Plaintiff v Defendant

2 Upon settlement, the plaintiff and two defendants agreed the following orders should be made:

(2) The defendants pay the plaintiff's costs including reserved costs to be taxed in default of agreement by the Costs Court.

3 In addition, the plaintiff sought further orders opposed (in part) by the defendants:

(a) Certification for two counsel.

(b) Certify daily trial fees for senior counsel at $8,250 per day (including GST) for each of the four days of hearing and four hours of special conference at $825 per hour (including GST).

(c) Certify daily trial fees for junior counsel at $4,125 per day (including GST) for each of the four days of hearing and four hours of special conference at $412.50 per hour (including GST).

4 The defendants did not object to a certification for two counsel nor did they dispute the number of days of trial or number of hours for conference. The dispute was whether I should fix senior and junior counsel's fees for trial and conference or leave that issue to be determined by the Costs Court.

5 The plaintiff, Mr Henwood, sued his employer, Nansor Australia Pty Ltd, a trucking company, and Vinidex Pty Ltd, a pipe manufacturer with whom Nansor contracted to transport its products around the country. Mr Henwood was injured on 9 July 2009 when unloading some products that had been loaded onto his truck at Vinidex's premises. He suffered an injury to his neck for which he underwent a discectomy and fusion of two cervical vertebra. Aged 51 years, he claimed to have suffered a total loss of earning capacity. Settlement was reached after only the plaintiff, another lay witness and the treating neurosurgeon had given evidence. Another 4 - 7 days of hearing was anticipated.

6 Liability of both defendants was in issue. The claim was brought in negligence and breach of statutory duty. Contributory negligence was alleged and loomed as a real issue. It was clear that much of the liability debate would turn upon a 'word against word' dispute about what instructions were given to the plaintiff to perform his task, and whether the plaintiff made a complaint about the load shortly before leaving Vinidex on the morning of his injury. Assessment of damages was also in contest, although it appeared it was most likely to centre upon the question of whether the plaintiff retained some work capacity despite his injury.

7 On 1 April 2013 the Supreme Court (Chapter 1 New Scale of Costs and Other Costs Amendments) Rules 2012 came into operation. As well as making various amendments to Order 63 of the Supreme Court (General Civil Procedure) Rules 2005, the 2012 rules substituted new appendices A and B to the principal rules. Appendix A sets out the Supreme Court scale of costs.

8 Rule 63.07 of the principal rules remain in the same form and provide:

(1) Subject to this Order, where by or under these Rules or any order of the Court costs are to be paid to a party, that party shall be entitled to taxed costs.

(2) Where the Court orders that costs be paid to a party, the Court may then or thereafter order that as to the whole or any part of the costs specified in the order, instead of taxed costs, that party shall be entitled to-

(a) a portion specified in the order of taxed costs;

(b) taxed costs from or up to a stage of the proceeding specified in the order;

(c) a gross sum specified in the order instead of taxed costs;

(d) a sum in respect of costs to be determined in such manner as the Court directs.

9 That rule permits the court to fix costs, or any portion thereof, rather than order that they be taxed in default of agreement.

10 Rule 63.82 of the principal rules provides for hearing and trial fees. The rule was amended by the 2012 Rules. The amendment had two main effects. One was to remove reference to the assessment of fees payable to counsel at trial on the basis of 'a brief fee and refreshers'. The second was make the assessment of counsels' fees subject to the applicable scale of costs, so that the rule now reads:

(1) Subject to the provisions of any applicable scale, the fees payable to counsel to appear at a hearing or trial shall be at the discretion of the Costs Court which may fix such fees -

(a) on the basis of daily fees;

(b) as a lump sum fee covering the whole of the hearing or trial; or

(c) on such other basis as the Costs Court considers appropriate.

11 Appendix A now contains a scale for counsel's fees. Previously there was no such scale. Subject to some other items in the scale, item 19 allows daily fees for counsel up to a maximum of $5,000 for junior counsel and $7,500 for senior counsel. Both those amounts are GST exclusive. The amount sought by senior counsel in the present application, $8,250 inclusive of GST, is therefore the maximum permitted under the scale.

12 The discretion of the court in allowing fees under the scale, whether exercised by a judge or an associate judge in the Costs Court, is to be exercised taking into account a number of considerations.[1] They include the complexity of the matter, the difficulty or novelty of the questions involved, the skill, specialised knowledge and responsibility involved by the legal practitioner, research and considerations of questions of law, and so on.[2]

13 According to Dal Pont,[3] 'the primary position is that costs are taxed or assessed, from which the court will in its discretion depart, and fix costs itself, in an appropriate case'.[4]

14 The circumstances in which a court might fix costs, including counsel's fees, instead of having them taxed in default of agreement, are wide and varied. However, in my view, there is good reason why the usual rule is that costs are taxed in default of agreement. The taxation of costs by the officers of the Costs Court ensures that costs are evaluated on a logical, fair and reasonable basis by those who are experienced and familiar with the assessment of costs. Such an approach promotes fairness and predictability within the legal market. Of course, where particular cases make it appropriate to do so, the judge hearing the case (with or without a jury) may in his or her discretion depart from the usual course and fix costs.

15 Courts have found it appropriate to fix costs in a variety of circumstances. Each must depend on the whole of the circumstances applicable to the case in question. Each also involves the exercise of a discretion which, of course, means that 'rules' are not built upon them. But the following are examples given by Dal Pont[5] of circumstances in which a discretion to fix costs has been judged appropriate:

(a) The case is lengthy and complex and the process of taxation is likely to be time consuming and expensive and so the jurisdiction to fix costs is exercised to avoid the incurrence of further costs;[6]

(b) The party awarded costs is unlikely, due to the financial position of the opponent, to be able to recover all taxed costs in due course and the cost of taxation would add a further burden on the successful party who is already likely to be out of pocket as a result of the litigation;[7]

(c) The relative simplicity of the matter may, in the court's view, make it appropriate to save the parties the difficulties and inconvenience and added expense of a taxation;[8]

(d) The costs to be taxed and the expense of taxation (and its attached delay) would be likely to be disproportionate to the amount of costs recoverable;[9]

(e) Due to the nature of the case, the continued litigation between the parties on the issue of costs (bearing in mind that a taxing officer's decision is reviewable) is likely to be counterproductive, and that the interests of achieving finality or to prevail;[10] and

(f) The history of the litigation and the complete lack of cooperation between parties demonstrated that an order for taxation would probably only lead to more expensive litigation.[11]

16 Another circumstance in which counsel's fees were fixed by the trial judge was in relation to a personal injury claim heard on circuit in regional Victoria. In Wardley v Ron Finemore Bulk Haulage Pty Ltd,[12] heard at Shepparton, Beach J said:

While in my view it is generally not desirable for judges to embark upon the process of taxation or fixing of fees, I am persuaded that there is merit in fixing the brief fees of the plaintiff's counsel on this occasion. This is because, broadly speaking, I think it is undesirable that country litigants (like the parties in the present proceeding), whose cases are heard on circuit, should then be routinely compelled to engage in processes of taxation that are ordinarily heard and determined in Melbourne. Further, if there is some sticking point which is preventing parties in civil cases on circuit in this region from agreeing questions of costs, then a judgment in the present matter on these issues may be of assistance in avoiding a multiplicity of proceedings or applications in other cases.[13]

17 The reasons advanced for fixing the costs in this case are that it would avoid expense and delay and that, having presided over several days of hearing, I am in a better position than the Costs Court to assess the complexity of the matter, and thus make a judgment as to costs. Only counsel's fees are sought to be fixed - it was not explained why but perhaps it is because only they might be attended by some controversy.

18 As for delay, the taxation of costs by the Costs Court in default of agreement will, by definition, take longer than if they are fixed by the trial judge. But in my view that fact alone does not justify a judge fixing costs. Otherwise all costs would be fixed by judges. Because the cost question only concerns counsel's fees it might be thought to be of such simplicity that a judge should fix them to save the time and expense of taxation. Against that, whether or not the amount claimed is excessive or falls within the usual 'market' of counsel's fees for a matter of this kind, is a matter the experienced associate judges in the Costs Court are generally in a better position to determine.[14]

19 The defendants have resisted the application that I should fix the costs. Presumably that is because they sense that the amount sought is excessive. The fact that the application is resisted is by no means determinative; but the desirability of there being consistency in assessment of counsels' fees across similar matters is a rational consideration to take into account.

20 Turning then to the ground of my closer appreciation for the complexity of the case, although both liability and quantum were in dispute, and there were two defendants and not one, in my view the case cannot be said to be particularly remarkable. The nature of the case and its degree of complexity is not difficult to discern from the pleadings and the documents in the court books filed by each party. Counsel for the first defendant conceded that this matter has had some 'complexity', but when pressed on what the nature of that complexity was, he said, 'It is not an assessment'.

21 Counsel for the plaintiff argued that it was complex because there were two defendants not one, each defendant owed a different duty, contributory negligence was hard fought, there had been some dispute about the admissibility of tendency evidence, and there was likely to be an argument that the statutory duty alleged to be owed by both defendants was not owed by the second defendant. It may be that all or some of those matters justified this case being heard in the Supreme Court rather than the County Court but, in my view, they do not singularly or collectively mark this case out to be particularly complex so as to justify counsel's costs being fixed by the trial judge.

22 Nor do I think that by hearing the evidence for two and a half days I obtained a particularly unique insight into the nature or the complexity of the case that would make it appropriate - all other factors being considered - that I should fix the fees

23 For the reasons I have discussed, I decline to fix counsel's fees. As with other costs awarded in the plaintiff's favour, counsels' fees should be taxed in default of agreement.

24 As the matter was not in dispute, and I am otherwise satisfied it is appropriate to do so, I will record that in my view this matter was appropriate for the attendance of senior and junior counsel. Unlike the County Court, there is no requirement under the Supreme Court rules or scale that the court or Costs Court certify for two counsel. It having been conceded by the defendants before me, and me having indicated my own view, I expect there will be no dispute should the matter go to taxation. Further, as recorded above, it was not disputed that each counsel is entitled to fees for four hours of conference. I will not 'certify' for such conferences but, again, I would expect there to be no dispute on that question if the matter of costs goes to taxation.

[1] Appendix A items 19(j) - which incorporates the criteria in item 17 - and 19(k).

[2] Item 17 of Appendix A. Item 19(k) provides for a discretion to allow fees in excess of the scale.

[3] G E Dal Pont, Law of Costs (Lexis Nexis Butterworths, 2009).

[4] Ibid [15.14], citing Aqualina Holdings Pty Ltd v Lynndell Pty Ltd (No 2) [2008] QSC 98, [6] (Daubney J.)

[6] Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119 at 123.

[7] Dunstan v Human Rights and Equal Opportunity Commission (No 3) [2006] FCA 916 [29] (Mansfield J.)

[8] Australian Performing Rights Association Ltd v Marlin [1999] FCA 1006 [4] (Burchett J).

[9] Dunstan v Human Rights and Equal Opportunity Commission (No 3) [2006] FCA 916 [28] (Mansfield J).

[10] Keen v Telstra Corporation Ltd (No 2) [2006] FCA 930 [6] (Rares J).

[11] Summerfield v Summerfield [2007] Fam CA 804 [109].

[12] [2013] VSC 181.

[14] Although, individual judges, by reason of their past experience as counsel in a particular field, their continuing involvement with the profession, and the period of time since they practised as counsel, will have greater or lesser degrees of knowledge of what is a fair and reasonable fee in a particular practice area.