William Timothy Cape v Redarb Pty Limited (Receiver and Manager Appointed); Robert John Yeomans; Junstamp Pty Limited; Olaks Pty Limited; G and L Warehouse Pty Limited; Aj Garrard (A Male) Trading As Canberra Auto Parts and Accessories; T and K Pepp [1991] ACTSC 34 (12 June 1991)

SUPREME COURT OF THE ACT

WILLIAM TIMOTHY CAPE v. REDARB PTY LIMITED (RECEIVER AND MANAGER APPOINTED);
ROBERT JOHN YEOMANS; JUNSTAMP PTY LIMITED; OLAKS PTY LIMITED; G. and L.
WAREHOUSE PTY LIMITED; A.J. GARRARD (a male) trading as CANBERRA AUTO PARTS
AND ACCESSORIES; T. and K. PEPPAS; ALSAI PTY LIMITED; SOWLIN PTY LIMITED;
ROGER ANTHONY NORTON and ESTATE OF THE LATE GEORGE ADAMS
S.C. No. 34 of 1990
Practice and Procedure

COURT

IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Higgins J.(1)

CATCHWORDS

Practice and Procedure - Review of items of taxation of third defendant's costs - Costs of interlocutory motion when costs order silent - "Indemnity costs" - Test to be applied.

Dawson v Watson (1929) VLR 263

Allen v Birkbeck (1931) VLR 140

Harry Smith Car Sales Pty Ltd v Claycom Vegetable Supply Co Pty Ltd (1978) 29 ACTR 21

Re Edward and Son; Ex p Tomlins (1885) 11 VLR 304

Mentors Ltd v Evans (1912) 3 KB 174

Bendir v Anson (1936) 3 All ER 326

Frankenburg v Famous Lasky Film Service (1931) 1 Ch 428

Giles v Randall (1915) 1 KB 290

Downing v Downing (1898) 23 VLR 483

Donnellan v Watson (NSWCA; 5.12.90; unreported)

HEARING

CANBERRA
12:6:1991

Counsel for the Plaintiff: Mr T. Johnstone

Instructing solicitors: Messrs Crossin Power Haslem

Counsel for the 3rd Defendant: Mr J. Topfer

Instructing solicitors: Messrs Mallesons Stephen Jaques

ORDER

1. The Court orders that an application for review be granted.

2. An amended Certificate of Taxation be issued deleting the allowance of items 93, 94, 95, 159, 189 and 191.

DECISION

This is an application by the plaintiff to review the allowance of certain items on a taxation of the Third defendant's costs pursuant to an order for costs in favour of the Third defendant against the plaintiff made by Gallop J. on 2 February 1990, by me on 28 February 1990 (the latter two on an "indemnity" basis) and pursuant to a Notice of Discontinuance dated 2 October 1990.

2. The application is made pursuant to O65 r66. There is, additionally, a right of appeal in respect of the items "Instructions for brief" and "Drawing same" pursuant to O65 r82. No additional evidence was tendered on the hearing before me. No point was taken that any item, the allowance of which was sought to be reviewed, had not been objected to on taxation. It follows, having regard to the terms of those rules, that I have to determine afresh whether the items to be reviewed should be allowed on the evidence before the Deputy Registrar who was the taxing officer. I may have regard to, but I am not bound by, her exercise of discretion.

3. I shall deal with the items raised by plaintiff's counsel before me in the order and in the categories raised.
1. Items 93, 94, 95, 159, 189, 191

4. These items relate to an application made by the Third defendant for summary judgment. It was not successful but no order for costs was made by the court. It was submitted before the taxing officer that the application was also unreasonable. She did not accept that. Indeed had it been so, the court would, no doubt, have ordered costs in favour of the plaintiff, or at least declined to order costs.

5. Before me, it was objected that those costs fell outside the order of Gallop J. on 2 February 1990. I agree with that proposition. It was a separate and subsequent application. Once an application for summary judgment is dismissed, however, without a specific order for costs being made, those costs usually are ordered to become costs in the cause. (See Dawson v Watson (1929) VLR 263; Allen v Birkbeck (1931) VLR 140.) Where the application was without reasonable justification, costs may well be awarded to the respondent thereto (see Harry Smith Car Sales Pty Ltd v Claycom Vegetable Supply Co Pty Ltd (1978) 29 ACTR 21).

6. There is no material before me suggesting that Gallop J. made any specific order as to costs of the application for summary judgment.

7. The Notice of Discontinuance filed by the plaintiff is equivalent to an order for party/party costs in the action generally in favour of the parties to whom the notice is given. (See O30 r1(1).) Nevertheless, when an order deposing of a motion is silent as to costs, it does not automatically follow that the costs of the motion are costs in the cause. The general rules where the order is silent as to costs are:-
1. A party making a successful motion is entitled to costs as

costs in the cause but the unsuccessful opponent is not so
entitled.
2. A party making an unsuccessful motion is not entitled to
costs as costs in the cause but the successful opponent is
entitled to have costs in the cause.
3. The costs of an unopposed motion, whether it is successful
or not, are costs in the cause generally.

(See Re Edward and Son; Ex p Tomlins (1885) 11 VLR 304; Mentors Ltd v Evans (1912) 3 KB 174, 179; Bendir v Anson (1936) 3 All ER 326.)

8. The general rule applicable here was that the costs of the motion were, unless a different order was pronounced or costs expressly not ordered, the plaintiff's costs in the cause, not the defendants'. It follows that this group of items should have been disallowed and I disallow them accordingly.
2. Items 105, 132, 133, 322 (part only)

9. These items relate to time spent by a Mr Kemp for the purpose of providing affidavit evidence. Mr Kemp was a member of the firm of solicitors acting for the Third defendant.

10. I note that the evidence of Mr Kemp was tendered in the proceedings the subject of the order of Gallop J. The costs of preparation and tender of his evidence were, accordingly, on an "indemnity" basis.

11. Apart from a party/party basis for taxing costs, there is solicitor/client. The latter embraces a more generous allowance than the former (see, for example, Frankenburg v Famous Lasky Film Service (1931) 1 Ch 428, 436).

12. Buckley L.J. in Giles v Randall (1915) 1 KB 290, noted three modes of taxation as between solicitor and client (295):-

"The first is where a client is taxing his own
solicitor's bill of costs, commonly called taxation as
between solicitor and own client. The second is where
the costs are to be paid out of a common fund in which
the client and others are interested...The third is
where the costs are payable by one party to another or
out of a fund in which the party entitled to costs has
no interest."

13. The more generous of the three modes is the first. It is clear that in the orders herein the term "indemnity basis" was intended to equate with solicitor and own client costs. Indeed it is "all costs" unless unreasonably incurred or calculated. (See Downing v Downing (1898) 23 VLR 483.) The terms of Gallop J.'s order makes this proposition quite clear.

14. There was no support for the proposition that it was unreasonable to tender Mr Kemp's evidence. The objection was that costs should not be allowed for attendances by Mr Kemp. As he was a witness, it is submitted, he is entitled only to witness fees.

15. Insofar as the objection relates to Mr Kemp's costs of qualifying to and giving evidence, I reject that contention. Any solicitor giving evidence would be entitled at least to such fees. As it is the firm acting for the Third defendant of which Mr Kemp is a member, the fee so charged is properly characterised as costs rather than as a disbursement.

16. Additionally, however, 2 hours 15 minutes was allowed as part of "Instructions for Brief" for work done by Mr Kemp (with Mr Topfer) in conferring with counsel. On a party/party basis, attendance as a solicitor for these times would have been inappropriate. It would be categorised on a time only basis without allowance for care, skill and attention. However, on an indemnity basis I do not believe that such a charge for Mr Kemp's attendance can be said to be "unreasonable" particularly as he had been involved in the matter. It was equivalent, in part, to two solicitors conferring with counsel.

17. It follows that I affirm the allowance of these items.
3. Item 322 - Duplication of time spent and/or folios perused

18. It was objected that the times and/or folios claimed were duplicated elsewhere. There was no reference made to any instance of such duplication. I am not satisfied there has been any such duplication.

19. I reject this objection.
4. Item 322 - Allowance for care, skill and attention

20. It is apparent that this item was calculated by reference to a general allowance of 50% added to the time spent and perusals made. That puts the allowance for care, skill and attention at 1/3 of the sum allowed under item 322.

21. It is true that part of this item was allowable on an indemnity basis and part on a party/party basis. I note also the general submissions made and apparently accepted by the taxing officer as to the nature of the matter. This action was an integral part of a complex network of litigation involving the plaintiff and Mr Maidment, together with companies controlled by the latter, of which the Third defendant was one. There were allegations of fraud made by the plaintiff. The actual litigation of interlocutory matters made the subject of the specific costs orders was itself such as to raise many complex issues. Whilst the solicitors had counsel to assist them, they had the responsibility of the action and the duty to select and brief counsel of sufficient experience and expertise to deal with the matter. (See, for example, Donellan v Watson NSWCA; 5.12.90 unreported.) An allowance of 1/3, as here, for care, skill and attention reflects a matter of sufficient importance and concern to warrant it being a Supreme Court matter. It is about average on the scale of level of care, skill and attention to be allowed for in such matters. I think a greater allowance could have been considered justifiable in the present case particularly having regard to the basis on which a considerable proportion of the cost was to be assessed but I say only that I am satisfied that the amount claimed and allowed is proper.

22. It follows that I reject this objection to item 322.
5. Disbursements - fees allowed to Mr Collins QC

23. Mr Collins was described in Gallop J.'s order of 2 February 1990 as "one of Her Majesty's Counsel". He was so appointed in the State of New South Wales (according to the "NSW Law Almanac 1991") on 1 November 1989. It was said that, as at the hearing and conferences claimed on p 45 of the Bill (between 25 and 30 January 1990) Mr Collins did not have such an appointment in and for the Australian Capital Territory. I accept that this is so.

24. It follows, of course, that Mr Collins was wrongly described in the order.

25. It was then submitted that Mr Collins' fees should have been allowed only as if he was junior counsel and, further, that only one counsel should have been allowed.

26. I would agree that on a party/party basis the fees charged by counsel would have needed reduction to fall within what was "necessary and proper". That would normally be judged against the fees conventionally allowed for local counsel. Even then, some additional allowance would not be inappropriate for junior counsel regarded as particularly senior and/or eminent.

27. However, in this matter, the fees for counsel so challenged are to be allowed on an indemnity basis. The fees charged by Mr Collins were not unreasonable for silk. The fees of Mr Purnell, although not singled out for objection were, likewise, not unreasonable in the context of this litigation.

28. Even though Mr Collins had no appointment as silk in this Territory, it was open to the taxing officer to allow fees as if Mr Collins had silk if she was satisfied it was proper in all the circumstances to do so. Given that Mr Collins had a commission of appointment in New South Wales, it was not "unreasonable" to allow those fees.

29. I consider that to be a reasonable exercise of discretion.

30. It was a case for which two counsel was not "unreasonable". The Third defendant, bearing in mind the allegations against it and the interests of its shareholders and directors, was, I think, clearly justified in coming to court with two counsel of the seniority and eminence respectively of Mr Collins and Mr Purnell.

31. I affirm the allowance of Mr Collins' fees.
6. Items 60, 77, 78, 79 and part 322 - Perusal of details of previous related litigation

32. It was objected that the detail of prior litigation was irrelevant.

33. I do not agree. It was reasonable to be aware of the place of this litigation in the general network of proceedings up until that time. The solicitors and counsel for the Third defendant were, in my view, acting reasonably in familiarising themselves with those prior proceedings.
7. Items 86, 89, 90, 91, 107, 145, 160, 161, 180-184, 220-226, 238-241, 258, 274, 281, 283, 293, 294

34. Item 86 was objected to on the basis that a discussion about Redarb Pty Ltd and its incorporation was irrelevant. The discussion was charged at a fixed and minimal rate. It covered other matters that clearly were relevant. This item should be allowed.

35. The remaining items are generally objected to on the basis that they were or were occasioned by discussions between solicitors for the Third defendant and those representing the First and Second defendants.

36. I do not see why such discussions were not appropriate. It may well have been to the advantage of all defendants to have a coordinated approach to the litigation. I am not able to conclude that any of these items can be characterised as costs unreasonably incurred. They related to the orders in respect of which costs were awarded on an indemnity basis.

37. I affirm their allowance.
8. Item 139 - Research on re-opening case

38. This was work done, whilst the decision of Gallop J. was reserved, to call additional evidence. It related to an uncommon procedural question. The point would not, however, require extensive research. No extensive research is charged for. It was not objected that the proposal itself was unreasonable. If it was not, then the work done in respect of it was not unreasonable. It related to the matter in respect of which the order for indemnity costs was made.

39. I affirm the allowance of this item.
9. Items 170, 173, 174, 192, 193, 202, 203, 227-230, 238-241, 245, 251-253, 258-260, 270, 281, 283, 293, 294, 299, 300, 301-303, part 322

40. The above items were all objected to on the basis that they fell outside the costs order of Gallop J.

41. If that was intended to be the scope of the objection it was plainly misconceived. However, a perusal of the Notice of Objection indicates that the gravamen of the objection is that the items are only allowable on a party/party basis and fall outside the scope of a party/party allowance.

42. The difference is that such costs must have been reasonably and necessarily incurred, as opposed to being not unreasonably incurred.

43. This issue does not appear to have been addressed directly by the taxing officer or in the response to the Notice of Objections. However, it is obvious the taxing officer was aware of the difference in the basis of taxation and allowed these items as it was expressly adverted to in the Notice of Objection addressed to her.

44. Applying the test above, I would rule on each of those items as follows:-

170 This was apparently reasonable and
necessary in the context of the entire
action. I confirm its allowance.
173 This was successful, I note. It is allowable.
174 As for 170.
192 As for 170.
193 As for 170.
202 As for 170.
203 As for 170.
227-230 As for 170.
238-241 As for 170.
245 As for 170.
251-253 As for 170.
258-260 As for 170.
270 As for 170.
281 As for 170.
283 As for 170.
293 As for 170.
294 As for 170.
299-300 It was objected this was a duplication.
The taxing officer did not so consider
it. I have no material before me, apart
from the items as described, to enable
me to disagree with this view. As for 170.
301-303 It seems to me that this was occasioned
by the plaintiff's actions. It was
reasonable and necessary for the Third
defendant (per Mr Maidment) to seek
advice and obtain the stated response.
322 As the particular items have not been
disallowed there is no cause to revise
the allowance of this item as assessed
by the taxing officer.

45. It follows that I grant the application for review and direct the issue of an amended Certificate of Taxation deleting the allowance of items 93, 94, 95, 159, 189 and 191.

46. I will hear the parties on costs.