Base Metals Exploration NL (in Liq) v Huntley Management Ltd (formerly Teys Management Ltd) & Ors [2007] QSC 194

SUPREME COURT OF QUEENSLAND CITATION: Base Metals Exploration NL (in Liq) v Huntley Management Ltd (formerly Teys Management Ltd) & Ors [2007] QSC 194 PARTIES: BASE METALS EXPLORATION NL (IN LIQUIDATION) ACN 081 009 181 (plaintiff) v HUNTLEY MANAGEMENT LTD (FORMERLY TEYS MANAGEMENT LIMITED) ACN 089 240 513 (defendant) BRIAN JAMES HOOKER (first defendant by counterclaim) INVESTMENT LICENSING PTY LTD ACN 072 428 794 (second defendant by counterclaim) FILE NO/S: BS8154/03 DIVISION: Trial Division PROCEEDING: Application ORIGINATING COURT: Supreme Court of Queensland DELIVERED ON: 3 August 2007 DELIVERED AT: Brisbane HEARING DATE: 20 April 2007 JUDGE: Moynihan J ORDER: 1. Assessing registrar’s direction be set aside. 2. The plaintiff and its liquidators Greg Moloney and Peter Geroff pay the defendants costs of and incidental to this application, and all costs arising out of the hearing of the preliminary objections raised by the plaintiff in the earlier hearings before Senior Deputy Registrar Houghton to be assessed. 3. Liberty to apply. CATCHWORDS: COSTS – ASSESSMENT – REVIEW – where review of direction of registrar – whether costs statement should be re- drawn – whether registrar’s direction should be set aside. Legal Profession Act 2004 (Qld) s7(1) Uniform Civil Procedure Rules 1999 (Qld) 690, 709, 714, -- 1 of 4 -- 2 742, sch 1. Elders Trustee and Executor Company v Estates of Oscar and Evan Herbert (1996) 132 FLR 24, considered. Magburry Pty Ltd v Hafele Australia Pty Ltd (No 2) [2002] 1 Qd R 183, considered. COUNSEL: GJ Robinson counsel for the plaintiff. DG Clothier counsel for the defendant. SOLICITORS: McCullough Robertson for the plaintiff. Piper Alderman for the defendant. [1] The defendant, Huntley Management Ltd (the applicant) applies pursuant to the Uniform Civil Procedure Rules 1999 (Qld) (UCPR) 742 for a review of a decision by a registrar (the assessing registrar) directing it to re-draw a costs statement so as to comply with UCPR 690. 1 [2] On 10 February 2006 Muir J ordered that the plaintiff’s, Base Metals Exploration NL (in Liq) (the respondent) proceedings against the applicant be dismissed and that the respondent pay the applicant’s costs of and incidental to the proceedings, including reserved costs, assessed on a standard basis save as to the costs of the summary judgment, these were to be assessed on an indemnity basis. [3] On 10 August 2006 the applicant filed an application for the assessment of the costs and served a copy on the respondent. The relevant costs statement was in two parts, Part A dealing with the period when the conduct of the file on behalf of the applicant was the responsibility of solicitors in Sydney (the Sydney costs) and Part B when the conduct was the responsibility of solicitors in Brisbane (the Brisbane costs). [4] That arrangement reflects the following circumstances. The respondent is a New South Wales company and was served with the proceedings there. It retained a firm of solicitors in Sydney to act on its behalf on the basis of a written costs agreement entered into in Sydney. 2 [5] The notice of intention to defend filed identified those solicitors in Sydney as the applicant’s solicitors and the partner there as the applicant’s solicitor. The notice was served by Brisbane agents and gave an address for service care of those agents. [6] So far as the Sydney costs are concerned the partner responsible for the conduct of this matter was in Sydney and the work was done by solicitors and staff there. On two occasions solicitors came from Sydney to instruct counsel in Brisbane. From approximately 12 July 2005 a partner in the firm’s Brisbane office assumed conduct of the matter. [7] At the relevant time the Sydney solicitor was acting as principal and the work was done ‘for or in a proceeding’ in this court. The work done in Sydney was charged on the basis of the costs agreement and not the rates provided for by Schedule 1 to the UCPR. If the costs were to be assessed in New South Wales it would be done 1 UCPR 690 provides that the assessment of costs on a standard basis under Pt 2 of the UCPR is to proceed on the basis of the scale of costs, Sch 1 to the Rules. 2 The assessing registrar upheld the validity of the arrangement -- 2 of 4 -- 3 on the basis of the costs agreement. There is no schedule to be applied under the New South Wales regime. [8] Pursuant to s7(1) of the Legal Profession Act 2004 (Qld) an interstate practitioner who has complied with the requirements of practice in another State is at liberty to act as a solicitor in Queensland. The Sydney solicitors satisfied this requirement. [9] The matter came before the assessing registrar for the determination of a preliminary point determining the basis of the assessment of the Sydney costs. The effect of the order the subject of this application is that these costs are to be assessed by reference to Schedule 1 of the UCPR. [10] UCPR 709 provides that an application for costs to be assessed is to be in approved form and accompanied by a costs statement. The approved form for this provides for a column for professional fees and a column for outlays. [11] UCPR 714 is as follows: Professional charges and disbursements (1) If a costs statement includes a charge for work done by a solicitor practising in Queensland and acting as agent for a party’s solicitor, the charge must be shown as a professional charge, not as a disbursement. (2) The registrar may assess and allow a charge mentioned in subrule (1) even though it is not paid before the assessment. (3) If a costs statement includes a charge for work done by a solicitor or barrister practising outside Queensland, the charge must be shown as a disbursement. (4) If the registrar allows a charge mentioned in subrule (3) when assessing costs, the amount the registrar allows must, so far as practicable, be an amount appropriate in the place where the solicitor or barrister practises. [12] The assessing registrar construed UCPR 714(3) and (4) on the basis that for an amount to be claimed as a disbursement it was to be an amount paid by the solicitor on the record on behalf of the client. On that approach UCPR 714(3) and (4) applied to the employment of an interstate solicitor as agent and the principal then claimed the agent’s fee, subrules (3) and (4) had no application. UCPR 690(1) made no distinction between solicitors within or out of the jurisdiction who were entitled to practise before this court. [13] The assessing registrar relied on a passage from Oliver’s Law of Costs3 to the effect that an amount could not be claimed as an outlay unless it was disbursed by the solicitor on the record. The Sydney costs could not therefore be considered as disbursements. [14] As the assessing registrar recognised in his reasons, however the passage in Oliver refers to solicitor/client assessment; for a solicitor to claim a disbursement against a client the solicitor must have incurred it. In my view, that does not apply in circumstances such as this where the payment is by way of reimbursement from costs payable by the unsuccessful party to the successful party. 3 LL Oliver, Law of Costs with precedents of bills of costs in all jurisdictions (1960). -- 3 of 4 -- 4 [15] The assessing registrar indicated that the approach to be adopted avoided the ‘unsatisfactory result’ that would occur for a litigant represented by an interstate practitioner, could recover costs on a higher rate than would apply to a litigant represented by a solicitor in Queensland. [16] UCPR 714(3) and (4) are not by their terms confined to cases where the solicitor on the record retains an interstate solicitor as agent. By its terms subrule (4) contemplates payment of an amount appropriate in the place where the solicitor or barrister practices for work done by a solicitor or barrister practising outside Queensland. [17] In both Elders Trustee and Executor Company v Estates of Oscar and Evan Herbert (1996) 132 FLR 24 and Magburry Pty Ltd v Hafele Australia Pty Ltd (No 2) [2002] 1 Qd R 183 rules in equivalent terms were applied to the professional costs of solicitors directly retained by the client as principal. In each case it was held to the effect that the principal solicitor’s fees were properly claimable as a disbursement when they retained interstate solicitors as agents. [18] It is difficult to see the basis for the assessing registrar’s concern that UCPR 714(3) would produce an undesirable result because the costs statement that comprised a claim for a single amount disbursed and that there would be insufficient detail to allow an assessment. The costs would have to be in terms of the costs agreement. [19] The considerations being those I have canvassed, the assessing registrar’s direction should be set aside. I will hear submissions as to any consequential directions and costs. The parties should bear in mind Practice Direction 7 of 2007. -- 4 of 4 --