Carter Newell's Bill of Costs, Re [1994] QSC 215 [1996] 2 Qd R 13

State Reporting Bureau TRANSCRIPT OF PROCEEDINGS (Copyright in this transcript is vested in the Crown. Copies thereof must not be made or sold without the written authority of the Director, State Reporting Bureau.) ! REVISED COPIES iSSUED I i State Reporttng Bureau IDate ,j g I 1-i 9 c.f SUPREME COURT OF QUEENSLAND CIVIL JURISDICTION DOWSETT J MIS No 408 of 1994 IN THE MATTER OF THE COSTS ACT 1867 .(AS AMENDED) IN THE MATTER OF A BILL OF COSTS OF CARTER NEWELL, SOLICITORS AGAINST LABIVOLO PTY LTD, DAVID LEONARD COX AND MARAE FELICIA COX CONCERNING ACTION BY MOSTIA CONSTRUCTIONS PTY LTD BRISANE .. DATE 24/05/94 JUDGMENT 1 4th Floor, The Law Courts, George Street, Brisbane, Q. 4000 Telephone: (07) 227 4360. Facsimile: (07) 227 5532 -- 1 of 15 -- 240594 HIS HONOUR: This is an application pursuant to Order 91 rule 119, for the review in various particulars of an order by the taxing officer. The bill of costs in question was rendered by the present applicant to the present respondent in connection with the conduct of litigation arising out of a building dispute. The action was, in the end, settled without trial. 10 At some time after the case was certified as ready for trial, the firm of solicitors who had till that time been handling the matter, amalgamated with another firm to form the p.r.esent applicant, or perhaps a firm from which the present applicant 20 has descended, to speak loosely. The relevance of that matter will appear later in these reasons. The first basis for attack upon the taxing officer's decision is the assertion that the bill should be reviewed "on the 30 basis that all costs should be allowed except those which were unreasonably incurred". In order to understand this assertion, it must be kept in mind firstly that this bill was not a bill rendered pursuant to ah order for costs made in proceedings. It was a bill rendered following the completion 40 of work performed by the present applicant on behalf of the respondent. There is no doubt that there is power to tax such a bill, and it was not suggested in the course of argument that there was 50 any impediment in this case to the respondents having the bill taxed. Order 91 rule 82 provides as follows: " 82 On the taxation of costs as between solicitor and client, costs which do not appear to the taxing officer to have been necessarily or properly incurred by the solicitor for the attainment of justice or protecting the rights of the party, or which appear to have been incurred improvidently, or through over caution, ~ 2 JUDGMENT -- 2 of 15 -- ( 240594 negligence, or mistake, on the part of the solicitor, shall not be allowed. On the taxation as between solicitor and client of costs of proceedings in Court, the taxing officer may allow reasonable charges for work or outlay properly done or made, notwithstanding that such charges are not recoverable from any other party, or have been disallowed in taxation in whole or part as between party and party, unless, in any case, the taxing officer is of opinion that the consent of the client ought to have been obtained before the charge was incurred, in which case no allowance shall be made in respect thereof unless it is shown to his satisfaction that the charge was incurred with the consent or with the subsequent approval of the client. The taxing officer's allowance or disallowance, in whole or in part, of any costs taxed under this Rule shall be subject to review, as in other cases. If, during the taxation of a bill of costs, or the taking of an account, between solicitor and client, it appears to the taxing officer that there must in any event be moneys due from the solicitor to the client, the taxing officer may from time to time make an interim certificate as to the amount so payable by the solicitor. Upon the filing of such certificate the Court or a Judge may order the moneys so certified to be forthwith paid to the client or brought into Court." It will be seen that on a taxation as between solicitor and client, costs which have been unnecessarily or improperly incurred in the attainment of justice or protecting the rights of the parties will be disallowed, as will costs which appear to have been incurred improvidently or through over-caution, negligence or mistake. It also appears that costs will be disallowed if the taxing officer is of opinion that the consent of the client ought to have been obtained before the charge was incurred where the charges are not such as to be recoverable from any other party. It is submitted on behalf of the respondent that this rule applies to a taxation as between solicitor and client. The applicant submitted that this was not so, and that the only test for disallowance of costs as between a solicitor and 3 JUDGMENT 10 20 30 40 50 60 -- 3 of 15 -- 240594 client is the reasonableness or otherwise of the incurrence of the cost. In support of this proposition, reference was had to the unreported decision of Mackenzie J in the matter of Quest Exploration Pty Ltd (decision handed down 17/7/92 in Application No 341 of 1991). At page 3 His Honour appears to have said that all costs on a taxation as between solicitor and own client should be allowed "except in so far as they were of an unreasonable amount or had been unreasonably incurred". This appears to be inconsistent with a strict application of Order 91 rule 82 to such a taxation. It may be, though, that some assistance in reconciling these two positions is to be derived from the judgment of Macrossan J, as His Honour then was, in re Feez Ruthning's Bill of Costs [1989] 1 QdR 55, especially at page 85. In that case, in considering the applicability of the Order 91 procedures to the taxation of a bill of costs as between solicitor and client, independent of any order, His Honour recognised the fact that where there was an order for taxation, the authority for payment was the order of the Court. Where the taxation was proceeding as between solicitor and client, the authority rested in contract or quasi contract. Thus, it seems to me, that in taxing a bill as between solicitor and own client, what the taxing officer must do is determine whether or not each charge was reasonably incurred incidental to the performance of the duty undertaken pursuant to the retainer. · His Honour came to the conclusion that in taxing a bill as 4 JUDGMENT 10 20 30 40 50 60 -- 4 of 15 -- 240594 between solicitor and client, the various provisions of Order 91 are applicable, although it may be that they must be modified to reflect the fact that what is being taxed is the indebtedness pursuant to the terms of such a contract of retainer. I have come to the conclusion, notwithstanding the decision of MacKenzie J in Request Exploration, that such is the better view with respect to the application of rule 82. That rule offers a series of circumstances in which it might be thought that the solicitor had acted unreasonably in incurring costs in the discharge of his duty. I see no reason why rule 82 cannot be applied to a taxation as between solicitor and client, always provided that the taxing officer keeps in mind the fact that the client has retained the solicitor and that the solicitor has been acting pursuant to that retainer. I would.have thought that the starting point should be to ask whether or not any particular cost was incurred in reasonable discharge of the duty pursuant to the retainer and that the various qualifications provided in rule 82 ought also be assessed having regard to that background. For that reason, although I do not think it necessary or appropriate to make an order in terms of paragraph 1 (a) of the summons, I will however proceed to consider the other grounds of objection consistent with that approach. Paragraph 1 (b) of the summons relates to items 57, 212, 612 and 724 of the bill of costs. As mentioned earlier, this 5 JUDGMENT 10 20 30 40 50 60 -- 5 of 15 -- 240594 matter was taken over following an amalgamation of two firms of solicitors and at the time, one of the principals indicated to the client that he would not be charged as a result of the amalgamation for "getting up to speed on the file". This I take to mean that the solicitor was assuring the client that he would not pay more as a result of the amalgamation simply because another solicitor would be handling the matter for the future. There were in fact two basic objections made to the taxing officer's determination in respect of these items. Firstly, before the taxing officer, the present applicant sought to call Mr Challen "to give oral evidence as to the facts and circumstances surrounding the entering of the agreement". Such evidence was said to be relevant to determine the meaning of the terms of the agreement. Whilst it is true that the circumstances leading up to the so-called agreement may have been relevant in an appropriate case to the construction of terms used in the agreement, that does not seem to me to mean that Mr Challen should have been called to give evidence as to what he meant by the expression "getting up to speed". It is an expression which is not a term of art, and no facts have been put before me or the taxing officer to suggest that the term had some special meaning in the context of the discussions between the applicant and the respondent. - In general, it is not permissible to call evidence as to the 6 JUDGMENT 10 20 30 40 50 60 -- 6 of 15 -- 240594 meaning of lay language, and I cannot see that it was permissible in this case. I would not intervene in the taxing officer's decision not to allow such evidence to be led. The second basis for objection related to the nature of the work which was the subject of these various items. Item 57 was perusal of certain diaries, item 212 was perusing of certain documents, item 612 was perusing a building contract and specifications, and item 724 was perusal of various files. All of these documents were apparently in the possession of the solicitors for the respondent prior to the change in solicitors and as I have said, the matter had been certified as ready for trial prior to that change. The taxing officer inferred that these documents would have been perused in all probability by the solicitors prior to the change of solicitors, that is prior to the date upon which the matter was certified as ready for trial. He therefore inferred that the subsequent perusals charged for were really part of the process described as "getting up to speed". This was an inference that was open to him on the material before him and I would not be inclined to interfere. Before me, the applicant sought to establish an alternative basis for such charging on the assertion that it was possible that even after certification of readiness, it may be necessary for the solicitors to further peruse such documentation in preparation for trial. 7 JUDGMENT 10 20 30 40 50 60 -- 7 of 15 -- 240594 I have no difficulty with the proposition that in the course of preparing for trial, it may be necessary for the solicitor, from time to time, to go back to documents which he has previously carefully read. However that is not the same thing as re-perusing documents which have previously been read. It would not be necessary for him to go to the whole of the documents. It would presumably only be necessary for him to go to parts of them. If a solicitor spent some period of time in looking at parts of documents in preparation for trial, then one might well expect that he could claim for the time so spent. It is difficult to say with any certainty how long that would take in the present case. In any event, the solicitors have chosen not to put their case on that basis, and I can see no basis for allowing them to change the nature of their claim in this regard at this late stage. For that reason I consider that the objection numbered 1 (b) should be disallowed. Paragraph 1 (c) of the application relates to items 162 to 165, 364 to 366, 480 to 484 and 493, 494, 500 and 501 of the bill. Items 162 to 165 involve telephone conversations with counsel about the obtaining of legislation required by him in the course of his research together with certain other material, sending certain fax transmissions to counsel containing legislation and proclamations and other associated photocopying and fax charges. Items 364 to 366 also involve the provision of copies of recent cases to counsel, including photocopying and delivery 8 JUDGMENT 10 20 30 40 50 -- 8 of 15 -- 240594 charges. Item 470, although it appears in the objection, is not relevant for present purposes. Items 480 to 484 involve the obtaining of a copy of a second reading speech in connection with certain legislation at the request of counsel, reading the second reading speech (which took 70 minutes) and writing to counsel enclosing a copy of that speech together with the costs of photocopying and delivery. Item 493 is a fax to counsel with a copy of an unreported decision. Item 494 is facsimile charges. Item 500 is also a fax to counsel concerning the effect of a certain section, and 501 is facsimile charges. In short, these were all either steps taken by the solicitors at the request of counsel to assist him in his preparation or items of research carried out by the solicitor without such request, the results of which research were forwarded to counsel. The taxing officer disallowed these items upon the basis that if it was properly a matter for counsel, then counsel should charge for it, but if it was being done by the solicitor, then it was either in the nature of self-education or was alternatively a matter properly chargeable by way of care and consideration. When one keeps in mind that this is a taxation as between solicitor and client, I am inclined to think that this is a rather too stringent attitude to adopt. When a solicitor puts substantial litigation into the hands of counsel it is 9 JUDGMENT 10 20 30 40 50 60 -- 9 of 15 -- 240594 reasonable to infer that he undertakes to provide reasonable assistance to counsel in preparation for trial. Sometimes that will involve obtaining copies of legislation and copies of cases not readily available, simply because solicitors rather than barristers have the messenger service and other facilities which readily facilitate the obtaining of such documents from places such as the Government Printer and interstate libraries. I do not think that it is a correct exercise of the discretion to assume, as the taxing officer seems to have done, that it is inappropriate for a solicitor to assist counsel in this way. It is true that the taxing officer assumed that there may be circumstances where this type of assistance would be reasonable, but I find it hard to understand why or how he was satisfied in this case that these items were not within that category - at least to the extent that they were requested by counsel. Items 162 to 165 certainly fall into that category. Items 364 to 366 also do. Items 480 to 484, although not apparently done at the request of counsel, all relate to the question of construction and it is reasonable to infer that they were a sensible attempt to assist him in his research. To discourage a solicitor from taking such a course or to require him to obtain special approval from his client before doing so would be, I think to discourage a solicitor from using his imagination and research skills. · Those matters seem to me to go beyond the appropriate subject 1 0 JUDGMENT 10 20 30 40 50 60 -- 10 of 15 -- 240594 for inclusion in care and consideration save for item 481, which is $133 for reading. That may appropriately be described as self-education. I think, though, that the other items, 480, 482, 483 and 484, should be allowed. Item 493 is forwarding of a copy of an unreported decision to counsel and 494 are fax charges. Again, this seems to me to be reasonable assistance to counsel in the circumstances and I think it would be an unreasonable deterrent to imaginative research and participation in preparation for trial by a solicitor to disallow those items. I think they were reasonably incurred in the circumstances. As to items 500 and 501, it is not immediately clear what is involved but it seems to have been an attempt to assist counsel in his preparation and research and, again, I am inclined to allow it as reasonable in the circumstances. The effect therefore is that items 162 to 165 should be allowed and the objection should be upheld to that extent. Items 364 to 366 should be allowed. Items 480, 482, 483 and 484 should be allowed. Items 493 and 494 should be allowed, as should items 500 and 501. Moving to paragraph 1 (d), items 722, 875, 961 and 962, these items involved photocopying. Item 722 was photocopying of further and better particulars for inclusion in counsel's brief. There was a very large number of pages involved in this photocopying, 1,262 pages. Item 875 was photocopying of 417 pages. Item 961 was 129 pages, and item 962 also 129 1 1 JUDGMENT 10 20 30 40 50 60 -- 11 of 15 -- 240594 pages. The taxing officer found that the photocopying was necessary and proper but did not allow photocopying at the rate of $1.40, which is one of the items prescribed in the scale, but rather at 50 cents per page. In doing so, he purported to exercise his discretion pursuant to scale item 19. A consideration of his reasons shows that he distinguished between two types of photocopying: photocopying where individual pages require individual attention, and what might be called bulk photocopying where very large numbers of pages could be photocopied without the intervention of an operator. He seems to have thought that whereas the former would justify charging at $1.40 per page, the latter could justify only a reduced rate. In taking this approach he was, as I have said, exercising a discretion specifically conferred upon him by the schedule of items and I see no basis for interfering in the exercise of his discretion. His reasoning is impeccable and in all of the circumstances I see no basis for interfering in that item. Paragraph 1 (e) relates to items 839 and 900 in the bill. These two items related to the provision of copies of statements by witnes9es to the client. Item 839 concerned a statement by a witness Marae Cox and 900 involved statements by the witness David Cox. These people are of course also the clients in question here. · The taxing officer's reasons for disallowing the provision of 1 2 JUDGMENT 10 20 30 40 50 .60 -- 12 of 15 -- 240594 these statements was that Order 91 rule 56 provides: "The fees allowed for drawing any pleading or other document shall include any copy made for the use of the solicitor, agent or client, or for counsel to settle." As these items had been prepared by the solicitor, the thrust of the decision is that no fee is allowable for a copy provided to the client for his use. It should be noted that there was no suggestion that this was an additional copy. It was, as I understand it, common ground that no other copy of such statement had ever been provided by the solicitor to the clients. If the clients had simply asked for a further copy, then it may well be that it would have been reasonable as between solicitor and client for it to be 10 20 provided at the cost of the client, but given that no other 3 o copy had ever been provided, and given the terms of rule 56, it seems to me that the taxing officer was clearly correct in his conclusion. I would disallow that objection. Finally, paragraph 1 (h) deals with the costs claimed for 40 engrossing the bill of costs. It was conceded by the applicant that there was no authority supporting the proposition that a solicitor is entitled to charge for engrossing a bill of costs where the taxation is between solicitor and client. 50 One's immediate reaction to such a proposition is to say that it seems to be reasonably inherent in taking instructions and doing the work that one will prepare a bill at one's own expense. However the applicant submitted that was an so 1 3 JUDGMENT -- 13 of 15 -- 240594 unreasonable approach, given the likely costs of preparing an appropriate bill in the context of the relationship of solicitor and client. It is certainly true that the requirements placed upon a solicitor for the preparation of the bill are more onerous than those placed upon most other professional people, but there does seem to be substantial authority for the proposition that the preparation of a bill at his own expense is part of a solicitor's duty. In this regard, I refer particularly to the decision of Sir G Innes J in re McCook [1887] WN (NSW) 86. The report of that case is very skimpy but it is said that there was reference by counsel to authority for the proposition that there could be no charge for drawing or copying a bill. His Honour is reported as having decided: "(After ascertaining that the practice was not to allow on taxation for the costs of preparing attorney's bills of costs), granted the application with costs." This seems to offer some support for the proposition that the practice is not to allow such an item. Similarly in re J F Fitzqerald and Seymour's Bill of Costs [1960] QdR 430 at page 435, Wanstall J, as His Honour then was, referred to an 10 20 30 40 observation by Buckley J in re National Bank of Wales [1902] so 2Ch 412 where His Lordship said: "The expense of drawing the bills showing that this was the amount due must have been borne by the solicitor whose duty it was to prepare the bills, and not by the client. This is not disputed." 1 4 JUDGMENT 60 -- 14 of 15 -- 240594 It was suggested that the duty to prepare the bills obviously included the duty to engross. This seems to me to be correct. In those circumstances I will also dismiss paragraph 1 (h) of the application. I should say that in the course of argument paragraphs 1 (f) and (g) of the summons were abandoned. I will therefore allow the application to the limited extent which I have indicated. HIS HONOUR: On the question of costs, it appears to me that the respondent has been substantially successful. It is true that the applicant has been successful to a small extent in dollar terms; however I do not think that is sufficient to justify my making an order in his favour. I think that the fairest approach will be that suggested by Mr Robinson, namely to order that the applicant pay the respondent's costs of these proceedings fixed at 90 per cent of the taxed costs thereof. 1 5 JUDGMENT 10 20 30 40 50 -- 15 of 15 --