Legal Practitioners Act 1893

Workers' Compensation and Rehabilitation Act 1981

Corwest Management Pty Ltd v Deputy Commissioner of Taxation & Anor, unreported; SCt of WA; Library No 6696; 5 May 1987

Joyce v Hutchinson (2000) 23 SR (WA) 248

Klahn v Talbot, unreported; FCt SCt of WA; Library No 950628; 20 November 1995

Australian Coal & Shale Employees Federation v Commonwealth [1953] HCA 25; (1953) 94 CLR 621

Bray v Ryan [1999] WADC 66

Grigoletto v Myer Properties WA Ltd, unreported; DCt of WA; Library No 3667; 31 March 1993

Mascarenhas v Western Mining Corporation - Nickel Division [2002] WADC 250

Mentors, Limited v Evans [1912] 3 KB 174

O'Leary v St Marks International College, unreported; Compensation Magistrate's Court; Library No 759; 14 November 1994

Re Melbourne Parking Station Ltd [1929] VicLawRp 2; [1929] VLR 5

Reed v Gray [1952] Ch 337

Schweppes Ltd v Archer (1934) 34 SR (NSW) 178

Smith v Buller (1875) 19 LR Eq 473

Thomas v Arimco Mining Pty Ltd & Anor [2000] WADC 150

Western Australian Bank v Royal Insurance Co [1908] HCA 11; (1908) 5 CLR 533

1 On 18 January 1994 the plaintiff was injured in the course of her employment by the defendant. In this action the plaintiff has successfully claimed damages for those injuries.

2 On 4 November 2002 the plaintiff's bill of costs was taxed by Deputy Registrar Harman. On 28 February 2003 Deputy Registrar Harman disallowed the defendant's objection to items allowed in the taxation.

3 The defendant applied for leave to appeal against Deputy Registrar Harman's decision of 28 February 2003. When that application came on for hearing before me the defendant applied to file out of time an application for review of the taxation pursuant to O 66 r 55 of the Rules of the Supreme Court. The plaintiff did not oppose the extension of time. I granted the extension of time and dismissed the application for leave to appeal.

4 The defendant objects to the following allowances in the plaintiff's bill of costs:

5 The defendant provided the following chronology:

"• 18 January 1994 Plaintiff sustained injury at work.

• 15 October 1999 Legislative amendments made re s93D.

• 13 December 1999 Plaintiff sought referral of question of degree of disability (Form 22) to the Director of the Conciliation & Review Directorate (enclosing among others) reports the fees for which are claimed as disbursements in the subject bill as items 35, 39, 41, 43, 44, 45, 46.

• 5 December 2000 Review Officer Mr Warwick hears argument on the Form 22 review.

• 18 January 2001 Review Officer Mr Warwick delivers his decision on the Form 22 review. No costs order is made.

• 1 March 2002 Plaintiff answers defendant's interrogatories in District Court action.

• 8 March 2003 Pre-trial conference held in District Court action. Quantum is agreed.

• 20 to 23 May 2002 District Court trial on liability only before Commissioner Greaves.

• 23 August 2002 Commissioner Greaves delivers his decision apportioning liability 80/20 in favour of the plaintiff.

Awards costs on the basis that 'the defendant pay the plaintiff's costs of the action to be taxed including the costs of interrogatories and costs reserved.

• September 2002 Plaintiff lodges party/party bill in the District Court action.

• 28 February 2003 Review decision of Taxing Officer dismissing the objections."

6 The s 93D application on 9 June 1999 referred to in the chronology was an application for leave to commence an action under the provisions of s 93D of the Workers' Compensation and Rehabilitation Act 1981 as it existed at that date. The amendments made in 1999 by the Workers' Compensation and Rehabilitation Amendment Act 1999 were to the effect that damages could not be awarded until the degree of the worker's disability had either been agreed or been determined in the Workers' Compensation and Review Directorate ("the Directorate").

7 The basis of a review by a Judge of a taxing officer's decision is set out in O 66 r 55(2):

"The Judge, if of opinion that the Taxing Officer has made an error in principle, may thereupon make such order to rectify the error as the Judge thinks just."

8 When the objection is as to the amount allowed by the taxing officer the Judge may allow the objection if the Judge considers that the Taxing officer has made an error in principle in determining how much should be allowed: Joyce v Hutchinson (2000) 23 SR (WA) 248.

The plaintiff's answers to defendant's interrogatories

9 The plaintiff's answers to the defendant's interrogatories were provided on 8 March 2003 and so the Legal Practitioners (Disbursements) Determination 1999 ("the 1999 Determination") applies to that item in the plaintiff's bill of costs. Item 10(b) is the relevant item in that determination. It provided:

10 JP is a reference to a Junior Practitioner. This method of describing the allowances for work done in an action was introduced by the Legal Costs Committee in the Legal Practitioners (Supreme Court) (Contentious Business) Determination 1996 ("the 1996 Determination"). The 1999 Determination provides in cl 5(2) that the rates set out in the 1999 Determination were ascertained in the manner set out in cl 7 of the 1996 Determination. Clause 7 of the 1996 Determination provided:

"(2) The new scale of costs shows the time and the fee earner whose hourly rates have been used to calculate the dollar amount in the scale. Set out in the table are the average maxima of hourly and daily rates revealed by the survey. Each item in the scale of costs specifies a dollar amount by reference to a fee earner.

(3) Thus, for example, item 6(a) of the Schedule which relates to the drawing and settling of a statement of claim, provides for a maximum of 10 hours for the preparation of this document to be performed by a senior practitioner charging at a rate of $270 per hour. In fact, in a particular matter, the time reasonably spent in drawing and settling a statement of claim may be only 2 hours and it may be performed by a practitioner who is relatively junior. By reason of the lack of complexity of the case, it may be that such practitioner should only reasonably charge at the rate of $180 per hour. If that be the case, then $360 would be a reasonable charge. Alternatively, if the statement of claim were drawn in complex litigation and 30 hours were reasonably spent on the task by a senior practitioner who might reasonably charge $280 per hour, then it would be appropriate for that party, if it were successful in the litigation to ask for a special costs order to be made by the Court to increase the maximum amount in item 6(a). This flexibility applies to each item in the scale other than the amounts set out in the items referred to in Part 4.

(4) Thus, by way of further example, it can be seen that item 2 of the Schedule applies a maximum of $540. It has been calculated on the basis of a junior practitioner taking 3 hours to perform the work and charging at a rate of $180 per hour. However, if in a particular case a senior practitioner performed the work and took 2.45 hours at a reasonable hourly rate of $220 per hour, the result would still be within the maximum amount allowed by the scale. It would then be a matter for the Taxing Officer to decide whether the time spent in performance of the work was reasonably spent by a practitioner of that seniority."

11 The defendant's objection to the allowance for this item was that:

"The interrogatories are directed to basic factual matters. No great explanation was required to or by the plaintiff. The answers are simple and brief. The plaintiff failed to establish how long was required to answer the interrogatories. The amount allowed should have been substantially nearer the low end of the scale."

12 Deputy Registrar Harman disallowed that objection. He ruled that the objection raised no matter of principle and the fact that the plaintiff had failed "at taxation to establish how long it took for her solicitor to render to her the relevant services" did not mean that there was an error of principle in the allowance.

13 It is my view that following the 1996 Determination in determining an allowance on a taxation for work done by a practitioner or paralegal it is necessary for the taxing officer to have regard to the time spent on the item, whether the work was done by a practitioner or a paralegal and, if done by a practitioner, the level of seniority of that practitioner and the hourly rate charged by the practitioner or the paralegal. Once that information is known the taxing officer should have regard to any other matters that may be relevant to determine whether the charge is a reasonable charge. Other matters that might be relevant in a particular case could include the complexity of the case and of the work done, the urgency with which the work was required to be done and the importance of the case.

14 It would seem from Deputy Registrar Harman's reasons that he failed to have regard to the time spent on answering the interrogatories, whether the work was done by a practitioner or paralegal and the hourly rate charged for the work done in determining whether or not the sum claimed for that item was reasonable. In my view this constituted an error of principle and the objection should be allowed. The item should be reviewed by Deputy Registrar Harman who, having regard to all relevant matters, should determine whether or not the sum claimed for this item is reasonable. In making his decision it is not necessary for the taxing officer to call for and examine the plaintiff's solicitors' time sheets. Whether or not he does so is a matter within the discretion of the taxing officer who has wide powers under O 66 r 44.

15 The defendant's objection to the allowance for getting up case for trial is three pages long and contains fifteen paragraphs. In drafting the objection the author has failed to follow O 66 r 53 which provides that the objection is to specify "by a list, in a short and concise form, the items or parts of items objected to, and the grounds and reasons for the objections." The matters raised in the objection appear to be:

1. In fixing the item the taxing officer failed to have regard to the time spent and the seniority of the person who carried out the work;

2. the taxing officer erred in the allowance when the plaintiff's representative submitted that the getting up had commenced before the writ had been issued;

3. Part of the getting up case claim is related to the work done for the s 93D application and the review in the Directorate.

4. quantum was agreed at the pre-trial conference on 8 March 2002;

16 The relevant item in the 1999 determination is item 13 which is as follows:

Getting up case for trial (subject to item 14(f) (includes work reasonably and necessarily undertaken prior to commencement of proceedings)

17 It appears from Deputy Registrar Harman's reasons that he did not have regard to the time spent in getting up case for trial, the level of seniority of the person or persons who did the work in getting up the case for trial and the hourly rate charged.

18 For the reasons I have expressed in relation to the objection to the allowance for answers to interrogatories it is my view that the failure of the taxing officer to have regard to those matters is a matter of principle and the bill should be referred back to the taxing officer to consider those matters.

19 The item in the schedule expressly includes in getting up case for trial work reasonably and necessarily undertaken prior to commencement of proceedings. This does not mean that all work done prior to the issue of the writ can be included in the allowance. In this case where work was done solely for the application under the former s 93D of the Workers' Compensation and Rehabilitation Act 1981 or for the application in the Directorate then that work would not be allowed under this item. Where work was done partly for those matters and partly for this action then an appropriate allowance could be made by the taxing officer in determining what work was reasonably and necessarily undertaken in respect of this action prior to the commencement of it.

20 The defendant's objection to the remainder of the items is as follows:

"Having regard to the [proceedings in the Directorate] and s 93D proceedings, it was incumbent on the plaintiff to prove that these reports were obtained for use in the common law proceedings. It does not matter that the plaintiff was able to use some (though not all) of these reports in the latter common law proceedings. It is submitted that if the cost of these reports could have been the subject of bills of cost in the s 93D and Form 22 proceedings, then they cannot be the subject of the present bill of costs."

21 Until the Legal Practitioners (Disbursements) Determination 1997 ("the 1997 Determination") determinations of the Legal Costs Committee did not deal with disbursements. Disbursements were covered by O 66 r 19 which enabled a taxing officer to allow "the reasonable expenses as fixed by the taxing officer of the typing, printing and binding of appeal books and other necessary payments and expenses incurred in the conduct of the litigation." In Klahn v Talbot, unreported; FCt SCt of WA; Library No 950628; 20 November 1995 the Full Court held that a practitioner's remuneration encompassed the legal costs payable to a legal practitioner and reimbursement to the practitioner of expenses properly incurred by that practitioner on behalf of the client. The Legal Practitioners Act 1893 was amended by the Acts Amendment (Legal Costs) Act 1997 to include within the meaning of the word "remuneration" in s 58W:

"The reimbursement of expenses properly incurred in the course of, or in connection with, business carried out by a practitioner for a client, whether incurred -

(a) by the practitioner on behalf of the client; or

22 The 1997 Determination amended the 1996 Determination by adding disbursements in the following terms:

"In addition to the fees and charges allowed under this Determination -

(a) as between practitioner and client, a practitioner may charge and be allowed disbursements necessarily or reasonably incurred; and

(b) as between party and party, a party may be allowed disbursements necessarily or reasonably incurred."

23 All subsequent determinations have included a corresponding provision. They have also continued to include the introductory words of the 1996 Determination that the Determination was exclusive of disbursements other than counsel fees. It would appear from this history that it has been an oversight to exclude from the introductory words of each determination the fact that it is exclusive of disbursements other than counsel fees and that it is the intention of the Legal Costs Committee that the determinations do apply to disbursements. The items in the determination continue to relate "to the mechanics of preparing a case for trial and presenting the evidence at trial". (Corwest Management Pty Ltd v Deputy Commissioner of Taxation & Anor, unreported; SCt of WA; Library No 6696; 5 May 1987.) Order 66 r 19 applies to disbursements prior to the 1997 Determination.

24 In determining this objection Deputy Registrar Harman held that "In my opinion, as long as in part at least each report may have been obtained in anticipation of this action, that is sufficient ground for recovery of its cost". In my view the test formulated by Deputy Registrar Harman is incorrect. The test is whether the cost of the report was necessarily or reasonably incurred as part of preparing the case for trial and presenting the evidence at trial. If the cost was incurred for the purposes of an application under the former s 93D or an application in the Directorate then the cost was not incurred in this action. If the report covers more than was required for either of those applications and includes information for the purposes of the action and additional expense was reasonably incurred as a result then a partial allowance could be made.

25 In arriving at his decision Deputy Registrar Harman concluded that:

"At taxation I was satisfied that the plaintiff had discharged the onus of establishing that the disbursements were incurred at least in part for the purposes of the action which at the relevant time was at least in contemplation. In seeking the opinion, the plaintiff was motivated to obtain opinion to prospectively assist in the proof of her case."

26 For the reasons I have expressed it is my view that the Deputy Registrar erred in principle in allowing the full amount of the cost of these reports. Having regard to his findings of fact it may have been appropriate to allow part of the cost of all or some of the reports if the reports contain more information than was required for the earlier applications and additional expense has been incurred in ensuring that the reports contain that information for the purposes of this action. These items are remitted back to him for determination in accordance with these reasons.