Rules of the Supreme Court, O66, r53(1) and O66, r55(1)(2).

No error in principle by Taxing Officer which justifies interference.

Brandon Valley Pty Ltd v Brinklow, unreported; SCt of WA; (Action No 1906 of 1983) 24 July 1987

Brooks v Sunlife Properties Pty Ltd & Anor, unreported; SCt of WA; Library No 970199; 30 April 1997

Cameron v Bennett, unreported; DCt of WA; Library No 2678; 19 January 1990

Clay & Anor v Karlson & Anor, unreported; SCt of WA; Library No 970424; 21 August 1997

Cox v McDonald, unreported; FCt SCt of WA; Library No 9103; 14 October 1991

Ellison v Parry, unreported; DCt of WA; Library No 3517; 16 October 1992

Foreman v E & L Metcalfe Pty Ltd, unreported; DCt of WA; Library No 3935; 14 February 1994

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

Mossensons (A Firm) v Coastline Associates, unreported; FCt SCt of WA; Library No 970661; 2 December 1997

Robinson v Corse, unreported; SCt of WA; Library No 980429; 3 August 1998

W J Green v Cooper & Oxley Constructions Co Pty Ltd (1993) 10 WAR 227

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

Keogh v Keogh [1905] VicLawRp 52; (1905) 26 ALT 202

Sellman v Boorn (1841) 8 M&W 522

1 GROVES DCJ: This action was tried before his Honour Judge H H Jackson on 7-10 September 1998. On 26 March 1999 judgment after trial was entered against the defendants in favour of the plaintiff in the sum of $103,600. As to costs it was ordered that:

"2. The defendants pay the plaintiff's costs up until 9 December 1997 including any reserved costs;

3. The plaintiff pay the defendants' costs from 10 December 1997 including any reserved costs."

2 In the defendants' bill of costs for taxation an amount of $13,500 was claimed for the item "Getting up case for Trial (13)". The costs were taxed on 9 August 1999. For this item the Deputy Registrar allowed $12,000.

3 Pursuant to O66, r53(1) of the Rules of the Supreme Court ("the Rules") the plaintiff objected to the amount allowed by the Deputy Registrar for this item on the following stated grounds:

"Error in principle may be inferred from an allowance which is so high or so low that the figure itself allows the Court to draw an inference that an error in principle has occurred: (Grigoletto v Myer Properties WA Limited, unreported; District Court Perth; Heenan CJDC; 31 March 1993).

The plaintiff says that the allowance made under item 3 suggests an error in principle has occurred. The amount allowed is 44.44 per cent of the maximum getting up case for trial at the rate of $270 per hour for 100 hours under the scale which includes work reasonably and necessarily undertaken prior to commencement of proceedings.

The liability in relation to both accidents was admitted and under item 3 the defendants can claim an allowance for getting up between 10 December 1997 and 9 September 1998."

4 The Deputy Registrar's reasons for decision on review were published on 16 September 1999. So far as is relevant he stated:

"It is my understanding that the plaintiff simply objects to the quantum determination.

The Rules distinguish items and the value of those items. An item refers to discrete services provided to a client. Rule 53 founds jurisdiction to review determinations as to items but not as to quantum alone. Unless there was a contest as to an item or its constituent parts the result of review simply as to quantum by the same officer on the same facts would simply confirm the original result.

As to any suggestion implicit in ground (b) that it is appropriate to embark upon an analysis of services provided and the time devoted to the delivery of those services I refer to my determination in Bray v Ryan. It remains my opinion that the scale simply provides that the maximum available to the defendant was $20,250. In arriving at a determination in relation to quantum I reflected upon the amount of time which would be reasonable to spend in getting up the action for trial in light of the services I was told were provided after 9 December 1997."

5 The certificate of taxation (the allocatur) was signed by the Deputy Registrar on 5 November 1999.

6 By summons filed on 17 November 1999 the plaintiff seeks a review of the Deputy Registrar's allowance for the item getting up case for trial pursuant to O66, r55(1) of the Rules which provides:

"If a party is dissatisfied with the certificate of the Taxing Officer as to any item or part of an item objected to under Rule 53 of this order he may within 14 days from the date of the certificate...apply to a Judge in Chambers for an order to review the taxation as to that item or part of an item."

7 The first matter for consideration is whether or not the Deputy Registrar erred in principle by finding that he did not have jurisdiction to review his decision on quantum before signing the allocatur, and limiting his jurisdiction to review of the allowance or disallowance of items or their component parts, but not otherwise.

8 In Grigoletto v Myer Properties (WA) Ltd, unreported; DCt of WA; Heenan CJDC, Library No 3667; 31 March 1993, addressed this issue. In particular reference was made to Cameron v Bennett, unreported; DCt of WA; Barlow DCJ; Library No 2678; 19 January 1990 and Brandon Valley Pty Ltd v Brinklow, unreported; SCt of WA; Registrar Watt; (Action No 1906 of 1983) 24 July 1987. Both of those decisions would support the Deputy Registrar's finding that he was restricted to reviewing the allowance or disallowance of an item or part of an item and not empowered to review simply quantum of an item. In Grigoletto Heenan CJDC concluded that although the logic of the interpretation adopted in those cases was clear it was his opinion that their conclusion was wrong. His Honour had no hesitation in concluding that a taxing officer's decision as to quantum was still open to review if it had resulted from an error in principle. Subsequently in Foreman v E & L Metcalfe Pty Ltd, unreported; DCt of WA; Barlow DCJ; Library No 3935; 14 February 1994 his Honour after considering Grigoletto and the authorities referred to therein concluded that his earlier decision in Cameron v Bennett could not be supported. He accepted (p17):

"...that a taxing officer's decision on quantum is subject to review, if it can be demonstrated the taxing officer has made an error or principle in determining how much should be allowed."

9 Having regard to the authorities the Deputy Registrar was clearly in error in finding that his jurisdiction to review did not extend to quantum alone.

10 The second matter for consideration is whether the Deputy Registrar made an error in principle by making a manifestly excessive allowance for getting up for trial.

11 The plaintiff contends that the allowance awarded by the Deputy Registrar was manifestly excessive when regard is had to the following:

1. The costs awarded in relation to getting up related only to the 9 month (approximately) period from 10 December 1997 until 9 September 1998.

2. The subject matter of the action related to injuries suffered by the plaintiff arising from a motor vehicle accident for which liability was admitted.

3. The action was uncomplicated and at the far lower end of the scale of complexity of cases contemplated by the Legal Practitioners (Supreme Court) (Contentious Business) Determination 1996. In contrast, the allowance represents 59.26 per cent of the maximum allowance where liability is admitted.

4. Allowances on taxation of costs for getting up in previous motor vehicle accident claims. In similar motor vehicle claims where liability has been admitted, the plaintiff can expect to receive between $5000 to $8000 as an award for getting up. Furthermore the award for the defendant should be substantially less than that for the plaintiff in recognition of the fact that the plaintiff bears the burden of proof.

12 The plaintiff argues that a substantial part of the getting up for trial should have been undertaken prior to the entry of the action for trial. The action had been entered for trial on 15 September 1997 which date preceded the date (10 December 1997) from which the defendant was entitled to costs. On that basis it might have been said that the whole of the costs for getting up for trial should have been incurred prior to 15 September 1997. The plaintiff does not however contend that and acknowledges that undoubtedly after the entry for trial and in the course of the preparation for trial that the defendant would have incurred some costs. The plaintiff's argument is however that the quantum of costs allowed is however manifestly excessive.

13 It is noted that a new system of positive case flow management was introduced by the District Court of Western Australia from 30 March 1996 in respect of all actions commenced after that date. This action was commenced on 30 January 1997. The procedures as to entry for trial were changed. A certificate of readiness was not necessary, however the Rules do require that all parties be ready for trial by the date of the pre-trial conference (O1, r3). In this case the first appointment for pre-trial conference was 21 October 1997. Again that date preceded the date from which the defendant is entitled to costs. On the question of when should getting up for trial be complete the plaintiff relied on various obiter from Ellison v Parry, unreported; DCt of WA; L A Jackson DCJ; Library No 3517; 16 October 1992; Cox v McDonald, unreported; FCt SCt of WA; Library No 9103; 14 October 1991; W J Green v Cooper & Oxley Constructions Co Pty Ltd (1993) 10 WAR 227. Relevantly in Ellison v Parry L A Jackson DCJ at p7 stated:

"In my view, it follows, that to say a party is 'ready' for trial is to say no more than say that the case is where it ought to be at that time in terms of preparation for trial and that there is no impediment to the listing for trial in the ordinary way."

14 Whilst those cases preceded the new system of positive case flow management introduced by this Court, the statement of L A Jackson DCJ, albeit somewhat rhetorical might be said to still be a reasonable view so far as being ready for trial is concerned.

15 More recently a number of cases have touched upon the evaluation of the general reasonableness of the costs which a taxing officer may have allowed. The relevant statements which emerge from those cases I set out hereunder.

16 Brooks v Sunlife Properties Pty Ltd & Anor, unreported; SCt of WA; Anderson J; Library No 970199; 30 April 1997:

"The power to review a taxing officer's decision can be exercised whenever the officer has acted upon a wrong principle or has failed to exercise his discretion or has wrongly exercised it: Schweppes Ltd v Archer (1934) 34 SR (NSW) 178; Hannan v Hannan (1965) NSWR 739; Federal Commissioner of Land Tax v Jowat [1930] HCA 51; (1930) 45 CLR 115 at 121. An error in principle may be revealed where the allowance is so low or so high as to show that the taxing officer must have made a mistake: Australian Coal and Shale Employees Federation v Commonwealth [1953] HCA 25; (1953) 94 CLR 621. An error in principle may occur both in determining whether an item should be allowed and in determining how much should be allowed: Schweppes Limited v Archer (supra) per Jordan CJ at 183.

I am not persuaded that the quantum allowed in respect to any of the items to which objections relate reveal that the taxing officer made an error in principle. All allowances are within the limits which were prescribed by the relevant scale and the most that can be said against them is that they are on the generous side if not perhaps (in the case of one or two of the items) on the very generous side. In my opinion that is not sufficient of itself to demonstrate error in principle."

17 Clay & Anor v Karlson & Anor, unreported; SCt of WA; Heenan J; Library No 970424; 21 August 1997:

"Generally speaking, the decision of a taxing officer is final. It will prevail on review by a judge unless as O66, r55(2) provides the judge is of opinion that the officer has made an error in principle. A very wide discretion is left to a taxing officer. Further as a judge is not nearly as competent to say what is the proper amount to be allowed, only in a very exceptional case will a judge review a taxing officer's decision as to quantum. However in Schweppes Limited v Archer (1934) 34 SR(NSW) 181 at 183 Jordan CJ said that 'An error in principle may occur both in determining whether an item should be allowed and in determining how much should be allowed' and in Theocharides v Joannou (1955) 1 All ER 615 at 620 Harman J contemplated that 'a decision as to quantum alone might be so outrageous as to speak for itself and show that the taxing officer did not exercise his discretion in a proper manner'. The attitude expressed in those cases is consistent with the manner in which the appellate jurisdiction traditionally is exercised in respect of decisions involving discretionary judgment (eg see House v The Queen [1936] HCA 40; (1936) 55 CLR 499 at 501, 505). Its application to the review of taxation of costs enables the Judge to perform the very desirable function of correcting a decision which is manifestly wrong."

18 Mossensons (A Firm) v Coastline Associates, unreported; FCt SCt of WA; Library No 970661; 2 December 1997 per Ipp J in considering O66, r55 stated:

"The point is that there must be an 'error in principle' before a judge will carry out a review under O66, r55. Although it is possible for an error in principle to be made in regard to the quantum allowed in respect of a particular item, that is generally regarded as unusual. In my opinion an error in principle on this basis could only be established if it is shown that no taxing officer, acting reasonably, could ever have taxed the particular item in the amount in question. This is an adaption of 'unreasonableness' in the sense described in Associated Providential Picture Houses Limited v Wenesbury Corporation [1947] EWCA Civ 1; (1948) 1 KB 223 at 230 (per Lord Green MR). The prospects of an applicant succeeding on such a basis when the amounts involved are to be measured in hundreds of dollars are remote, if not fanciful."

19 His Honour went on to say that in general terms if a very small amount were involved that of itself would militate strongly against any intervention on the part of the Court.

20 Finally, in Robinson v Corse, unreported; SCt of WA; Library No 980429; 3 August 1998 Anderson J commented:

"Although there is no tariff and every case is different I see no reason why a taxing officer cannot have regard to costs taxed and allowed in similar cases in an evaluation of the general reasonableness and propriety of allowance made in the case under review. Similar cases provide the important framework within which discretionary judgments have to be exercised."

21 It is against that background that I now turn to consider the issue. The parties are agreed that the maximum amount allowable for getting up for trial in this case was $20,250. The amount allowed was $12,000 which represents 59.26 per cent of the maximum. That is to say in effect that the greater part of getting up the case for trial was undertaken post entry for trial. That in my view would not be unusual insofar as the reality in running a case to trial is concerned. At the pre-trial conference stage the case for a party will have been sufficiently prepared and the brief mastered to enable counsel to enter into negotiations with a view to settling a claim if that be possible. In the course of the negotiations issues will often arise which, if a settlement is not achieved, will require a party to undertake further investigations as part of getting the case up so as to be finally ready for trial. The fact that it does not settle at that stage may of itself be indicative that such further preparation is necessitated. Depending upon the complexity of the case, the number of witnesses and expert witnesses who may be called the ongoing or additional amount of work to be undertaken in the course of getting the case up for trial will undoubtedly vary. In this case the plaintiff contends that allowances on taxation of costs for getting up in motor vehicle accident claims where liability has been admitted a successful plaintiff might expect to receive between $5000 to $8000. I acknowledge the difference here, we are not talking about hundreds of dollars (as was Ipp J in Mossensons v Coastline Associates (supra)) but rather several thousand dollars.

22 Nevertheless it has to be said that the Deputy Registrar, being the officer of this Court who undertakes taxations of bills of costs is in the best position to make an evaluation as to the appropriate quantum for each item claimed in a party's bill of costs. He may have regard to costs taxed and allowed in similar cases. As against the plaintiff's contention the amount allowed may well be "on the very generous side". However can it be said that "...no taxing officer, acting reasonably, could ever have taxed the particular item in the amount in question"?

23 On the appointment for taxation the Deputy Registrar has the benefit of hearing submissions both in support of and against the amount claimed. Not being satisfied with the allowance, the plaintiff requested a review of taxation. Although the Deputy Registrar wrongly, in my view, concluded that he did not have jurisdiction to review quantum, he stated:

"In arriving at a determination in relation to quantum I reflected upon the amount of time which it would be reasonable to spend in getting up the action for trial in light of the services I was told were provided after 9 December 1997."

24 Even if it is accepted that the allowance is on the very generous side, that is not to say that the taxing officer was not acting reasonably. In Ellison v Parry (supra) the taxing officer acceded to the argument that 45 per cent of the work of getting up a case for trial had been done prior to the signing of the certificate of readiness and 55 per cent thereafter. There it was said by the learned Judge that "It might be thought an unusually high proportion of work was done after the signing of the certificate of readiness and it might tend to imply that the case was not ready for trial..." at the time when the certificate of readiness was signed. The same might be said in this instance given that the amount allowed is in the order of 60 per cent of the work of getting up for trial having been done after the pre-trial conference. However, that is not sufficient cause to say that the taxing officer was acting unreasonably.

25 In the end result I am not persuaded that the taxing officer was acting unreasonably. I adopt the test of Ipp J in Mossensons v Coastline Associates (supra).

26 Accordingly in my view no error of principle is revealed which justifies interference.