NAIRN -v- METRO-CENTRAL JOINT DEVELOPMENT ASSESSMENT PANEL [2018] WASCA 18 (20 February 2018)

Court of Appeal (WA)|2019-11-15|Before: Chaney J

The application made by fourth respondent is to be heard and determined upon the evidence that was before the taxing officer, and no further evidence is to be received, unless otherwise directed by the reviewing judge.[9] Further, the decision of the taxing officer on all questions of fact are final.[10]
As noted by Kitto J in Australian Coal & Shale Employees' Federation v The Commonwealth:[11]

The court will always review a decision of a taxing officer where it is contended that he has proceeded upon a wrong principle, for the purpose of determining the principle which should be applied; and an error in principle may occur both in determining whether an item should be allowed and in determining how much should be allowed. Where no principle is involved, and the question is, whether the Taxing Officer has correctly exercised a discretion which he possesses and is purporting to exercise, the court is reluctant to interfere. It has undoubted jurisdiction to review the Taxing Officer's decision even where an exercise of discretion only is involved and will do so freely on a proper case, using its own knowledge of the circumstances, but it will in general interfere only where the discretion appears not to have been exercised at all, or would have been exercised in a manner which is manifestly wrong, and where the question is one of amounts only, will do so only in an extreme case.

Further, as observed by Ipp J in Mossensons (A firm) v Coastline Associates:[12]

The point is that there must be an error in principle before a Judge will carry out a review under O 66 r 55. 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 can 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.

As noted by Mitchell J in Soia v Bennett:[13]

Errors in principle are to be contrasted with questions of mere quantum. Nevertheless, errors in principle may be made both in determining whether an item should be allowed and in determining how much should be allowed. An error in principle may be inferred from a decision of the taxing officer if the result is such that the discretion appears not to have been exercised at all, or where it has been exercised in a manner that is manifestly wrong.

The fourth respondent bears the onus of satisfying the court that the decision reached by the taxing officer was wrong,[14] that is, that the taxing officer proceeded upon a wrong principle.

Disposition - did the taxing officer err in principle in in permitting the applicants to recover amounts under scale item 23?

I turn to the question of whether the taxing officer erred in principle in permitting the applicants to recover amounts under scale item 23.
It is well established that an error in principle may occur in determining whether an item should be allowed.[15] However, the question of whether allowance may be made under scale item 23 in circumstances where an application for judicial review is transferred to the Court of Appeal does not appear to have been the subject of judicial consideration.
For the reasons set out below, I find that ground 1 is made out.
The RSC O 66 sets out the applicable rules as to costs, and O 66 r 11(3) clarifies that costs determinations made under the Legal Profession Act apply as between party and party.
As observed by Buss P, Murphy JA and Beech JA in Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [2017] WASCA 76 (S) [11]:

By s 280(1) of the [Legal Profession Act], a party's recoverable costs are confined, in effect, by the scale limits. To that extent, s 280(1) is protective of the party charged and, more generally, serves the due administration of justice by limiting the allowable scope for legal costs.

In this case, I find that the taxation proceeded upon a wrong principle in so far as allowance was made under scale item 23. That is, there was an error in that the applicants' recoverable costs were not confined to the applicable scale limits.
Scale item 11 makes allowance for 'Motions and originating process', and specifically, scale item 11(a) refers to applications for judicial review under the RSC O 56. The application determined by the Court of Appeal was an application for judicial review.
The application of a scale item is to be determined by a plain reading of the 2016 Determination. A plain reading of the 2016 Determination favours an interpretation that allowance for costs incurred in prosecution of an application for judicial review is to be determined by reference to scale item 11. Further, the 2016 Determination serves a regulatory (or controlling) purpose, and such reading is consistent with a regulatory purpose, as it is simple, clear and unambiguous.
On a plain reading of the 2016 Determination, in the context of an application for judicial review, I find that there is no proper basis for an allowance to be made under scale item 23.
The orders made by Chaney J and the Court of Appeal Registrar concerned matters of procedure in the prosecution of the application for judicial review. The RSC O 56 r 5 concerns the procedure on an application for judicial review, and sub‑rule (4) expressly provides that a single judge dealing with an application for judicial review may, without deciding it, order that it be heard by the Court of Appeal. Upon the making of the order by Chaney J on 18 May 2017, the Court of Appeal proceeded to hear and determine an application for judicial review. While the order of Chaney J determined the coram, it did not change the character of the application from an application for judicial review to an appeal to the Court of Appeal.
On 31 May 2017, the Court of Appeal Registrar ordered that pursuant to the CA Rules r 68, pt 5 of the CA Rules would apply to the proceeding. Again, the order did not change the character of the application from an application for judicial review to be determined by the Court of Appeal, to an appeal to the Court of Appeal.
I note that the taxing officer expressly accepted the fourth respondent's contention that the proceeding always remained a judicial review proceeding.[16] However, the taxing officer also found that the transfer to the Court of Appeal 'fundamentally changed the amount of work that had to be undertaken and, as was found on the taxation hearing, fundamentally impacted on the costs which can be recovered by the successful party.'
The taxing officer's reasons reveal that the taxing officer had regard to what was described as 'a statement of general principle'. That is, that 'any practitioner who has appeared as counsel in the Court of Appeal can attest to the fact that significantly more preparation is required for a Court of Appeal hearing than one in the General Division.' The taxing officer also reasoned that '...it would be inequitable to confine the Applicants' costs to Item 11 in those circumstances and not to permit the Applicants to recover, from the date of the Orders, costs under Item 23.'
It is not possible to discern whether the 'statement of general principle' as described by the learned taxing officer is correct or a widely held view. In any event, I find that considerations of fairness, and the potential for an 'inequitable' outcome, which appear to have informed the taxing officer's approach, were not proper grounds upon which to make an allowance under scale item 23.
As conveniently summarised in Dal Pont G E, Law of Costs (4th ed, 2018), at 508, the courts speak in terms of 'fair', 'qualified', or 'unreasonable' indemnity. This limits the costs payable by the unsuccessful litigant. That limit has historically been set by reference to the costs a taxing officer considers 'necessary or proper' for the attainment of justice or the protection of rights of the party by whom they were incurred.
A taxing officer may only set limits and make allowance under applicable scale items. The limits fixed by the scale may result in an outcome that is not adequate or proper for the attainment of justice. This may be mitigated by the recovering party securing a special costs order.
In this case, the Court of Appeal considered an application for a special costs order and concluded that such an order was not appropriate. Had the court been satisfied that a special costs order was appropriate, then the limits fixed in scale item 11 may have been raised. The court may also have made any order or given any direction for the purposes of enabling costs above those in the 2016 Determination to be ordered or assessed.[17]

For the reasons set out above, ground 1 is made out. I make no findings in relation to the second and third grounds of review as they were framed in the alternative and premised on the first ground not being accepted.
The RSC O 66 r 55(2) provides that the judge, if of the 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.
Subject to hearing from the parties as to the appropriate form of orders, I propose to make orders the effect of which will be to set aside the certificate of the taxing officer and to refer the bill of costs to another taxing officer. I will also hear from the parties as to the costs of this review.
In light of these reasons, the applicants may seek to amend their bill of costs and a taxing officer has the power to allow amendment. That being a matter for the taxing officer, I will make no direction in that regard.

Schedule A - Applicants' party / party bill of costs for taxation

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

[1] Edge Visionary Living Pty Ltd v Nairn [2016] WASCA 211, as noted in Nairn v Metro-Central Joint Development Assessment Panel [5].

[2] Nairn v Metro-Central Joint Development Assessment Panel [54].

[3] Nairn v Metro-Central Joint Development Assessment Panel [203].

[4] Decision on a request for review of the taxation of the applicant's bill of costs (21 December 2018) [4] ‑ [6], citing Zgteek Pty Ltd v Michael Lurie & Associates [2012] WASC 419 [26] ‑ [27].

[5] Fourth respondent's objections to taxation filed 23 November 2018 par 31.

[6] Fourth respondent's further responsive submissions on objections to taxation filed 14 December 2018 par 10.

[7] Sanders v Snell (No 2) (2000) 174 ALJR 53 [11] (Kirby J); see also Dal Pont G E, Law of Costs (4th ed, 2018) 688.

[8]WJ Green & Co (1984) Pty Ltd v Tace Pty Ltd (No 4) [ 2010] WASC 363 [23].

[10] The RSC O 66 r 43; discussed in Dal Pont G E, Law of Costs (4th ed, 2018) 688.

[11]Australian Coal & Shale Employees' Federation v The Commonwealth [1953] HCA 25; (1953) 94 CLR 621, 628.

[12] Mossensons (A firm) v Coastline Associates (Unreported, WASC, Library No 970661, 2 December 1997) 9.

[13] Soia v Bennett [2014] WASCA 204 [33] citing Rankilor v Circuit Travel Pty Ltd [2012] WASCA 155 [75] ‑ [77].

[14] Australian Coal & Shale Employees' Federation v The Commonwealth 627.

[15] Australian Coal & Shale Employees' Federation v The Commonwealth 628; Soia v Bennett [33]; Rankilor v Circuit Travel Pty Ltd [76]; City of Belmont v Saldana [No 2] [2018] WASC 278 [39].

[16] Decision on a request for review of the taxation of the applicant's bill of costs (21 December 2018) [19].

Court (Court of Appeal) Rules 2005

By judgment delivered on 20 February 2018, the Court of Appeal determined the application pressed on behalf of the first and second applicants for judicial review of a town planning decision by the first respondent (Panel) on 19 October 2016, and a related decision by the second respondent (Tribunal) on 3 April 2017: Nairn v Metro-Central Joint Development Assessment Panel [2018] WASCA 18.
The application for judicial review was referred to the Court of Appeal by order of Chaney J on 18 May 2017, apparently on the basis that it raised issues left unresolved by a notice of contention in earlier proceedings before the Court of Appeal.[1]
On 31 May 2017, the Court of Appeal Registrar ordered that pursuant to the Supreme Court (Court of Appeal) Rules 2005 (WA) (CA Rules) r 68, pt 5 of the CA Rules would apply to the proceeding. Time was extended for the filing of affidavits and the Court of Appeal Registrar also ordered that the applicant file and serve a document in the form of an appellant's case under the CA Rules r 32, adapted as appropriate; and that the fourth respondent file and serve a document in the form of a respondent's answer under the CA Rules r 33, adapted as appropriate.
There were eight grounds of judicial review. By grounds 1 - 6, the applicants challenged the Panel's 19 October 2016 decision, and by grounds 7 and 8, the applicants challenged the Tribunal's 3 April 2017 decision.[2]
The applicants succeeded on grounds 2 and 3. The other 6 grounds failed.[3] The application for judicial review was allowed and it was ordered that a writ of certiorari issue, quashing the decision of the Panel of 19 October 2016 to grant the application for development approval.
At judgment delivery, the applicants applied for an order that the fourth respondent pay the applicants' costs of the application for judicial review, including any reserved costs, to be taxed if not agreed. The fourth respondent conceded that an order for costs in those terms was appropriate.
The applicants also applied for a special order as to costs, that pursuant to the Legal Profession Act 2008 (WA) s 280(2), the limits on costs fixed in the 2016 Determination be removed. The fourth respondent opposed the application.
The application was refused: Nairn v Metro-Central Joint Development Assessment Panel [2018] WASCA 18 (S). At [5] ‑ [10], Buss P, Murphy JA and Beech JA determined as follows:
1. The principles governing an application for a special costs order to the effect that the costs of a party to an appeal or an application before this court should be taxed without reference to the limits provided for in the 2016 Determination are set out in Sino Iron Pty Ltd v Mineralogy Pty Ltd. It is unnecessary to repeat them.
2. In the present case, we were satisfied that the amount of costs allowable under the 2016 Determination was not inadequate because of the unusual difficulty, complexity or importance of the matters litigated in the application for judicial review.
3. The matters of construction of the town planning scheme were, no doubt, of importance to the parties to the application and had an element of general public importance, but we would not characterise the matters on which the applicants were successful as being of 'unusual' difficulty, complexity or importance.
4. Some of the other matters raised in the litigation on which the applicants were unsuccessful were of greater difficulty, complexity and importance.
5. Further, in the context of the court's general overriding discretion in relation to costs, the applicants were successful on two of their grounds but failed on the remaining six grounds. That factor was relevant in deciding whether this court should in the exercise of its discretion make a special costs order either generally or to a limited extent.
6. We considered that the allowances in the 2016 Determination were in the circumstances reasonable and appropriate. It was our opinion that justice would be done as between the parties in relation to costs if the fourth respondent were ordered to pay the applicants' costs of the application for judicial review, including the costs of the grounds on which the applicants failed and any reserved costs, to be assessed if not agreed. That is the order we made. [Footnotes omitted.]
The applicable scale items were not identified in the judgment.

Fundamentally, an application to a judge seeking review pursuant to O 66 r 55(1) is limited in the scope of the review undertaken. The envisaged process is not in any sense a review de novo. Rather, it is a review confined to an examination directed at ascertaining whether or not the already reconsidered decision of the taxing officer contained an error of principle. A review by a judge under O 66 r 55(1) is no occasion for new points of challenge to emerge, or for issues not raised to the taxing officer, or for points inadequately argued before the taxing officer to be re-ventilated afresh. Obviously, taxing officers hold expertise in taxations about costs determinations. They deal in the day-to-day nitty-gritty of assessing the costs in litigation, by reference to scales and allowances at a level of detail that judges do not. That is one reason why any further review opportunity window that is allowed under O 66 r 55 to a judge is an extremely limited one. See the observations by EM Heenan J in Gibson v Commonwealth of Australia [2002] WASCA 323.

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