BETWEEN : MICHELLE RAELENE PENFOLD by her next friend RAYMOND DOUGLAS PENFOLD

BETWEEN : MICHELLE RAELENE PENFOLD by her next friend RAYMOND DOUGLAS PENFOLD

Costs - Plaintiff by her next friend seeks a Special Order as to costs - Separate representation for next friend not essential - Whether the Court should order that the scale limit for "getting up case" be increased - "Good and sufficient" reason for special costs order found - Turns on own facts.

Supreme Court Contentious Business Determination of 1996

Featherstone (by his next friend Angela Featherstone) v Westar Engineering Pty Ltd & Ors (1999) WADC 139

Lewandowski & Ors v Lovell, unreported; FCt SCt of WA; Library No 9603110; 14 June 1996

Schmidt v Gilmour & Anor (1998) WAR 219

Steeden v Walden [1910] 2 Ch 393

1 YEATS DCJ: The plaintiff by her next friend seeks a Special Order as to costs pursuant to O66 r12(1):

"Where the Court is of opinion that a Special Order as to costs should be made by reason of the unusual complexity or importance of the case or for any other good or sufficient reason the Court may order that any particular allowances in any relevant scale be raised or a limit removed and in giving any such direction the Court may fix a time within which the Taxing Officer may allow such costs."

2 The Special Order is sought under Item 13 "Getting up case" in the Supreme Court Contentious Business Determination of 1996 in Action No 6963. The application is to increase the scale limit from $27,000 to $35,560 for Item 13.

3 The grounds are set out in the affidavit of the plaintiff's solicitor. The plaintiff was injured as a passenger in a motor vehicle accident in 1991 (Action No 6963 of 1992) and was injured again in a motor vehicle accident in 1992 (Action No 3704 of 1995). In the first accident the plaintiff suffered severe facial injuries, concussion with post-traumatic amnesia, possible basal skull fracture, cerebral oedema, areas of cerebral contusion in the frontal lobes of the brain and of cervical whiplash injury. The driver of the vehicle in which the plaintiff was a passenger was convicted of drink driving; this gave rise to liability issues and liability was not admitted until April 1999.

4 In the meantime the plaintiff was injured again in the second accident in 1992 again as a passenger in a motor vehicle. On this occasion she felt shocked and frightened and experienced pain in her ribs.

5 The plaintiff was a single mother caring for her young son and after the second accident began to be affected by psychiatric symptoms which were found by her psychiatrist to be related to her accident caused frontal lobe dysfunction. The papers evidence a considerable number of medical reports providing often conflicting opinions on the aetiology of her symptoms and her prognosis for improvement.

6 Although the writ issued in 1991 in respect of the first accident there is evidence that there was considerable delay in progressing her claims until her present solicitor took over in 1998. The issues which needed addressing at that stage included the defendant's denial of liability for the first accident, allegations of contributory negligence and whether the plaintiff was capable of instructing her solicitor and managing her claim. There were numerous complex legal issues requiring attention as well as a substantial amount of evidence to be gathered. The plaintiff's solicitors spent extra time preparing interrogatories and seeking police documents and proof of the defendant's drink driving conviction. Extra time was also taken up arranging for an application to the Guardianship and Administration Board.

7 Annexed to the plaintiff's solicitor's affidavit is a draft bill of costs together with detailed accounts justifying each item, some from earlier solicitors of the plaintiff and others the costs incurred by the plaintiff's solicitor. Also annexed to the affidavit is a copy of the client/lawyer agreement entered into between the plaintiff, the next friend and the plaintiff's solicitor in 1998. There is also a copy of time sheets showing costs incurred on a solicitor/client basis which are unclaimable on party/party costs.

8 I am informed that the next friend has been advised to seek separate representation for this hearing so far as it concerns the special costs order. The next friend has declined to do so. I do not consider that that necessarily places any impediment in the way of my proceeding with the application for a special costs order. That is so because of the special position of the next friend in relation to costs. It is well established that a next friend is liable to the solicitor acting for the person under a disability for the costs incurred in the proceedings (Halligan v Lawson [1993] 9 SR (WA) 166 per Kennedy DCJ at 169). But the next friend will be indemnified by the person under a disability for costs properly incurred on his or her behalf "in all cases where the Court is satisfied that the litigation has been prompted by motives of benevolence towards the infant and has been conducted in his interest and with diligence and propriety." (Steeden v Walden [1910] 2 Ch 393 per Eve J at 399.)

9 Order 66 r24(3) and (4) deal with this circumstance:

"(3) Except as provided by paragraph (4) the costs payable to his solicitor by or on behalf of a plaintiff who is a person under disability or for any money recovered by or on behalf of a person under disability in any proceedings to which this Rule applies being the costs of or incidental to those proceedings or consequent thereon, must be taxed; and no costs shall be charged or retained by the solicitor or any plaintiff in respect of those proceedings except the amount of such taxed costs.

(4) This Rule does not apply where the plaintiff's solicitor does not claim additional costs against his client over and above the party and party costs, as ascertained by taxation or the agreement of the defendant, payable to the client in the proceedings."

10 It can be seen that the Rules contemplate that a next friend will for the benefit of the person under disability enter into a solicitor/client agreement as to costs. That has occurred in this case. The solicitor/client agreement is in the form approved by the Law Society. I am satisfied the next friend's entering into the solicitor/client agreement was beneficial to the plaintiff and enabled her case to be prepared for trial and for the settlement to be reached. The Rules require that the additional costs over and above party/party costs be taxed to ensure they have been reasonably incurred. Although the costs are the costs of the next friend and not those of the plaintiff I believe the interests of the next friend are protected both by the requirement that the costs be taxed and by the indemnity.

11 In Featherstone (by his next friend Angela Featherstone) v Westar Engineering Pty Ltd & Ors [1999] WADC 139 at para 18, Blaxell DCJ said:

"Furthermore, the fact that the client is a person under a disability will not ordinarily require that he or she (or the next friend) be separately represented. This is so notwithstanding the potential conflict of interest between the solicitor and the client as to the quantum of the bill. It is undoubtedly for this very reason that O66, r24 requires that in such circumstances the bill of costs must be taxed, and it is by this means that the interests of the party under a disability will usually be protected".

12 For these reasons this matter can proceed in the absence of separate representation for the next friend.

Section 27A(2) Motor Vehicle (Third Party Insurance Act) 1943

13 Section 27A(2) of the Motor Vehicle (Third Party Insurance Act) 1943 provides:

"An agreement is not to be made for a legal practitioner to receive, for appearing for or acting on behalf of a person in an action to which this section applies, any greater reward than is provided for by a determination in force under section 58W of the Legal Practitioners Act 1893."

14 The defendant submits that the effect of s27A(2) is to limit the solicitor/client costs to the maximum costs recoverable under the scale provided in the relevant determination. The defendant further submits that although the Act does not prevent a court from making a special order for party/party costs under O66 r12(1) nonetheless, as costs are compensatory in nature, party/party costs may not be awarded which exceed a party's liability for solicitor/client costs so that the effect of s27A(2) is to limit party/party and solicitor/client costs to the maximum allowance provided under the scale in the determination.

15 The defendant's submission depends on the meaning to be given to the words "any greater than is provided for by a determination in force". The plaintiff submits that in its terms the determination contemplates and provides that where extra work is done and costs reasonably incurred in excess of the maximum that special costs orders under O66 r12 may be pursued. (See particularly Part 4 para 7 of the determination.) The plaintiff submits that when s27A(2) refers to "the determination" that should be taken to include special orders for costs as contemplated or provided for in the determination.

16 I accept the plaintiff's submissions about that. The express preservation of the court's powers under O66 r12 within the determination indicate to me that the determination "provides for" costs in excess of the maximum amount set out in the determination. Therefore s27A(3) does not have the effect of limiting party/party and solicitor/client costs to the maximum allowance under the determination. The plaintiff is entitled to seek a special costs order.

17 The amount of work done in a case may constitute a good and sufficient reason for a special costs order (Schmidt v Gilmour & Anor (1988) WAR 219 per Burt CJ at 220).

"Whether the amount of such work does in any particular case constitute a good and sufficient reason to depart from the scale is of course another matter and the discretion which the rule confers upon the court - 'the court may order' - is not one which must be exercised upon a finding of inadequacy of any degree. So to hold would be inconsistent with the policy of the scale. The inadequacy must be such as to constitute a good and sufficient reason and whether it does is a question for judgment in every case."

18 In Lewandowski & Ors v Lovell, unreported; FCt SCt of WA; Library No 9603110; 14 June 1996 Murray J discussed the approach the court must take at p11:

"... it is clear that apart from the unusual complexity or importance of the case, the simple consideration of the amount of work reasonably required in carrying the litigation to its conclusion may, of itself, constitute a good and sufficient reason to depart from the scale. The way in which that issue is to be addressed by the court before the matter of taxation is presented to the Taxing Officer has been considered and it has been held that the court must make at least a preliminary or provisional judgment as to the amount of work done, whether it has been reasonably undertaken and whether it has been reasonably performed, bearing in mind in considering the making of an order the basic proposition that the successful party to litigation is ordinarily entitled to an order for costs in such a form as to enable the recovery of those costs which have been reasonably and properly incurred in conducting the litigation."

19 The defendant opposes the Special Order in this case. He submits that the maximum amounts in the scale are normative and the court should not readily depart from that scale. The defendant submits that this case was not particularly complex and the only distinguishing feature was the extraordinarily long history of the matter. Some of that delay the defendant contends was a result of the plaintiff's original solicitors failing to properly advance the claim. The defendant submits that he should not be responsible for those increased costs. The defendant also submitted that the numerous attendances on an architect for home modifications, spa pool and home alarm were not provable; the defendant also points out that substantial time was spent on the plaintiff's bowel problems which were not accident caused.

20 Whether any particular item was reasonably incurred is a matter of detail that need not concern me. That will be a matter for taxation. I should note however that there has been a substantive reduction in the bill of costs submitted by the original solicitors reducing that bill from $6200 to $4000. That goes some way to meeting the defendant's concerns about the earlier solicitor's delays. I also accept that a solicitor must pursue all aspects of a claim even though some issues fall away before trial.

21 I have perused the plaintiff's solicitor's affidavit and annexures thereto. This is not a case of unusual complexity or importance. But the amount of work done in preparing the case for trial has been substantial. The level of fees charged in the bill of costs was, in my opinion, reasonable and in many items at a lower rate than might be charged by a senior practitioner in the position of the plaintiff's solicitor. It is evident that substantial costs were expended on the issues concerning liability before liability was admitted in 1999. The need for the appointment of a next friend and issues involving the Guardianship and Administration Board added to the costs. Taking account of the nature of the plaintiff's injuries, the need to pursue liability issues, and the appointment of a next friend the amount of work appears to me to have been reasonably undertaken and to have been necessary in properly preparing this case for trial.

22 I agree with defence submissions that the mere fact that the maximum amount in the determination is inadequate does not automatically lead to a special order. However in the circumstances of this case I consider the inadequacy to be such as to constitute a good and sufficient reason for a special order.

23 For these reasons I make a Special Order as to the plaintiff's costs of getting the case up for trial in Action No 6963 of 1992. The scale maximum is increased from $27,000 to $35,560.