On 7 October 2016, Dr Zaghloul commenced an action in the General Division of this Court (Supreme Court action). He was self‑represented. The indorsement to the writ filed by Dr Zaghloul indicated that his cause of action was for defamation, arising from certain statements made by the second to eighth respondents.
On 20 October 2016, Dr Zaghloul filed a notice of discontinuance of the Supreme Court action. On 21 October 2016, a copy of that notice was served on the solicitors for all of the respondents.
Because the notice of discontinuance was filed before the respondents had filed a defence, O 23 r 2(1) of the Rules of the Supreme Court 1971 (WA) (RSC) permitted Dr Zaghloul to discontinue the Supreme Court action, provided he pay the respondent's costs of that action.
As it turned out, only the first respondent had incurred costs. In February 2017, the first respondent filed a bill of costs (BOC). That BOC was taxed by a registrar in the amount of $10,567.75.
At the conclusion of the taxation, Dr Zaghloul objected to the Registrar signing the allocatur. His objections were the subject of a review by the Registrar. She dismissed his objections. The learned Registrar delivered written reasons for that decision (Registrar's Decision).[1] After the costs of the taxation were taken into account, the Registrar issued a certificate for the costs of the Supreme Court action in the sum of $13,067.75.
Dr Zaghloul then sought a review of the Registrar's Decision pursuant to O 66 r 55 RSC. The review was heard by Kenneth Martin J. His Honour dismissed the review, and made the following orders (Primary Decision):[2]
Review application of the plaintiff under RSC O 66 r 55 is dismissed with costs.
The plaintiff is to pay the [first] defendant's costs of the RSC O 66 r 55 review application on an indemnity basis, save for any costs that are assessed by a taxing officer to be of an unreasonable amount, or that were unreasonably incurred.
Dr Zaghloul now appeals against those orders.
The first respondent filed a Notice of Contention in respect of parts of the primary judge's reasons which were the subject of a number of the grounds of appeal.
Dr Zaghloul requires leave to appeal. He also requires an extension of time within which to appeal. For the reasons set out below, leave to appeal should be granted, and the appeal should be allowed, to the extent that order 2 made by the learned primary judge should be set aside, and there should be substituted an order that the appellant pay the first respondent's costs of the review fixed in the sum of $10,131. While Dr Zaghloul was successful to that limited extent, the first respondent should properly be regarded as the successful party on the appeal. Dr Zaghoul should pay the first respondent's costs of the appeal, fixed in the sum of $18,000. It is unnecessary to address the contentions the subject of the Notice of Contention.
[2]
Some of the issues raised by Dr Zaghloul in this appeal must be understood by reference to some surrounding context.[3] Dr Zaghloul was employed by the first respondent between 2008 and 2013. He claimed to have suffered a psychological injury in the course of that employment which he attributed to bullying. The first respondent conducted an investigation in respect of his complaint, but the first respondent refused to provide Dr Zaghloul with a copy of the report of the investigation (Report).
In 2012, Dr Zaghloul commenced an action against the first respondent in the Federal Court, seeking damages in contract and tort in respect of his alleged workplace injury (Federal Court proceedings). In the course of those proceedings, the first respondent made an application for the trial of a separate question as to whether the Federal Court had the power to award Dr Zaghloul the damages he claimed. That question was resolved in Dr Zaghloul's favour at first instance. The first respondent appealed, and the appeal was dismissed.[4] The first respondent was ordered to pay Dr Zaghloul's costs.[5] At the time of the hearing of this appeal, those costs had not been taxed.
In early 2016, in the course of the Federal Court proceedings, Dr Zaghloul obtained a copy of the Report. In the Supreme Court action, Dr Zaghloul alleged that defamatory statements had been made by the second to eighth respondents, who were employees of the first respondent, to the investigator who investigated Dr Zaghloul's complaint of bullying, and that those statements were reproduced in the Report. The only publication of those statements which was alleged in the indorsement to the writ filed by Dr Zaghloul in the Supreme Court action, was the provision of the Report to the solicitor acting for Dr Zaghloul in the Federal Court proceedings, in February 2016.
On 19 October 2016, Dr Zaghloul sent emails to the solicitors for the respondents in the Supreme Court action, indicating that he intended to discontinue the Supreme Court action. The notice of discontinuance was filed on 20 October 2016, and was served on the respondents' solicitors on 21 October 2016. On 20 October 2016, and before the notice of discontinuance was served, a conditional appearance was filed on behalf of the first and ninth respondents.[6]
The notice of discontinuance filed by Dr Zaghloul stated that he 'wholly discontinue[d] the proceeding without prejudice'.[7] In an affidavit that he filed with the notice of discontinuance,[8] Dr Zaghloul deposed that he discontinued the proceeding
[3]
without prejudice on the basis of what I have found ... to be a technicality that could form the basis to dismiss my application, notwithstanding my belief that I have a course (sic) of action against the defendants, and to avoid waste of the Court's valuable resources.
[4]
On 2 October 2017, almost a year after filing the notice of discontinuance, Dr Zaghloul filed both a summons seeking summary judgment in the Supreme Court action, or alternatively judgment in default of appearance, and a statement of claim. He contended that the notice of discontinuance he had earlier filed was ineffective, but that even if it was not, he contended that the Court could grant leave to uplift the notice. Dr Zaghloul's application for summary judgment was dismissed by the Master,[9] and an appeal against that decision was dismissed.[10]
[5]
The framework for taxations of costs, and the review thereof
[6]
It is convenient at this point to briefly mention the framework for the taxation and review of a bill of costs, which is set out in O 66 RSC.
Where an order of the Court (such as O 23 r 2 RSC) directs the payment of any costs, then those costs may be taxed without any order of the Court to that effect.[11]
A bill of costs prepared for taxation must be prepared to show clearly the various items for which costs are claimed, together with a reference to that item in the applicable costs scale to which the item in the bill relates, the dates of the items of costs, particulars of the services charged for (where necessary), disbursements, and professional charges.[12] (The taxation of the BOC was conducted by reference to the costs allowed under the scale set out in the Legal Profession (Supreme Court) (Contentious Business) Determination 2016 (scale).)
For the purposes of a taxation of costs, the taxing officer may exercise a number of powers, including the power to summon and examine witnesses orally or on affidavit; to administer oaths; to direct the production of books, papers and documents; and to exercise all the powers of the Court in relation to the admission of evidence.[13]
Order 66 r 53, r 54 and r 55 RSC permit a party dissatisfied with the taxation of a bill of costs to object and apply for a review, and then to seek a review of the taxation by the taxing officer, and thereafter to seek a review of the taxation by a judge. Those rules relevantly provide as follows :
Party dissatisfied with taxation may object and apply for review
[7]
(1) A party who contends that the taxing officer has made an error in principle in allowing or disallowing any item or part of an item in a bill of costs taxed by him may, at any time before a certificate of taxation dealing finally with that item is signed, or at such earlier time as may, in any case, be fixed by the taxing officer -
[8]
(a) deliver to the other party interested in the allowance or disallowance and carry in before the taxing officer, an objection in writing to the allowance or disallowance specifying the objection by a list, in a short and concise form, the items or part of items objected to, and the grounds and reasons for the objections; and
(b) thereupon apply to the taxing officer to review the taxation in respect of those items or parts.
...
[9]
(1) Upon an application under rule 53 to review the taxation, the taxing officer shall reconsider and review his taxation in relation to the objections, and he may, if he thinks fit, receive further evidence in respect of the objections.
(2) If so required by a party, the taxing officer shall state in his certificate of taxation or by reference to the objection, the ground and reason of his decision on the objection, and any special facts or circumstances relating to his decision.
(3) The taxing officer may tax the costs of the objections and add them to or deduct them from, any sum payable by or to a party to the taxation.
...
[10]
(1) If a party dissatisfied with the certificate of the taxing officer as to any item or part of an item objected to under rule 53 of this Order, he may, within 14 days from the date of the certificate, or such other time as the Court, or the taxing officer at the time he signs his certificate, allows, apply to a judge in chambers for an order to review the taxation as to that item or part of an item.
(2) The judge, if of 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.
(3) The certificate of the taxing officer is final and conclusive as to all matters which have not been objected to in accordance with these rules.
[11]
A party who has required the taxing officer to state the ground and reason of their decision on an objection, for the purpose of seeking a review, may request the taxing officer to grant a stay of proceedings either wholly or limited to the item or part thereof which is the subject of the objection.[14]
As O 66 r 55(2) RSC makes clear, the judge's power to rectify an error in the taxation depends on the judge's conclusion that the taxing officer has made an 'error in principle'. Errors in principle may be made in determining whether an item should be allowed, and in how much should be allowed, but a complaint as to the amount allowed, of itself, will not constitute an error in principle.[15] 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 has been exercised in a manner that is manifestly wrong,[16] or if it is shown that no taxing officer, acting reasonably, could ever have taxed the particular item in the amount in question.[17]
The costs allowed by a taxing officer on a certificate of taxation are deemed to be a judgment of the Court and are recoverable accordingly.[18]
[12]
The taxation, and the reviews thereof by the Registrar and the primary judge The first respondent's BOC
[13]
Following the filing of the discontinuance of the Supreme Court action, the first respondent filed the BOC for taxation.[19] The total amount of costs claimed was $32,442.
The amounts claimed in the BOC were as follows:[20]
[14]
Getting up - foreshadowed summary judgment application
[15]
The BOC included some information and what were, in effect, submissions, in support of the costs claimed. The first respondent submitted that when Dr Zaghloul foreshadowed his intention to bring the Supreme Court action, 'he was provided with sound reasons why the claim should not be brought'[21] but that he persisted in filing the writ, only to discontinue the action shortly thereafter. The first respondent submitted that Dr Zaghloul had initiated numerous proceedings against it, including the Federal Court proceedings, with the result that the first respondent had incurred considerable legal costs.[22] The first respondent also made submissions about the manner in which Dr Zaghloul had conducted the other proceedings, and submitted that the first respondent had therefore been concerned 'to act as quickly and decisively as possible to dismiss the [Supreme Court action] if possible, ... and to minimise the stress that the litigation could reasonably be expected to cause [the second to eighth respondents]',[23] who were employees of the first respondent.
In addition, the first respondent stated, in the BOC, that the total legal costs for which it was billed were in excess of $52,000, so that the sum claimed in the BOC represented about 62% of those total costs.[24]
Further, the first respondent stated, in the BOC, that the BOC was drawn by reference to the relevant items in the applicable scale and the costs incurred by the first respondent, and did not contain any work of a solicitor-client nature, any clerical work, or any work outside the scope of the costs to which the first respondent was entitled by virtue of O 23 r 2(1) RSC.[25]
[16]
The BOC was provisionally assessed by a registrar of the Court, in accordance with the Court's practice directions.[26] However, Dr Zaghloul objected to that informal assessment, and the Registrar then conducted a formal taxation hearing.
The learned Registrar summarised the contentions advanced by Dr Zaghloul on the taxation as follows.[27] First, Dr Zaghloul contended that no costs should be awarded, having regard to the underlying subject matter. The learned Registrar rejected that contention and proceeded on the basis that, pursuant to O 23 r 2(1) RSC, Dr Zaghloul was obliged to pay the first respondent's costs, by virtue of the discontinuance of the Supreme Court action.[28]
Secondly, Dr Zaghloul contended that the first respondent had not acted reasonably in the circumstances.[29] He submitted that there was no evidence to confirm that the costs claimed by the first respondent had been incurred reasonably and legally.[30] In addition, Dr Zaghloul submitted that the majority of the costs claimed in the BOC for legal work under the description of 'getting up' was for work undertaken by senior counsel for the first respondent, who had been retained in the Federal Court proceedings since 2011.
In response, the first respondent contended that in view of the extensive involvement that senior counsel for the first respondent had had in the Federal Court proceedings, it was reasonable for the first respondent to brief him in the Supreme Court action.[31] In the course of the taxation hearing, counsel for the first respondent provided the Registrar and Dr Zaghloul with a copy of senior counsel's fee note, in respect of the work he had undertaken.[32]
The learned Registrar rejected Dr Zaghloul's submission that evidence was required to confirm that the costs claimed had been incurred reasonably and legally.[33] She accepted that the costs claimed had been incurred.[34] The learned Registrar also accepted that the significant history of litigation between the parties, in which senior counsel had acted for the first respondent in the Federal Court proceedings, meant that the first respondent was not in the position where it needed to brief a counsel, with no background knowledge of the dispute, in the Supreme Court action.[35] As she observed, that meant that counsel for the first respondent in the Supreme Court action was aware of the issues between the parties and did not need to start 'at the start'.[36]
Thirdly, Dr Zaghloul contended that the amount of costs sought was excessive.[37] The learned Registrar approached the question of quantum on a global basis,[38] by considering what quantum of costs was appropriate in circumstances where the discontinuance was filed within a reasonably short period after the writ was filed.[39] The learned Registrar concluded that the total amount which should be allowed for 'getting up' in the Supreme Court action, and for the discontinuance itself, was $5,500.[40] To reflect that conclusion in the terms of the claims made in the BOC (set out at [25] above), the learned Registrar disallowed claim 2 in its entirety, disallowed $2,471.70 of the amount claimed for claim 3, and allowed claim 4 in full.[41] She also allowed, in full, the amounts claimed in claim 1, claim 5, claim 6 and claim 7. After adding the taxing fee of $257.75, the learned Registrar assessed the BOC at $10,567.75.[42]
At the end of the taxation hearing, Dr Zaghloul objected to the allocatur being signed. The Registrar made orders for the filing of written objections for the purposes of a review of the taxation pursuant to O 66 r 53 RSC.[43]
[17]
Dr Zaghloul made 36 discrete objections to the taxation. The learned Registrar considered each of them, and dismissed them all.
Dr Zaghloul's objections fell into seven broad categories. First, many of the objections essentially proceeded on the basis that the first respondent was not entitled to its costs either because the discontinuance filed by Dr Zaghloul was not effective, with the result that the Supreme Court action remained on foot, or because O 23 r 2(1) RSC operated only after some pleadings had been filed, and in this case, no pleadings had in fact been filed. The Registrar rejected those objections. As Dr Zaghloul ultimately did not pursue those contentions in the appeal, it is unnecessary to say any more about them.
Secondly, Dr Zaghloul objected to the taxation on the basis that there should be a stay of the review under O 66 r 58 RSC.[44] The learned Registrar concluded that Dr Zaghloul's application for a stay was premature, because while it was open to Dr Zaghloul to apply for a stay pending a review by a judge, there was no basis for a stay prior to the conclusion of the review by the taxing officer.[45]
Thirdly, Dr Zaghloul objected on the basis that 'there should be a set-off in respect of costs ordered to be paid by the first [respondent] ... in related Federal Court proceedings'.[46] The learned Registrar rejected that objection on the basis that the Supreme Court did not have jurisdiction to deal with costs incurred in the Federal Court by way of set‑off.[47]
Fourthly, Dr Zaghloul advanced a number of objections concerned with the reasonableness of the amount claimed in the BOC. He submitted that there was no basis for the amount claimed because most of the costs claimed were incurred by the first respondent in investigating a summary judgment application.[48] The learned Registrar rejected that objection, having previously disallowed, in its entirety, the first respondent's claim for costs incurred in preparing the summary judgment application.
Fifthly, Dr Zaghloul made various objections directed to whether sufficient detail of the costs claimed, or evidence for the costs claimed, had been provided. He contended that:
[18]
(i) the BOC did not contain the details required by O 66 r 42 RSC;[49]
[19]
(ii) he was not provided with details of the costs incurred;[50]
[20]
(iii) the first respondent had not provided evidence, in the form of an affidavit or witness statement, to show that counsel's fees had been sought or paid,[51] that counsel should have sworn an affidavit in support of the fees claimed,[52] and that the first respondent did not explain the work that the lawyers had done;[53]
[21]
(iv) he 'had no evidence from the first [respondent] to justify the costs charged'[54] and that insufficient particulars were provided of the amounts claimed in the BOC;[55]
[22]
(v) the material provided by counsel at the taxation hearing was not sufficient,[56] and that the first respondent should have provided evidence in support of the BOC.[57]
[23]
The learned Registrar rejected the latter contentions, in short because she was of the view that:
[24]
(i) the BOC set out the claim for the costs incurred in detail, and a copy of the schedule of fees for senior counsel had been provided to explain the work that was done;[58]
[25]
(ii) the BOC contained sufficient details to comply with O 66 r 42 RSC;[59]
[26]
(iii) it was not usual for an affidavit or witness statement to be provided at a taxation, and it was not necessary to do so in this case;[60]
[27]
(iv) there was more information attached to the BOC than was commonly found in bills of costs filed in similar circumstances, and there was sufficient information attached to the BOC to enable Dr Zaghloul to put forward objections and for the Registrar to deal with those objections;[61]
[28]
(v) although there was power in O 66 r 44 RSC for a taxing officer to obtain evidence by affidavit or on oath, and to direct the production of documents, that was a discretionary power, and it was not necessary to utilise that power in this case. The learned Registrar noted that it was usual for material to be handed up at a taxation and to be relied on by the taxing officer, and it was rare for evidence to be led. She was satisfied that the costs set out in the BOC had been incurred;[62]
[29]
(vi) the BOC contained sufficient particulars of the amounts claimed.[63]
[30]
Sixthly, Dr Zaghloul contended that in incurring the sum of $55,000 in costs, the first respondent was not 'acting rationally'.[64] The learned Registrar concluded that that objection did not raise an error in principle and should be dismissed.[65]
Finally, Dr Zaghloul objected to the quantum of the costs allowed at the taxation.[66] The Registrar rejected this objection on the basis that it did not involve any contention that she had made an error in principle.[67]
The learned Registrar ordered that Dr Zaghloul pay the first respondent's costs of the review, which she fixed in the sum of $2,500.[68] With the addition of those costs, the certificate of taxation issued by the learned Registrar amounted to $13,067.75.[69]
The amounts allowed following the Registrar's review of the taxation are set out in the table below:[70]
[31]
Getting up - foreshadowed summary judgment application
[32]
Dr Zaghloul then lodged what he described as an 'appeal' (that is, an application for a review of the Registrar's Decision) pursuant to O 66 r 55 RSC. He advanced 12 'grounds of appeal' in respect of the taxing officer's decision.
The learned primary judge observed that there was no basis for an 'appeal' against the certificate of a taxing officer issued after a review conducted pursuant to O 66 r 53 and r 54 RSC. His Honour noted that instead of an appeal, O 66 r 55 RSC provided a limited opportunity for a further review by a judge to correct any error in principle made by the taxing officer.[71]
The learned primary judge observed that the 'appeal' documents filed by Dr Zaghloul did not 'readily align or correlate in any clear or discernible way with Dr Zaghloul's earlier 36 written objections'.[72] However, his Honour discerned three issues arising from the various 'grounds' identified by Dr Zaghloul.
First, his Honour noted that Dr Zaghloul sought to challenge the jurisdiction of the taxing officer, on the basis that Dr Zaghloul had not actually discontinued the Supreme Court action. It is unnecessary to address the learned primary judge's reasons for rejecting that contention because in his appeal to this Court, Dr Zaghloul did not pursue a challenge to this aspect of the conclusion reached by the learned primary judge.
Secondly, the learned primary judge noted that Dr Zaghloul advanced a general contention that the taxing officer had made an error in principle in relation to the quantum of the costs she allowed. His Honour noted that the taxing officer allowed only $5,500 for claims 2, 3 and 4 in the BOC, and in doing so, taxed off just over 80% of the total amount for those claims, yet Dr Zaghloul maintained that 'that $5,500 result reflects an underlying error of principle'.[73] The learned primary judge noted that Dr Zaghloul submitted that the amount allowed was too high, but that Dr Zaghloul did not explain why that was so, other than to submit that any amount allowed, in excess of $99 for the filing of the memorandum of appearance, was wrong and would reveal an error in principle.[74] The learned primary judge held that no error in principle was disclosed in relation to the quantum of the costs allowed, and that Dr Zaghloul's submissions were without merit. His Honour observed that those submissions 'reek of being advanced simply to stave off a looming day of him ever paying anything to the first [respondent] '.[75]
Finally, the learned primary judge discerned that the balance of Dr Zaghloul's grounds of appeal contended that he had been denied procedural fairness, within the conduct of the taxation hearing before the Registrar and thereafter. The learned primary judge rejected that contention, and concluded that 'more than abundant measures of procedural fairness were afforded to Dr Zaghloul - in what was an economically disproportionate allocation of scarce resources overall'.[76]
The learned primary judge concluded that 'no errors of principle were identified, let alone shown' and that consequently the review application should be dismissed with costs.
His Honour then went on to consider whether Dr Zaghloul should be ordered to pay costs. He concluded that an order for indemnity costs was warranted. The learned primary judge said:[77]
[33]
Notwithstanding that Dr Zaghloul is a self-represented litigant, the wholly uneconomic and grossly disproportionate resourcing scale of the present review exercise was made more expensive and costly than it ought to have been. What is a significant waste of this court's resources was incurred under what is an effective failure by Dr Zaghloul to appreciate the legal constraints of an O 66 r 55 review and to find and focus on any true error of principle. Instead, there was a proliferation of time-consuming exchanges of unnecessary written materials. Those materials seemingly multiplied exponentially over time in a fashion which, on my assessment, was unnecessarily wasteful and is ultimately inexcusable.
A court must be very cautious before making an indemnity costs order against a self-represented litigant. However, enough is enough in the present circumstances. I am well-satisfied that it is both necessary and appropriate to mark this court's firm disapproval of what I see as an attempted manipulation of its costs review processes to attempt to effectively stave off the day of ever having to render a payment of any costs to the first [respondent]. That attempt has failed.
[34]
Dr Zaghloul submitted that he did not require leave to appeal to this Court, but that if he did require leave, it should be granted, as he would suffer a substantial injustice if the orders under appeal were not set aside. The first respondent submitted that the decision of the learned primary judge was an interlocutory decision, and hence leave to appeal was required, pursuant to s 60(1)(f) of the Supreme Court Act 1935 (WA) (SC Act).
In our view, Dr Zaghoul requires leave to appeal, for the following reasons.
First, in our view, the appeal can properly be characterised as an appeal from an interlocutory order given by a judge, for which leave to appeal is required, by virtue of s 60(1)(f) of the SC Act. Interlocutory orders are orders made to resolve an issue arising out of an application made in the course of a proceeding, but they may also be made before the proceeding commences,[78] and even after the conclusion of the proceedings.[79] They may be contrasted with final judgments or orders, which finally determine the rights of the parties in the principal cause pending between them, having regard to the legal, rather than the practical, effect of the judgment or order.[80] Consequently, an interlocutory order is one which does not finally dispose of the rights of the parties in the proceedings.[81]
The orders made by the primary judge were, in our view, interlocutory in nature, in that they did not finally resolve the rights of the parties in the principal cause pending between them, but merely determined the costs able to be included in the costs allowed on the taxation.
Secondly, that conclusion is consistent with Victorian authority. In Kowal v Zoccoli,[82] the Victorian Court of Appeal held that although an order made on a taxation of costs, and an order varying the taxation, gave effect to what was otherwise a final order or judgment, in themselves, they were not final. Rather, they were interlocutory in nature, and consequently, leave to appeal was required under the applicable rules of the Court.
Thirdly, in Larussa v Carr,[83] which was an appeal against an order of a single judge of the general division of the Court, made pursuant to O 66 r 55 RSC, this Court proceeded on the basis that leave to appeal was required. However, the reasons of the Court did not allude to the basis on which leave was required.
Fourthly, there is some authority of this Court which suggests that leave to appeal is not required in an appeal from an order of a judge on a review under O 66 r 55 RSC. That authority is Altorfer & Stow (A Firm) v Lindsay & Ors.[84] In our view, that authority is distinguishable, and in any event is inconsistent with Larussa v Carr, and should therefore not be followed. In Altorfer & Stow (A Firm) v Lindsay & Ors,[85] McLure JA (with whom Wheeler JA agreed) held that leave to appeal was not required in an appeal against a decision of the Master on a review of a taxation. However, in that case, the parties and the Court proceeded on the basis that if leave was required, it was required only because s 60(1)(e) of the SC Act applied. The Court did not consider whether s 60(1)(f) applied. Furthermore, at the time of the appeal in Altorfer, s 60(1)(e) of the SC Act did not permit this Court to grant leave to appeal. (The provision was subsequently amended to permit this Court to grant leave to appeal in cases of the kind described in s 60(1)(e).[86])
Generally, leave should not be granted unless the decision below is plainly wrong or is attended by sufficient doubt to justify the grant of leave and a substantial injustice would be done if the decision remains undisturbed.[87] As we have concluded that ground 6 of the grounds of appeal has merit, leave to appeal should be granted.
Dr Zaghloul also requires an extension of time within which to appeal. An interlocutory civil appeal must be commenced within 14 days of the decision under appeal.[88] The orders made by the primary judge were made on 23 April 2018. Dr Zaghloul filed his Appeal Notice on 10 May 2018, three days out of time. It is apparent from his Appeal Notice that Dr Zaghloul was under the misapprehension that the appeal was required to be filed within 21 days. We would grant Dr Zaghloul an extension of time in which to bring the appeal, until 10 May 2018.
[35]
Dr Zaghloul advanced seven grounds of appeal. In the course of the appeal hearing, he did not press grounds 2, 5 and 7. It is convenient to address the grounds of appeal by considering, first, ground 4, then ground 3, then ground 1, and finally ground 6.
[36]
[4] The learned Judge erred in mixed fact and law, or alternatively in law, in reaching a mistaken conclusion that the Taxing Officer 'was fully empowered to proceed and to tax the bill as submitted' where there was no evidence before the Taxing Officer to proceed to taxation (at [50]).
[37]
Dr Zaghloul submitted that the BOC itself, and the submissions by counsel for the first respondent at the hearing before the learned Registrar,[89] were 'inadmissible as evidence by the rule against hearsay'.[90] Dr Zaghloul relied on the decision of Edelman J in Pourzand v Telstra Corporation Ltd[91] for the proposition that the submissions of counsel on a taxation do not constitute evidence in support of a bill of costs.[92]
Dr Zaghloul further contended that the first respondent should have submitted evidence, in an affidavit, to confirm that the work referred to in the BOC was, in fact, done and that it pertained to the action.[93] Dr Zaghloul's concern was that the quantum of the BOC was so high that the work the first respondent claimed to have been done could not have been attributable to the Supreme Court action.[94]
Dr Zaghoul also contended that there was no evidence submitted with the BOC to substantiate the legal fees charged by senior counsel, where those fees amounted to 80% of the total amount in the BOC.[95]
Dr Zaghloul further submitted that the Registrar's acceptance of the BOC without substantiating evidence of the costs claimed denied him procedural fairness.[96]
In addition, Dr Zaghloul submitted that the BOC was not signed, and that that was contrary to par 4.7.4.1(3) of the Supreme Court Consolidated Practice Direction.[97]
Finally, Dr Zaghloul submitted that the learned Registrar erred in that she did not give any reasons for dismissing his objection, based on the absence of evidence to substantiate the amounts claimed in the BOC.[98]
[38]
Ground 4 has no merit, for the following reasons.
First, it is not the case that evidence to substantiate the costs claimed in a bill of costs is required in every taxation. The starting point in assessing a bill of costs is that there is a strong presumption of the existence of a retainer, when a solicitor has performed work on behalf of a person with his or her knowledge and assent, in circumstances which are consistent with that person being the solicitor's client.[99] Accordingly, in the case of a solicitor who acts on the record for a party, it will ordinarily be presumed that there is a retainer and that the party for whom the solicitor acts is liable for the solicitor's costs.
Next, in assessing the costs claimed in a bill of costs, a taxing officer has the power to summon and examine witnesses, require the production of documents, and administer an oath so as to receive evidence.[100] Those powers may be called in aid in a case where there is a real doubt about whether the costs claimed by a party have in fact been incurred. However, those powers are clearly discretionary and a taxing officer is under no obligation to exercise such powers in every case.[101] To require evidence, on oath, to substantiate the costs claimed in a bill of costs, when no real doubt exists as to whether those costs were in fact incurred, would merely add to the costs of litigation for no material benefit. The modern approach to the taxation of costs is to ensure that taxations are conducted as efficiently and economically as is possible.[102]
In addition, counsel for the first respondent, who appeared at the taxation, advised the Registrar that she had examined the first respondent's files and confirmed that the costs had been incurred and paid.[103] The learned Registrar was entitled to rely on the statements of counsel, as an officer of the Court, as confirmation that the costs in question had in fact been incurred and paid by the first respondent.[104]
Secondly, in this case, the evidence and other information before the Registrar left no room for any real doubt that the costs claimed in the BOC had been incurred in relation to the Supreme Court action. While no affidavit evidence was produced by the first respondent, the learned Registrar observed that 'there was more information attached to this bill than is commonly found in bills filed in similar circumstances'.[105] The BOC explained, in some detail, why such substantial costs had been incurred so early in the course of the action, specified the total costs incurred by the first respondent and those actually claimed in the BOC, particularised the work done in respect of each of the items of costs claimed, confirmed the basis on which the BOC had been prepared, and particularised who had undertaken the work, the number of hours of work, and the rates charged. Furthermore, the majority of the costs claimed in the BOC were for counsel's fees. In the course of the taxation, the first respondent produced a copy of counsel's invoice in respect of his fees.[106] To that extent, evidence of the costs claimed in the BOC was provided.
Thirdly, in so far as Dr Zaghloul submitted that he was not given the opportunity to object to counsel's invoice because it was produced during the taxation, and he had no opportunity to consider it,[107] there was no proper basis on which Dr Zaghloul could have objected to the Registrar's receipt of the invoice for counsel's fees. In addition, there is no doubt that Dr Zaghloul was given an ample opportunity to make submissions as to whether the costs claimed were reasonable. Furthermore, the Registrar's conclusion that no evidence was required to substantiate the other costs claimed in the BOC did not give rise to any denial of procedural fairness to Dr Zaghloul. Absent some evidence to cast doubt on the first respondent's liability to its solicitors for the legal costs claimed in the BOC, evidence to substantiate that liability was not required, as a matter of procedural fairness or otherwise.[108]
Fourthly, this was not a case like Pourzand v Telstra Corporation Ltd.[109] In that case, the party claiming costs submitted an affidavit of a solicitor which referred to, but did not annex, a report of a review conducted by a counsel who had been briefed to provide advice in relation to the costs which might be claimed. The Court held that even if counsel's report had been annexed to the affidavit, her views, which equated to submissions, did not constitute admissible evidence. However, as the Court acknowledged, had counsel appeared at the taxation, her views may have been a valuable submission on the question of the costs which should be allowed on the taxation. In the present case, counsel made a submission which was relied upon by the Registrar, because counsel was an officer of the Court.
Fifthly, Dr Zaghloul's reliance on par 4.7.4.1(3) of the Supreme Court Consolidated Practice Directions was misplaced. That paragraph of the Practice Directions did not apply in this case. It applies only to costs assessments under pt 10 div 8 of the Legal Profession Act 2008 (WA) (LP Act).
Finally, in so far as Dr Zaghloul contended that the learned Registrar had not given reasons for her conclusion that the costs had been adequately substantiated, without affidavit evidence, there is no merit in that contention. The learned Registrar provided clear and quite detailed reasons for her conclusion that evidence was not required, and why she was satisfied that the costs had been incurred.[110]
In so far as the issues raised by ground 4 are concerned, there was no error by the learned primary judge in his conclusion that no error in principle had been identified in the learned Registrar's approach to the taxation of the BOC.
[39]
Ground 3 of the grounds of appeal is in the following terms:
[40]
[3] The learned Judge erred in law by endorsing the costs allowed for items 3 and 4 for work allegedly tendered between 11 and 20 October 2016, and items 5 to 7 for costs associated with the BOC (reasons at [57] - [60]).
Particulars
[41]
(a) The claim for item 3 ($6,925.60) of the BOC 'Getting up' was based on item 17 of the scale 'Preparation of case for trial'. There was no statement of claim to justify any work done save for entering appearances.
(b) The claim for item 4 ($1,046.10) of the BOC 'Discontinuance' was based on item 24 of the scale 'Pretrial, mediation, conferrals, or other conferences'. The proceeding did not go past serving the writ and filing appearances to justify any such costs.
(c) The costs under items 5, 6 and 7 should have been disallowed pursuant to s 304(2)(a) of the Legal Profession Act 2008 (WA) because the claimed costs were so excessive, being more than twice the allowed costs.
[42]
In his submissions on ground 3, Dr Zaghoul challenged the amounts allowed by the learned Registrar, both globally and in respect of the particular claims made in the BOC. Dr Zaghloul submitted that the total amount claimed by the first respondent, in the sum of $32,442 for party-party costs was not reasonable or necessary because the only 'work product' was the filing of a conditional appearance.[111] He submitted that the learned judge should have held that the BOC was inflated and disallowed any costs pursuant to O 66 r 1 RSC.
Dr Zaghloul submitted that the taxing officer should have had regard to the costs allowed in similar cases, to assist in assessing the discretionary judgment of the Registrar in this case. He referred to a number of cases involving the taxation of costs in the District Court,[112] including UTA Pty Ltd v Albany Star Pty Ltd & Ors,[113] by way of example. Dr Zaghloul appeared to rely on that case to support the proposition that the amount of $5,500, which the Registrar allowed for getting up and for the discontinuance, where the action was discontinued after 10 days, was excessive and unreasonable when compared to the $900 allowed following the discontinuance after 5 weeks in that case.[114]
Dr Zaghloul also submitted it was not reasonable or necessary for the first respondent to have involved senior counsel, whose fees represented the majority of the costs the subject of the BOC.[115] He acknowledged that it was arguable that it was not unreasonable for the first respondent to have engaged the same senior counsel who had been involved in the earlier proceedings.[116] However, he submitted that given the different nature of the proceedings (defamation in the present action, and employment-related issues in the Federal Court action), it was an error in principle for the learned Registrar to conclude that it was reasonable for senior counsel to be engaged.
Turning to the particular claims made in the BOC, Dr Zaghloul submitted that certain claims should have been wholly disallowed. In so far as claim 3 in the BOC was concerned, he submitted that no work was done in preparation of the case for trial because the only work reasonably done was to file a conditional appearance.[117]
Dr Zaghoul also submitted that the amount claimed for the discontinuance (claim 4) should not have been allowed because that item under the scale covered other work, which was not undertaken here.[118]
Dr Zaghloul submitted that in the face of a bill for $32,442, it was reasonable for him to pursue a taxation, and the costs claimed for the taxation itself were excessive. Dr Zaghloul further submitted that the primary judge should have disallowed the costs claimed for items 5, 6 and 7 in the BOC, having regard to what he described as the 'grossly inflated' costs under items 2, 3 and 4 of the BOC and to s 304(2)(a) of the LP Act. Dr Zaghloul also submitted that the learned Registrar failed to consider the criteria for assessment of a BOC under s 301 of the LP Act.[119]
In addition, Dr Zaghloul submitted that the total cost of costs allowed for the taxation itself - comprising $2,500 for preparing the BOC, $1,452 for attending the taxation, and $759 for lodging the BOC, together with another $2,500 in costs for dealing with the objections raised by Dr Zaghloul - amounting to a total of $7,211, was disproportionate to the amount assessed by the Registrar for the work actually done in respect of the action.
[43]
There was no merit to any of these submissions. None of them supported the conclusion that the learned primary judge erred in finding that no error in principle was made by the Registrar, either in her approach to the quantum of the costs allowed, or at all.
The learned Registrar clearly regarded some of the costs claimed by the first respondent in the BOC as excessive. She disallowed the entirety of some of the amounts claimed, including the entirety of the claim for costs incurred in preparing the summary judgement application (claim 2). Dr Zaghloul's challenges to the amounts allowed for individual items constituted nothing more than contentions that the quantum allowed was excessive. That does not constitute an error in principle.
As for Dr Zaghloul's submission that the costs allowed were unreasonable, having regard to the costs allowed in the cases to which he referred by way of example, that submission must be rejected. The quantum of the costs allowed in any given case must be assessed by reference to the facts and circumstances of the individual case.
The discretion of the Court in O 66 r 1(2) RSC to deprive a party of costs as a result of the disentitling conduct referred to in that rule pertains to the Court's discretion to make a costs order, rather than to the amount allowed on a taxation.
As for the decision by the first respondent to engage senior counsel from the outset, the learned Registrar clearly considered whether that decision was reasonable and concluded that it was, given counsel's extensive involvement in the related proceedings. There was no error in principle in that conclusion.
As for Dr Zaghloul's contention that the amount allowed for the discontinuance (claim 4) was excessive, that submission failed to recognise that the learned Registrar assessed claims 2, 3 and 4 on a global basis, and effectively assessed the entire costs of getting up the action, until the discontinuance was filed, as a lump sum. Dr Zaghloul's focus on the notional component of that amount which was attributed to claim 4 ignored the fact that the learned Registrar allowed a total of $5,500 for claims 2, 3 and 4, and simply adjusted the notional amounts allowed for those individual items, so as to achieve that total figure. That approach involved no error in principle.
In so far as Dr Zaghloul relied on s 301 and s 304(2)(a) of the LP Act, those provisions had no application in this case. They apply in relation to costs assessments sought by a law practice under pt 10 div 8 of the LP Act.
We turn, next, to Dr Zaghloul's contentions in relation to the costs allowed for the taxation and the review. While the costs allowed for the taxation exceeded the total amount of costs allowed for the legal work in the Supreme Court action itself, and by a considerable margin, that of itself is not indicative of any error in principle. The significant quantum of the costs allowed on the taxation, and on the Registrar's review, simply reflected the cost to the first respondent of dealing with the numerous issues and objections raised by Dr Zaghloul at each stage. The number of issues and objections raised inevitably resulted in increased costs to the first respondent. Dr Zaghloul did not establish that there was any basis for concluding that the amounts allowed were manifestly unreasonable, so as to permit the inference of error.
[44]
Ground 1 of the grounds of appeal is in the following terms:
[45]
[1] The learned Judge erred in law by failing to adjudicate on the appellant's sought order to have the Certificate of costs delayed until the first respondent paid a judgment debt, or alternatively have any allowed costs set-off against the judgment debt.
[46]
Dr Zaghloul submitted that following the decision of the Full Court of the Federal Court in the related Federal Court proceedings, the first respondent had been ordered to pay his costs (at that stage, Dr Zaghloul was represented by counsel). Dr Zaghloul submitted that although he had received counsel's invoice in the sum of $63,800, the first respondent had refused to make any payment towards the costs of the appeal.
Dr Zaghloul explained that he sought an order to set-off any allowed costs he was required to pay against the costs awarded to him in the Federal Court proceedings, pursuant to O 66 r 59 RSC.
Order 66 r 59 RSC provides:
[47]
Where a party who is entitled to be paid costs is also liable to pay costs, the taxing officer may, subject to any direction of the Court -
(a) Tax the costs which that party is liable to pay and set off the amount allowed against the amount he is entitled to be paid and direct payment of any balance; or
(b) Delay the issue of a certificate of taxation for the costs he is entitled to be paid until he has paid or tendered the amount he is liable to pay.
[48]
Dr Zaghloul submitted that neither the taxing officer nor the primary judge gave consideration to the order he sought to delay or set‑off the certificate for the taxed costs, having regard to the award of costs in his favour, against the first respondent, in the Federal Court proceedings.[120] He submitted that the Registrar erred in not delaying the payment of the amount she had assessed until after the costs awarded to Dr Zaghloul in the Federal Court proceedings had been paid. He submitted it was an unreasonable exercise of the learned Registrar's decision to require him to pay the first respondent's costs in those circumstances.[121]
[49]
There was no merit in ground 1. The Registrar had no discretion to stay the payment of the costs allowed on the BOC by reference to an award of costs made in Dr Zaghloul's favour in another jurisdiction.
In any event, the point was moot because by the time the appeal was heard, Dr Zaghloul had paid the amount assessed by the learned Registrar in respect of the BOC.[122]
[50]
Ground 6 of the grounds of appeal is in the following terms:
[51]
[6] The learned Judge erred in law in allowing extraneous or irrelevant matters to guide or affect the order for costs on indemnity basis ([68] - [70]).
[52]
Dr Zaghloul submitted that the learned primary judge should not have awarded costs on an indemnity basis. He submitted that he had not persisted in a hopeless case, although he did accept, in the course of his submissions before this Court, that he had 'misbehaved' in using Court time 'for an argument which I thought was going to work and I [should not] have, in hindsight'.[123] He also accepted that perhaps he had incorrectly raised arguments, or raised too many objections. However, he submitted that having regard to the authorities on indemnity costs, his conduct was not such as to warrant an indemnity costs order, in that, for example, he had not breached or ignored programming orders, or filed an affidavit without leave or at short notice before a hearing.[124] Dr Zaghloul submitted that the entire taxation process, culminating in the appeal, had resulted from the inflated BOC filed by the first respondent.[125] He submitted that he had never intended to occupy the Court's time with unfounded claims, and had not pursued any points that he had not thoroughly researched and understood to be reasonably open.[126]
In addition, Dr Zaghloul submitted that an indemnity costs order in a case such as this would stifle the development of the law because litigants would be dissuaded from challenging costs for fear of an indemnity costs order.[127]
None of these submissions identified how the learned primary judge erred by taking into account an irrelevant consideration. The submissions, in essence, went to the merits of the indemnity costs order made by the learned primary judge. An appellate court is not entitled to substitute its own decision for a discretionary decision made at first instance, as to costs, merely because it would have reached a different decision.[128]
However, Dr Zaghloul also submitted that he was given no opportunity to make submissions as to whether an indemnity costs order should be made.[129]
Counsel for the first respondent confirmed that at the hearing before the primary judge, the first respondent had not sought an order for costs on an indemnity basis. He also conceded that the appellant ought to have been given an opportunity to make submissions before the primary judge as to whether an order for indemnity costs should be made,[130] although he submitted, albeit somewhat faintly, that at the time when the learned primary judge made the order, Dr Zaghloul had not sought the opportunity to make submissions in relation to whether an indemnity costs order should be made.[131] The latter submission must be rejected. By the time the learned primary judge made the orders, he had clearly made his decision in relation to the question of indemnity costs. That decision, and his Honour's reasons for it, were set out in his reasons for decision, which appear to have been delivered immediately before his Honour proceeded to actually make the indemnity costs order.
[53]
The denial of procedural fairness was not referred to in the grounds of appeal. However, counsel for the first respondent did not object to Dr Zaghloul raising the denial of procedural fairness. Moreover, counsel for the first respondent was in a position to, and did, substantively respond to that contention. To the extent that it is necessary for Dr Zaghloul to amend ground 6 to contend, in addition, that the learned primary judge erred in law in making the indemnity costs order, because he failed to afford Dr Zaghloul procedural fairness before making that order, we would grant leave to amend.
In our respectful view, the failure to afford Dr Zaghloul a hearing in relation to whether an indemnity costs order should be made constituted a denial of procedural fairness. The concession made by counsel for the first respondent acknowledged that Dr Zaghloul had not been put on notice that an indemnity costs order might be made against him, and was not given the opportunity to make submissions in relation to whether that order should be made, before the learned primary judge proceeded to make the order. That denied Dr Zaghloul the opportunity to be heard in respect of a matter which might (and ultimately did) adversely affect his interests.
Counsel for the first respondent submitted that not every denial of procedural fairness will warrant correction on appeal. He submitted that the criticisms made by the learned primary judge about the manner in which the appellant had pursued the taxation were warranted, and that in the course of the appeal hearing, the appellant had acknowledged that that was so, at least in respect of some of the objections. He noted that the learned primary judge had taken the view that Dr Zaghloul had pursued the taxation and objections in an attempt to stave off having to pay the costs of the discontinuance. (Dr Zaghloul paid those costs after the hearing before the primary judge.[132]) Accordingly, he submitted that even if the appellant had been given an opportunity to make submissions, nothing he could have said would have led to a different result.[133]
Not every denial of procedural fairness will warrant correction on appeal. A party who alleges a denial of procedural fairness must show that that denial deprived him of the possibility of a successful outcome, because unless that is shown, appellate intervention to set aside an order made after a denial of procedural fairness would be an exercise in futility. If the possibility of a successful outcome is to be negated, the Court must be satisfied that a properly conducted hearing could not possibly have produced a different result.[134]
In the present case, we are satisfied that Dr Zaghoul has established that the denial of the opportunity to be heard in relation to whether an indemnity costs order should be made denied him the possibility of persuading the learned primary judge to reach a different view.
Ground 6, amended as noted in [111] above, should be upheld.
The error of law occasioned by the denial of procedural fairness infected only order 2 of the orders made by the learned primary judge. In our view, that order should be set aside. This is not a case where remittal of the question of costs to the learned primary judge is necessary or appropriate. This Court has before it all of the material which was before the learned primary judge, and is in a position to exercise the costs discretion afresh. That is the appropriate course in all of the circumstances.
[54]
The costs order which should be made in respect of the review before the learned primary judge
[55]
As the first respondent was wholly successful on the review before the learned primary judge, the starting point is that costs should follow the event. Dr Zaghloul did not dispute that an order to that effect would be appropriate. Counsel for the first respondent submitted that if this Court considered that an order for indemnity costs ought not to have been made, the Court should order that Dr Zaghloul pay the first respondent's costs of the review fixed in the sum of $10,131 in accordance with the scale and the draft bill of costs attached to the first respondent's submissions dated 19 March 2018. It would be desirable to fix costs rather than to make an order for costs to be assessed. In our view, the amount sought, having regard to the number of issues raised by Dr Zaghloul, was reasonable.
As the first respondent sought to retain the benefit of the indemnity costs order, it is appropriate to consider whether an indemnity costs order should be made in the exercise of the costs discretion. The general principles in relation to the making of indemnity costs orders are well‑established.[135] With specific reference to in‑person litigants, in Tey v Optima Financial Group Pty Ltd,[136] the court said:
[56]
Where it is alleged that a person's conduct was improper or unreasonable so as to justify an order for indemnity costs, the fact that the person was without legal representation will ordinarily be a relevant factor in determining whether such an order is justified. What might be considered conduct warranting an indemnity costs order where a party is legally represented may not appear in the same light when account is taken of the lack of legal expertise of a litigant in person. That will necessarily depend upon the particular circumstances of the case. But where, after taking into account the lack of legal representation, the conduct of an unrepresented party is such as to warrant an indemnity costs order the court should not be reluctant to make such an order. Litigants in person have the capacity to inflict a great deal of unnecessary expense and hardship on other parties and the court should not stay its hand where such censure is properly called for.
[57]
In our view, an indemnity costs order is not warranted in respect of the costs of the review before the learned primary judge, for the following reasons.
In the present case, having discontinued the Supreme Court action within a very short space of time, Dr Zaghloul was faced with a very large BOC from the first respondent. It is not surprising that he felt that that quantum of costs was unreasonably and unjustifiably high in all of the circumstances. While Dr Zaghloul had considerable success in the taxation, in that the learned Registrar taxed off approximately 80% of the quantum of costs originally sought, the result was that Dr Zaghloul was still required to pay costs in the sum of $10,567.75.
A litigant in person might, understandably, still consider that to be a significant sum for the costs of an action which was on foot for only 13 days, and in which the action had not proceeded beyond the defendants filing a conditional appearance. In contrast, lawyers, and litigants with the benefit of legal advice, can be expected to understand that significant legal costs can very quickly accrue in litigation. They can also be expected to understand that the Registrars of the Court have considerable expertise in assessing costs. Legally represented litigants can thus be expected to appreciate that to pursue a review of a taxation before a judge, where intervention is limited to those cases where an error in principle is demonstrated, is a step which should not lightly be taken, given the prospect of incurring yet further costs.
Had Dr Zaghloul received the benefit of legal advice, before pursuing the review under O 66 r 55 RSC, there would have been a more compelling case that he should pay the first respondent's costs of that review, on an indemnity basis. However, he did not have the benefit of such legal advice. Having regard to the submissions made by Dr Zaghloul before the learned primary judge, and before this Court, we are satisfied that his conduct in pursuing the review was, notwithstanding his attempts to research the law, the result of an incapacity properly to appreciate the issues, rather than an unwillingness to engage with the issues, or the deliberate pursuit of a case which he knew, or should have known, to be hopeless. In our view, Dr Zaghloul's conduct in pursuing the review before the primary judge was not so improper or unreasonable as to warrant the making of an indemnity costs order as a sign of the Court's disapproval of his conduct. That conclusion is confirmed by the following further observations.
In this case, the first respondent did not seek an order for indemnity costs before the learned primary judge. If a legally represented litigant does not seek indemnity costs on the basis that they have incurred additional and unnecessary costs as a result of the improper or unreasonable conduct of an opponent in the litigation, which costs will exceed those allowed under the applicable scale of costs, that will often be a significant factor to be weighed up in determining whether an indemnity costs order is warranted.
In all the circumstances of this case there should be no indemnity costs order. The appropriate costs order on the review is that Dr Zaghloul should pay the first respondent's costs of the review, fixed in the sum of $10,131.
[58]
In view of Dr Zaghloul's abandonment of grounds 2, 5 and 7, and our view that grounds 1, 3 and 4 should be dismissed, it is unnecessary to consider the matters raised in the first respondent's Notice of Contention.
[59]
In the course of the hearing of the appeal, this Court indicated to the parties that whatever the outcome of the appeal, it intended to deal with all issues, including the question of the costs of the appeal, without a further hearing.
On that basis, counsel for the first respondent indicated that if successful, the first respondent would seek an order that its costs of the appeal be fixed, either on an indemnity basis, in the sum of $40,000, or on a party-party basis, in the sum of $20,000.
Dr Zaghloul submitted that the proper order was that there be no order for the costs of the appeal.
The starting point in relation to the award of costs is that the Court will generally order that the successful party to the appeal will recover their costs. However, what constitutes 'success' in any proceeding is to be determined by the reality of the circumstances involved in the case. The Court may depart from the general rule that costs follow the event to take into account matters such as the failure of a party on one or more issues.[137] The Court may order that a successful party recover only part of its costs, but that step should only be taken where there are discrete and severable issues on which the generally successful party failed, and which added to the costs of the proceedings in a significant and readily discernible way.[138] Where the Court decides to modify the usual costs orders to reflect the limited success of a successful party, that power will be exercised broadly and as a matter of impression, without any attempt at mathematical precision.[139]
In the present case, while in our view the appeal should be upheld, the reality is that the first respondent has been substantially successful on the appeal, and wholly successful in so far as the appeal concerned the substantive order made by the learned primary judge: all of the grounds of appeal relevant to order 1 of the learned primary judge's orders will be dismissed. In our view, in those circumstances, the first respondent should be regarded as the successful party on the appeal.
However, the first respondent was not entirely successful on the appeal: ground 6 of the appeal will be upheld. That ground raised an issue which was quite separate from the balance of the appeal. In our view, the first respondent's lack of success on ground 6 should be reflected in a reduction in the costs it is entitled to recover in the appeal. The costs sought by the first respondent should be reduced by 10% to reflect its loss on ground 6, in circumstances where the point on which Dr Zaghloul succeeded was not raised in ground 6 as originally formulated, and where his success was due, in part, to the first respondent's proper concession. The first respondent sought costs on a party‑party basis in the sum of $20,000. Having regard to the number of grounds of appeal, and to the applicable scale, that quantum of costs is not unreasonable. Ninety percent of those costs amounts to $18,000.
Finally, and for the sake of completeness, we should deal with the first respondent's application for its costs of the appeal to be paid on an indemnity basis. For the reasons outlined at [119] - [123], and having regard to the manner in which Dr Zaghloul approached the appeal, including his abandonment of obviously hopeless grounds, in light of an intervening decision of this Court[140] which was delivered subsequent to the filing of the appeal and of the parties' submissions, an order that Dr Zaghloul pay the first respondent's costs on an indemnity basis is not warranted.
[60]
Disposition of the appeal - the orders which should be made
[61]
In our view, the orders which should be made are as follows:
The time within which to file the Appeal Notice is extended to 10 May 2018;
The appellant has leave to amend ground 6 of the grounds of appeal, by adding the words 'alternatively, because he failed to afford procedural fairness to the appellant before making that order';
Leave to appeal is granted;
The appeal is allowed;
Order 2 of the orders made by the learned primary judge on 23 April 2018 is set aside and the following order is made:
The plaintiff is to pay the defendant's costs of the O 66 r 55 RSC review application fixed in the sum of $10,131.
The appellant do pay the first respondent's costs of the appeal fixed in the sum of $18,000.
[62]
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
[3] The relevant background facts were summarised by this Court in Zaghloul v Woodside Energy Ltd [2018] WASCA 191 [2] ‑ [7] (referred to herein at [15] - [132]).
[10] Zaghloul v Woodside Energy Ltd [2018] WASCA 191. Special leave to appeal against that decision was refused: Zaghloul v Woodside Energy Ltd and Ors [2019] HCASL 30.
[70] It should be noted that not all the amounts are precise figures as some reflect notional amounts allowed by the Registrar in respect of each item. However, the total figures highlighted in bold reflect the actual amounts allowed by the Registrar.