Body Corporate for Sunseeker Apartments v Jasen [2012] QDC 51

DISTRICT COURT OF QUEENSLAND CITATION: Body Corporate for Sunseeker Apartments CTS 618 v Jasen [2012] QDC 51 PARTIES: BODY CORPORATE FOR SUNSEEKER APARTMENTS CTS 618 (Plaintiff) AND CAROL DIANE JASEN (Defendant) FILE NO/S: D322/08 DIVISION: PROCEEDING: Review of costs assessment ORIGINATING COURT: District Court, Southport DELIVERED ON: 28 March 2012 DELIVERED AT: Brisbane HEARING DATE: 29 August 2011 JUDGE: McGill DCJ ORDER: Assessments varied, subject as to amount to further submissions on one point. CATCHWORDS: HOME AND COMMERCIAL UNITS – Body Corporate Fees – proceedings to recover unpaid contributions – recovery costs – test for assessment of COSTS – Assessment – recovery for costs in respect of proceedings to recover unpaid body corporate contributions – test on assessment – whether costs reasonable Body Corporate and Community Management (Accommodation Module) Regulation 1997 s 97(1)(c) Anderson v Bowles (1951) 84 CLR 310 – considered. Amos v Monsour Legal Costs Pty Ltd [2007] QCA 235 – considered. Attorney-General of NSW v Kennedy Miller Television Pty Ltd (1998) 43 NSWLR 729 – followed. Bottoms v Reser [2000] QSC 413 – followed. Crane Distribution Ltd v Dark Star Two Pty Ltd [2011] QSC 90 – followed. EMI Records Ltd v Ian Cameron Wallace Ltd [1983] Ch 59 – considered. -- 1 of 36 -- 2 Hawkins v Permarig Pty Ltd [2004] 2 Qd R 388 – considered. Owners of Strata Plan 36131 v Dimitriou [2009] NSWCA 27 – considered. Schweppes’ Ltd v Archer (1934) 34 SR (NSW) 178 – applied. Seven Network Ltd v News Ltd [2007] FCA 1062 - cited. Re Skinner and Smith’s Bills of Costs (No. 2) [1990] 1 Qd R 180 – cited. Voet v Body Corporate for Swell Apartments [2011] QCATA 48 - not followed. Warren v Body Corporate for Buon Vista Community Title Scheme 14325 [2004] QCA 104 – considered. Warren v Body Corporate for Buon Vista Community Title Scheme 14325 [2002] QDC 371 – considered. COUNSEL: S.M. McNeil for the plaintiff N. Hiscox for the defendant SOLICITORS: Short, Punch and Greatorix for the plaintiff The defendant was not represented [1] This is a review under UCPR r 742 of the decisions of a costs assessor with respect to costs statements assessed by him pursuant to an order made by another judge. On 18 June 2009 Newton DCJ gave judgment in the action that the defendant pay the plaintiff a certain amount, including an amount for ―recovery costs‖ up to a certain date, together with ―ongoing legal fees in accordance with s 97 of the 1997 Module (s 143 of the 2008 Module) to be assessed.‖1 On the same day he dismissed an application by the defendant and ordered the defendant to pay the plaintiff‘s costs of and incidental to the application to be assessed on the indemnity basis.2 The plaintiff subsequently filed a costs statement in respect of each of these orders, and on 27 November 2009 Irwin DCJ ordered that each of them be assessed by a particular costs assessor. That costs assessor filed in the court on 15 November 2010 certificates that costs were assessed, in respect of the first costs order, at $43,240.12, and in respect of the second costs order, at $17,564.95. Background and history of the litigation3 [2] The defendant is or was the owner of a unit in the Community Title Scheme, the body corporate for which is the plaintiff. Under the Body Corporate and Community Management Act 1997 (―the Act‖) the plaintiff is entitled among other things to levy owners for contributions in respect of certain matters. The Accommodation Module is the applicable regulation module for the scheme under the Act. As is common with such schemes, there was a manager appointed whose functions included taking care of the common property, but who was also entitled to 1 I shall refer to this as ―the first costs order‖ and the statement of costs for it as the ―first costs statement‖. 2 I shall refer to this as ―the second costs order‖, although technically it ought to have been made before the first costs order. The second costs statement relates to it. 3 This is a highly simplified outline; the litigation was lengthy and the file unusually bulky for this court. -- 2 of 36 -- 3 conduct a business managing the letting to holiday makers of the home units of those owners who chose to take advantage of that service. [3] The defendant‘s unit was not let out through this manager, and in the late 1990s she became concerned that the amounts being levied by the body corporate covered payments by the body corporate to the manager for doing things which ought to have been the responsibility, and at the cost, of the owners who were having their units let out through the manager. As a result she stopped paying body corporate contributions, and apparently did not pay any for many years. I do not know and it is obviously not relevant for me to consider whether there was any justification in her original complaint, but if there was I strongly suspect that the appropriate response was not to refuse to pay contributions. [4] The Body Corporate and Community Management (Accommodation Module) Regulation 1997 (―the regulation‖) provided in s 97(1): ―If a contribution or contribution instalment is not paid by the date for payment, the body corporate may recover each of the following amounts as a debt— (a) the amount of the contribution or instalment; (b) any penalty for not paying the contribution or instalment; (c) any costs (recovery costs) reasonably incurred by the body corporate in recovering the amount.‖ [5] Proceedings to recover unpaid contributions were initially commenced in a Magistrates Court in October 2003; they were subsequently transferred to the Commissioner under Part 4 of the Act, although it appears that step was ultimately rejected. Eventually it found its way to the District Court, as time passed, additional contributions were levied and not paid, and the amount by way of penalty and recovery costs increased. By the time the matter came to trial the plaintiff was claiming unpaid contributions between 1 April 1999 and 1 June 2008, in respect of which an amount of $34,295.85 was allowed.4 The plaintiff also claimed interest. Judge Newton allowed interest under the Supreme Court Act 1995 s 47 in respect of contributions levied prior to 24 May 2002, in the sum of $7,046.98, and in respect of the period thereafter, the penalty provided for as determined under s 96 of the regulation, in the sum of $20,403.93.5 In addition, his Honour allowed an amount by way of recovery costs in the sum of $41,445.41 for the period from September 2003 to August 2008. His Honour accepted evidence before him that these costs were reasonable. His Honour also made the order in relation to ongoing legal costs indicated above. [6] The action came on for trial on 5 February 2009, and was heard over two days. Counsel appeared for the plaintiff; there was no appearance for the defendant. Evidence was given and documents were tendered, and his Honour reserved his decision. Subsequently, the defendant applied to reopen the trial so that she could be heard in relation to the matter. That application was in due course heard by his Honour, and the decision on that application was reserved. Both decisions were 4 It is difficult to accept that the delay was due just to obstruction by the defendant, as the plaintiff asserts. This was conceptually a simple claim, and ought to have been brought speedily to trial. 5 The penalty adopted by the body corporate by ordinary resolution was simple interest at 2.5% per month, the maximum allowed under s 96. -- 3 of 36 -- 4 given together on 18 June 2009. The defendant‘s application was dismissed, and the second costs order was made. His Honour ordered expressly that those costs be assessed on the indemnity basis. There has been no dispute that as a consequence those costs are to be assessed under r 703. [7] The defendant initially filed a notice of objection to each of the costs statements. Under the rules a notice of objection is to be served rather than filed, but it seems that the notice or a copy of the notice was served on the solicitors for the plaintiff. Subsequently, however, amended notices of objection were prepared dated 26 March 2010. The evidence was not very clear as to when these were served on the plaintiff‘s solicitors,6 and whether they were before the costs assessor. The costs assessor did not give reasons for his decisions, a matter to which I shall return, so I do not know whether the assessments were in fact conducted on the basis of the amended notices of objection or the original notices of objection. However, the application for review sought to support particular objections by reference to the amended notices of objection, and the review was conducted by reference to the amended notices of objection.7 I consider that that was appropriate in all the circumstances, and if there was any failure to comply with the rules involved I nevertheless validate the giving of those amended notices of objection. [8] The defendant has at times not had solicitors acting for her in relation to this matter. At times she has had various solicitors who have received instructions; it is probably fair to say that none of these lasted very long. For a time there were solicitors acting in relation to the costs dispute; the amended notices of objection and amended application to review were filed on behalf of the defendant by a firm of solicitors, who have subsequently withdrawn. By the time of the review the defendant did not have solicitors on the record, but on the hearing of the review counsel appeared for the defendant, and informed me that he was appearing on a direct brief. I was told (though I think the matter is not the subject of evidence) that the amended notices of objection had been prepared by a costs assessor, and that may provide a reason why there would be some practical advantage in looking at the amended notices of objection rather than the original notices of objection.8 [9] The application for review has previously been before another judge, who made various orders, including orders for costs, and gave various directions. The hearing of the review was allocated to me by the Chief Judge. I have not previously been involved in the proceedings between the parties. The effect of s 97 of the regulation [10] In relation to the second costs order, there is no reason to doubt that the order was made in the exercise of the court‘s power to order costs on the indemnity basis, under the court‘s general discretion in relation to costs: UCPR r 681. There is, however, a potential difficulty about the effect of s 97(1)(c) of the regulation, quoted earlier. On its face, it is inconsistent with UCPR r 680 which provides: 6 The amended notes of objection to the first costs statement was served under cover of a letter dated 26 March 2010: Affidavit of defendant filed 25 March 2011; Exhibit CDJ-24. 7 See UCPR r 742(3)(a), (5)(b). 8 As I indicated during the hearing, I do not regard that as in any sense evidence of the opinion of the costs assessor concerned in relation to any of the objections in the amended notices. -- 4 of 36 -- 5 ―A party to a proceeding cannot recover any costs of the proceeding from another party other than under these rules or an order of the court.‖ [11] The combination of r 680 and r 681, which provides that costs are in the discretion of the court, reflect a long standing part of the ordinary processes of dealing with costs of court proceedings. They have their analogues in earlier provisions in Queensland and elsewhere, although these particular rules were introduced into the UCPR by amendment in 2009. [12] The effect of a similar inconsistency divided the New South Wales Court of Appeal in Owners of Strata Plan 36131 v Dimitriou [2009] NSWCA 27. That appeal concerned a provision in similar legislation in New South Wales which provided in s 80: ―An owners corporation may recover as a debt a contribution not paid at the end of one month after it becomes due and payable, together with any interest payable and the expenses of the owners corporation incurred in recovering those amounts.‖ [13] The wording of that section is slightly different from the wording in s 97, the Queensland provision, but the differences are not material, particularly since all members of that court agreed that on its correct interpretation the New South Wales provision covered legal costs, and restricted the amount of such legal costs payable as ―expenses‖ to costs and disbursements reasonably incurred and reasonable in amount. It seems to me that if ―expenses incurred‖ are limited by implication to those reasonably incurred and reasonable in amount, then ―costs reasonably incurred‖ must be equally so limited. I shall return to this point. [14] Another issue, on which there was not unanimity, was whether the entitlement to recover expenses under s 80 extended to the costs of proceedings where the statute dealing with those proceedings either made no provision for costs, or provided for costs only in limited and specific circumstances. In Dimitriou the plaintiff had commenced a proceeding to recover outstanding levies in the Small Claims division of the Local Court, where costs were circumscribed by provisions of the rules. The defendant made an application to the Consumer and Tenancy Tribunal disputing the validity of the levies, and the Local Court proceedings were stayed until the Tribunal dismissed the defendant‘s claim, with no order for costs being made; in that Tribunal an order for costs could be made only as specifically authorised by the Act or in relation to an order dismissing an application or appeal because it was frivolous, vexatious, misconceived or lacking in substance, or because the relief sought was not within the jurisdiction of the Tribunal: s 192. [15] The Local Court proceedings were revived but an amended statement of claim was then filed which took the matter out of the Small Claims division and moved it to the general division. This gave rise to a dispute as to whether legal costs could be claimed as a substantive component, so as to move the proceeding into the general division. After some further delay while the parties were invited to resolve the matter, ultimately judgment was given for an amount which included an amount of expenses, and ―plaintiff‘s costs as agreed or assessed‖ between certain dates. That decision was challenged on appeal to a single judge of the New South Wales -- 5 of 36 -- 6 Supreme Court who allowed the appeal, set aside the decision and sent the matter back. A further appeal was allowed, and the original decision upheld. [16] Evidently there was no agreement as to what the issues on the appeal were; each of the three members of the Court of Appeal defined the issues in different terms.9 Each considered as one of the issues the question of how to reconcile the provision entitling recovery of costs as expenses with another provision of what was in that matter the same Act limiting costs before the Tribunal. Hodgson JA referred to Anderson v Bowles (1951) 84 CLR 310, and at [43] said: ―The Act does preclude orders for costs being made by an Adjudicator or (with limited exceptions) by the Tribunal. However, it also provides that an owners corporation is entitled to expenses (including legal costs) incurred in recovering arrears of contributions; so in my opinion, if legal costs incurred in proceedings before an Adjudicator or the Tribunal are truly to be characterised as having been incurred in recovering arrears of contributions, the legislative intention is that they should be recoverable.‖ [17] His Honour noted that there may be a real question about whether proceedings before an adjudicator or the Tribunal were properly so characterised but noted that that issue had not been raised previously in that particular matter: [44]. Accordingly, the magistrate had not erred in including costs of the proceedings in the Tribunal. [18] Handley AJA noted that the restriction on costs in the Small Claims division of the Local Court was also applicable, but held that that restriction, and the provision of the statute dealing with proceedings in the tribunal in relation to costs, were both properly characterised as general provisions which did not qualify the special provision that applied in relation to the costs covered by s 80, the equivalent of s 97(1)(c) of our Act: [122]. His Honour went on at [127] to express the view that the provision conferred a right to recover these expenses ―independently of any costs order that may or may not be made.‖ It is not at all clear that his Honour was intending to lay down there a principle that if the question of costs of some particular proceedings were resolved in a particular way by a court which had jurisdiction to decide that question, it would be open in later proceedings between the parties in the same or some other court to re-litigate that issue. [19] As a general proposition, once an issue properly before a court of competent jurisdiction is decided by that court, the rights of the parties in relation to the matter are merged in the judgment, and it is the rights arising under the judgment which are to be enforced rather than any other rights.10 Hence in Anderson v Bowles (supra) four justices in a joint judgment at p 323 said: ―It is a general rule that where it is sought to include costs incurred in other proceedings in the damages arising upon a cause of action, 9 See Hodgson JA para [22], Basten JA para [55]; Handley AJA para [155]. I wonder what Professor Raymond would make of that. 10 Blair v Curran (1937) 62 CLR 464 at 532; Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 at 597; Mango Boulevard Pty Ltd v Spencer [2008] QCA 274 at [45]-[67]. -- 6 of 36 -- 7 costs shall not be included, if as a matter of judicial determination or by a positive rule of law they are treated as costs which should be borne by the party suing. Accordingly it is not possible to recover as part of such damages the difference between party and party costs awarded to the plaintiff in the original litigation and the costs as between solicitor and client which he has incurred. Further, if costs are expressly withheld by the court in the original proceeding none can be recovered in the action for damages brought by the plaintiff from whom they were so withheld.‖11 [20] In that case proceedings were brought by the plaintiff against the defendant to recover possession under the Summary Ejectment Act 1867. The proceedings were long and complicated, but ultimately the plaintiff was put into possession of the property. Regulation 75 of the National Security (Landlord and Tenant) Regulations, which corresponded with the Landlord and Tenant Acts 1948 s 62, provided that no costs should be allowed in any proceedings in relation to which the part applied, not being proceedings in respect of an offence. Subsequently an action was brought seeking damages for trespass, and including in those damages the legal expense incurred by the plaintiff in the earlier proceedings. The court held that there was a cause of action for trespass, or for breach of contract, but in relation to the question of costs, that regulation amounted to a legislative declaration that the parties to proceedings for the recovery of possession or proceedings arising thereout should not be liable to one another for the costs of those proceedings. Their Honours said that if such costs could be recovered by an action for damages, they would be ―made recoverable by a side wind‖: p 323. Accordingly, the effect of the relevant legislation was to prevent a claim for costs being advanced in the subsequent action.12 [21] That decision was distinguished by the majority of Queensland Court of Appeal in Hawkins v Permarig Pty Ltd [2004] 2 Qd R 388. The question in that matter was whether the Integrated Planning Act 1997 s 4.1.23, which provided that each party to a proceeding in the Planning and Environment Court must bear its own costs, applied not only to the proceeding in that court but also to an action in another court to recover the amount of those costs as damages for breach of contract, a proposition that was rejected by the majority. McPherson JA at [18] said: ―The matter can be tested by asking whether the direction in s 4.1.23(1) is so broadly designed as to render ineffectual an express contract between parties to proceedings in that court that one of them should indemnify the other, wholly or in part, in respect of the costs of that party in those proceedings. Such agreements to indemnify would, one might suppose, be not uncommon in practice … It would be surprising if the reach of s 4.1.23(1) is so wide as to invalidate an agreement like that altogether; and, if that is so in the case of a specific agreement to pay the other party‘s costs, it must also be true of the general right to recover damages arising out of a breach of contract measured, as in this case it would be, by the loss occasioned by having to pay one‘s own costs in accordance with the statutory direction in s 4.1.23(1).‖ 11 Citations of authority omitted. 12 Applied on this basis in Russell v Roman Catholic Archdiocese of Sydney [2008] NSWCA 217 at [48], [49]. -- 7 of 36 -- 8 [22] It seems to me that the difference between these two decisions lies in the different interpretations which were placed on the relevant legislative provisions. In Anderson the section was interpreted as preventing the plaintiff from recovering the legal costs of the proceedings at all, whereas in Hawkins the section was interpreted as merely restricting the orders as to costs which could be made in a proceeding by the Planning and Environment Court. I suspect that if in Anderson there had been an express contract between the parties that the defendant should indemnify the plaintiff in respect of any costs that the plaintiff might be put to in taking proceedings to recover possession following the determination of the tenancy, the High Court would have held that that right was excluded by the terms of the legislation. It would otherwise have been very easy for astute landlords to evade the prohibition which the legislature for policy reasons had imposed. [23] In the light of these authorities I have difficulty in accepting the proposition of Handley AJA that the New South Wales section gave a right to recover expenses independently of any costs order that may or may not be made. That meant that if in a proceeding to recover unpaid contributions an order for costs was made other than as provided in s 80, or if no order for costs were made, in a later proceeding the amount of the costs could be recovered. In my opinion the true position is that, if the costs were recoverable under s 80, they ought to have been recoverable in that proceeding. That may mean that there was an error of law in the decision under which they were not recovered, but that would be an error within jurisdiction and while it stood, in my opinion, a separate proceeding could not be brought to recover the costs not recovered in the first proceeding. However, I think that the passage should be understood as meaning that there was under s 80 a right to recover the costs independently of, and overriding, the ordinary discretion in relation to costs possessed by the relevant court or, in the case of a tribunal which had a more limited power in relation to costs, notwithstanding that more limited power. [24] The third member of the court in Dimitriou, Basten JA, in a detailed consideration of the point, analysed the various statutory provisions applicable to the relevant court and tribunal and also other courts which might be affected by the operation of s 80, and how any possible inconsistency between them could be reconciled. At [83] he noted that ―the apparent anomaly in having costs in the tribunal or before an adjudicator recovered as expenses incurred in recovering contributions, pursuant to s 80, in circumstances when neither the adjudicator nor the tribunal had power to award costs with respect to proceedings before them, may be resolved in one of five ways.‖ After a consideration of these various possibilities he said at [85] that ―the preferable construction is that s 80 either permitted recovery of costs limited to the debt recovery proceedings or it permitted the recovery of costs which were themselves recoverable by order of a court of competent jurisdiction.‖ He analysed this by reference to the question of whether s 80 purported to be a statutory provision which overrode the general provisions relating to costs in the various courts, and held at [92] that it did not. [25] A similar issue might have arisen in the proceedings before Newton DCJ. In those proceedings he ordered the defendant to pay the costs as recovery costs under s 97 of the regulation, but did he have a discretion to make any other order? How can rr 680 and 681 be reconciled with the statutory entitlement in s 97? It is difficult to believe that the legislative intention was to override the ordinary discretion in relation to costs, but that does seem to be the effect of the decision of the majority of the New South Wales Court of Appeal in Dimitriou. If that is correct, it may be -- 8 of 36 -- 9 that the second costs order made by Newton DCJ, awarding costs of the defendant‘s application on the indemnity basis, was one he ought not to have made, because the only order available was that the defendant pay the plaintiff‘s costs under s 97. There was no appeal from that order, and it is not for me to review its correctness. Nevertheless, it seems to me that any process of analysis of a provision such as s 97 of the regulation which does not deal with issues such as these is at least not comprehensive, and is likely to be unsatisfactory. [26] There are important policy considerations on each side. Contributions are the lifeblood of a body corporate in much the same way as taxes are the lifeblood of the state. Just as legislatures have imposed special regimes restricting the capacity of taxpayers to delay their liability to pay tax by arguing about it, and otherwise limiting such disputes,13 it may be unsurprising if the legislature were to impose a regime which would provide particularly favourable treatment for recovering body corporate contributions, including legal costs incurred in the process. On the other hand, the exercise of a discretionary power in relation to costs is an important part of a court‘s capacity to control its own process, particularly when orders for costs are made or withheld on what approach disciplinary grounds.14 One would expect that a court would ordinarily require fairly clear words to justify any legislative intrusion into its capacity to use its discretionary power in relation to costs to regulate its own process in this way. It is not difficult to think of situations where the automatic operation of s 97, to the exclusion of the ordinary rules, would be unsatisfactory, if not capricious.15 Hopefully in time this issue will be resolved. [27] In the past there have been provisions in by-laws entitling a body corporate to recover such costs, which seem to have been treated by courts as not excluding the ordinary provisions in relation to costs of a proceeding.16 That appears to have been the approach in Warren v Body Corporate for Buon Vista Community Title Scheme 14325 [2002] QDC 371. Robin DCJ expressed agreement with something I had said in an earlier matter, where I had noted a concern that there should not be any duplication between the amounts claimed and payable under the by-law on this basis and the amounts recoverable as assessed costs of the action. That matter was an appeal from an order that the defendant pay certain levies and ―moneys duly levied upon the owner by the body corporate‖ pursuant to the Act to be assessed by the registrar. The magistrate also made an order for the defendant to pay the costs of the assessment to the plaintiff in any event. The appeal was dismissed, before the assessment took place, with Robin DCJ ordering ―costs [of the appeal] to be assessed on the standard basis but that that occur on the basis that the matter had been concluded today before lunch.‖ This order did not even give full standard costs, let alone the amount which would have been recoverable either as indemnity costs or under regulation 97. 13 See for example FJ Bloemen Pty Ltd v Commissioner of Taxation (1981) 147 CLR 360 at 375. 14 For example, orders for costs on the indemnity basis are sometimes made on this basis: Di Carlo v Dubois [2002] QCA 225. See also Amos v Monsour Legal Costs Pty Ltd [2007] QCA 235 at [29]. 15 For example, what if a body corporate sues to recover $X for unpaid contributions, the lot owner promptly offers to pay $Y under the rules, which is not accepted, and at the trial the body corporate recovers as unpaid contributions only $Y, or even $Z, which was less than $Y? 16 A by-law could not override the provisions of the UCPR: see Body Corporate and Community Management Act 1977 s 142(1), Reprint 1, and see Acts Interpretation Act 1954 s 7(1). Note also s 142(5). The position is analogous to the effect of a contract between the parties: Gomba Holdings (UK) Ltd v Minories Finance Ltd [1993] Ch 171 at 194; Platinum United II Pty Ltd v Secured Mortgage Management Ltd [2011] QCA 229 at [6]. -- 9 of 36 -- 10 [28] An application for leave to appeal to the Court of Appeal was dismissed: [2004] QCA 104. The defendant in that matter sought to raise the question of the jurisdiction of the magistrate to order costs under the by-law, and whether such costs were costs of the proceeding contemplated by the UCPR. Rule 690 was relied on. Ultimately the Court of Appeal did not consider it appropriate to grant leave to appeal, bearing in mind that by this time the Magistrates Court registrar had assessed the amount payable pursuant to the judgment at under $1000. The court refused the application for leave to appeal ―with costs to be assessed‖. Rule 702(1) would suggest only standard costs were ordered. Obviously, however, the points to which I have referred were not decided in that matter.17 [29] This decision was described by QCAT in Voet v Body Corporate for Swell Apartments [2011] QCATA 48 at [27] as endorsement by the Court of Appeal of the magistrate‘s decision to allow the recovery of indemnity costs. I cannot see how it is capable of being characterised in those terms; the court plainly refused leave to appeal and therefore decided not to consider the question of the entitlement to costs on a ―solicitor and client basis‖ under a by-law, but it dealt with costs before it apparently on the assumption that the by-law did not apply to ―costs of the proceeding‖, and so did not apply to the costs of the application for leave to appeal.18 The issue has not, as far as I know, been decided by the Court of Appeal in Queensland, nor does it appear to have received much careful consideration from any Queensland court. That is why I have discussed it at some length, although strictly speaking the point does not arise in the review. The test for assessment under s 97 [30] One point which undoubtedly arises, however, is the test to be applied on the assessment of the first costs statement. That was expressly for costs payable under s 97(1)(c) of the regulation, or its 2008 successor, which is in the same terms,19 and therefore was to be assessed on the basis of what costs were payable under that section. There is no Queensland decision binding on me on that point, but, as I mentioned earlier, one of the matters decided in Dimitriou was that the equivalent provision in that state carried costs and disbursements reasonably incurred and reasonable in amount.20 [31] At first glance this is essentially the test for indemnity costs under UCPR r 703(3), although it appears that in New South Wales it corresponds to party and party costs assessed on the ordinary basis. In New South Wales the test for indemnity costs is all costs other than those that appear to have been unreasonably incurred or appear to be of an unreasonable amount are to be allowed. [32] The difference between ―reasonable‖ and ―not unreasonable‖ may appear to be essentially semantic, but such a difference has been recognised as giving rise to a 17 The President did comment at p 5 that the body corporate was only entitled to recover its costs and expenses ―properly incurred‖. 18 The QCAT decision also seems to misinterpret the New South Wales decision in Dimitriou, and to have treated the decision of Newton DCJ in this matter as implying that the amount recoverable under s 97 ―can include indemnity costs‖, which I think also misses the point. 19 Section 145(1). For this reason I have ignored the question of which section was applicable at any particular time, a point not raised by either party. 20 See also Crane Distribution Ltd v Dark Star Two Pty Ltd [2011] QSC 90 at [33]; Owners of Strata Plan 58631 v Caporale [2011] FCA 109 at [19]. -- 10 of 36 -- 11 different test by the legislature in New South Wales, and by the Court of Appeal. Indeed, the difference has been recognised for some time. In EMI Records Ltd v Ian Cameron Wallace Ltd [1983] Ch 59 Megarry VC identified four bases for assessing costs under the English rules then in force: the party and party basis which embodied the traditional ―necessary or proper‖ test, the common fund basis which allowed a reasonable amount in respect of all costs reasonably incurred,21 the trustee basis where all costs incurred were allowed except those which should not have been incurred in accordance with the duty of the trustee, and the solicitor and own client basis where the test was ―all costs except insofar as they are of an unreasonable amount or have been unreasonably incurred.‖ The issue in that case was the effect of an order for costs on ―the indemnity basis‖, something not provided for under the English rules at that time, although orders in such terms had been made, particularly before 1960. [33] One question was whether such an order had to be equated with one of the orders contemplated by the rules. The Vice Chancellor held that it did not, and under the applicable statute the court‘s discretion was not confined to making an order for taxation on one of the specific bases in the rules: p 70. Nevertheless, the Vice Chancellor considered that the test to be applied where costs were ordered to be taxed on the indemnity basis was the test applied for solicitor and own client costs: p 71. His Lordship said there that this test gave: ―the litigant a complete indemnity, shorn only of anything that is seen to be unreasonable. The litigant does not have to establish that the costs were necessary or proper, or that the costs were of a reasonable amount and reasonably incurred. Provided they are costs of and incidental to the proceedings, he is entitled to recover them, subject only to the qualification that they are liable to be reduced in respect of anything that the taxing master considers to fall within the headings ‗unreasonable amount‘ or ‗unreasonably incurred‘. In a word, the difference is between including only the reasonable and including everything except the unreasonable.‖ [34] Despite the logical point that any particular charge must be either reasonable or unreasonable, so that both tests should in theory produce the same result, the practical difference lies in the fact that in the real world there will be a third category of charges, where there is doubt as to whether the charge is reasonable or unreasonable. If the party claiming the costs has the onus of showing that they are reasonable, then such costs will not be recovered; but if the question is whether the costs are shown to be unreasonable, then such costs will be recovered. This is the point recognised by his Lordship, and in the New South Wales Court of Appeal. [35] As Hodgson JA said in Dimitriou at [40]: ―The onus is on an owners corporation to prove that the costs and disbursements it claims have been reasonably incurred and are reasonable in amount, so that if a selection has to be made from the three different bases I have referred to, the second basis is most appropriate. In my opinion, the third basis [i.e. indemnity costs] would not be appropriate, because that would include any costs that 21 Said by his Lordship to have replaced the old ―solicitor and client‖ basis. -- 11 of 36 -- 12 are not shown to appear to be unreasonable. Further, in my opinion the costs and disbursements cannot be made reasonable by agreement between the owners corporation and its legal practitioner …‖ [36] This last point is of some importance; the mere fact that the body corporate and its lawyers have agreed that costs are to be payable in a particular way, for example at a certain hourly rate for certain partners and staff, is not something which in itself makes those costs reasonable. In determining whether the costs in fact charged on a certain hourly rate are reasonable, it is therefore necessary to consider whether that hourly rate is reasonable. That is an objective matter, and does not depend simply on the fact that parties have agreed to a charge at that rate, subject only to the qualification that the amount payable under s 97(1)(c) could not exceed the amount in fact charged to the body corporate, because of the requirement that the costs be ―incurred‖. [37] Nevertheless, it would be interesting to know whether in practice in New South Wales there is much difference between party and party and indemnity costs assessed on this basis. The test in Queensland for party and party costs on the standard basis is ―all costs necessary or proper for the attainment of justice or for enforcing or defending the rights of the party whose costs are being assessed‖: r 702(2). This is the traditional test for party and party costs, and in practice these days in Queensland provides an amount which is likely to be very much less than the amount actually charged by the parties‘ lawyers.22 Part of the difference is no doubt explained by the fact that the standard basis of assessment in Queensland is conducted by reference to the scale of costs in the schedules to the UCPR, whereas indemnity costs are usually assessed by reference to a costs agreement between the parties, although that is subject to a test of reasonableness. [38] Interestingly, in the past the difference between the test for party and party costs and solicitor and client costs was not very great, at least in terms of the wording of the test and the rules: there was little difference in the wording of RSC O 91 r 81 and r 82,23 although the position was complicated by the fact that additional costs might be allowed as between solicitor and own client particularly if the client had been warned that particular expenses might not be recovered from the other party if successful, but had nevertheless approved them: Re Skinner and Smith’s Bills of Costs (No. 2) [1990] 1 Qd R 180. [39] Although the test adopted in New South Wales, and in my opinion appropriate in Queensland under s 97(1)(c), is similar in wording to the test under r 703, what was said about the onus is a matter of some significance, and provides a distinction from the test under r 703. I am going into this point in some detail because there was read before me an affidavit by a costs assessor who prepared the costs statements on behalf of the plaintiff and who swore in paragraph 7: 22 A point on which I enlarged in Henley v State of Queensland [2005] QDC 94. 23 Re Price (dec) [1941] St R Qd 205 at 209. Both were taxed under the scale, and commonly the same amount would be allowed for the same item of work on both bases. Also in England there is not much difference: Penn v Bristol & West Building Society [1997] 1 WLR 1356 at 1365. -- 12 of 36 -- 13 ―When undertaking an assessment of costs on an indemnity basis a costs assessor is to allow all costs incurred unless unreasonably incurred or of an unreasonable amount.‖ [40] Authority was cited. This is following the wording of the New South Wales rule for indemnity costs, not the Queensland rule, which as I have indicated is more in line with the New South Wales rule for party and party costs, but there is more to it than that. So far as I am aware, the first decision in Queensland interpreting the test for indemnity costs under r 703 was that of the Chief Justice in Bottoms v Reser [2000] QSC 413.24 In that matter an order was made by another judge after the commencement of the UCPR for ―solicitor and own client costs‖, and the question was how the costs were to be assessed. His Honour was aware of the decision of EMI Records, which he referred to in his reasons, but said that the UCPR should be interpreted as specifying only two bases for assessment, the standard basis and the indemnity basis, and that as a matter of interpretation the order should be treated as one for costs on the indemnity basis under r 703. [41] His Honour went on to say: ―That encompasses all costs except so far as they may be of unreasonable amount or were unreasonably incurred. … In approaching such an assessment, the registrar ought to be conscious of the caution of the Vice-Chancellor in EMI that in determining reasonableness ‗the receiving party will be given the benefit of any doubt‘. In other words, considerable liberality should ordinarily be extended in assessing reasonableness. That is indeed implicitly recognised by the reference in para (b) of sub-rule (3) to any costs agreement between a client and the client‘s solicitor. It would perhaps be an unusual case where, costs having been agreed in that way, they were then, on this process of assessment, to be excluded as ‗unreasonable‘. Plainly, however, if they warranted the characterisation of outlandish, they ought not no doubt nevertheless to be excluded. I emphasise my view that in such an assessment, no niggardly or unduly narrow approach would be warranted.‖ [42] In the context of the analysis in EMI Records, his Honour was clearly laying down the principle that the approach to be adopted in applying the test in r 703 was to be equated with that adopted for the assessment of indemnity costs by his Lordship in EMI Records. It may be that this interpretation owed more to the term ―indemnity costs‖ than the actual wording of r 703, although there is the consideration that on his Honour‘s approach this is the most generous order for costs that a court can make under the rules.25 As I subsequently recognised in Henley, in the absence of a decision on the point from the Court of Appeal his Honour‘s decision should be treated as laying down in an authoritative way the test for the assessment of costs under r 703. That was also recognised by the District Court judge in Amos v Monsour Legal Costs Pty Ltd [2006] QDC 485, although it seems to me that when 24 It is most unfortunate that this decision, which is of such importance in this area and has been referred to in a number of later cases, is not available on the court web page. At that time the relevant rule was r 704. 25 It may be as well that the decision was a product of its time, bearing in mind that it was decided in the context where there was in Queensland a particular difficulty in relation to the assessment of costs by the court, which is illustrated by the facts set out in my reasons in Henley (supra). -- 13 of 36 -- 14 the matter reached the Court of Appeal – [2007] QCA 235 – that court in its reasons for judgment did not fully endorse the approach of the Chief Justice;26 the court at [29] quoted the relevant rule, and when it came to apply the test said simply that it was open to the magistrate (who had done the assessment in that case) to conclude that the costs in question were ―reasonable‖: [30].27 [43] It follows that, despite the similarity in wording between the test in r 703 and the test adopted by the Court of Appeal in New South Wales in Dimitriou, the tests are to be applied in different ways. If one applies the test in Dimitriou to costs payable under s 97, which I consider is the approach that should be adopted, and the Chief Justice‘s approach to the assessment of indemnity costs under r 703, s 97(1)(c) does not provide for either costs assessed on the standard basis or costs assessed on the indemnity basis, but rather an intermediate test, which may be equated with the old common fund or solicitor and client basis in England. Unlike the situation for indemnity costs, the onus is on the body corporate, and the defendant is to be given the benefit of the doubt.28 [44] On the face of it, therefore, the first costs statement was prepared on the wrong basis, and if it had been allowed as prepared it would follow that the costs assessor had applied the wrong test. However, it was not allowed in full, and therefore I cannot deduce from that that the wrong test has been applied.29 I think, however, it is a matter of some importance that costs assessors when assessing costs under s 97 of the regulation apply the Dimitriou test rather than the r 703 indemnity basis test. [45] After the hearing the defendant put in further written submissions, that the reasonableness of the costs payable under s 97 should be considered in the light of the principle of proportionality, so that the legal costs were proportional to the amounts in dispute. Reference was made to comments by Sackville J in Seven Network Ltd v News Ltd [2007] FCA 1062 at [8]-[10] (of summary), [17]-[18] (of reasons). His Honour there was not speaking about proportionality as a principle to be applied in the assessment of costs under s 97 or any other regime; he was complaining about the inherent inefficiency involved in the parties having spent in that matter far more costs than was justified by the amount in dispute.30 Whether or not as a reform some concepts of proportionality should be introduced to the law of costs, I am not aware of any authority that the current law applying to these assessments includes any such principle. 26 It did at [29] approve his statement that no niggardly or unduly narrow approach would be warranted. 27 It might be going too far to read significance into the choice of this word rather than ―not unreasonable‖ in a context where there was no express discussion about the point; the court also did not criticise the approach which had been adopted by the Chief Justice. It seems to me that the point remains open before the Court of Appeal, but that unless and until that court decides to the contrary the Chief Justice‘s approach should be applied under r 703. 28 That appears to have been the approach in fact adopted by Newton DCJ in the trial: [2009] QDC 169 at [42]. 29 My impression from the amounts taxed off the two costs statements is that the first was assessed more rigorously than the second: e.g. photocopying charges were reduced in the first but not the second. This suggests that the assessor applied different tests. 30 See now Federal Court Rules 2011 r 1.32(2): ―The court may deal with the proceeding in a manner that is proportionate to the nature and complexity of that proceeding.‖ There is no Queensland equivalent. -- 14 of 36 -- 15 Test for review under r 742 [46] The test traditionally adopted for the review by a court of decisions of a taxing officer is that laid down by Jordan CJ in Schweppes’ Ltd v Archer (1934) 34 SR (NSW) 178 at 183-4:31 ―In appeals as to costs, the principles to be applied are these. The court will always review a decision of a taxing officer where it is contended that he has proceeded upon a wrong principle, for the purpose of determining the principle which should be applied; and an error in principle may occur both in determining whether an item should be allowed and in determining how much should be allowed. Where no principle is involved, and the question is, whether the taxing officer has correctly exercised a discretion which he possesses and is purporting to exercise, the court is reluctant to interfere. It has undoubted jurisdiction to review the taxing officer‘s decisions even where an exercise of discretion only is involved, and will do so freely on a proper case using its own knowledge of the circumstances, but it will in general interfere only where the discretion appears not to have been exercised at all, or to have been exercised in a manner which is manifestly wrong; and where the question is one of amount only, will do so only in an extreme case.‖ [47] One difference between the situation here and the situation in the past is that in the past the taxing officers were always officers of the court, whereas now they are independent costs assessors who are simply approved for the purposes of performing assessments generally, and appointed to perform a particular assessment, under the rules. However, I do not think that in itself makes much difference; the approach is similar to that adopted by appellate courts dealing with appeals from any specialist or expert tribunal.32 Another distinguishing feature is that in the past what was reviewed was the decision of the taxing officer upon an objection to the initial taxation, in respect of which the taxing officer would provide reasons: O 91 r 118(1). These reasons were available to the judge conducting the review. However, as I mentioned earlier, I do not have the benefit of reasons from the costs assessor. Absence of reasons from the costs assessor [48] Rule 738 provides a mechanism for a party to obtain the costs assessor‘s reasons for any decision included in the certificate. The certificates in the present case followed the usual form, certified a particular amount as being the costs assessed, divided between professional fees and disbursements, stated the assessor‘s fee, and that it has been included as a disbursement, and that the plaintiff is entitled to be paid the costs of the assessment which were assessed at the amount of the assessor‘s fee. Nothing was said about which objections had been allowed and which disallowed, 31 Adopted by Kitto J in Australian Coal and Shale Employees’ Federation v The Commonwealth (1953) 94 CLR 621 at 628-9, and by Thomas J in Re Bain Gasteen & Co’s Bill of Costs [1990] 1 Qd R 412 at 416. 32 Bhattacharya v General Medical Connal [1967] 2 AC 259 at 265; Medical Board of Queensland v Thurling [2003] QCA 518 at [12]; Fletcher v Queensland Nursing Council [2011] 1 Qd R 111 at [86]. -- 15 of 36 -- 16 or anything about any decisions taken in the course of arriving at that assessment. In these circumstances a party seeking reasons was faced with no option but to seek reasons for all of the decisions taken in the assessment.33 [49] Rule 738(3) provides that ―a party requesting reasons must pay the costs assessor‘s reasonable costs of preparing the reasons and those costs form part of the party‘s costs in any subsequent review.‖ I was told that in the present case when the costs assessor was asked for reasons he provided an estimate of his costs of providing such reasons of $8,400.34 This the defendant said she could not afford, so no reasons were obtained. It was argued that as a result the application for review was defective and did not comply with r 742(3)(b), in that it did not ―have attached to it a copy of any written reasons for the decision given by the costs assessor.‖ The paragraph uses the word ―any‖, which clearly indicates that the obligation to attach written reasons exists only if written reasons exist. If the costs assessor has not given any written reasons there is no obligation to attach them. In any case, any deficiency in this respect would have been only an irregularity: r 371(1). [50] I must say that the notion that an amount like $8,000 could qualify as ―reasonable costs‖ of providing reasons for the costs assessor‘s decisions in this matter strikes me as manifestly fanciful. That implies that the costs assessor was going to spend a long time constructing reasons for the decisions, rather than, as ought to have been done, simply preparing a document setting out what those reasons were in terms which the party seeking the reasons, and the court, can understand. [51] The costs assessor is expected to exercise a quasi judicial function in a rational way consistent with the applicable law, and ought therefore to have reasons for any decision taken in the course of undertaking an assessment. Whenever an amount claimed in a costs statement is disallowed or adjusted, or whenever an objection is rejected, if the costs assessor has done his job properly he must have reasons, if only in his mind. Given that the rules contemplate that the costs assessor may be required to provide reasons for any decision, it seems to me obvious that the costs assessor in the course of conducting the assessment should keep working papers which contain notes sufficient to indicate to him what the reasons were for each decision taken. When asked to provide reasons therefore it should simply be a matter of going back through the notes and setting out, in a form which would be comprehensible to others, what those reasons were. [52] This is not a novel proposition. In 1997 Sperling J in New South Wales, in a passage quoted and approved on appeal in Attorney-General of NSW v Kennedy Miller Television Pty Ltd (1998) 43 NSWLR 729 at 735-7, said: ―It does not seem to me that what I have proposed would be particularly onerous or that it would materially increase the cost of the process. It may be preferable for assessors to anticipate the possibility of a request for reasons when processing the bill. In the ordinary course, the assessor would need to note against any item reduced the amount of the reduction or the reduced amount in order to be able to tally up the result. It would be easy enough to record 33 These circumstances show that this must be possible, despite the reservations of Holmes JA in Romely v Vandenberg [2009] QCA 17. 34 Affidavit of defendant filed 25 March 2011 para 39. -- 16 of 36 -- 17 the reason for the reduction in each instance at the same time. In each case, the reason must be readily to mind. Otherwise, the item would not have been reduced. In most instances, a word or two would suffice. A code could be devised for recurring reasons. I doubt that this would add much to the cost of the assessment. It would, in my view, be a reasonable incident of the assessment and chargeable as part of the assessment. If a request for reasons were made at a later time, little extra work would be required to produce the reasons in suitable form.‖ [53] In the present case the amended notice of objection to the first costs statement included a general objection in relation to the question of whether indemnity costs were recoverable, and 174 specific objections, most of which followed one of a small number of standard forms. The first costs statement contained 354 items. The second costs statement contained only 202 items, and the amended notice of objection only 71 objections, many of which were again in a standard form. It seems to me that if the costs assessor had conducted the assessment properly in the way I have indicated, reasonable costs for providing reasons should not have exceeded a couple of hundred dollars.35 The figure quoted suggests that what the costs assessor was contemplating doing, at the cost of the party, was setting out to construct a reasoned justification for the result he had arrived at. That is not a proper part of the provision of reasons. [54] Since the ―reasonable costs‖ of providing reasons form part of the costs in the review, I suspect it would be open to the court to review these costs, but there are practical difficulties in recovering costs which have already been paid; no doubt the costs assessor would not actually hand over the reasons until he had received payment. I suspect that the court has power, if appropriate, to order a refund by the costs assessor. Apart from that, a decision of a costs assessor would appear to be a decision of an administrative character made under an enactment, whether or not in the exercise of a discretion, and therefore a decision to which the Judicial Review Act 1991 applies: s 4(a). It seems to me that if a party to the assessment requests reasons for the decision under s 32 of the Judicial Review Act, the costs assessor is obliged to provide such reasons pursuant to s 33 of that Act, a section which makes no reference to any charge to be imposed for such a statement of reasons. The District Court does not exercise jurisdiction under the Judicial Review Act 1991, and I have no close familiarity with the workings of the Act, but if my suspicion is correct and a party can obtain reasons free under that Act, it would provide a substantial practical constraint on costs assessors who might otherwise be disposed to charge unreasonable fees under r 738. [55] In any case, I do not have reasons from the costs assessor for the decisions he arrived at. That does not mean that I cannot conduct a review; I can and have. But it does seem to me that I cannot accord the traditional respect referred to in the authorities to the decisions of the costs assessor in relation to particular matters, including matters of quantum, if I do not know what they are or why they were arrived at.36 What I do have, however, is a list of the adjustments made to those items in the costs statements which were reduced or disallowed, from which I can deduce that in the case of particular objections they were either allowed in full, 35 The certificates show that the costs assessor had already charged $8,400 for the two assessments. 36 And see Fleming and Fleming [2009] Fam CA 552 at [27]. -- 17 of 36 -- 18 allowed in part or disallowed. This has helped, though sometimes even with this information the assessment process remains impenetrably obscure. For example, Item 46 of the first costs statement sought an amount of $357 for drafting certain submissions, from which an amount of $13.40 was deducted by the assessor. The amount claimed represented 17 units at $21 per unit,37 and hence the deduction is 0.638 of a unit, or three minutes and forty-nine point seven seconds of the solicitor‘s time. I cannot imagine how such a deduction could have been arrived at. In this instance, it is not difficult to conclude that whatever the assessor‘s reasons the decision was likely to be wrong. [56] This limited information from the costs assessor must have been forthcoming before the amended application was filed in the court on 19 May 2011, since there is attached to it a copy of the costs statements marked up to show the amounts taken off where that occurred. In these circumstances it is somewhat puzzling that some of the objections pursued in the amended application in respect of each costs statement were to items in the statement which had already been disallowed by the costs assessor. In other cases, the objection was that the amount claimed was excessive and an amount had been deducted by the costs assessor. On the hearing of the review, counsel for the defendant did not press most of these. In addition, the ground of objection in the amended notice of objections to a number of specific items in the first costs statement was simply that the amount claimed was not a standard cost. That was consistent with the general objection that the costs should be assessed on a standard basis, an objection I would reject as indicated earlier, and which was not pressed on the hearing. It follows that these objections should not be allowed.38 Review of assessment of first costs statement [57] There are a number of items in the amended notice of objection which were pursued on the review where the objection was simply that the time taken was excessive. For the costs assessor this would have been largely an exercise in looking that the material on the file and what was achieved and assessing the question of whether the length of time claimed was reasonable. The solicitor concerned was charging the equivalent of $210 an hour, a rate which was not alleged to be excessive and which is indeed comparable with the rate allowed for a solicitor under the scale. Sometimes the documents concerned were documents which were on the court file, either because they had been filed or because they were attached to one of the filed affidavits. In some cases, however, the relevant documents were not immediately available; the plaintiffs‘ solicitors had not brought their file to court. In relation to a number of these objections, all that can be said on the review is that no sufficient reason has been shown to depart from the conclusion of the costs assessor, that the amount claimed was reasonable. This applies to objections numbered 1, 3, 10, 17, 30, 37, 46, 63, 65, 66, 74 and 101. [58] There were, however, a number where as a result of my looking at the documents I cannot see how a costs assessor could have regarded the amounts claimed as reasonable. In the case of Item 3, this covered perusing the fourth amended defence and what was presumably a formal email from the defendant enclosing it, and 37 A unit is six minutes of time charged; the costs statements were drawn on the basis of time charging. 38 This applies to objections 29, 31-36, 38-41, 43, 49-53, 67, 68, 70, 71, 79, 83-86, 95, 150, 154-156, 158, 159, 160, 165, 166, 168, 171 and 172. -- 18 of 36 -- 19 drafting and sending what strikes me as a formal reply. I have looked at the fourth amended defence; there is little indication of any great change compared with the previous defence. Even if some time was taken to compare the two documents carefully and identify just what change was involved, the amount claimed of 10 units seems to me clearly excessive. No amount was deducted by the costs assessor; in my view a reasonable amount of time for this was at most five units. [59] Objection 4 related to Item 13, an email to the plaintiff advising when the reply was due and the timeframe for completion of disclosure. This followed an email earlier that day setting out details of the amended defence, and requesting certain documents for disclosure, and responded to a request by email from the plaintiff. I cannot see why this letter should not have been a formality, which would not have taken more than one unit. Two units were claimed, but I regard that as more than is reasonable and I allow one unit. Objection 5 related to Item 15, perusing an email from the court enclosing one page of the fourth amended defence and thereafter reviewing the notice of intention to defend and defence, for which three units were claimed. Bearing in mind that this related to the amended defence in respect of which I have already reduced the allowance under Item 3, this item ought to have been little more than a formality, and I will reduce it to one unit. [60] Objections 8, 11 and 14 related to Items 19, 24 and 31, all claimed for drafting, or drafting and settling, the reply to the amended defence. There were 31 units (just over three hours) for the lawyer, and three units for a partner who in effect settled the reply. This seems a lot, but I have looked at the document on the court file and it is long and complex, and, bearing in mind that the time taken involves working out what it should say as well as actually composing it, on the whole I would not interfere with the costs assessor‘s allowance in respect of these three items. Something similar happened with Items 20, 25 and 37, all of which related to a supplementary list of documents. There would be additional documents subject to disclosure following the amendment, but a total of 20 units (two hours) seems excessive, and I will reduce this to one and a half hours, which I consider the limit of what is reasonable. I will make the adjustment by reducing Item 25 (Objection 12) by $105. There was something similar with Items 29 and 30, where there were a total of 20 units spread over two days essentially reviewing certain documents provided by the plaintiff and cross-referencing them with the pleadings. The documents are, however, lengthy and on the whole I am not persuaded to make any adjustments in relation to Objection 13. Objections 12 and 13 alleged that Items 25 and 30 were duplications of items already claimed. This form of objection is appropriate where a Bill is drawn on a charge-for-item-of-work basis, but not when the time costing basis is used, and a particular item of work covers two or more days. The real issue here is whether the total amount of time claimed for the item of work is reasonable for doing that work. [61] Objection 9 was to Item 21, reviewing a precedent which I expect was relevant to drafting the amended reply. Only one unit was claimed and I am not persuaded to uphold the objection. Objection 7 was to Item 18, 15 units for drafting an affidavit to oppose the defendant‘s application, where the amount claimed was reduced by $93.60 by the assessor, a figure which looks wrong. Items 16 and 17 were also reduced by what strikes me as odd amounts, $29 and $8.50, when 3 and 1 units were claimed. I cannot work out any logical explanation for these reductions, so I can only conclude that the assessor regarded the amount claimed as excessive. I will substitute for Item 18 a reduction of $105 (5 units), $11.40 more than the -- 19 of 36 -- 20 assessor allowed. Objection 16 claimed that the solicitors were overcharging for photocopying at 80 cents per page; the assessor has reduced this to 20 cents per page, which strikes me as reasonable and I would not make any further adjustment. The same applied to Objections 24 and 122. [62] There are a number of items where the objection was that the rate for a solicitor has been charged when in fact a clerk was used, or ought to have been used. These have already been reduced by the costs assessor in a way that seems appropriate, and I would not make any further adjustment. This relates to Objections 15, 19, 56, 126 and 144. [63] Objection 20 to Item 46 has already been referred to, in relation to the problem of the absence of reasons. Seventeen units (one hour, forty minutes) seems a long time for drafting what I assume was intended to be an outline of submissions, although I have not looked at the document, which I could not find on the file. The fact that there has been some reduction by the assessor suggests that he thought the amount was more than was reasonable, but the fact that the amount of the reduction does not make sense means that I am not really able to be guided by it. In the circumstances I will allow only 10 units, a reduction of a further $133.60. [64] Objection 27 was that Item 68 was a duplication of Item 76. Both related to phone calls from the court, and no doubt the explanation is that the court phoned twice. Objection 28 was that Item 69 was a duplication of Item 64, which on its face is correct, but this follows the phone calls from the court, and the solicitors may have been required to lodge the order again. The assessor reduced the rate to a clerk‘s rate, but otherwise allowed the item and I do not think a further reduction is justified. [65] Objection 42 was to Item 91, 11 units for trial preparation; it was said that this should have been covered by general care and consideration. In bills drawn on a time costing basis it is common for matters of this nature to be specifically claimed, with the result that the allowance for care and consideration is much lower than would be the case with the traditional bill.39 In this bill the claim for care and consideration (Item 354) was only $390, or 1.4% of the professional costs in the total bill, a very modest amount. Like the assessor, I would not uphold this ground of objection, and the time claimed was not shown to be otherwise excessive. The same applies to Objection 69. [66] Item 96 was a fee to counsel to confer and advise, essentially an advice on evidence and other matters associated with preparation for trial, of $2,200. The matter was relatively complex, particularly because of the issue about the validity of the contributions levied, but also because of the need to prove that the costs were reasonable. The trial extended over two days even without the defendant‘s appearance, and there was a bundle of exhibits on the file which was about three inches thick, including two books of documents and another bundle of documents proved by a certificate under s 95 of the Evidence Act. On the whole I think that an advice on evidence and trial preparation was appropriate, the fee was not shown to be more than was reasonable, and I will not reduce the item. Objection 44 was to Item 95, six units for perusing counsel‘s advice, which was said to be lengthy. No 39 Brookfield v Davey Products Pty Ltd [1997] FCA 1462; Wide Bay Conservation Council Inc. v Burnett Water Pty Ltd (No. 9) [2011] FCA 661 at [126]. -- 20 of 36 -- 21 doubt this was something which required careful consideration, and I am not persuaded that this item was more than reasonable. [67] Items 99, 110 and 113 all related to the preparation of a notice to admit documents, and totalled 15 units, or one and a half hours. Even allowing for the fact that there were a lot of documents involved, this seems quite a long time. There is a form for a notice to admit documents, and it is essentially just an exercise in making a list of all of the documents admission of which is sought. That should have been easy enough to achieve, particularly for someone who had the benefit of counsel‘s advice on evidence and who had the previous day spent 11 units on preparing for trial including collating witness documents. Overall I do not think that more than 10 units would be reasonable for this, even allowing for the fact that there were quite a number of documents, since a notice to admit documents is essentially a straightforward thing to prepare; I will therefore disallow Item 110. [68] Items 117 and 123 were for drafting a witness statement, a total of 25 units plus a discussion with counsel: Item 124. This was then sent to the witness, who rang (briefly – Item 133) and a short further statement was then drafted (Item 139 – one unit) and the statement(s) sent to counsel, Item 140. There was later a conference with counsel and the witness (Item 172), and then an affidavit of the witness was drafted (Item 182), sent to counsel (Item 188), a further five units for drafting this affidavit (Item 191), a further conference with counsel and the witness (Item 194 – 11 units) before this (and another affidavit) were collated: Item 201. It appears from Items 202 and 203 that the affidavit was only four pages long, although it had 94 pages of exhibits and was overall a substantial document. Most of these items were objected to: Objections 60, 64, 96, 103, 106 and 111. [69] The witness was of some importance, but overall this appears excessive and unreasonable. I cannot see any justification in two conferences with counsel, and in circumstances where the statement of the witness was essentially just the foundation of the affidavit, quite a lot of time seems to have been spent on it. In my opinion a reasonable process would have involved drafting a statement which was then shown to the witness, followed by a conference with the witness and counsel to settle the statement, then drafting an affidavit of the witness, having it settled by counsel, collating the required exhibits, and execution of the affidavit. In this context, the combination of Items 117 and 123 is excessive. I disallow 10 units from Item 117 and I disallow the item for one conference (Item 172 – Objection 96). I will consider Item 201 separately. I will also reduce Item 136, counsel‘s fees, by 45 minutes, $247.50, as this covers the two conferences. The remaining Objections, 64 and 125, are not upheld. [70] Item 121 was referred to as a brief to counsel, but it would be better described as an email to counsel advising of the progress which had been made in preparation for trial, which prompted a discussion with counsel of half an hour: Item 124. On the whole I think that, given the complexity of the matter, it was reasonable for the solicitor to work closely with counsel in relation to preparation, and to keep counsel informed. What does concern me, however, is that on top of the four units claimed for this email there are a further four units claimed the same day for an email to the plaintiff which seems to cover much the same ground: Item 127. No doubt there had to be some changes, but I would have thought that one of the emails could have started with a copy of the other as a first draft, with adjustments then being made as appropriate. Item 127 is objected to but only on the ground that this is not an item -- 21 of 36 -- 22 of standard costs; in the circumstances I think that two units should be deducted, and I will take them off Item 121 for convenience. [71] Additional items dealing with preparation for trial in conjunction with counsel to which objection was taken were Items 150, 151, 152, 160 and 173. It does appear that the solicitor was working very closely with counsel in the course of preparation, but on the whole I am not persuaded that it would not have been open to the costs assessor to find the extent to which that was done was reasonable.40 Objection 87 is that Item 158, 19 units for Mr Webb to draft his affidavit, was excessive. I have looked at the document which is Document 24 on the court file, and it seems to me that it is unsurprising that the assessor regarded it as reasonable to spend that amount of time on drawing that document; it is a substantial document. A further seven units were spent on drafting that document under Item 181,41 making a total of 26 units, or just over two and a half hours. That does seem quite a long time, but it is a fairly complicated affidavit and I am not persuaded that a conclusion that that amount of time was reasonable ought not to have been reached. [72] Objection 88 was directed to Item 159 claiming for solicitor‘s attendance in a conference with counsel and a representative of the body corporate discussing documents and events and available witnesses in connection with raising contributions, for which 10 units were claimed. This was said to be excessive and the involvement of counsel was said to be unnecessary. The representative of the plaintiff was apparently not called as a witness, though he was the body corporate chairman and it was relevant to discuss with him what witnesses were available and otherwise to work out what documents needed to be proved. Generally I consider that the close involvement of counsel in this matter was reasonable, and it strikes me that this is something that the solicitor ought to have done anyway even without counsel, so this item should not be reduced. In any case, I am not persuaded that the assessor was not justified in allowing it. [73] Objection 90 related to Item 162, preparation of an affidavit by Mr Besley, who gave evidence at the trial, for which 21 units were claimed. I have not seen the affidavit but his evidence was referred to by Newton DCJ and that it could take of the order of two hours to prepare such an affidavit is plausible. A further nine units were claimed under Item 165 for a conference with counsel and Mr Besley; I think it was reasonable for there to be a conference with a witness. The affidavit may well have been drafted after the conference with counsel. Item 165 was subject to Objection 91, while Objection 92 was to Item 166, a further four units that day with the solicitor conferring with counsel discussing matters to be discussed regarding Mr Besley‘s evidence: Item 166. I do not see why this was necessary, given that there was a conference with counsel and Mr Besley and the solicitor on the same day (Item 165)42 and I uphold Objection 92 and disallow Item 166. [74] It appears from Items 208 and 209 that Mr Besley‘s affidavit was six pages long,43 and apart from Item 162 (21 units) there was a further six units claimed under Item 174, and 16 units under Item 182 for drafting that affidavit, the affidavit of Ms Griffiths, and an email to the court. The third should have been a formality, but 40 Objections 80, 81, 82, 89 and 97 are not upheld. 41 The subject of Objection 102. 42 Even if this conference in fact preceded the conference with Mr Besley. 43 It also had 55 pages of exhibits: Item 208. -- 22 of 36 -- 23 it is not possible to dissect the 16 units claimed in respect of the other two items. The draft affidavit was sent to counsel under Item 188 and more work was done on it under Item 201. It appears that at least 27 units were spent on Mr Besley‘s six- page affidavit. This does seem more than was reasonable, and I disallow Item 174, six units, which is the subject of Objection 98. [75] Objection 97 related to Item 176, a conference with counsel and Mr Verevis, another witness, which was also reasonable. Objection 103 related to Item 182, which I have already mentioned, which was not reduced; on the whole I think it was open to conclude that it was reasonable. Item 185 was for the partner to confer with counsel, for which six units were claimed; the lawyer also attended, under Item 187. neither of these were disallowed, although a further conference with counsel discussing further matters for preparation for trial under Item 195 was disallowed by the assessor. The partner gave evidence at the trial, and it was reasonable for him to confer with counsel, and for the lawyer handling the matter generally to attend. I do not uphold Objection 104. [76] There was another item, 186, 16 units claimed for the partner reviewing the file and preparing evidence. This was claimed in fairly broad terms, and it was objected to on the ground that it was part of care and conduct rather than a separate item. I have already dealt with this general objection. In circumstances where the partner was called as a witness in order to prove the reasonableness of the legal costs charged up to a particular date, I think it was reasonable for him to review the file in preparation for giving such evidence, so I will disallow Objection 105. [77] Objection 111 was to Item 201, perusing what ought to have been a relatively short email from counsel, and then collating two affidavits, for which a total of 30 units is claimed. Bearing in mind that this does not involve drawing or finalising the affidavits but simply collating them, three hours seems a lot even allowing for the fact that there were a significant number of exhibits to each of these affidavits.44 No doubt some time has to be spent on something like this, but three hours strikes me as excessive and I reduce that to two hours, on the ground that any further time on this is more than is reasonable. Indeed, I doubt if this work even required a lawyer, rather than a clerk or secretary. [78] Objection 123 related to Item 214, 28 units for the partner reviewing evidence and preparing of the hearing. Again this was objected to on the ground that it should be covered by general care and conduct, but I do not agree, for the reasons given earlier. The real issue here is that these 28 units come on top of 16 units from the previous day, a total of almost 4.5 hours. That does strike me as a long time, but no doubt the file with which the solicitor had to be reasonably familiar was quite a substantial one, and it would have been appropriate for him to ensure that he was in a position to respond to any questioning about the reasonableness of any particular conduct on the part of the solicitors over the years. It would not have been apparent in advance that he was not going to be cross-examined by the defendant. On the whole, I am not persuaded that this amount of preparation was excessive and I disallow the objection. 44 94 pages of exhibits for Ms Griffiths‘ affidavit (Item 202), 55 pages of exhibits for Mr Besley‘s affidavit (Item 208). -- 23 of 36 -- 24 [79] Objection 124 was to Item 215, 60 units for the lawyer instructing counsel on the first day of the trial. There was a further 15 units for the partner claimed under Item 216 which was the subject of Objection 125. Curiously there does not seem to be an amount claimed for the partner attending to give evidence, though he did. The ground of Objection 124 was in part that the amount claimed was not in accordance with the scale, which for reasons I have given was not a good ground of objection. Neither of these items was reduced by the assessor, and on the whole I think it was reasonable for the partner to be there for part of the time even apart from the requirement for him to give evidence. I disallow Objections 124 and 125. [80] Objection 127 was to Item 218, the lawyer preparing for the second day of the trial, 10 units in effect spent before going to court getting the matter ready. This was objected to on the ground that this came under general care and conduct, but for the reasons I have given I think it was reasonable and appropriate for it to be claimed as a specific item in a bill prepared on this basis and I do not allow that objection. Objection 128 to Item 219, instructing counsel on the second day of the trial, was also based on a failure to charge in accordance with the scale, and is therefore disallowed. [81] Objection 130 was to Item 221, a telephone call with the client confirming the outcome of the trial. There was no substance to the ground of objection that this was not an item of standard cost, but it was also said to duplicate Item 223, a letter to the client advising the outcome of the trial. However, this was not a telephone call to the client, but simply responding when the client telephoned, and on the whole I think it was reasonable to respond to that call, and also to send a letter giving more formal advice on the situation under Item 223. I disallow Objection 130. Objection 131 had already been successful; Item 226 was fully disallowed by the assessor. [82] Following the hearing, the defendant put in additional written submissions which objected to costs associated with the bankruptcy and insolvency proceedings against her, alleging that they were motivated by a desire to force her to sell the home unit in the scheme in question, which was motivated by the desire of the owner of another lot or lots to acquire her unit. Whether or not that other owner had such a desire, bankruptcy proceedings are a process commonly used in effect as a method of enforcement of a money judgment, particularly one of any significance, and it would be unsurprising, and I think not inappropriate, for the plaintiff, once it obtained judgment, to be taking steps until it was paid to enforce it by means of bankruptcy proceedings. That would be legitimate even if it happened to be convenient from the point of view of the plaintiff, or particular lot owners, for the defendant‘s unit to be forced onto the market. It would be understandable that the plaintiff would prefer the unit to be owned by someone who was prepared to pay the contributions. Such a process would be more likely to be effected by registering a warrant to seize and sell property against the defendant‘s title to the unit, since such a warrant if executed would put the unit on the market, whereas if the defendant were made bankrupt the realisation of her property would be under the control of the trustee in bankruptcy, who may be able to satisfy her debts without taking that step. In any event, what matters is whether the particular steps taken with a view to enforcing the judgment were reasonable. I have addressed a number of those below, by reference to specific objections. -- 24 of 36 -- 25 [83] The plaintiff in the outline objected to Items 224, 225 and all the Items from 243 to 320 inclusive, on the basis that these were ―bankruptcy and insolvency costs‖, which were unreasonable because it was unreasonable to seek to make the defendant bankrupt. Apart from the fact that most of these items were not the subject of objections pursued in the amended application, most of them also did not involve steps with a view to bankruptcy, as distinct from steps with a view to enforcing the judgment under the enforcement procedures provided under the rules. There is the further difficulty that most of these items were not the subject of objection in the amended notice of objection. There were only three items relating to bankruptcy proceedings in the costs statement. Item 260 was for drafting the bankruptcy notice, and was subject to Objection 140 on the ground that the item was excessive, which was partly successful and $42 was taken off by the assessor. Items 296 and 297 were for a letter on 25 June 2009 to a specialist bankruptcy service enclosing the notice and a cheque for the filing fees (outlay $400 – Item 297). They were not the subject of objection in the amended notice of objection. It appears the judgment debt was paid by cheque from the defendant received on 8 July 2009, and presumably that was the end of the bankruptcy proceedings. In all the circumstances, I am not persuaded that any further reduction should be made, even apart from the technical difficulties that the defendant faces in raising these matters at this stage: UCPR r 742(5)(b). Some of Items 243-320 were the subject of specific objection and argument, and I have dealt with those below. [84] Objection 133 was to Item 242, a discussion with counsel about further steps to be undertaken (three units), of which two units were disallowed by the assessor. I am not persuaded that that was not an appropriate response. Objection 134 was to Item 244, seven units, preparing a statement and application for an enforcement warrant, which was charged in addition to Item 243, three units for ―preparing warrant of execution‖ and Item 245, four units for drafting the application for the enforcement warrant, the subject of Objection 135. These were said to be excessive and a duplication. A more persuasive point is that this was premature, in circumstances where judgment had not yet been obtained, although it may well have been reasonable to anticipate that there would be a favourable judgment forthcoming. Nevertheless, nothing could be done in relation to this until the judgment was delivered. After judgment there was an enforcement warrant issued (Item 298), but there were also amounts claimed at Items 275 and 276, apparently in relation to an application for an enforcement warrant. [85] Apart from this, an enforcement warrant in Form 75 is a straightforward enough document, and most of the things that have to be inserted into the form can only be inserted once the date and amount of the judgment are known. The same applies to the statement under r 817. In my view it was not reasonable to be drafting an enforcement warrant or preparing an application for one or a statement in support of it prior to the time when the judgment had been obtained. It is not a question of whether the plaintiff was short of money and very keen to be paid, it is a question of the reasonableness of doing this work, and in my opinion it was clearly not reasonable to be doing this work at this time. In my view Items 243, 244 and 245 were premature, although Item 243 was not objected to; I would uphold Objections 134 and 135, but Item 275 was disallowed by the assessor, presumably as a duplication of Item 245 (Objection 147), and, as a warrant was issued, the cost of preparing it and the application and statement in support should have been allowed at some point, in a reasonable amount. It would have been reasonable to allow Item 243, two units for drafting the application, and four units for preparing -- 25 of 36 -- 26 the statement to accompany the application, all after the judgment was delivered; more than that was not reasonable. The equivalent of that can be achieved by allowing Objection 134 in part and reducing Item 244 by $63, allowing Objection 135 in part and reducing Item 245 by $42, leaving Item 275 as taxed off and upholding Objection 147 and disallowing Item 276, $147. [86] Objection 136 was to Item 246. Evidently there had been a request from the judge for updated quantum schedules, essentially to update interest calculations to a particular date. That would have involved some work, but I do not understand why it was necessary to write to the client about this, since it should have been simply a matter of preparing a calculation and amending the schedule, for which a further 10 units were claimed under Items 248 and 249 as well. I disallow Items 246 and 247 under Objection 136, and Item 248 will be reduced to two units, making a total of five units with Item 249. In these circumstances it is not necessary to allow Objection 138, which objected to Item 249 as a duplication of Item 248. Objection 139 was that Item 251 was a duplication of Items 248 and 249, but it appears that it involves a different schedule, and as it was already reduced by $42 by the costs assessor I will not make any further reduction to this item. [87] Objection 142 was to Item 267, an email forwarding the judgment to counsel, for which two units were claimed. Presumably there was an electronic version of the decision which had been forwarded by the associate, so passing this on to counsel ought to have been a formality and I disallow one of the two units claimed. Objection 143 was to Item 269, a letter to the client forwarding a copy of the decision and no doubt explaining it, for which five units were claimed. That seems a lot, but I suppose some explanation was justified and it may well have been reasonable to spend that amount of time; I am not persuaded that the assessor was wrong not to reduce this amount. [88] Objection 145 was to Item 273, said to be unexplained; there appear to have been two attendances on the registry seeking to get the judgment finalised. That does seem unnecessary, but presumably this was supported by diary notes before the costs assessor, and it may in fact have taken two attendances to get anywhere with the registry in Southport. I will not reduce this amount. Objection 149 was to Item 277, a further three units claimed for finalising the letter to the plaintiff; this was on top of five units claimed on the previous day, and that does strike me as excessive. I uphold Objection 149 and disallow Item 277. [89] Objection 151 was that Item 279 was not an item of standard costs, which necessarily fails, and was a duplication of Item 278; it was an email following up a phone call, and I think in the circumstances it is understandable that the client would want something in writing. I will not allow that objection. The same objection was made to the related Item 280 and it fails for the same reason. Objection 153 to Item 281 related to a further phone call to the court in relation to the process of taking out the judgment, and again this may in practice have been necessary, or at least part of a process of chasing up the registry, and I will not disallow this item. [90] Objection 161 was to Item 289, 11 units spent reviewing Victorian enforcement requirements. This was said to have been reasonable on the basis that the plaintiff knew that the defendant had property in Victoria, so it was an exercise of finding out whether the decision could be enforced against that property. This, however, -- 26 of 36 -- 27 occurred prior to the time when the enforcement warrant for which the application had already been made had issued (see Item 298, three days later) and at a time when the plaintiff was also taking steps to enforce the judgment by way of a bankruptcy notice (see Item 296), so it seems to me obviously premature and unreasonable to be investigating the possibility of executing the judgment in Victoria when there had not even been a reasonable attempt to execute it in Queensland or by way of bankruptcy proceedings. I therefore disallow Item 289. [91] Objection 163 was to Item 293, a further attendance on the court registry. I expect this was when the application for the enforcement warrant was lodged; the fee was paid at the same time: Item 294. I am not persuaded that the disallowance of this objection was wrong. Objection 164 was to Item 298, and the ground was that it was unnecessary for the lawyer rather than a clerk to attend the registry to pick up the warrant; that objection appears already to have been upheld by the assessor who disallowed $99. Nothing further is required. Objection 173 was to Item 319, said to be a duplicate of Item 317. It appears that an email was sent to the Southport registry effectively seeking to prevent further action on the enforcement warrant following an indication that the defendant would be making a payment shortly (Item 137) and a similar email was sent to the registry in Cairns: Item 319. It is not apparent why that could not have been achieved simply by sending the one email to both registries, but if two emails were to be sent there should have been negligible additional work involved in sending the second. I therefore uphold Objection 173 and disallow Item 319. [92] That is the last of the objections pursued in the amended application, but it was agreed that Item 344 in the statement should also have been disallowed, as this was covered by a different costs order made by Irwin DCJ on 27 November 2009. (The equivalent item in the other costs statement was disallowed by the assessor: Item 192). [93] In later written submissions the defendant objected to Item 354, $390 for general care and consideration. This was not the subject of objection in the amended notice of objection, and is quite a modest, indeed almost nominal, claim for care and consideration, given the size of the costs statement. That may well be appropriate in a costs statement drawn on a time-costing basis. The matters relied on for disallowing the item in the defendant‘s affidavit related to the basis of assessment, where I do not agree with her submission that assessment should be on the standard basis, and a complaint about excessive and duplicated costs, but that is really concerned with something other than the ordinary justification for an item of this nature. I will not interfere with Item 354. [94] In summary therefore the adjustments that I have made to the assessment of the first costs statement, where the amount claimed is disallowed in whole or in part, are as follows: Objection No. Item No. Reduction 2 3 $105.00 4 13 $21.00 5 15 $42.00 7 18 $11.40 -- 27 of 36 -- 28 12 25 $105.00 20 46 $133.60 54 110 $105.00 60 117 $210.00 62 121 $42.00 74 136 $247.50 92 166 $84.00 96 172 $168.00 98 174 $126.00 111 201 $210.00 134 244 $63.00 135 245 $42.00 136 246 & 7 $66.20 137 248 $105.00 142 267 $21.00 148 276 $147.00 149 277 $63.00 161 289 $231.00 173 319 $21.00 — 344 $120.00 TOTAL $2,489.70 [95] The costs statement as assessed claimed professional costs of $28,421.70 and outlays of $11,302.09, a total of $39,723.79. The costs assessor disallowed $4,582.90 from the professional fees and $0.80 from the outlays (one letter and one phone call), but then added short charges of $2,100.03. There is no explanation for the amount of short charges allowed, even in the spreadsheet provided by the costs assessor which does not provide particulars of how the strange figure of $2,100.03 was made up, but there was no argument directed specifically to this issue on the review. The overall result of this was that the costs statement was assessed at $37,240.12, to which the assessor‘s charge of $6,000 was added, to produce the total in the certificate of $43,240.12. As a result of the review, that is reduced by $2,489.70 to $40,750.52. The statement as delivered was reduced overall, on assessment and on review, by $4,973.37, about 12.5%. [96] There are two other matters I should mention. In the written submissions referred to earlier, the defendant complained that the judgment of Newton DCJ was contrary to law and had wrongly allowed an excessive amount in respect of interest. I have no power to go behind that judgment; if there was any substance in these matters, they should have been raised by way of appeal. Complaint was also made that many of the costs claimed were costs incurred before the matter got to the District Court, but these were part of the costs covered by the amount awarded by Newton DCJ in -- 28 of 36 -- 29 respect of recovery costs up to August 2008. Recovery costs thereafter, the subject of the first costs statement, all related to District Court proceedings. [97] The other matter I should mention is that the costs assessor in his certificate assessed the costs of the assessment at $6,000, the amount of his fees for the assessment, and certified that the plaintiff was entitled to be paid these, and that they had been included as a disbursement in the figures given earlier in the assessment. In my opinion that involved a further error on the part of the costs assessor. The costs assessor is required to decide, that is assess, the costs of the assessment: UCPR r 732. The costs assessor‘s fee was payable in the first instance by the plaintiff, and was to be included in the plaintiff‘s costs of the assessment: r 740(4). But apart from the amount of that fee, the costs of the assessment of the plaintiff means the costs incurred by the plaintiff in respect of the assessment, as is clear from r 734(5), where the expression is given a meaning with a particular temporal limitation for the purposes of that rule. [98] The costs of the plaintiff of the cost assessment are the costs incurred by the plaintiff in doing what was required in order to obtain an assessment of costs under the rules, that is, under Part 3 of Chapter 17A. This involved preparing and serving the costs statement (r 705), perusing the notice of objection (r 760), the application for the assessment under Division 2, any dealing with the costs assessor including the costs of preparation of any submissions for the costs assessor, and the finalisation of the assessment, the perusing of the certificate and the steps taken thereafter to obtain judgment for the amount certified: r 740. In the first costs statement, these were covered by Items 321-353. [99] The matter is complicated by the fact that on 27 November 2009 Irwin DCJ, when appointing the costs assessor, ordered the defendant to pay the plaintiff‘s costs of and incidental to the plaintiff‘s application fixed in the sum of $3,800. It is not clear whether there is any overlap between that figure and the amount included in the first costs statement; for example, Item 344 would appear to be covered by the amount of that order. This is not a matter which was raised during the hearing, and I will hear submissions on it when delivering these reasons. Obviously, to the extent that the plaintiff‘s costs were covered by his Honour‘s order, they cannot be claimed again on the assessment.45 [100] This, however, is beside the point that I mainly wish to make, which is that the costs assessor in my opinion erred when assessing the costs of the assessment as simply his fees. He should have assessed the plaintiff‘s costs of the assessment on the basis I have indicated, including his fees. These being payable by the defendant, they would have been included in the total amount certified, as they ultimately were, so that this error by the costs assessor does not affect the outcome of the assessment, and I merely mention it in case there is any confusion among costs assessors as to just what is meant by the expression ―the costs of a costs assessment‖. [101] It also suggests that the costs assessor did not comply with the procedure which must be followed if r 733(4) is to be properly applied. I do not know whether there were any offers to settle under r 733, but the terms of sub-rule (4) mean that, when a costs assessor has assessed all items in the costs statement other than the costs of the 45 To be fair, they were appropriately included as anticipated costs in the costs statement, which of course had been drawn prior to the time of that application. -- 29 of 36 -- 30 assessment, the costs assessor should disclose to the parties what the amount of that assessment is and enquire whether there is any relevant offer to settle costs under r 733. If there is, that triggers r 734(3) and (4), and those sub-rules have to be taken into account when determining which party pays what by way of the costs of the assessment. There is the further complication that r 734(5) means that the costs of the assessment for r 734 may have a different starting date from the date which otherwise applies to the costs of the assessment, but once the costs assessor has the relevant information any adjustment can be made. In addition, the costs assessor should invite any submissions as to whether he should decide otherwise under sub-rules (3) or (4) as may be applicable. The costs assessor can then finalise the process of assessment and issue his certificate. Given the error revealed on the face of the certificates in the present case, I suspect that this process was not followed in the present case. If not, it ought to have been. Review of assessment of second costs statement [102] This is a statement of the costs payable under the order on the defendant‘s application of 11 February 2009, an order that the defendant pay the costs of that application to be assessed on the indemnity basis. The assessment therefore should be undertaken in accordance with the principles in Bottoms v Reser (supra). There is one issue about the scope of the assessment which was raised in the defendant‘s material, where she claimed that the costs statement includes the costs of two adjournments which were the subject of a separate costs order on 10 March 2009. These costs were not separately assessed, but the defendant claims she has already paid the amounts claimed by the plaintiff in respect of these costs.46 [103] If an order has already been made for some costs, a later costs order cannot carry the costs the subject of the earlier order unless that earlier order was one to that effect, for example by the costs being reserved or made costs in the cause. It appears that these costs have in fact been included in this costs statement, but it seems to me that as long as the plaintiff gives credit for the payments already made the defendant is not prejudiced by that, since the assessments in both orders were to be made on the indemnity basis. If there was an agreement that the plaintiff would accept and the defendant would pay $X in satisfaction of the plaintiff‘s rights to costs under the earlier order, that discharged that right, but there was no evidence of an express agreement, and payment of the balance of the amount sought after the assessments had been completed could not amount to an implied agreement. [104] It appears that the second costs statement covers the costs payable under the order of 10 March 2009 as well as under the order on the application of 18 June 2009, but as both were to be assessed on the same basis, this is an irregularity only and does not affect the real matter in issue, which is what amount is properly payable in respect of these costs. It is clear that the plaintiff must give credit for any amount in fact paid in respect of costs by the defendant, so the defendant is not prejudiced by any irregularity involved. If the costs covered by this costs statement are ultimately assessed at $X and the defendant has already paid $Y in respect of such costs, the only amount the plaintiff can recover is $X minus $Y. That, however, is not 46 Affidavit of defendant filed 25 March 2011 para 5, although this indicates that initially she paid only $1,314.80 after deducting costs she claimed under an order of the Mossman Magistrates Court of 28 July 2004 which have not been assessed or agreed, and a deduction of part of a fee for counsel which she regarded as excessive. She paid the balance of $3,162 on 25 April 2011: affidavit of defendant sworn 13 May 2011. -- 30 of 36 -- 31 something which affects the correct determination of the value of X. When these reasons are delivered, I will see if there is any consequential dispute about the money payable in view of money paid or paid into court.47 [105] In a large number of the objections the ground relied on was simply that the item was excessive. Presumably the costs assessor checked the file to determine that there was some documentation to establish each of the items the subject of the objection. Most of them claim only a relatively small amount of time anyway, and in relation to a number of these it is sufficient to say that, in the light of the material before me, it is not clear that circumstances exist that would justify my interference with the decision of the costs assessor. This applies to Objections 1, 6, 12, 19, 28, 33, 38, 42, 47, 51, 53, 66 and 70. [106] Objections 2 and 3 related to two items of time for a partner whose attention was evidently drawn to the situation, and who spoke with counsel about it for three units: Items 9, 10. I think the involvement of a partner was reasonable, as there had been a partner exercising some supervision in this matter from time to time, and presumably this was the partner who had given evidence at the hearing and faced the prospect of having to be cross-examined. I am a little wary about the length of the attendance in Item 10, but on the whole I do not think that it has been shown to be unreasonable, or that the costs assessor was wrong in allowing it without deduction. I disallow these objections. [107] The following day there was an attendance claimed by the solicitor (but not by the partner) in relation to the matter being listed; this is related to the previous issue and for the same reason I disallow Objection 4. Objection 7 related to Item 17, drafting a summary of defendant‘s correspondence and demands, five units. This was evidently prepared with a view to placing it before the court on the application, and would have required a review of a good deal of correspondence from the defendant. Assuming it was put before the court as an exhibit to one of the affidavits, the time for preparing it was justified and I disallow Objection 7. [108] Objection 8 to Item 20 appears to have been already upheld, since the amount claimed was disallowed by the assessor. Objection 10 was apparently that Item 22 was a duplication of Item 20, and a further duplication of Item 15; in any event, given that Item 20 was disallowed I do not think that this one should also be disallowed. Objection 11 was to the related item for transmission by email. [109] Objection 13 was to Item 27, two units for perusing an email from the defendant‘s solicitors, which seems excessive, although I have not actually looked at the email. On the whole, although I am doubtful about this item, I will not disallow it. Objection 14 was to Item 28, 13 units for drafting an affidavit providing some information as to the history of the matter. It appears from Items 36 and 37 that the affidavit was eight pages in length, and had 26 pages of exhibits. Item 28 is for 13 units (1 hr 18 mins) for drafting, it was then discussed with counsel, and there was further drafting in Item 34 of 15 units, one and a half hours. This was after the draft affidavit had been seen by counsel, who had made amendments to some of the paragraphs: Item 33. Item 34 was also objected to, on the ground that it is a duplication of Item 28, and excessive, with five units to attend to amendments 47 On 27 May 2011 McGinness DCJ ordered the defendant to pay $20,000 into court, which she says she did on about 16 June 2011. -- 31 of 36 -- 32 conceded. Item 33 was perusing the email from counsel, which was the subject of Objection 16, on the ground that the involvement of counsel was unnecessary. [110] On the whole, I think it was appropriate for counsel to be involved, but that should have reduced the drafting burden and I cannot see how it could be reasonable to spend as much as 28 units drafting an affidavit which was only eight pages essentially dealing with mechanical matters about the history of the proceeding and correspondence with the defendant. Notwithstanding the generosity implicit in the test for indemnity costs, in my opinion this was unreasonable and it is appropriate to disallow five units from Item 28, and 10 units from Item 34, although I am not persuaded that it was unreasonable to involve counsel and I will not uphold Objection 16 to Item 33. [111] Objection 18 related to Item 41, a letter by email to the plaintiff advising of submissions and directions after the hearing on 17 February 2009. It appears that all that happened on that day was that the judge made some directions for the exchange of material in relation to the application to reopen the trial, and the matter was adjourned to 10 March 2009. I cannot see how it would have taken half an hour to compose an email explaining that to the plaintiff. I allow Objection 18 in part, but allow two units for the email; more than that was unreasonable. That reduces the amount claimed by $63. [112] Objection 20 related to Item 47, an email forwarding to counsel the correspondence from and to the defendant‘s solicitor; this was said to be unnecessary, but I am not persuaded that it was unreasonable and that objection is disallowed, as is Objection 21 which is to the related Item 48, for transmitting that letter by email. Objection 25 was to Item 52, an email from counsel, again on the basis that counsel ought not to have been involved in this much detail; I am not persuaded, however, that that was unreasonable. The amended notice of objection contains a second Objection 25, to Item 57, a brief to counsel which appears simply to have advised that no material has been served and that a search of the court file revealed that no material has been filed, for which two units were claimed. It appears that there was a response by email from counsel suggesting a letter to the defendant‘s solicitors, which was then drafted (Item 60 – two units) and transmitted: Item 61. Although I think it was generally reasonable for counsel to be involved, it does strike me as unreasonable to have to consult counsel on such an obvious proposition that, when the defendant had failed to comply with a time limit for serving material, the appropriate response was to write to the defendant‘s solicitors complaining about that, and I think that sufficiently clear that this objection should have been allowed by the assessor. I allow the second Objection 25 and Objection 27, and disallow both of these items, $42 and $21, along with the related Item 58 - $3.20, which was the subject of Objection 26. [113] Objection 30 was to Item 75, 11 units for drafting a further affidavit by Mr Webb. It appears from the following two items that this was a further five pages. This was after one unit had been spent reviewing documents in preparing of affidavits (Item 74) and again this was essentially a mechanical affidavit explaining what correspondence has been sent and received and so on. I will allow seven units; it seems to me that any more than this was plainly unreasonable, so Objection 30 is allowed in part and reduced by $84. -- 32 of 36 -- 33 [114] Objection 31 was to Item 79, claiming 60 units for instructing counsel on the hearing on 10 March. It is possible to have to spend a long time instructing counsel on such a hearing, and the fact that no amount was disallowed by the costs assessor suggests that there was appropriate documentation to demonstrate that this length of time had actually been spent. On the whole I am not persuaded that this was unreasonable on the indemnity basis. Objection 32 was to Item 81, perusing an email from counsel advising of orders made at the directions hearing. That seems unnecessary when the solicitor was attending instructing counsel in the hearing, but I suppose if counsel does send an email advising formally of the directions it is reasonable enough for the solicitor to look at it. I therefore do not disallow Item 81. [115] There follow some items which are related to the lodging of a caveat or caveats over land owned by the defendant in Victoria. I have already said something about this earlier in relation to the other costs statement; I will not repeat here what I said there, though it applies here as well, but there is the further consideration that, whatever the caveats or proposed caveats in Victoria were for, they plainly had nothing to do with the defendant‘s application of 11 February 2009. This costs statement was to deal with the plaintiff‘s costs in relation to that application, and matters such as this which have nothing to do with that application do not belong in the costs statement.48 Although there was no specific objection to these items, in my view they are plainly inappropriate49 and I disallow Items 82-86 and 88. [116] Objection 34 was to Item 89, on the ground that it is a duplication of Item 87. The latter claimed five units for drafting a report to the plaintiff advising the outcome of the hearing, which seems fairly generous anyway, and Item 89 is a further two units for finalising that report: in my view, any more than five units would be plainly unreasonable and I would uphold Objection 34 and disallow Item 89. Objection 35 related to Item 92, a charge for sending a six-page fax to the defendant, where it was said that ordinary mail would have sufficed. The costs assessor has disallowed $5 of the $8.20 claimed, though I do not know on what basis; it may be simply that the charges for sending a fax were regarded as excessive, since Items 98 and 100, which also involved faxes, were also reduced. I cannot work out the basis upon which these reductions have been made from the amounts of the reductions, even on the assumption that there is a higher charge for the first page of a fax, and it does not appear that all these reductions have been made on the same basis. [117] The defendant‘s point was that faxes were not getting through to her, and the difficulty with communicating by fax is that it is not clear from the mere fact that the document has been transmitted that it has actually been delivered to the intended person, particularly if the fax number is not one specific to that person. In all the circumstances I think it was unreasonable for the solicitors to have continued to send letters by fax when they had had problems with that form of communication in the past and had been told not to use it. It is unreasonable to expect the defendant to pay extra for sending something by fax when she was not receiving faxes, so I allow Objection 35 and reduce Item 92 to 55 cents. [118] Objection 36 was to Item 95, a telephone call to counsel advising of the latest letter from the defendant; again it has not been shown to be unreasonable for counsel to be involved to this extent and to be informed of the latest letter from the defendant. 48 Crane Distribution Ltd v Dark Star Two Pty Ltd [2011] QSC 90 at [32]. 49 Under UCPR r 708(4)(b); see r 722. -- 33 of 36 -- 34 Objection 37 was to Item 96, two units for preparation for hearing, which was said to be a self-education item. This involved reviewing disclosure obligations under the Act. On the whole I am not persuaded that this was unreasonable. Objection 39 was to the cost of a facsimile to the defendant comprising a letter and various enclosures (12 pages), about half of which was disallowed by the assessor, apparently on the basis that the fax charges were excessive. For the reasons given in relation to Objection 35, this item is also reduced further, to 55 cents. [119] Objection 44 was to Item 110, five units for a letter by email to lot owners enclosing copies of emails exchanged between the plaintiff and defendant and giving some other information about the proceeding, for which five units were claimed. The costs assessor has already reduced this by two units and I am not persuaded that any further reduction is appropriate. Objection 50 was to Item 121, five units claimed for reviewing the file in relation to allegations in respect of cost orders in a letter from the defendant, the perusing of which was Item 120. It seems a little surprising that it should be necessary to spend half an hour going over the file which ought to have been familiar to the solicitor, but I think this is one of those cases where the approach indicated in the test for indemnity costs would prevent the amount being reduced. Somewhat reluctantly therefore I will not uphold Objection 50. [120] Objection 59 was to Item 136, three units for drafting a letter to the plaintiff dealing with two topics. The plaintiff had received a letter directly from the defendant seeking search and photocopying charges in respect of certain matters, and this was forwarded to the solicitors with a request that they calculate the search and photocopying charges, which does not really sound like legal work. I suppose the request had something to do with the application, so its inclusion in the bill may be justified. It was submitted that these were matters covered by the email to the plaintiff which was claimed for under Item 116, and there does seem on the face of it to be some force in that proposition. In those circumstances, three units is clearly unreasonable, and I will allow the one unit conceded in the notice of objection. [121] Objection 60 to Item 138 was another example where counsel was being kept informed of developments; I consider that generally speaking that was appropriate in an assessment on the indemnity basis and I would not uphold this objection, or the related Objection 61 to the charge for sending that by email. Objection 62 to Item 142 was for three units for a letter by fax to the defendant advising that she had failed to comply with s 205 of the Act in relation to disclosure of documents. I have seen the letter and could not say that the assessor must have found that the time for it was unreasonable. This objection is disallowed. Objection 63 was for the charge of sending the letter by fax. There is also the consideration that Item 144 was for transmitting the same letter by email. In a similar situation, Items 123 (fax) and 124 (email), the assessor disallowed the fax item. This was sought to be justified on the basis that there had been a history of difficulty in communicating with the defendant, but they had as recently as the previous month been communicating with the defendant by email: see e.g. Item 126. For the reasons given earlier, Item 143 ought to have been disallowed by the costs assessor and I uphold Objection 63.50 50 There is also the curious feature that the assessor reduced Item 100, $4.20 for a two-page fax, to $0.55 and Item 92, $8.20 for a six-page fax, to $3.10, but Item 143, $4.20 for a two-page fax, was not reduced at all. -- 34 of 36 -- 35 [122] Objection 64 was to Item 145, nine units for a telephone call from the defendant‘s solicitors. That is a long time, but it did involve telling new solicitors for the defendant about the history of the proceeding, and presumably it was supported by an appropriate file note, and I will not uphold that objection. Objection 65 was to Item 148, an email to the plaintiff passing on an offer that had been received and commenting on it, for which four units were claimed. That seems a lot, but it may have included the cost of working out what the practical difference was between what was being offered and the plaintiff‘s legal entitlement, which may have taken some time and on the whole I am not persuaded that this objection has substance. [123] Objection 67 was to Item 159, drafting a further affidavit of Mr Webb, for which 21 units were claimed. It is apparent from Items 161 and 162 that the affidavit was only nine pages, plus 37 pages of exhibits. I looked at the affidavit on the court file and it had some complexity and I am not persuaded that a conclusion that something in the order of two hours had not been shown to be unreasonable was wrong. Objection 68 was to Item 160, reviewing material in preparation for the hearing of the application, for which a further 15 units were claimed. This was in preparation for the hearing of the application to reopen, but it seems to me that this ought to have covered much the same ground as that covered by the affidavit which had been prepared, and the issue is whether it was unreasonable to take one and a half hours on top of the time taken to prepare the affidavit. If the affidavit was appropriately directed to the relevant issues, preparing it should have had the effect of familiarising the solicitor with the relevant material. I accept that there may have been some additional preparation which would be appropriate, but it was unreasonable to spend more than one hour and I allow Objection 68 in part and disallow five units. [124] Objection 69 was to Item 164, 42 units for instructing counsel on the hearing. The notice of objection said that the hearing was three hours in length. I was told that the hearing started at about 10.45 am and was finished by lunchtime, which is actually less than three hours, but there would have been additional time involved and overall something over four hours is in my view not unreasonable. There would have been some additional time associated with instructing counsel on the hearing. Objection 71 was to Item 202, general care and consideration, for which only $300 was claimed. The objection sought a reduction on a pro rata basis, but in fact no reduction was made even though the overall costs statement was reduced by the costs assessor by about 10%. I think that for a bill drawn on a time costing basis, it is reasonable for this item to be essentially nominal, and I think the amount claimed of $300 was, so I would not reduce it further. [125] Accordingly, the result of my review of the costs assessment is that I uphold in whole or in part the following objections to the following items, and as a result make the following reductions in the amount claimed in the bill: Objection No. Item No. Reduction 14 28 $105.00 17 34 $210.00 18 41 $63.00 -- 35 of 36 -- 36 25 57 $42.00 26 58 $3.20 27 59 $21.00 30 75 $84.00 82 $21.00 83 $21.00+$2.00 84 $21.00 85 $3.20 86 $21.00 88 $21.00 34 89 $42.00 35 92 $2.65 39 98 $6.85 59 136 $42.00 63 143 $4.20 68 160 $105.00 TOTAL $841.10 [126] The costs statement as served claimed professional costs of $11,489.70 and outlays of $4,195.75, a total of $15,694.45. The costs assessor disallowed $1,529.60 from the professional fees and $1.65 from the outlays (three letters), but then added short charges of $1,001.75. There is no explanation for the amount of short charges allowed, even in the spreadsheet provided by the costs assessor which does not provide particulars of how the figure of $1,001.75 was made up, but there was no argument directed specifically to this issue on the review. The overall result of this was that the costs statement was assessed at $15,164.95, to which the assessor‘s charge of $2,400 was added, to produce the total in the certificate of $17,564.95. As a result of the review, that is reduced by $841.10 to $16,723.85. Overall, the amount claimed in the statement was reduced by about 8.7%. [127] There are two other matters I should mention. The first is that the additional written submissions from the defendant referred to earlier complained in general terms about the costs covered by this costs statement as being excessive or unreasonable. I can understand that a person who is not experienced in litigation will often fail to appreciate just what is involved in the process, the work involved and the time taken for that work, and therefore the costs involved. The conduct of litigation is an inherently labour-intensive activity, and is therefore always going to be expensive. This fact has always been one of the most compelling reasons why parties ought wherever possible to resolve their differences without litigation. The other matter is that my comments about the assessment of the costs of the assessment apply here as well. The relevant items in the cost statement are Items 169-201. Again, there may be some potential for overlap, although I notice that this time a number of the items associated with the application for the costs assessment appear to have been disallowed by the assessor. Again, this matter will have to be dealt with after the reasons are delivered. -- 36 of 36 --