Whether costs should be fixed at a gross sum
13 In Dunstan v Human Rights and Equal Opportunity Commission (No 3) [2006] FCA 916 (the main costs judgment) delivered at the same time as this judgment, I referred at [22]-[24] to certain of the principles relevant to deciding whether to make a gross sum order for costs. I will not repeat them.
14 The course of the taxation of costs thus far in these matters indicates that the process of taxing costs to date in these matters has been prolonged and expensive. Mr Dunstan contends that that is the defendants' fault, and so should not be in the particular circumstances a reason to fix a gross sum for costs.
15 The bills of costs lodged on 20 February 2001 totalled $20,967 (31/97) and $21,137 (32/97) respectively. An accompanying memorandum indicated that, as the defendant in each matter was represented by the same solicitor and as each matter was conducted simultaneously, many item costs had been apportioned to each bill of costs. Mr Dunstan by letter of 25 March 2001 raised a number of objections to those bills of costs. The defendants indicated that, apart from the possibility that certain claimed costs relating to discovery ought not to have been included, they disagreed with Mr Dunstan's objections. They were nevertheless prepared to have the items objected to removed from the bills of costs. That led to the bills of costs being reduced by $3808 to $17,159 (31/97) and by $3811 to $17,326 (32/97). The disputed (and conceded) items were identified.
16 The taxing officer then, pursuant to O 62 r 46(3), issued an estimate of the taxable costs by letter to the parties in each matter of 22 June 2001. The estimates were $11,990 (31/97) and $11,907 (32/97). Under O 62 r 46(3), Mr Dunstan objected to those provisional costs assessments so that process of taxation needed to be undertaken.
17 Before the process of taxation, attempts to resolve the amount of the costs in each matter by mediation were undertaken. They were unsuccessful. The taxations were then re-activated after March 2002.
18 Mr Dunstan outlined his general position by letter of 10 September 2001. He asked that the process be deferred until he was released from prison. He indicated also that he would take every point available on the taxations. His attitude is reflected in the following quote from that letter:
'1. It is not accepted that each alleged item was actually carried out.
2. If the alleged item was actually carried out, it is not accepted that the alleged item was in any way connected with cases AG31/1997 and AG32/1997.
3. If the alleged item was actually carried out in connection with cases AG31/1997 and AG32/1997, it is not accepted that the alleged item was necessary or proper.
4. If the alleged item was necessarily and properly carried out in connection with cases AG31/1997 and AG32/1997, it is not accepted that the cost shown is in accordance with the appropriate cost schedule.'
There is clearly no realism in that approach. It is, for instance, self-evident that upon each defendant being served with the summons in each matter, each defendant would consult solicitors, that the solicitors would consider the summons and would take instructions in relation to it, would attend the directions hearings, and the like. There may be scope to dispute that all attendances for those purposes were necessary or proper, or that all needed to take as long as they did, but not that none of them were necessary or proper. It is also self-evident that instructions were taken to challenge by motion the jurisdiction of the Court to hear the information, because Mr Dunstan was served with those documents and attended when the motion in each matter was addressed. There may be scope to assert that that work should not be allowed on a party/party taxation, but not that some such work was not carried out, and also to challenge the need for all the work done in relation to those motions. Mr Dunstan, however, signalled very early that his approach was to dispute every costs item on every conceivable ground.
19 On 20 May 2002, Mr Dunstan filed his notices of objection to the bills of costs in each matter. He claimed that the costs orders of 14 September 1998 should not have been made because the Court had been deliberately misled about material facts. It was unrealistic to raise that issue at the taxation. Any application to set aside the costs orders should have been made to a judge. A taxing officer has no power to set aside or ignore orders of the Court. The notices of objection took the four points quoted in [18] above in relation to every item in the bills of costs, and in respect of some items raised additional objections or expanded upon one or more of the objections.
20 On 29 May 2002, directions were given for the taxing process. It was to commence on 20 September 2002. On 6 September 2002, Mr Dunstan applied by motion to set aside the costs orders in each matter. On 13 September 2002, those motions were each dismissed with costs: Dunstan v Seymour [2002] FCA 1195. In the meantime, the taxations were rescheduled to commence on 4 October 2002.
21 There have then been seven attendances between 4 October 2002 and 27 November 2003 totalling 15.5 hours for the taxing of costs. There has been no progress since that date. In that time, only five of 37 pages of the bill of costs in one matter (31/97) have been taxed. That covers 45 of 326 items. The taxation of the other bill of costs (32/97) has not yet started. Mr Dunstan's circumstances have restricted the sessions to no more than two hours, and it has been difficult to arrange his availability. Some schedule sessions have not taken place, though events beyond Mr Dunstan's control.
22 I do not regard that material as supporting Mr Dunstan's claim that responsibility for the slow progress of the taxation of costs rests with the defendants. It shows that the defendants, for the purposes of the taxation, were prepared to concede Mr Dunstan's first round of objections. They did so, on the evidence, to progress the taxation. They did not thereby acknowledge that those items should not have been claimed. An issue arose as to the extent to which Mr Dunstan should have access to material the subject of legal professional privilege for the purposes of the taxation. Another issue arose as to the extent to which time spent on research should be allowed on taxation. They are common issues which arise. They do not indicate the defendants consciously claimed work done which was not done, or claimed that time was spent which was not spent. The taxing officer could adjudicate on the individual items of work claimed. Indeed, the material referred to tends to indicate that Mr Dunstan, rather than the defendants, has approached the taxation of costs in an obstructive way by disputing each item of work claimed, even to the extent of saying that the work was not done.
23 In my view, it is clear that the continued taxation of the bills of costs would be unduly protracted and unduly expensive, having regard to the amounts of the costs claim which are to be taxed. The history thus far demonstrates that. It is not necessary to identify precisely why progress has been so slow, save for the finding I have made that the defendants have not caused that slow progress by any improper conduct on their part. I see no reason why progress might be accelerated if the taxation of costs were to resume.
24 It is also clear, on the material, that the further expense of continuing to tax their costs in the normal manner would be an expense which the defendants are unlikely to recover from Mr Dunstan. I adopt my findings at [29] of the main costs judgment. That is a factor which weighs in the scales in favour of making a gross sum costs order.
25 As I said in the main costs judgment, the need to ensure that Mr Dunstan is not disadvantaged by a gross sum costs order, by such an order fixing costs at a figure higher than would be fixed on normal taxation, can be accommodated by a careful and conservative approach to the fixing of a gross sum for costs in each matter.
26 Mr Dunstan contends that it is not possible to do that in these matters because the process of taxation of costs to date reveals that, however conservative an approach is taken, there is too great a risk of fixing too high a gross sum for costs. (He also argued in relation to the gross sum costs applications considered in the main costs judgment that the uncertainty about reaching a proper gross sum in these matters should indicate that similar uncertainty should be found to exist in relation to those costs applications as well.)
27 I do not accept that submission.
28 The means by which a gross sum for costs might be fixed are referred to by Kim Chapman. For reasons given in the main judgment, I generally accept his evidence. Mr Chapman's starting point in these matters has been the taxing officer's estimates of taxable costs in each matter of $11,990 (31/97) and $11,907 (32/97). That starting point firstly took out of the bills of costs all items to which Mr Dunstan initially objected on 25 March 2001. The estimates then represent about 70 per cent of the bills of costs as adjusted by the defendants' concessions and about 57 per cent of the bills of costs as lodged.
29 Mr Chapman has also reviewed the taxation of the bill of costs (31/97) thus far. He has considered Mr Dunstan's objections, the concessions made by the defendant in that matter, and has been alert to check that the work itemised does relate to the particular matter. On the basis of the taxing officer's rulings thus far, and his consideration, he considers it is unlikely that the two bills of costs will be taxed at less than the taxing officer's estimates, a total of $23,897.
30 The items to which Mr Dunstan initially objected on 25 March 2001 related in part to the discovery process, including making the relevant documents available for inspection by Mr Dunstan or his wife before the DPP took over the prosecution. Mr Dunstan in his written submissions suggests that none of that work was done, at least not in these proceedings. That is disputed in the correspondence between the parties. Although the extent of that work may not all be recoverable on a party/party basis, I think that much of it would be recoverable. They also relate to the defendants' unsuccessful motion to challenge the jurisdiction of the Court. I agree those items would not be allowed on taxation, including the conduct of the 'pre-trial conference' of 13 May 1998 (when the motions of the defendant were dismissed). They further relate to the defendants' request for particulars of the allegations. I consider that topic is one in respect of which proper costs would be recoverable. However, consistent with the defendants' concession, I do not propose to take any of those matters into account in determining the present costs applications.
31 Mr Dunstan in his written and oral submissions identified several other items which, he said, were improperly claimed. It is not necessary to address them individually at this point, as I do not consider the points made - assuming them to be valid - go much distance towards demonstrating that no proper or reliable means of determining a gross sum for costs is available.
32 Mr Chapman was cross-examined by Mr Dunstan. Partly that related to items to which Mr Dunstan had objected on 25 March 2001 and had been conceded. He raised with Mr Chapman the suggestion that the general care and conduct allowance had been claimed twice, but Mr Chapman did not accept that. Mr Dunstan presented to Mr Chapman his analyses of the bill of costs (31/97) which indicate that duplication. The care and consideration allowance of 20 per cent appears to have been applied to the whole bill, and not merely to the reduced amount reflecting the concessions. The concessions which were originally the subject of that uplift totalled $2089 (31/97) and $2092 (32/97), so the possibly wrongly included component of the care and consideration element is $418 (31/97) and $418 (32/97) respectively. The balance of the conceded items were disbursements, which were not subject to the uplift. It is not clear that the taxing officer's estimates made the necessary adjustment to the care and conduct allowance, although it is likely that they did so as the normal practice is to estimate the allowable costs items, and then to add the care and conduct component. As Mr Chapman did not expressly say that had been done in this case, I will out of an abundance of caution make that adjustment to the figure I would otherwise fix as a gross sum for costs.
33 Mr Dunstan also suggested to Mr Chapman that, on taxation, no costs would be allowed against Mr Dunstan in either matter from the time when the DPP took over the prosecutions until their dismissal on 28 August 1998. Mr Chapman did not agree. The short answer is that the costs orders made on 14 September 1998 ordered Mr Dunstan to pay the costs of the proceedings. Those orders related to the whole proceeding, in each matter, and not only to the conduct of the proceeding to a particular time.
34 There was nothing else elicited in cross-examination of Mr Chapman which, in my view, went in any material way to demonstrating that there was no sound basis for reliably fixing a proper gross sum for costs in these matters.
35 Upon the whole of the material and submissions, I think the process of taxing the bills in these matters thus far does indicate that the bills as prepared do in general accurately reflect the material in the files of the defendants' solicitors, and do in general reflect an attempt to identify the work attributable to the particular matter. There may be errors in those processes, but they are not shown to be so unreliable that I should not have regard to their foundation, that is the working records, as lacking in general reliability.
36 For those reasons, in my judgment, these matters are ones where the strong preponderance of material is in support of an order for gross sum costs. I propose to make such an order.