty Ltd (No 2) [2016] NSWCA 31 R v Wilcock (1845) 7 QB 317; 115 ER 509 Richards v McBride (1881) 8 QBD 119 Rockcote Enterprises Pty Ltd v FS Architects Pty Ltd [2008] NSWCA 39 Seltsam Pty Ltd v Ghaleb [2005] NSWCA 208; 3 DDCR 1 State of New South Wales v Kaiser (2022) 108 NSWLR 476; [2022] NSWCA 86 Taylor v The Owners - Strata Plan 11564 (2014) 253 CLR 531; [2014] HCA 9 Torbey Investments Corporated Pty Ltd v Ferrara [2017] NSWCA 9 Young v Royal Society for the Prevention of Cruelty to Animals New South Wales [2020] NSWCA 360 Texts Cited: A Saddington, Taxation of Costs Between Parties (1919, Law Book Co) J Ahern, A Weingart and M Johnson, Legal Costs Handbook (1995, LBC Information Services) J White, Legal Costing (1988, Blackstone Press) Quick on Costs (Thomson Reuters, vol 1) R Sullivan, Statutory Interpretation (2016, 3rd ed, Irwin Law) W Bannehr and A Porter, Guide to the Preparation, Delivery and Taxation of Bills of Costs (12th ed, 1921, Waterlow and Sons) W Summerhays and T Toogood, Precedents of Bills of Costs (2nd ed, 1877, Stevens & Sons, London) Category: Principal judgment Parties: Coal & Allied Operations Pty Ltd (Plaintiff) David Malcolm Crossley (First Defendant) District Court of NSW (Second Defendant) Representation: Counsel: B Kelleher SC and N Compton (Plaintiff) T Lynch SC and M Fraser (First Defendant)

HEADNOTE [This headnote is not to be read as part of the judgment] Mr David Crossley made a claim against Coal & Allied Operations Pty Ltd in the District Court's "Compensation jurisdiction" for injuries suffered during his employment as a coal miner. The claim was resolved by consent on 28 August 2020 for $50,000, with an order that Coal & Allied were to pay Mr Crossley's costs. The parties failed to reach agreement on costs, and Mr Crossley's solicitors rendered a bill of costs amounting to a total of $115,800.90. A large component was for the costs of "scanning" more than a thousand pages of documents, for which Mr Crossley's solicitors claimed they were entitled to $36 per page scanned. This claim was made upon the basis of item 5 (titled, "Perusal of documents") of Part 1 of Schedule 2 of the Legal Profession Uniform Law Application Regulation 2015 (NSW) which provided a fixed cost of $36 per page "[w]here it is not necessary to peruse but it is necessary to scan a document". The dispute went to assessment, where a costs assessor certified an amount of $28,196.87. Mr Crossley's application for review of that assessment was allowed, primarily because of arithmetical errors, and resulted in an assessment in the amount of $40,839.44. Both the assessor and the costs review panel considered the amounts charged by Mr Crossley's solicitors for scanning documents not to be fair and reasonable and rejected some 90% of that aspect of the claim. Mr Crossley appealed to the District Court pursuant to s 89 of the Legal Profession Uniform Law Application Act 2014 (NSW), where the only issue was the charged amounts for scanning documents. The District Court allowed the appeal, finding that Mr Crossley's solicitors were entitled to charge $36 per page for scanning documents, that being what the sub-item meant as a matter of construction. Coal & Allied brought proceedings in the Court of Appeal seeking judicial review of the District Court's decision, contending that the judgment disclosed error of law on the face of the record and should be set aside. Coal & Allied advanced a series of arguments as to why the total amount of costs ordered was subject to a requirement that it be "fair and reasonable". However, during the course of argument it adopted a suggestion from the Bench that the reference to "$36" in the sub-item may be a mistake and that, as a matter of construction, it might not bear its literal meaning. Coal & Allied sought leave, which was granted, to amend its summons to add a ground to that effect. The issue determined by the Court was whether, as a matter of construction, the sub-item bore its literal meaning. The Court (Leeming JA, Stern JA and Simpson AJA agreeing) held, setting aside the order of the District Court:

(2022) 108 NSWLR 476

Coal & Allied Operations Pty Ltd v Crossley

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