Conomos, Re [1995] QSC 343

IN THE SUPREME COURT OF QUEENSLAND Brisbane O.S. No. 832 of 1995 Before the Hon. Mr Justice Shepherdson BETWEEN IN THE MATTER OF THE COSTS ACT 1867 AND IN THE MATTER OF A BILL OF COSTS OF GEORGE CONOMOS, SOLICITOR AGAINST WAJIR PTY LTD JUDGMENT - SHEPHERDSON J - CHAMBERS Judgment Delivered 22nd December 1995 CATCHWORDS: SOLICITORS - TAXATION OF COSTS -s.30 Costs Act 1867. Application by lessee to have referred for taxation lessor's solicitor's bill of costs. Application made more than one month after bill delivered. The Queen v. Towner (1896) 7 QLJ 139 applied Counsel: D.A. Skennar for applicant S.L. Doyle Q.C. for respondent Solicitors: Fisher Robinson for applicant George Conomos for respondent Hearing date: 15 December, 1995 -- 1 of 9 -- IN THE SUPREME COURT OF QUEENSLAND Brisbane O.S. No. 832 of 1995 Before the Hon. Mr Justice Shepherdson BETWEEN IN THE MATTER OF THE COSTS ACT 1867 AND IN THE MATTER OF A BILL OF COSTS OF GEORGE CONOMOS, SOLICITOR AGAINST WAJIR PTY LTD JUDGMENT - SHEPHERDSON J - CHAMBERS Judgment Delivered 22nd December 1995 The applicant Wajir Pty Ltd has applied under s.30 of the Costs Act of 1867 for an order that the Bill of Costs and Disbursements of George Conomos of 17 October 1995 be referred for taxation. The above heading incorrectly describes the Bill of Costs as being against Wajir Pty Ltd. The Bill of Costs is against Dakola Holding Pty Ltd as trustee. The applicant is the lessee named in a lease executed on 20 August 1995 in which Dakola Holding Pty Ltd is the lessor. The respondent is the lessor's solicitor. The affidavit evidence shows that the lease imposed a contractual obligation on the applicant as lessee to pay (inter alia) "the usual and proper costs and outlays of the lessor's solicitors (as between solicitor and own client) of and incidental to the preparation execution and stamping of this lease and any guarantee thereto including the certification of the lessee and/or its guarantors". -- 2 of 9 -- 2 The material before me shows that on 19 September 1995 the respondent prepared a memorandum of fees addressed to Dakola Holding Pty Ltd as trustee in respect of the lease to the applicant. This was a lump sum bill and showed the respondent's costs to be $3,600 "as per Queensland Law Society Scale" plus outlays (including estimated stamp duty and registration fees) totalling $4,450-90. By letter dated 25 September 1995 the applicant's solicitor requested the respondent to provide an itemized account of his professional costs. The respondent (with the lessor's consent) withdrew his account dated 19 September 1995 and on 18 October 1995 the applicant's solicitor received from the respondent a letter dated 17 October 1995 enclosing an itemized Bill of Costs and outlays. The professional costs in the itemized bill totalled $6,629-64; this is the bill which the applicant seeks to have referred to taxation. On 14 November 1995 the applicant's solicitor caused the itemized Bill of Costs to be lodged with the taxing officer of this court for taxation together with objections lodged on behalf of the applicant. On the same day the applicant's solicitor served objections on the respondent. It appears that what was called a directions hearing in the taxation was to take place on 28 November 1995. On 20 November 1995 the applicant's solicitor received from the respondent a letter dated 17 November 1995 in which the respondent referred to s.30 of the Costs Act of 1867 and stated that in his view the applicant, being a third party not chargeable with but liable to pay the bill, "must apply to the court for a reference for the taxation and settlement of" the bill. In his letter of 17 November the respondent insisted that the applicant's solicitor vacate the appointment of taxation. I note from the applicant's solicitor's affidavit sworn 28 November 1995 he says "I accept that s.30 of the Costs Act may preclude the applicant from lodging the bill direct with the taxing officer". Subsequent correspondence ensued between the solicitors. On the hearing of the application before me, Mr Doyle Q.C. for the respondent argued that under s.30 I had a discretion to -- 3 of 9 -- 3 exercise and submitted that good reason had to be shown before I could order that the matter be referred for taxation; the mere fact of dispute, he argued, did not justify my referring the bill for taxation. To that end he relied on an affidavit of Graham Donald Macdonald a solicitor who deposed to the reasonableness of the bill save that he had not attempted to examine each item in the bill against the file . Miss Skennar for the applicant, contended that no reason for the exercise of the discretion had to be shown. I turn then to s.30 which reads:- "30. Third parties applying for taxation. 6 & 7 Vic. c.73 s. 38. Where any person not the party chargeable with any such bill within the meaning of the provisions hereinbefore contained shall be liable to pay or shall have paid such bill either to the attorney his executor administrator or assignee or the trustee of his estate or to the party chargeable with such bill as aforesaid it shall be lawful for such person his executor administrator or assignee or the trustee of his estate to make such application for a reference for the taxation and settlement of such bill as the party chargeable therewith might himself make and the same reference and order shall be made thereupon and the same course pursued in all respects as if such application was made by the party so chargeable with such bill as aforesaid Provided always that in case such application is made when under the provision herein contained a reference is not authorised to be made except under special circumstances it shall be lawful for the court or judge to whom such application shall be made to take into consideration any additional special circumstances applicable to the person making such application although such circumstances might not be applicable to the party so chargeable with the said bill as aforesaid if he was the party making the application." The opening words of the first paragraph of s.30 refer to "any person not the party chargeable with any such bill within the meaning of the provisions hereinbefore contained". The applicant is not the party chargeable with the Bill of Costs in the instant case. The lessor is the party chargeable and there was no dispute that the applicant as lessee was liable to pay his lessor's costs; it is unnecessary to cite authorities to this effect. -- 4 of 9 -- 4 There was no dispute but that s.30 applies when the taxation is between solicitor and client and that the applicant in the present case is liable to pay the respondent's costs against the lessor on a solicitor and client basis at least. The first paragraph of s.30 refers to "provisions hereinbefore contained" and the second paragraph refers to the right of an applicant as a third party, "to make such application for a reference for the taxation and settlement of such bill as the party chargeable therewith might himself make". The third paragraph reads:- "and the same reference and order shall be made thereupon and the same course pursued in all respects as if such application was made by the party so chargeable with such bill as aforesaid" The proviso which is found in the fourth paragraph of s.30 refers to a situation where "a reference is not authorised to be made except under special circumstances". It is I think quite obvious that s.30 refers to earlier provisions in the Costs Act of 1867 and these earlier provisions deal with a taxation of costs against the party chargeable with the bill. Section 22 prohibits an attorney from commencing or maintaining any action for recovery of any fees charges or disbursements for any business done by him until the expiration of one month after delivery to the party to be charged of a Bill of Costs. Section 24 relevantly provides:- "Upon the application of the party chargeable by such bill within such month an appointment for taxation of the same may be obtained as of course and without order of a judge ... and thereupon such bill and the demand of such attorney ... shall be taxed and settled by such officer without any money being brought into court ... " Section 25 deals with "Taxation after one month" and commences "In case no such application as aforesaid shall be made within such month as aforesaid then it shall be lawful for the Supreme Court or a judge thereof either upon the application of the attorney ... whose bill may have been so delivered ... or upon the application of the party chargeable by such bill with such directions -- 5 of 9 -- 5 and subject to such conditions as the court or judge making such reference shall think proper to refer such bill and the demand of such attorney ... to be settled and taxed by such officer of the court as aforesaid and in case any such reference as aforesaid shall be made on the application of the party chargeable by such bill then without any money being brought into the court ...". Section 25 also deals with what is called "Taxation after twelve months" and contains a proviso which reads:- "Provided always that no such reference as aforesaid shall be directed upon an application made by the party chargeable with such bill ... after the expiration of twelve months after such bill shall have been delivered ... except under special circumstances to be proved to the satisfaction of the Supreme Court or a judge thereof to whom the application for such reference shall be made". In my view, when s.30 refers to provisions hereinbefore contained it includes each of ss. 22, 24 and 25 and also refers to s.29 which deals with the form of application for taxing. By s.30, persons such as the applicant can avail themselves of the same rights given under earlier provisions of the Costs Act to the party chargeable with the bill. In dealing with this application I think it important to bear in mind that "Taxation is the proceeding by which a solicitor's Bill of Costs is submitted for revision to an official of the court, who goes through the bill, item by item, and allows, disallows or moderates every charge contained in the bill" (Encyclopedia of the Laws of England Vol. 12 p.77). In the present case the applicant clearly falls within s.30 and in my view, by virtue of the second paragraph of s.30 he was entitled "to make such application for a reference for the taxation and settlement" of the bill in question "as the party chargeable therewith" (the lessor) might itself make. By s.24 the lessor as party chargeable by the bill might within one month after delivery of the bill have obtained an appointment for taxation without the order of a judge. In fact the applicant's solicitor did this and the solicitor in his affidavit said - "On 14th November 1995 I caused the -- 6 of 9 -- 6 aforesaid itemized account to be lodged with the taxing officer of the Supreme Court together with objections lodged on behalf of the applicant, for taxation". In my view the applicant's solicitor erred in accepting that s.30 of the Costs Act might preclude the applicant from lodging the bill direct with the taxing officer within one month after delivery of the bill. In my view he was entitled within the month after the bill was delivered to apply for an appointment for taxation. The application now before the court was made after one month and so the provisions of s.25 apply. Where the party chargeable with the bill or the third party who falls within s.30 applies within the month after delivery, an appointment for taxation can be obtained "as of course and without order of a judge"; furthermore "thereupon such bill ... shall be taxed and settled by such officer without any money being brought into court". (see s.24). The law on this is well settled. In The Queen v. Towner. The Queen v. District Court of Gympie ex parte No. 1 North Phoenix Gold Mining Co. Ltd (1896) 7 QLJ 139 Griffith CJ (with whose reasons Cooper and Real JJ. agreed) said (at pp. 142-3) when referring to the Costs Act (and he was obviously referring to the Costs Act of 1867):- "That Act gave a summary remedy both to clients and solicitors. The solicitor could not bring an action on his bill until a month after he had delivered it. During that month the client could, ex parte, obtain an appointment from the proper officer to have the bill taxed; and that appointment, although obtained ex parte, had the effect of an order of the court - or a statutory order, if that term is preferable - which conferred upon both parties the right to have the bill taxed; for it was expressly provided that the Taxing Officer could proceed with the taxation in the absence of either party. After the month had expired, neither the client nor the solicitor could obtain an order or appointment for taxation of his own motion, but a judge could make an order directing the bill to be taxed. When that order had been made, the taxation could proceed in the absence of either of the parties. I think it is clear, under these circumstances, that neither of the parties could stop the taxation either by staying away or by saying he did not want to go on with it." I do not know what has happened to the appointment for taxation initially obtained by the -- 7 of 9 -- 7 applicant's solicitor. It appears that it has probably been abandoned. In my view, strictly speaking the present application should have been unnecessary. However, the application is before me. There is a distinction, found in ss.24 and 25 of the Costs Act between the situation which obtains where the application for taxation is made within the one month period and where an application is not made within that one month but is made before 12 months after the bill shall have been delivered have elapsed. The above extract from the judgment of Griffith C.J. illustrates the distinction. In the former case the appointment for taxation is obtained "as of course and without the order of a judge" and it is mandatory that the bill be taxed and settled and no money is to be brought into court. In the second case however i.e. the case where s.25 (apart from the proviso) applies, the court or a judge may refer the bill for taxation "upon the application of the party chargeable by such bill for such directions and subject to such conditions as the court or judge making such reference shall think proper" but it appears that where the reference is made on the application of the party chargeable by such bill then without any money being brought into the court. Sections 24 and 25 cover 3 different classes of case and the situation concerning these classes was summarised by the Lord Chancellor Lyndhurst in the matter of In re Gaitskell (1845) Vol. 1 Phillip's Reports 576 at pp. 580-1 when he said:- "The other point relied upon by the appellant was, that the order of reference ought not to have been made ex parte but upon a special application. The petition upon which that order was made, was presented after the expiration of one month, but within 12 months, from the time of the delivery of the bills. Now, it is true, that in the case of bills so circumstanced, the Act provides that the order of reference shall be made with such directions and subject to such conditions, as the court or judge shall think proper; and then there immediately follows a proviso, that after 12 months have elapsed from the delivery of the bill, or a verdict has been obtained for the amount, no such reference shall be directed except under special circumstances, to be proved to the satisfaction of the court or judge to whom the application shall be made. In these last cases, therefore there is to be examination, and enquiry, and evidence of witnesses, for the purpose of guiding the discretion of the courts; and when I find that the legislature has distinctly provided for that course in this class of cases and not in the other, I think -- 8 of 9 -- 8 I am justified in coming to the conclusion, that in the latter class of cases, it is not necessary to institute any enquiry or examination before the order is made, but that the legislature intended that the direction should be given in the order with reference to the state of the proceedings as contained in the petition; subject of course to this that if the party applying misrepresents the circumstances the order will be discharged on the ground that the court in making it has been misled. With that qualification I think there is no danger in making orders of course in different forms applicable to different states of circumstances". In the view which I take of this matter, while the applicant has lost the right to apply within the month after the bill was delivered, the situation in this case is such that to do justice between the parties I should make the order sought free of conditions. I therefore refer for taxation and order the taxation of the Bill of Costs of George Conomos dated 17 October 1995 against Dakola Holding Pty Ltd as trustee. I shall hear from the parties on the matter of costs. -- 9 of 9 --