Carter Newell's Bill of Costs, Re [1993] QSC 79 [1993] 2 Qd R 593

te orting Bureau TRANSCRIPT OF PROCEEDINGS (Copyright in this transcript is vested in the Cro;vn. Copies thereof must not be made or sold without the written authority of the Director, State Reporting Bureau..) SUPREME COURT OF QUEENSLAND CIVIL JURISDICTION RYAN J O.S. No 1238 of 1992 IN THE MATTER of THE COSTS ACT 1967 (as amended) and IN THE MATTER of CARTER NEWELL'S BILL OF COSTS against THOMAS BOLITHO THORNE-LARGE and LESLEY JEAN THORNE-LARGE concerning a purchase from ALVESrrA PTY LTD from 4 February 1 99 2 to 3 April 1992 (pursuant to Queensland Law Society Conveyancing Scale) and IN THE MATTER of AN APPLICATION BY CARTER NEWELL (a firm) FOR REVIEW OF THE TAXATION BRISBANE .. DATE 30/03/93 .. JUDGMENT 1 -- 1 of 14 -- 300393 cml (Ryan J) HIS HONOUR: I have concluded that the applican-t'·s solicitors were entitled to the costs of the taxation. I direct the taxing officer to review and correct the taxation in the light of my judgment. I allow the applicant one half of the costs of the application 10 to be taxed. I give liberty to apply and I publish my reasons. 20 30 40 50 60 2 -- 2 of 14 -- IN THE SUPREME COURT OF QUEENSLAND o.s. No. 1238 of 1992 Before Mr. Justice K.W. Ryan [Carter Newell] IN THE MATTER of THE COSTS ACT 1967 (as amended) - and - IN THE MATTER of CARTER NEWELL'S BILL OF COSTS against THOMAS BOLITHO THORNE-LARGE and LESLEY JEAN THORNE-LARGE concerning a purchase from ALVESTA PTY LTD from 4 February 1992 to 3 April 1992 (pursuant to Queensland Law Society Conveyancing Scale) - and - IN THE MATTER of AN APPLICATION BY CARTER NEWELL (a firm) FOR REVIEW OF THE TAXATION REASONS FOR JUDGMENT- RYAN J. Judgment delivered 30/03/1993 Appearance: Mr. F. Girach for the Applicant Mr. A. Walsh for the Respondent Solicitors: Carter Newell for the Applicant Walsh & Partners for the Respondent Hearing Date: 25, 26 February 1993 -- 3 of 14 -- IN THE SUPREME COURT OF QUEENSLAND O.S. No. 1238 of 1992 Before Mr. Justice K.W. Ryan [Carter Newell] IN THE MATTER of THE COSTS ACT 1967 (as amended) - and - IN THE MATTER of CARTER NEWELL'S BILL OF COSTS against THOMAS BOLITHO THORNE-LARGE and LESLEY JEAN THORNE-LARGE concerning a purchase from ALVESTA PTY LTD from 4 February 1992 to 3 April 1992 (pursuant to Queensland Law Society Conveyancing Scale) - and - IN THE MATTER of AN APPLICATION BY CARTER NEWELL (a firm) FOR REVIEW OF THE TAXATION REASONS FOR JUDGMENT- RYAN J. Judgment delivered 30/03/1993 The applicant, a firm of solicitors, has applied for a review pursuant to s.34 of the Costs Act 1867 of a decision of the Taxing Officer, and for judgment to be entered against the respondents pursuant to s.29 of the Costs Act. It also seeks a declaration that the lump sum bill of costs delivered by the applicant to the respondents on 3 April 1992 is -- 4 of 14 -- 2 the bill of costs taxed on 13 October 1992; that the itemised bill of costs issued against the respondents on 28 July 1992 is an explanation of the lump sum bill delivered on 3 April 1992; that the Taxing Officer erred in fact in finding that the itemisation delivered on 28 July 1992 was in substitution of the lump sum bill delivered on 3 April 1992; that in calculating pursuant to s. 26 of the Costs Act whether one-sixth of the applicant's bill of costs has been taxed off, the Taxing Officer must calculate such proportion on the basis of the initial lump sum bill; and that the Taxing Officer erred in law in holding that one-sixth had been taxed off the applicant's bill of costs against the respondent. It seeks in addition an order that the respondents pay the applicant's costs of the taxation on 13 October 1992 in the sum of $93.50 together with the taxing costs to the Court in the sum of $108; and that the applicant have judgment against the respondents in the sum of $1221. The originating summons had originally been made returnable on 14 December 1992. It was adjourned sire die by Mackenzie J. on that day upon the application of the applicant. It was made returnable before me on 25 February 1993. It is deposed on behalf of the applicant that instructions were received from the respondents in February 1992 to act on their behalf in the purchase of a property at 62 Chelmsford Road, Mudgeeraba. On 3 April 1992 a lump sum memorandum of fees was forwarded to the respondent in the sum of $1,127.50. The total amount due was $877.50, after allowance of an amount paid in the sum of $250. Payment in full was not forthcoming from the -- 5 of 14 -- 3 respondents. On 28 July 1992 the applicant on its own initiative served an itemised bill of costs in the sum of $1,772.08. The respondents set the bill of costs down for taxation. The date appointed for the taxation was 13 October 1992. A law clerk of the applicant was granted leave to appear on behalf of the applicant before the Taxing Officer. At the conclusion of the taxation, the Taxing Officer determined that he would allow the applicant's costs in the sum of $1,359.11. The Taxing Officer reserved his decision on the question whether one-sixth had been taxed off the applicant's bill of costs. He determined that the taxing fee for the taxation was $105, the applicant's professional costs of attending the taxation were $93.50; and the respondents' costs were limited to the $44 fee for setting the bill of costs down for taxation. On 11 November 1992, the Taxing Officer wrote to the applicant: "I have determined that the costs of taxation shall go to the client and have fixed these costs in the sum of $44. A copy of the Taxing Officer's certificate showing the final figures is attached for your assistance. The amount payable by the client after taxation amounted to $1,065.11 but was limited to the amount of the lump sum bill delivered on 3 April 1992." The attached certificate (which is not dated or signed) states that the bill of costs has been taxed and allowed at $1,359.11. It finds that more than one-sixth has been taxed off the bill and therefore the costs of taxation allowed at $44 and the taxing fee of $105 are payable by the applicant. It is certified that the amount payable by the respondents to the applicant is $877.50. -- 6 of 14 -- 4 It is deposed by the respondent Mr. Thorne-Large that he received three different bills from the applicant. The first was a memorandum of fees dated 3 April 1992 for a net amount of $877.50. The second was a letter of demand from the applicant dated 22 June 1992 in which an amount of $974.50 was claimed. The third was a bill of costs in taxable form for $1,528.08. On 23 July 1992 the applicant wrote to Mr. Large-Thorne (sic) and requested a remittance n full satisfaction of the amount outstanding, namely $1,127.50 within seven days. It stated that if a cheque for that amount was not received it would have no alternative other than to institute legal proceedings against him to recover the outstanding amount. Subsequent letters demanded payment of a balance of $97 4. 50. On 28 July 1992, the applicant sent to the respondents its bill of costs in taxable form. It is a matter of dispute between the parties whether it was accompanied by a letter of that date, which stated that whilst the bill totalled $1,522.08, the applicant was prepared to accept the lesser amount of $877.50, this amount being the total of its memorandum of fees dated 3 April 1992. Mr. Thorne-Large has deposed that the letter was received by him after 3 August 1992 when the appointment for taxation was made. There is no reference to it in the Taxing Officer's ruling to which I refer later in this judgment. It had however been put before the Taxing Officer before he signed his certificate, and in these circumstances it does not appear to me to matter whether it accompanied the bill of costs. On 24 December 1992 the applicant sought from the Taxing Officer written reasons for his decision. These were provided. -- 7 of 14 -- 5 On 14 January 1993 the applicant wrote to the Taxing Officer asking whether he was prepared to alter his findings of fact upon review or whether he proposed that his finding of fact stand. It enclosed a copy of the letter to Mr. Thorne-Large dated 28 July 1992. The Taxing Officer replied that he did not intend to alter his ruling. When I examined the material which had been placed before me, it appeared that no allocatur or certificate had been signed by the Taxing Officer, with the consequence that the taxation of the bill of costs had not been completed. See 0.91 r. 116. When I raised this matter on further consideration of the application, I was informed by the applicant that an inspection of the file would show that this was not so. Accordingly I inspected the file, but could see nothing which indicated that an allocatur or certificate had been signed. I informed the parties of this result. On 25 March 1993, I received from the applicant a signed certificate of taxation. Section 34 of the Costs Act provides: "No bill which shall have been previously taxed and settled either under an appointment or order of reference shall be again refused unless under special circumstances the Court or Judge to whom such application is made shall think fit to direct a relaxation. Provided nevertheless that where a bill of costs shall have been taxed, an order for review of the taxation may be made after rule or summons to show cause by the Supreme Court or a Judge thereof and it shall be lawful for such Court or Judge in case they or he shall think fit thereupon to direct the proper officeraforesaid to review and correct such taxation instanter." In Re Feez Ruthning's Bill of Costs [1989] 1 Qd. R. 55 it was decided that the objection procedure in rules 117 to 119 of -- 8 of 14 -- 6 0.91 apply to a taxation of costs between solicitor and client. It was pointed out by Macrossan J. at p. 87 that it can be said that the rules regulate the procedural steps to be taken under the relevant provisions of the Costs Act whether substantive or otherwise. In the letter of 24 December 1992 from the applicant to the Taxing Officer to which I have already referred the applicant stated that it was unhappy with his determination that the costs of the taxation should go to the client and that there be no order with respect to who paid the taxing fee. It stated that it did not request him to provide reasons or ask for a review as 0. 91 r. 117 appeared to apply to dissatisfaction as to the allowance or disallowance of "items" and not as to the ordering of costs. It stated that it had no objection to the allowance or disallowance of any items in the bill. It requested him to let it have his reasons so that the matter could be finally determined between the parties. As already mentioned, these were supplied. It was submitted before me by the applicant that r. 117 was inapplicable in this case, as it was not objecting to items or parts thereof, and consequently that r. 119 was also inapplicable. Section 26 of the Costs Act provides for the payment of the costs of an appointment for taxation by reference to the event of such taxation. Clearly the "event" of taxation of a bill will depend upon the allowance or disallowance of items in the bill, but in my opinion the costs of an appointment for taxation are not themselves an item in the bill of costs. A person may not -- 9 of 14 -- 7 have any basis for an objection to taxation under r. 117 because he is not dissatisfied with the allowance or disallowance of the whole or any part of any item, but he may be dissatisfied with the application to the bill as taxed of the one-sixth rule. In those circumstances I consider that he may apply for a review of taxation under s.34 of the Costs Act, without following the procedures in 0. 91 rr. 117-119. The applicant relied both before the Taxing Officer and before me on the decision in Re Hellard and Bewes (1896) 2 Ch. 229. In that case, a lessor's solicitors had written to the lessee's solicitors on 24 December that their charges in relation to the lease amount to £7. 11 . 0. On 1 January, the lessee's solicitors wrote asking for particulars of the charges. In reply, the lessor's solicitors on 2 January sent a bill with detailed items amounting to £10.10.8, adding at the foot "say £7.11 .0''. The lessee obtained an order to tax the bill, and on the taxation the whole of the £7.11.0 was allowed. It was held that the bill was delivered on 24 December, that the bill sent on 1 January was merely explanatory, and that, the bill not having been reduced on taxation, the solicitors were entitled to the costs of the taxation. The Taxing Officer's ruling referred to "the client's correspondence of 25th June 1992 which clearly rejects the bill for $1,127.50". This correspondence was not placed before me by the parties, but on inspection of the file to ascertain whether an allocatur or certificate had been signed, I read a letter from the respondent to the applicant of that date which states: "In response to your request for payment of account no. 50997 for the amount of $974.50, I am unable to -- 10 of 14 -- 8 reconcile this amount as I thought that your bill was for the sum of $877.50. I regard the total bill of $1,127.50 to be excessive." The Taxing Officer then stated: "The difference between the two cases lies in the point that the second Holland v. Bewes bill could not be perceived as a substitution for the initial bill whereas in the instant case the latter bill is an attempted substitution of the first bill to the extent of those items that bring the bill in over the amount of the first." The position in this case is that the applicant had sent the client a lump sum bill and had demanded payment of that lump sum. The client was not willing to pay the amount claimed, and he was not liable to be sued upon the bill. In Re Walsh Halligan Douglas' Bills of Costs (1990) 1 Qd.R. 288 at p. 294, it was said by Dowsett J. that a bill will not be a bill of costs as contemplated by s.22 of the Costs Act unless it sufficiently particularises the charges to enable the client to take informed advice as to whether he should demand taxation. The solicitor thereupon delivered an itemised bill for which an appointment for taxation was obtained by the client. In Re Tilleard (1863) 32 Beav. 476, it is stated in the headnote: "The solicitor of a railway company in his bill charged 500 guineas in a lump sum for attendances and correspondences of above one year. The bill was ordered to be taxed. Held that the solicitor might supply a detailed statement of the items comprised in the general charge exceeding that amount, but that he could not increase his demand beyond 500 guineas." Sir John Romilly M.R. said:- "The solicitors says, 'I claim in respect of this item 500 guineas. You ask for an explanation. You are entitled to one, and this charge of 500 guineas is made up of items in respect of which I insist I was entitled to charge £790, but I only charge £525.' He -- 11 of 14 -- 9 does not alter his bill; the charge is still £525, and he cannot claim any more than that sum, but he is entitled to take all these i terns in and have them taxed for the purpose of showing how he makes out that the 500 guineas is due to him. It was the reason why I directed the taxation of this bill, and if the Taxing Master had allowed more than 500 guineas upon it, I should have held that it was an improper allowance, and I should have disallowed the excess beyond the 500 guineas." In Re Russell, Son & Scott (1886) 55 LT 70, it was said by Cotton L.J. at p. 22:- "The Court has frequently held that where a bill of costs has been carried in by a solicitor for taxation in a taxable form, another bill cannot afterwards be brought it. But that is not the case here. In the present case the Taxing Master could not tax the bill because it was not in a taxable form, and therefore following Re Tilleard he allowed the solicitors tobring in a supplemental paper containing the items of the costs. Of course, the solicitors could not have brought in a bill charging more than £1000 (the amount of the first bill)." These cases were followed in Re Edwin Sutherland & Co's Bill of Costs (1971) Qd.R. 318. In Re Carthew (1884) 27 Ch.D. 485, the bill delivered by a solicitor was a detailed bill consisting of items amounting of £84.4.5. At the foot of it was written "say £78" and the signature followed these words. The bill was taxed at £66.13.4, so that more than one-sixth was taxed off if the amount was taken at £83.3.4, but less than one-sixth if taken at £78. It was held that the bill was one for £83.3.4, which had on taxation been reduced by more than one-sixth. Cotton L.J. pointed out that there was no bill showing an amount of £78, and that sum could not be considered as the amount of the bill delivered in the sense of a provision in the same terms as s.26 of the Costs Act. Lindley L.J. said that it was impossible to say that it was a -- 12 of 14 -- 10 bill for £78; it was a bill containing items making up £83.3.4, with an offer to take a less sum. In Re Hellard & Bewes, a lump sum bill had been delivered, and later a document setting out items detailing the charge. It was held that the lump sum bill was the bill actually claimed, and as it was allowed in full on the taxation the solicitors were entitled to the costs of the taxation. In the instant case, a bill had been delivered on 3 April 1992. Accordingly, unlike the situation in Re Carthew, there was a bill showing the sum of $877.50. If it is correct to regard the itemised bill as being explanatory of that bill, then it would follow from Re Hellard & Bewes that the bill delivered in the sense of s.26 of the Costs Act was the bill delivered on 3 April 1992, and it would follow from Re Tilleard that the amount which could be charged would not be more than that stated in the lump sum bill. I consider that the proper inference to draw from the evidence in this case is that the itemised bill is to be regarded as explanatory of the lump sum bill. The client had rejected the lump sum bill. The solicitor had been delivered an itemised bill. The solicitor could not recover more than the amount of the lump sum bill. On the taxation, the amount claimed in the lump sum bill was allowed in full. The solicitor was therefore entitled to the costs of the taxation. I consider that the order I should make pursuant to s.34 of the Costs Act is to direct the Taxing Officer to review and correct such taxation in the light of this judgment. -- 13 of 14 -- 1 1 The application in this case was made prematurely, and it was prolonged as a consequence of a wrongful assumption that the taxation had been concluded. I allow the applicant one-half of the costs of the application to be taxed. I give liberty to apply. -- 14 of 14 --