Thompson v Cavalier King Charles Spaniel Rescue

SUPREME COURT OF QUEENSLAND

CITATION: Thompson v Cavalier King Charles Spaniel Rescue (Qld) Inc [2020] QCA 2

PARTIES: JAMES BOYD THOMPSON / (appellant) / v / CAVALIER KING CHARLES SPANIEL RESCUE (QLD) INC / (respondent)

FILE NO/S: Appeal No 12173 of 2018 / SC No 9148 of 2013

DIVISION: Court of Appeal

PROCEEDING: General Civil Appeal

ORIGINATING COURT: Supreme Court at Brisbane – Unreported, 12 October 2018 (Dalton J)

DELIVERED ON: 31 January 2020

DELIVERED AT: Brisbane

HEARING DATE: 6 June 2019

JUDGES: Fraser and Philippides JJA and Ryan J

ORDER: Appeal dismissed with costs.

CATCHWORDS: PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – TAXATION AND OTHER FORMS OF ASSESSMENT – APPEAL, REVIEW OR REFERENCE – where the primary judge refused an application for a declaration that the appellant was not served with a costs statement on behalf of the first defendant, and refused to set aside a default costs assessment and for the consequent order for costs made by the registrar – where the costs assessment was made on the indemnity basis – where the appellant alleges that the respondent’s solicitor’s affidavit contained various formal defects – whether the appellant’s objections to the costs statement had merit – whether the respondent’s solicitor’s affidavit contained formal defects / Uniform Civil Procedure Rules 1999 (Qld), r 668, r 703, r 706, r 708, r 709, r 710, r 740 / Amos v Monsour Legal Costs Pty Ltd [2008] 1 Qd R 304; [2007] QCA 235, considered / House v The King (1936) 55 CLR 499; [1936] HCA 40, followed / Lee v Abedian [2017] QSC 22, distinguished

COUNSEL: The appellant appeared on his own behalf / C D Templeton for the respondent

SOLICITORS: The appellant appeared on his own behalf / ACLG Lawyers for the respondent

1. FRASER JA: I agree with the reasons for judgment of Philippides JA and the orders proposed by her Honour.

2. PHILIPPIDES JA: The appellant, Mr Thompson, appeals against a decision of the primary judge, Dalton J, made on 12 October 2018 in which her Honour refused his application for a declaration that he was not served with a costs statement on behalf of the first defendant, Cavalier King Charles Spaniel Rescue (Qld) Inc, and refused to set aside orders of the registrar made on 16 August 2018 ordering a costs assessment, as well as the registrar’s orders of 21 September 2018 for judgment for those costs to be paid when they were assessed. The primary judge also refused an application to have the costs assessment itself, which the appellant alleged contained errors, set aside.

3. The appellant’s appeal against that decision raised three principal grounds. The first ground, that service of the costs statement was not effected on 23 July 2018 when it was sent to the appellant’s email address, was dismissed with ex tempore reasons given upon the hearing of submissions as to that ground.

4. The remaining two grounds are that, at a minimum, one or more of the applicant’s objections in his amended notice of objections is meritorious (ground 2) and that the affidavit of Nathaniel Delaney dated 11 October 2018 was non-compliant, contained false information and was only given to the appellant 15 minutes before the application was heard (ground 3).

Background

5. By claim filed 27 September 2013, the appellant commenced proceedings as plaintiff against seven defendants, the respondent to this appeal being the first defendant. On 12 February 2016, Mullins J ordered, inter alia, that various paragraphs of the plaintiff’s statement of claim be struck out and that the plaintiff pay the costs of the first and sixth defendants of the application filed on 27 January 2016 on the indemnity basis.¹

6. On 14 August 2018, the respondent filed an application for a costs assessment to be completed pursuant to r 710 of the Uniform Civil Procedure Rules 1999 (Qld) (the UCPR) and that Mr Raymond Bull be appointed as the costs assessor.² A costs statement³ and an affidavit of Mr Delaney affirmed 14 August 2018 in which he deposed to, inter alia, neither his client nor his firm’s office having received a notice of objection from the appellant, was also filed.⁴ On 16 August 2018, the registrar ordered that a costs assessment be completed and that Mr Bull be appointed to assess the costs under r 708 of the UCPR.⁵ The appellant served objections to the costs statement on the respondent on 17 August 2018.⁶ The costs statement was in the sum of $28,483.97 (comprising $28,475.22 for professional fees and $8.75 for outlays). On 18 September 2018, Mr Bull filed a costs assessor’s certificate, having assessed costs in the sum of $26,377.32 (comprising $25,669.57 for professional fees and $707.75 for disbursements).⁷ On 21 September 2018, a deputy registrar made a registrar’s order for costs in the sum of $26,377.32, consequent upon the assessor’s certificate.⁸

7. On 28 September 2018, the appellant filed an application⁹ pursuant to r 709 of the UCPR seeking, inter alia, that the following orders be set aside:

the registrar’s order of 16 August 2018;

the costs assessor’s decision filed 18 September 2018; and

the registrar’s order for costs made on 21 September 2018.

8. An amended version of the objections were served on the respondent on 9 October 2018. On 12 October 2018, Dalton J dismissed the appellant’s application and ordered that he pay the respondent’s costs in the sum of $5,951.¹⁰ That decision is the subject of this appeal.

9. The appeal lies to this Court pursuant to s 62(1)(a) of the Supreme Court of Queensland Act 1991 and, by r 765(2) of the UCPR, is brought by way of an appeal and requires an error in the House v The King¹¹ sense to be demonstrated.

Rule 709 and r 703 of the UCPR

10. Rule 709 of the UCPR provides for the setting aside of a default costs assessment. If a costs assessor is appointed under r 708 to assess costs, the Court may, on the application of the party liable for the costs, by order, set aside or vary a decision of the costs assessor or any order made under r 740. The application must be supported by an affidavit explaining the party’s failure to file a notice of objection to the costs statement and any delay, as well as a notice of objection in accordance with r 706(2) to (5), as an exhibit to the affidavit. Rule 722 applies to any reassessment of costs on an application made under r 709 of the UCPR.

11. Rule 703(3) deals with costs assessment on the indemnity basis, as occurred in this case. It provides that when assessing costs on the indemnity basis, a costs assessor must allow all costs reasonably incurred and of a reasonable amount, having regard to the scale of fees prescribed for the Court, any costs agreement between the party to whom the costs are payable and the party’s solicitor, and charges ordinarily payable by a client to a solicitor for the work.

The decision of the primary judge

12. The issues before the primary judge mirrored those before this Court. Having rejected that the appellant was not served with the respondent’s costs statement on 23 July 2018, the primary judge turned to the question of whether or not the orders of 16 August 2018 and 21 September 2018 ought to be set aside as follows:¹²

“There are two rules, rule 668 and rule 709. I think 709 is the more specific rule and I will address it in terms. I will just note that under both rules the Court is given a discretion. The facts material to both rules are the same and my decision would not be any different under rule 668.

…

I turn to look at the substance of the objection to costs statement because in deciding whether or not to set aside the default assessment and give Mr Thompson an opportunity to put his points before the costs assessor, an assessment of the merits of those points must, of course, be very relevant.

Since the 17th of August 2018, Mr Thompson has, in fact, delivered a second version of the objection to costs statement. It is marked up with underlining so that one can see it is the original version but with some fairly substantial amendments. That second version was served on the first defendant with this application on the 9th of October 2018. It is that second version which I have looked at in deciding whether or not there are meritorious matters raised in the objection to costs statement.

In my view, there are not meritorious matters raised in it. Many of the complaints or almost [sic] of the complaints, are very general in their nature. They are querulous in their nature, and they are, in my view, very unlikely to cause any costs assessor acting reasonably to make any significant reduction in the costs statement which the first defendant relies upon.

The solicitor appearing for the first defendant said that the objection to costs statement does not comply with the rules, and that is right in the sense it does not comply with the form 61 version 1 document. Of itself, non-compliance with a form, especially by somebody acting in person, is not something which would greatly trouble me, but I think when the non-compliance is analysed, it really is a result of the nature of the objections which are taken and which I have already described.

The form to be filled in requires the party objecting to a costs item to say in relation to each item what the proposed reduction is, and at the foot of the notice of objection to - essentially do the mathematics to show the total proposed deduction. When the sort of complaints Mr Thompson has made are analysed, they – they are not the kind of complaints that would allow somebody to fill in those parts of the form which Mr Thompson has ignored.

So looking then at the relief sought in the application, I will refuse to make the orders sought at paragraphs 2, 3 and 4 primarily because I do not think that the objection to the costs statement contains anything meritorious and anything likely to succeed in reducing the costs statement which was prepared by the first defendant. It follows that I would not make any order in terms of paragraphs 5 and 6 of the application.

I make an order that the plaintiff pay the first defendant’s costs in the sum of $5951.”

Ground 2 - objections to the costs statement

13. The appellant submitted that the primary judge erred in fact and law by determining that his objections were meritless and that it would, therefore, be sufficient for the purposes of the appeal to show that just some of his objections had merit. The appellant’s amended notice of objections itself contains some 58 objections.¹³ The appellant’s written submissions focussed on 12 points, which encompassed 22 of his objections to the costs statement.

14. The respondent submitted that whether there was merit in the proposed objections was highly relevant to the exercise of the discretion under r 709 of the UCPR, as was recognised by the primary judge, who found that many of the complaints were querulous in their nature and very unlikely to cause any costs assessor, acting reasonably, to make any significant reduction in the costs statement. Further, it was submitted that the appellant did not identify any basis for concluding that the primary judge’s consideration of this issue was affected by the kind of error recognised in House v The King, it being clear from the transcript that the primary judge considered the objections and the costs statement closely, questioning the respondent’s solicitor about the latter.

15. The respondent’s written submissions responded to Objections 4, 7, 9, 33, 34 and 34(a) and submitted that the remaining objections contended for relatively minor reductions based on what were said to be unreasonable charges by, mostly, reference to Lee v Abedian.¹⁴ The respondent submitted that Lee was inapt as a comparison, given that that case concerned the costs of an application involving junior and senior counsel, who charged $15,000 or more per day, whereas only solicitors were engaged in the present case.

16. The respondent further submitted that the assessor who performed the default assessment had already reduced the amount claimed in the disputed costs statement by reducing the amount of professional fees by $2,106.65 (from $28,483.97 to $26,377.32). It was thus contended that, even if there were merit in the appellant’s objections, in order to succeed, the appellant would have to show that the costs statement overcharged him by at least $2,106.65, indeed, significantly more, such that the assessment should be set aside. No submissions were made as to whether a reassessment would likely result in a reduction greater than that which has already occurred.

17. I now turn to the objections as enumerated in the appellant’s formal amended notice of objections.

Objection 4 – apportionment

18. A primary objection related to Objection 4. It was contended, relying on Re Colquhoun, a Solicitor¹⁵ and Beaumont v Senior,¹⁶ that the costs were not globally apportioned between the two clients represented by ACLG Lawyers, being the first defendant (the respondent in these proceedings) and sixth defendant, as ought to have occurred. As the respondent argued, the appellant identified no factual basis upon which it could be alleged that there was no apportionment. To the contrary, the evidence before the Court was to the effect that the costs assessor was given the first defendant’s file and engaged to complete a costs statement for the first defendant only. This objection is without substance and reveals no appellable error.

Objection 7 – indemnity costs greater than respondent’s costs

19. By Objection 7, the appellant, relying on Irving v Gagliardi,¹⁷ objected that the indemnity costs awarded against him were greater than the respondent itself was liable to pay to ACLG Lawyers. The argument was that the costs statement was inconsistent with the respondent’s financial reports because those financial reports did not purport to show the liability of $28,483.97 that the costs statement said the respondent owed to its solicitors. The appellant’s submission proceeded on the assumption that this showed error in the costs statement and not the financial reports of the respondent. The financial statements of the respondent and the client agreement were not in evidence and there was no application to adduce them. There is no basis demonstrated in the material to support this objection which amounts to no more than assertions.

Objection 9 – work done before notice of change of solicitor filed

20. Objection 9 likewise lacks merit. It concerns the first respondent being charged for the preparatory work undertaken by ACLG Lawyers set out from approximately Items 1 to 50 of the costs statement. It is premised on the erroneous assumption that solicitors cannot necessarily commence acting for a party before a notice of change of solicitor is filed and they officially take over carriage of a matter by notice, and that such work cannot be billable.

Objections 33, 34 and 34(b) – charges for preparation of submissions

21. Objections 33, 34 and 34(b) are also baseless. They object to being charged a total of $1,671.20 for the preparation and production of the respondent’s outline of submissions for the hearing of the application. The appellant submitted that Practice Direction 6 of 2004 provided that no charge was to be made for the preparation of an outline. These objections all stem from a misconception on the part of the appellant as to the effect of Practice Direction 6 of 2004. As the respondent submitted, it is not correct to say that the practice direction prohibits charging for an outline, rather, it only prohibits charging for preparing a file index search, list of material and completion of an appearance slip.

Objection 45 – charges for collecting and examining orders on 12 February 2016

22. Objection 45 concerns the costs of collecting a copy of the sealed orders of Mullins J dated 12 February and then examining those orders on 16 February 2016. The appellant’s objection is based on the erroneous understanding that the orders of Mullins J (in respect of which the indemnity costs were ordered) were delivered on 22 February 2016. However, those orders were in fact dated and sealed on 12 February 2016.¹⁸ It was therefore possible for the orders to be collected and examined on 16 February 2016 and the time it took to do that to be properly charged for. ¹⁹ The complaint is of a spurious nature.

Objection 35 – charges for callover attendance

23. Objection 35 is that the costs statement did not apportion the fee for attendance at the callover on 4 February 2016.²⁰ The charge is for $49.10.²¹ The appellant submits that the callover attended concerned two applications for the proceeding and that he had already paid the costs for one (apparently as part of the fixed costs order to be paid). The amount in question, it was submitted, ought to therefore be halved to $24.55, a trivial amount given the deduction made by the assessor.

Objections 13, 20, 21, 23, 27, 36, 37, 38 and 39 – unreasonable charges

24. Objections 13, 20, 21, 23, 27, 36, 37, 38 and 39 are to what the appellant submits to be unreasonable charges as described in Lee. It is to be observed that, unlike the present case, Lee concerned costs ordered on the standard basis, not the indemnity basis and related to the engagement of counsel. As mentioned already, it is not of assistance. The charges in this case have not been demonstrated to be unreasonable.

Objection 46 – costs for care and conduct

25. Objection 46 is that the care and conduct costs claimed by the solicitors against the first defendant are excessive and unreasonable. The appellant submitted that the costs are a 50 per cent surcharge on the solicitors’ professional fees. The amount charged for care and conduct under Item 189 of the costs statement is $8,664.57 and the total costs, as claimed (and including the care and conduct costs), are $28,475.22 excluding outlays ($19,810.65 without the care and conduct costs). The care and conduct costs were therefore 43.74 per cent of the original total professional fees before the addition of the care and conduct costs.

26. The applicant relied on Practice Direction 22 of 2018 in contending that the care and conduct costs were unreasonable. That practice direction provides guidance that costs for care and conduct will usually be calculated as a percentage of the total amount otherwise allowed for costs (excluding outlays) having regard to the factors in item 1 of sch 1 of the UCPR. In the absence of exceptional circumstances, that percentage should be 15‑20 per cent (for a “straightforward claim not otherwise specified, where the amount involved is not above $2 million”). Ultimately, however, item 1 of sch 1 of the UCPR provides for costs for solicitor’s care and conduct in the amount the registrar considers reasonable having regard to factors such as the complexity of the proceeding, the importance of the proceeding and the amount of costs otherwise involved.

27. Further, the appellant referred to authorities where care and consideration in percentages of 50 per cent and 30 per cent were held to be either excessive or approaching the upper limit.²² But those cases, as the respondent pointed out, related to costs ordered on the standard, not indemnity, basis.²³ In the present case, Item 189 of the costs statement is described as:

“Care and Conduct – Instructions generally, all sundry attendances and perusals not herein specifically referred to, care and consideration having particular regard to the fact that Counsel was not briefed and the solicitors firm acting both as instructor and advocate. Care and consideration on the costs of drafting, engrossing and copying this Costs Statement.”

28. Each case is to be considered in the circumstances of its own factual background and it is not irrelevant when assessing costs for care and conduct in the present case that the solicitors acted as both advocate and instructor because counsel was not engaged. It is also not irrelevant that the appellant’s amended statement of claim, the subject of the strike out application, was voluminous, being some 116 pages long, comprising 881 paragraphs.²⁴ The respondent submitted that the vast majority of the application to strike out related to the first defendant applying to strike out many of the paragraphs of the claim made against it. In the circumstances, the appellant has not advanced any basis to conclude that the trial judge erred in concluding the objection was meritless.

Objections 50, 53 and 55 – charges for correspondence

29. Objections 50, 53 and 55 relate to charges for several communications the subject of complaint but which clearly contain typographical errors as the trial judge identified. Item 196, for example, is described as “Sending letter to the First and Second Defendants’ Solicitors enclosing the Costs Statement and requesting the Objections (Formal)”. In the course of submissions below, this was accepted to be a typographical error, which was expressed to the costs assessor and should have referred to Mr Thompson. The appellant demonstrated no basis for concluding to the contrary. The objection is meritless.

Objections 12 and 18 – calculation errors

30. Objection 12 relates to an alleged calculation error whereby an 18 minute call had been charged to the appellant at the amount as if it were a 30 minute call. The first respondent charged $149 for an 18 minute telephone call with ACLG Lawyers (Item 4 of the costs statement). Item 16 of sch 1 of the UCPR provides that attendances by a solicitor involving skill or knowledge are to be charged at the rate of $74.50 for each quarter hour. Item 3(b) provides that a proportionate amount of the cost for one quarter hour is to be charged for part of each quarter hour after the first quarter hour spent on a matter. Accepting the correct figure should be $89.40 ($74.50 + $74.50 x (3/15)), results in a minor overcharge in Item 4 of the costs statement of $59.60.

31. Similarly, Objection 18 concerns being charged $372.50 for a one hour and 12 minute telephone attendance on the first respondent. Accepting, in accordance with the rules above, the correct figure should be $357.60 ($74.50 x 4 + $74.50 x (12/15)), results in a similarly minor overcharge in Item 15 of $14.90.

Objections 36 and 38 – 4 and 12 February 2016 calculation errors and costs for representation

32. Objections 36 and 38 comprise a number of points. The appellant submitted, relying on Amos v Monsour Legal Costs Pty Ltd,²⁵ that the attendance of two solicitors for the hearing of the application was “disproportionate” because the appellant was there self-represented. However, as the respondent submitted, Amos is not authority for that proposition but for the proposition that considerations of general proportionality are required when assessing the reasonableness of a costs statement. That case did not suggest that a successful party cannot claim costs for engaging legal representation to defend a claim brought by a self-represented litigant. The contention that it was a “disproportionate” use of resources to do so has not been demonstrated.

33. An objection was also taken to being charged $1,304 for the attendance on 4 February 2016 of an advocate solicitor, Mr Delaney, and an instructing solicitor, Ms Fung. The appellant quarrelling as to the duration of the charged attendance on the basis that the hearing before Mullins J actually ran for 58 minutes, whereas four hours of attendance was billed.

34. By way of background, two applications involving the appellant and the first and sixth defendants were heard by Mullins J on 4 February 2014. The first was an application brought by the appellant to amend his statement of claim. That application ran from 2.19 pm until 3.14 pm, a total of 55 minutes. It was dismissed with the appellant being ordered to pay costs of the first and sixth defendants fixed in the sum of $2,500.²⁶ The second application was the strike out application, the subject of the order of indemnity costs and the subject of this appeal. That application ran from 3.51 pm until 4.49 pm, a total of 58 minutes, at which time the matter was adjourned, part heard, until 12 February 2016. The solicitors for the first defendant were however required to be in attendance at the Court from the start of the applications list at 10.00 am on 4 February 2014. As counsel for the respondent submitted, to charge the first defendant for four hours in those circumstances was reasonable for the purposes of assessing costs on the indemnity basis. The appellant has not established that it was not.

35. The same applies to the continuation of the application on 12 February 2019, in respect of which, by Objection 38, the appellant objects to being charged a further $1,304 each for a four hour attendance by both solicitors on the basis that the hearing went for two hours and 22 minutes. The hearing on 12 February began at 12.50 pm, adjourned at 12.58 pm, resumed at 2.31 pm and concluded at 4.45 pm. This also overlooks that the solicitors were required to attend court from 10.00 am (the commencement time for the matters listed for hearing) until 4.45 pm. In any event, including the adjournments, during which the solicitors presumably had to remain in the court precinct, the hearing ran for three hours and 55 minutes, just under four hours.

Other objections

37. Many of the objections contained in the appellant’s amended notice of objections were not the subject of written or oral submissions before this Court. As the respondent submitted, many of those objections are over minor matters and fail to appreciate that costs were assessed in accordance with what is reasonable, on the indemnity basis. They are querulous in nature and do not reveal any error below of the House v The King kind.

Ground 3 - the affidavit of Nathaniel Delaney of 11 October 2018

38. The appellant advanced a third ground of appeal relating to the affidavit of Nathaniel Delaney of 11 October 2018. The appellant complained that the affidavit and the first defendant’s outline of submissions were only provided to the appellant approximately 15 minutes before the commencement of the hearing. It was said that the affidavit contains at least one false and misleading statement relating to Mr Delaney’s carriage of the matter, that it did not comply with the UCPR and was incorrect in its assessment as to costs for the same reason that the costs statement was incorrect. Further, the appellant had not received the costs assessor’s certificate before receiving it as annexed to the affidavit. It was submitted that the primary judge relied on that document in formulating her decision but that the filed copy does not bear the requisite memorandum that it was used by leave, despite its shortcomings.

39. In addition, the appellant submitted that the primary judge failed to consider various documents at the hearing of the application. The appellant submitted that on his appearance slip for the primary hearing, he requested that the appellant’s outline of argument be considered, along with documents 177, 178, 180, 182, 183, 184, 187, 188, 189, 190, 86, 89, 108 & 147.²⁷ He based the complaint on the assertion that not all of these documents were considered on the endorsement sheet for the hearing, which, he submitted, was in these terms:

“Leave to read and file applicant’s outline of submissions, first defendant’s submissions. Application reads document 189. First Defendant reads documents 100, 177, 180, 187, 182, 188, 189, 190, 194. Leave to read and file copy of court document 190. Leave to read and file applicant’s appearance slip. Application reads material in the written outline.”

40. On that basis, the appellant argued that the primary judge failed to consider his submissions, neglecting to “take any account” of documents 86, 89, 108, 147, 178, 183 and 184, as requested, because they were not expressly referred to on the endorsement sheet.

41. There is no substance in any of these complaints. The appellant did not object to the affidavit being received. Nor was an adjournment sought to address it. The affidavit effectively only contains uncontroversial matters such as that the appellant and Mr Delaney had corresponded by email on a number of occasions and a copy of the form commonly used for objections. Complaints as to form, such as a possible error with respect to the commencement date of Mr Delaney’s engagement and the form of the affidavit do not provide a basis for appellable error. As to the contention that the primary judge failed to consider documents, the absence of specific reference on the endorsement sheet does not provide a sufficient basis to assert that those documents were not considered. In any event, as the respondent submitted, the appellant failed to explain the relevance of documents 86, 89, 108 and 147. The relevant costs statement²⁸ was annexed to the affidavit of Mr Delaney filed 14 August 2018²⁹ and the primary judge had regard to the amended version of the appellant’s notice of objections (annexed to his affidavit filed 5 October 2018).³⁰ As to document 184 (an affidavit of Mr Thompson, filed 31 August 2018),³¹ it was directed to the appellant’s contention that he never consented to service by email communication, outlined his usual routine for accessing his email, exhibited a copy of the relevant email and costs statement and stated that he did not access his email on this occasion until Friday, 27 July 2018. These were all matters addressed in submissions by the appellant to the primary judge.³² The appellant raises no matter that justifies the conclusion that there was any error in the trial judge’s approach or determination.

Orders

42. The appeal should be dismissed with costs.

43. RYAN J: I agree with the reasons for judgment of Philippides JA and the orders proposed by her Honour.

Footnotes

1. AB2 at 146-148. ↩

2. AB2 at 414. ↩

3. AB2 at 416. ↩

4. AB 2 at 443. ↩

5. AB2 at 542. ↩

6. AB2 at 18. ↩

7. AB2 at 601. ↩

8. AB2 at 603. ↩

9. AB1 at 15. ↩

10. AB1 at 10. ↩

11. (1936) 55 CLR 499. ↩

12. AB1 at 13. ↩

13. AB2 at 29-47. ↩

14. [2017] QSC 22. ↩

15. [1853] EngR 248; (1854) 5 De GM & G 35; 43 ER 781. ↩