RACHEL DAWN MIDDLETON and PATRICK JOHN CASSIDY as Executors and Trustees of the Will of DAVID MIDDLETON (DEC)

Supreme Court Rules - Application for special orders as to costs - Plea for orders due to unusual complexity or for other sufficient reason - Application refused - Turns on own facts

Legal Practitioners Act 1893

Ann Frank Nominees Pty Ltd v Connell (1991) 6 WAR 271

Lewandowski & Ors v Lovell, unreported; FCt SCt of WA; Library No 960310; 14 June 1996

McLean v Kerville, unreported; FCt SCt of WA; Library No 6455; 1 October 1986

Way v Swan Television & Radio Broadcasters (1991) 5 WAR 323

1 HASLUCK J: This is an application for special orders and directions on taxation of costs as between the legal practitioner Gregory Norman Hocking, and his former clients the plaintiffs in action CIV 1937 of 1997, namely, John David Middleton, Joanne Harrison and Karen Jean Whittred. The issue raised by the application lies between Mr Hocking and the plaintiff, Joanne Harrison, in particular.

2 The three plaintiffs were represented by the legal practitioner in a claim brought pursuant to s 7 of the Inheritance Act concerning the will of their late father, David Middleton, who died at Parkerville on 3 January 1997. The number given to the claim advanced pursuant to the Inheritance Act was the number mentioned earlier, CIV 1937 of 1997, and the present application forms part of those proceedings.

3 The plaintiffs were also plaintiffs with others in Supreme Court action number CIV 1825 of 1997. This was a related action concerning a mutual wills agreement allegedly entered into by the deceased prior to his death. I will turn to the details of these respective claims shortly.

4 The application for special orders relies upon O 66 r 12 of the Supreme Court Rules. That rule in subpar (1) reads as follows:

"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 limit within which the taxing officer may allow such costs."

5 I note in passing that another rule has also been touched upon in the course of discussion. Order 66 r 51 provides that if a party needs to obtain some special order or certificate for costs, then the party interested should apply within 30 days. It is not clear from what date or event the period of 30 days is to commence to run. I will return to that aspect of the matter later.

6 It was common ground before me that the relevant scale in respect of which the special orders had to be obtained was the Legal Practitioners Supreme Court (Contentious Business) Determination 1996 which was gazetted on 20 December 1996. Item 21 of that scale provides that the maximum allowable in respect of an originating motion or originating summons of the kind presented in this matter under the Inheritance Act is the sum of $6,900.

7 The scale indicates that the amount in question is referable to proceedings involving two days' preparation and one day hearing. Other scale items have been mentioned including item 24 which makes an allowance of $270 for pre-trial mediation or other conferences.

8 In the context of the present application, it is said that having regard to the criteria in O 66 r 12 a case exists for a special dispensation or order removing the limits determined by the scale. Accordingly, it becomes necessary for me to look closely at the history of the relevant proceedings with a view to determining whether a special order should be made by reason of the unusual complexity or importance of the case or for any other good or sufficient reason.

9 The evidentiary materials before me include the Court file in respect of Supreme Court action CIV 1937 of 1997. On that file one finds the affidavits on both sides lodged in regard to the application for relief under the Inheritance Act. I also have before me the Court file in Supreme Court action number CIV 1825 of 1997 which relates to the mutual wills agreement I mentioned a moment ago. I have taken account of the various affidavits on that file.

10 Additionally, I have before me the affidavit of Gregory Norman Hocking, the present applicant for the special orders, his affidavit being sworn 28 September 2000. On the other side, I have the affidavit of Patricia May Edward sworn 26 October 2000. I have access also to my reasons for judgment dated 28 July 2000 in the matter of Harrison v Hocking [2000] WASC 188. That was an application brought by the plaintiff, Joanne Harrison, to set aside a costs agreement entered into between the parties. The application for relief on that occasion was based on various provisions of the Legal Practitioners Act 1893.

11 In reviewing these materials with a view to determining whether the criteria set out in O 66 r 12 are applicable to the circumstances of the present case, I must take account of some of the previously decided cases bearing upon an issue of this kind.

12 In that respect a useful starting point is Seaman Civil Procedure Western Australia at par 66.12.1. The learned author says:

"In relation to items in the old scales there is no reason why the amount of work involved in the preparation of a case cannot of itself provide good and sufficient reason to increase the allowance provided under the old scales. Schmidt v Gilmour [1988] WAR 219 at 220."

"One view is that once a party shows by affidavit or some other acceptable means that a large volume of work has been done, it should be presumed by the Judge hearing the application for a special order that it was reasonably and competently done and the only question for him or her is whether the scale item is likely to adequately compensate for the work and if it does not, he or she should make the order. It is for the taxing officer then to consider the quality of the work done, its reasonableness and its necessity. Way v Swan Television and Radio Broadcasters Ltd (1991) 5 WAR 323 at 325."

"A contrary and, it is suggested, the better view is that those propositions are too narrow and that it is a matter of judgment whether the amount or work done appears to have been reasonably done so as to constitute good and sufficient reason for the making of an order. See Esther Investments Pty Ltd v Markalinga Pty Ltd (1992) 8 WAR 400 at 404."

13 In Esther Investments Pty Ltd v Markalinga Pty Ltd (1992) 8 WAR 400, the learned Chief Justice says this at 404:

"It is a matter for the trial judge to determine as a matter of judgment whether, on the face of it, the amount of work done appears to have been reasonably done so as to constitute good and sufficient reason for making the order.

That is a judgment which is essentially preliminary and provisional in nature for the purpose of the exercise of the discretion granted by the rule. A judge will no doubt draw on his own experience, the impression gained during the course of the litigation, and his appreciation of the issues which have been involved, in making that judgment.

There is, of course, a basic principle that the successful party to litigation in the ordinary course of events will be entitled to an order for costs. The purpose of such an order for costs is to enable the successful party to recover those costs which have been reasonably and properly incurred in conducting the litigation."

14 I pause to mention also a case relied upon by counsel for the present applicant, namely Collins v Westralian Sands (1993) 9 WAR 56. In that case, Ipp J, having cited with approval the passage from the judgment of the Chief Justice in the Esther Investments case I have just mentioned, went on to say this at 67:

"Prior to making these remarks the learned Chief Justice had cited Schmidt v Gilmour will approval and again, in my view, nothing said by his Honour detracts from the proposition that it is always a matter of discretion for the trial judge to determine whether good and sufficient reason exists for making the order.

Without in any way wishing to suggest an exhaustive list, the trial judge, when exercising the discretion, will take into account considerations such as those referred to by Virtue J in Cruickshank v Producers Markets Co-operative Ltd, whether additional work was done, whether that work was necessarily or reasonably done, whether the fees proposed to be charged for such work are reasonable, whether an inadequacy exists, and the principle that an order for costs should enable the successful party to recover costs which have been reasonably and properly incurred."

15 I digress briefly to note that in both the cases reference is made to the concept of the successful party being entitled to its costs. That concept, of course, has no application to the circumstances of the present case, which is the situation of a legal practitioner endeavouring to recover his costs from a former client. Indeed, the presence of that concept in the reasoning of the Judges I have just mentioned raises a further issue as to whether indeed there is jurisdiction under O 66 r 12 to make an order of the kind presently being applied for. I will return to this issue later. However, as it was not a matter in controversy before me, I will assume, without deciding, that a jurisdiction to make orders of the kind proposed does in fact exist.

16 In support of the proposition that the Court has jurisdiction to make special orders as between solicitor and client I note in passing that counsel for the applicant relied upon Mikuljanac v Wigmore Tractors Pty Ltd (1997) 9 SR (WA) 137.

17 It was against the background of the decided cases, and the language of the rule itself, that some discussion took place with counsel as to the basis of the present application. It became apparent that counsel for the applicant was relying essentially upon two limbs of the criteria reflected in O 66 r 12, namely, the requirement concerning unusual complexity or, in the alternative, the requirement that an order could be made if there was any other good or sufficient reason.

18 Counsel suggested that these two limbs of the rule should be considered disjunctively. It would be sufficient if either of the prescribed requirements had been satisfied. It follows from that view of the matter that I need give no further consideration to the third criteria mentioned, that is to say, the importance of the case, as no reliance was placed upon that limb of the rule.

19 Counsel for the applicant also submitted that failure to make a special order extending the relevant limit would preclude a detailed assessment being made by the taxing officer as to the value of the work performed. In other words, counsel submitted that the effect of granting the special order was not to decide the amount of remuneration which could be obtained. The effect of such an order would simply be to refer the task of determining the fair amount of remuneration to the taxing officer.

20 This was said to be a further reason why the Court, in considering the criteria I have mentioned, should exercise its discretion in favour of the applicant. Special orders would allow the taxing officer to undertake a detailed examination of the relevant materials and to make a thorough assessment of the work performed.

21 It is against this background that I now turn to the history of the present matter and to an appraisal of the work performed by the plaintiffs' former solicitor, Mr Hocking.

22 The deceased, David Middleton, married on three occasions. The plaintiffs are the children of his first marriage. Later, on 16 December 1978, the deceased, David Middleton, married Gillian Langton Middleton. There were two children of that marriage. After Gillian's death, the deceased married Rachel Middleton, who became the first defendant in the action CIV 1937 of 1997.

23 It is apparent from the reasons for decision I handed down on 28 July 2000, and from the materials before me on that occasion, that in January 1997, shortly after the deceased's death, the three plaintiffs, including Joanne Harrison, attended on Mr Hocking at his office at Midland and obtained preliminary advice as to their rights under the Inheritance Act.

24 At about the same time, the two children of the Gillian Middleton marriage obtained advice from their solicitors, Dwyer Durack, about a mutual wills agreement allegedly entered into by the deceased with Gillian prior to his death. As a consequence of this latter consultation, the proceedings known as CIV 1825 of 1997 - which I will call the mutual wills action - were commenced.

25 The nature of the claim in the mutual wills action is reflected in the statement of claim. The children of the deceased from his two marriages are described. Reference is made to the marriage of the deceased Gillian Middleton. The statement of claim says further that pursuant to an agreement each of David Middleton and Gillian Middleton executed mutual wills dated 28 December 1984, leaving their respective estates to the survivor and, failing that, after the same specific bequests and a legacy in each will, left the residue of their estates to the plaintiffs equally, that is to say, to all the children of the deceased from his two marriages.

26 The statement of claim goes on to say that Gillian Langton Middleton died on 5 December 1991 without having revoked her said will. David Middleton, having survived her, succeeded to her joint assets and took the residue of her estate pursuant to the agreement and as provided in her said will.

27 The statement of claim then pleads that in breach of the mutual wills agreement, on 21 December 1996, David Middleton executed a will naming the defendants as executors. After giving legacies of $20,000 to each of his six grandchildren, and legacies of $25,000 to each of David John Ross and a stepdaughter, Susan Murray, he left the residue of his estate, subject to payment of funeral and testamentary expenses, just debts and all duties to his wife Rachel Dawn Middleton.

28 The statement of claim adds that David Middleton died on 3 January 1997 and the probate of his will was granted to the defendants, Rachel Middleton and Patrick Cassidy. The plea is then raised that as a consequence of the facts pleaded in the statement of claim and especially the alleged mutual wills agreement, David Middleton was constituted trustee of the joint assets of himself and Gillian Langton Middleton. The relief claimed was a declaration that the deceased's assets were held on trust. An injunction was also sought to restrain the defendants, and especially Rachel Middleton, from distributing those assets.

29 A short time after the mutual wills action was commenced, the plaintiffs in the present proceeding, CIV 1937 of 1997, on 27 August 1997, issued an originating summons seeking orders pursuant to s 6 of the Inheritance Act that the defendants, namely, Rachel Dawn Middleton and Patrick John Cassidy, make such provision as the Court thinks fit out of the estate of David Middleton for each of the plaintiffs.

30 Thus, the two actions were proceeding simultaneously. It is apparent from the materials before me that there was a degree of communication and cooperation between Dwyer Durack and Mr Hocking as the solicitors for the plaintiffs in the respective proceedings.

31 I have mentioned earlier that I have had an opportunity to look at the materials on the file concerning the Inheritance Act application. It appears from those materials, broadly described, that Mr Hocking was instrumental in taking instructions from the three plaintiffs and then proceeding to file and serve affidavits on their behalf in support of their claim for provision out of the estate.

32 Mr Hocking prepared and filed three comparatively short affidavits sworn in August 1997 describing in a summary form the circumstances of the three plaintiffs and the nature of their claim. Some months later, in December 1997, Mr Hocking having by then obviously taken more detailed instructions, longer affidavits were filed setting out the plaintiffs' circumstances more fully.

33 A further, responsive set of affidavits was filed in early 1998. When a question arose of deferring the trial a further affidavit was sworn by the plaintiff Joanne Harrison with an affidavit also being sworn by Mr Hocking himself.

34 It was against this background, of issue being joined between the parties in both sets of proceedings, that the possibility of a settlement began to emerge. It appears from the materials I have seen that such a prospect was in contemplation by mid-1998.

35 It was common ground at the hearing before me concerning the present application for special orders that in September 1998 Mr Hocking decided to merge his practice with another firm of solicitors, Friedman Lurie Singh. He rendered a bill of costs to the three plaintiffs at that time.

36 The reasons for judgment delivered on 28 July 2000 set out the basis upon which Mr Hocking rendered his bill. He assumed the validity of a costs agreement he had entered into with the plaintiffs, including the plaintiff Joanne Harrison. He calculated his costs by reference to the scales established by that agreement. Thus, in September 1998, the total amount said to be due and payable by the plaintiffs at that time was $18,989.33. This figure included the sum of $16,860.30, being an amount mentioned in an account previously rendered by Mr Hocking on 21 May 1998. The amount said to be due and payable by the plaintiff on the basis that the costs were to be shared equally between the three plaintiffs was the sum of $6,329.78.

37 The settlement canvassed by the parties was eventually consummated by a deed of family arrangement and compromise of actions which is exhibit C to the affidavit of Patricia May Edward sworn 26 October 2000. The deed is undated but related correspondence suggests that it was executed by the parties in or about December of 1998.

38 Neither of the two actions had been brought on for hearing at the time of settlement. Indeed, in March 1998, the inheritance action, CIV 1937 of 1997, having been in the callover list, was put to one side by Ipp J as the presiding Judge on the submission of the parties that the Inheritance Act application should not be dealt with until the outcome of the mutual wills action was known. As it turned out, neither of the matters proceeded to a hearing because of the settlement I have described.

39 A consequence of the settlement was that certain chattels belonging to the deceased were sold by auction. This meant that the applicant, Mr Hocking, took possession of funds that were due to his clients, the plaintiffs. Those funds were applied towards discharge of his costs, again on the assumption that the costs agreement upon which Mr Hocking relied was valid.

40 A balance of unpaid legal costs was left outstanding, with the result that Mr Hocking was obliged to take action to recover an amount said to be due by the plaintiff, Joanne Harrison. It was then, while she was being pressed for payment of legal costs, that an application was made on Joanne Harrison's behalf by counsel to set aside the costs agreement pursuant to provisions of the Legal Practitioners Act. I dealt with the application in the reasons for judgment I handed down on 28 July 2000 and ruled in her favour.

41 The consequence of the costs agreement being set aside was that it became necessary for Mr Hocking to prepare a fresh bill of costs. The relevant yardstick was the scale of costs allowed by the 1996 determination mentioned earlier.

42 I understand that such a bill of costs has not yet been prepared or rendered. Mr Hocking and his advisers considered that he should first determine whether the Court would be prepared to exercise its discretion under O 66 r 12 to make special orders raising the limits that would otherwise apply. Nonetheless, in anticipation that a fresh bill will be rendered in due course, Mr Hocking and his advisers have prepared some detailed schedules of the legal work performed. These schedules are exhibited to Mr Hocking's affidavit of 28 September 2000.

43 I will not review the schedules in detail, but if one looks at the situation in overview, it is useful to turn to exhibit 3. In that exhibit, one finds a draft of what is called a special orders bill of costs. The document sets out a comparison between the costs that might be recoverable if special orders are made of the kind contended for, and the position if no special orders are made.

44 As one looks at that document, one or two key features of the document become apparent. One notices that if, on Mr Hocking's summation, the special orders are made, a total of $22,598 will be claimed in respect of all the work performed, this being a figure applicable to work done for the three plaintiffs considered together. If no special orders are made, the total claimed will be in the order of $15,645.50. It is perhaps of interest to compare these figures to the amount of $18,989.33 which had previously been claimed in September 1998 at a time when the costs agreement was being used as the point of reference.

45 The consequence is that if the special orders are made, Mr Hocking will seek to recover from the plaintiff, Joanne Harrison, $7,532.66 as a one-third portion, while if the orders are not made the amount of his claim will be reduced to $5,215.16.

46 As one reviews exhibit 3, one notices immediately that the principal point of contention concerns item 21 of the scale, being the item I mentioned earlier. If no special orders are made, then it follows from my earlier description of that item that Mr Hocking would be confined to a claim of $6,900 in respect of the originating summons issued under the Inheritance Act. If a special order is made, then by reference to the description of work performed the claim will be in the order of $12,217.50.

47 It is against this background, having set out the history of the matter in summary form, that I return to O 66 r 12 and the criteria mentioned in that rule. When one looks at the matter in overview, it becomes apparent from what I have said that the work performed by Mr Hocking relates essentially to the period of January 1997 to September 1998.

48 I digress briefly to say that it is common ground that Mr Hocking continued to perform work after September 1998, as is evidenced by the making of the deed of compromise in December 1998, and related steps, but he was by then associated with his new firm of Friedman Lurie Singh. I understand that his new firm rendered its own account.

49 In essence, then, the period under notice is a period of something in excess of 18 months. It is important to note, as I have already stressed, that the present claim for a special order under O 66 r 12 is confined to the question of complexity and to the requirement concerning any other good or sufficient reason.

50 It is important to keep in mind, as counsel for the applicant submits, that the consequence of making the special order is not to allow to Mr Hocking the amounts claimed or set out in his supporting affidavit. The making of the special order would simply be an avenue whereby the matter is referred to the taxing officer who can undertake a detailed assessment of the amounts in issue.

51 Nonetheless, as I have already indicated, it follows from the decided cases that in exercising the discretion I must arrive at some provisional determination as to whether a case exists for raising the limits prescribed by the 1996 determination. In that respect, as counsel for the applicant suggested, I am obliged to proceed upon the basis that the two avenues allowed for by the order of "unusual complexity" or "good or sufficient reason" must be considered disjunctively.

52 When I turn to the question of complexity I am obliged to note that not only is the period the subject of the work something in excess of 18 months or so, but it appears from the evidentiary materials and the schedules forming part of Mr Hocking's affidavit that the estate is not large. The deceased's affairs were not especially complicated.

53 One notices that the affidavits prepared by Mr Hocking on behalf of his clients, although thorough, were not of great length, apart from the three affidavits prepared in December 1997. There is no indication on the materials before me that particular legal issues arose which required the practitioner to research the relevant law or to prepare evidence and affidavits in the light of an inquiry into the law.

54 One also has to take account of the fact that the matter never did proceed to a hearing. I use the word "matter" advisedly. It is significant that neither of the two sets of proceedings reached that point. It was not a situation in which counsel and the instructing solicitor were obliged to prepare legal arguments on the eve of trial or present evidence and submissions at trial.

55 I pause to say that this situation stands in contrast to the reasoning of the Full Court in the case of Schmidt v Gilmour [1988] WAR 219. One finds at 222 of the relevant report that what persuaded the learned Judge in that case that the limit should be lifted was a consideration of the extraordinary number of hours involved in preparing the respondent for trial and undertaking other activities in the course of getting up the case for trial.

56 Hence, when I take account the various matters I have mentioned, it seems to me that, viewed in the context of an application under the Inheritance Act, this matter cannot be characterised as one of unusual complexity. In arriving at that conclusion I place particular weight on the fact that the matter did not proceed to a hearing. In summary, then, I am not persuaded that the criterion of unusual complexity referred to in O 66 r 12 applies in the circumstances of this case or that there is a sufficient basis to justify a lifting of the limit by special order upon the basis proposed.

57 When I turn to the second ground, that the limit should be lifted for any other good or sufficient reason, similar considerations apply.

58 It is true, as the decided cases show, that one can take account of the volume of the work performed, and that one must presume, in the absence of any specific evidence to the contrary, that the work was performed competently. Notwithstanding the various criticisms made by counsel for the plaintiffs in the course of argument before me, I accept that Mr Hocking worked conscientiously on behalf of his clients. Nonetheless, when I look at the various matters I have mentioned, I consider that this application for relief under the Inheritance Act and some related activity undertaken by Mr Hocking concerning the mutual wills action did not involve a great amount of work or give rise to complexity. In my view, the application under the Inheritance Act in the present case can be characterised as the kind of comparatively straightforward application that the limit in the scale was designed to cover. For that reason, I conclude that there is not a basis for making a special order of the kind proposed under the second of the two limbs.

59 I must add by way of a footnote to my ruling, and for the sake of completeness, that in the course of argument reference was made to the recent decision of Bruce Angelo Gatti as trustee for the Bruce Gatti Family Trust v Brett Davies [2000] WASC 190, being a decision handed down by Wheeler J on 28 July 2000. I am informed that an appeal has been lodged in respect of the decision in question with the result that the outcome is not yet finally known.

60 It seems, however, that two principal issues emerge from the Gatti case. There is firstly the question of whether the Court has jurisdiction to grant special orders in circumstances where a solicitor is seeking to recover costs from his client.

61 I have already indicated that, without deciding the point or purporting to make any final ruling in respect of such an issue, I have simply assumed that I have jurisdiction to make an order of the kind sought. In the event, however, it turns out that the question of jurisdiction is academic. If I do have the jurisdiction to make a special order of the kind applied for, such an order will not be made in the circumstances of the present case, in any event, for the reasons I have given.

62 The second matter emerging in the Gatti case is the question of whether an application for a special order of the kind before me today should be made promptly and, more specifically, within 30 days, this being the period mentioned in O 66 r 51.

63 Wheeler J notes in par 11 of her judgment in the Gatti case that the reference to 30 days in O 66 r 51 begs the question because it is not clear from what event or date the 30 days should be thought to commence.

64 In the circumstances of the present case, it is perhaps arguable that the 30 days should be thought to commence from 28 July 2000 when a ruling was given by me that the practitioner was not at liberty to rely upon the costs agreement. This meant that, thereafter, subject to any appeal against the ruling, he was obliged to submit an account to the client in order to recover costs.

65 It was upon this basis that counsel for the plaintiff, Joanne Harrison, submitted that Mr Hocking was in delay. She pointed out that Wheeler J had disallowed the application for relief in Gatti because of delay.

66 It follows from what I have said that in a sense this issue is now academic also. I have concluded that the special order should not be granted, irrespective of any question of delay.

67 Nonetheless, without purporting to make any final or decisive ruling as to the application of O 66 r 51, I think it should be said on Mr Hocking's behalf that I do not see him as being in delay in the manner that was applicable in the Gatti case. I would say, further, that if anything turned upon this point, I would be minded to grant an extension of time to Mr Hocking to allow the application for special orders to come before me so that it can be dealt with on its merits, as I have purported to deal with it.

68 My reasoning in that regard is this: it is true that a considerable period of time has elapsed since September 1998 when Mr Hocking first attempted to recover his costs by issuing a bill to the client. Nonetheless, as I pointed out at some length in my decision of 28 July 2000, the delay which ensued was largely referable to the fact that the costs were to be resolved once the litigation was disposed of. In this case, notwithstanding a settlement in December 1998, the auction which brought funds to hand did not occur until much later.

69 It was then that the plaintiff, Joanne Harrison, brought the application to set aside the costs agreement. The passage of time was not held against her. A similar view of the matter applies when I look at the position of Mr Hocking. Once the Court ruling was handed down, and was known to be against him, it seems to me that in a reasonably prompt manner he has taken steps to pursue the alternative avenue available to him for recovery of costs.

70 One would usually expect that he was allowed some 21 days or so to consider his position, should there be any thought of an appeal against the adverse ruling. On 26 September he lodged the present application. Thus, if the time limit of 30 days is thought to have an application to the circumstances of the present case, there is, in my view, an adequate explanation for the passage of time. For that reason, I would be minded to grant an extension of time should any such extension be necessary so that his application could be heard.

71 I will conclude by returning to the various paragraphs of the chamber summons itself. Bearing in mind the opposition of counsel for the plaintiffs to all of the paragraphs in the summons, I will dismiss the application in its entirety. The plaintiffs will be allowed the costs of the application.