Gbt Corporation Pty Ltd v Scott Sheils and Glover [1994] ACTSC 70 (5 July 1994)

SUPREME COURT OF THE ACT

GBT CORPORATION PTY LTD v. SCOTT SHEILS AND GLOVER
No. SCA23 of 1994
Number of pages - 9
Practice And Procedure

COURT

IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
HIGGINS J

CATCHWORDS

Practice And Procedure - costs - taxation - items disallowed - appeal from decisions of Registrar of Magistrates Court and Magistrate on review of Registrar's decisions - costs incurred by firm of solicitors acting for themselves as defendants - partner briefed as counsel - whether certain items allowable: instructions to partner for application for further particulars; draw and engross brief to counsel; conference with counsel; instructions for brief on application in Chambers; attend counsel to instruct and waiting; counsel's fees.

Magistrates Court (Civil Jurisdiction) Act 1982 (ACT), ss.250, 251, 263(2), 274
Magistrates Court (Civil Jurisdiction) (Solicitors' Costs) Regulations, Reg 7, Schedule 2
Supreme Court Rules, Fourth Schedule, O.65 r.83(1)
Legal Profession Practice Act 1958 (Vic), s.11

Cachia v Hanes [1994] HCA 14; (1991) 23 NSWLR 304
Secretary, Department of Foreign Affairs and Trade v Boswell (No 2) [1992] FCA 629; (1992)

39 FCR 288

Guss v Veenhuizen (No. 2) [1976] HCA 57; (1976) 136 CLR 47
TNT Bulkships Ltd v Hopkins [1989] NTSC 42; (1989) 65 NTR 1
Oliver, Law of Costs, 1960, Law Book Co. Sydney, p.67
Commonwealth of Australia v Magriplis (1962) 3 FLR 47
Watkins v Alcock (1954) Tas SR 63
Bickford v Bickford (1923) SASR 148
Re Dacey; ex parte Chick and Kev Distributors Pty Ltd [1981] FCA 47; (1981) 51 FLR 389
Crase v Downey (1982) VR 803

HEARING

CANBERRA, 3 June 1994
5:7:1994

Counsel for the Plaintiff/Respondent: Mr A Tsirimokos

Instructing solicitors: Vandenberg Reid

Counsel for the Defendants/Applicants: Mr G Brzostowski

Instructing solicitors: Scott Sheils and Glover

ORDER

THE COURT ORDERS THAT:

1. Leave to appeal be granted.
2. The appeal be upheld.
3. The defendants have leave to amend their bill of costs.
4. The matter be remitted to the Registrar to be taxed in accordance
with these reasons.

DECISION

HIGGINS J On 27 July 1993, Magistrate Nicholl ordered the plaintiff to provide particulars of its claims against the defendants. It was also ordered to pay their costs of that application.

2. Mr Thompson, Registrar of the Magistrates Court, taxed those costs. The sum of $1,451.05 was claimed, but only $368.35 was allowed.

3. The power of the Registrar to allow or disallow items claimed for costs is to be found in s.250 of the Magistrates Court (Civil Jurisdiction) Act 1982 (ACT) (the Act). That section provides,

On a taxation of costs in proceedings -
(a) the Registrar shall allow all such costs as were, in her or his
opinion, necessary or proper for the attainment of justice in the
proceedings or for enforcing or defending the rights of the party
whose costs are being taxed; and
(b) the Registrar shall disallow all such costs as were, in her or
his opinion, incurred as a result of an excess of caution, negligence
or mistake or merely at the desire of the party incurring those costs.

4. Sub-sections 251(2) and (3) are also relevant. They provide,

(2) Subject to this Act, solicitors are entitled to charge costs,
and on the taxation of costs in proceedings, costs shall be allowed,
according to the prescribed scale of costs, and costs shall be
determined having regard to the relevant amount in relation to those
proceedings.
(3) Subject to this Act, solicitors are entitled to charge for
counsel's fees, and on the taxation of costs in proceedings, counsel's
fees shall be allowed, according to the prescribed scale of costs, and
counsel's fees shall be determined having regard to the relevant
amount in relation to those proceedings.

5. The reference to the "relevant amount" is, in this case, a reference to the sum claimed by the plaintiff. That sum determines which of several scales of costs is applicable: see s.251(1).

6. The scales of costs are prescribed by the Magistrates Court (Civil Jurisdiction) (Solicitors' Costs) Regulations (the Costs Regulations). Regulation 7 provides that the prescribed scale, having regard to the amount claimed by the plaintiff in this case, is to be 90% of the scale set out in the Fourth Schedule to the Supreme Court Rules. The bill of costs as drawn did not make such a claim. It claimed counsel's fees in full and solicitors' costs at 80% of the Fourth Schedule.

7. The Registrar had regard to the fact that the defendants' solicitors were acting for themselves. He pointed to the general rule that a litigant in person is not entitled to other than out-of-pocket expenses: Cachia v Hanes [1994] HCA 14; (1991) 23 NSWLR 304; Secretary, Department of Foreign Affairs and Trade v Boswell (No 2) [1992] FCA 629; (1992) 39 FCR 288.

8. That rule, as the Registrar correctly observed, does not apply to a legal practitioner appearing on his or her own behalf in litigation. That proposition was affirmed by the High Court of Australia in Guss v Veenhuizen (No. 2) [1976] HCA 57; (1976) 136 CLR 47.

9. The Registrar considered that solicitors acting for themselves do, necessarily, have only a limited entitlement to costs compared with solicitors acting for a client. He said,

... I consider that such costs should not include recompense for work
done which, in reality, represents attendances upon him/herself or for
drawing his/her own proof.

10. The Registrar also referred to Order 65 Rule 83(1) Supreme Court Rules. That rule provides,

... where a barrister and solicitor acts in both capacities, or
appears as a barrister, instructed by his partner acting as solicitor,
neither he nor his partner shall be entitled to make any charge for
"Instructions for brief", or for "Drawing" or "Engrossing brief", but,
in lieu of all such charges, such barrister and solicitor, or partner,
as the case may be, shall be entitled to such fees as are allowed by
the taxing officer for "Preparing for trial", and for "Preparing brief
notes for use on trial".

11. Having regard to the fact that there were no claims for either of such latter items or evidence to particularise such items of preparation, the Registrar disallowed items claimed under the three first mentioned headings.

12. The amount claimed for "counsel's fees" was also disallowed by the Registrar for the additional reason that "... I do not believe that the retention of counsel was necessary in the circumstances".

13. In any event, the Registrar considered that the sum paid was not allowable by reason of non-compliance with s.263(2) of the Act. That sub-section relevantly provides as follows,

On a taxation of costs in proceedings, ... counsel's fees shall not be
allowed unless, before the taxation is completed, the Registrar is
satisfied, by the production of a receipt or otherwise as the
Registrar may direct, that the ... fees ... have been paid.

14. Having regard to the extent to which costs claimed had been reduced, costs relating to preparation and service of the bill of costs were also disallowed. As drawing, engrossing and serving the Certificate of Taxation would be done by the Court, those costs were also disallowed.

15. The defendants were dissatisfied with the taxation of costs and applied under s.274 of the Act for a review of the decisions of the Registrar in relation to six specific items. On review, those disallowances were affirmed by Magistrate Nicholl on 10 March 1994.

16. By notice dated 30 March 1994, the defendants sought leave to appeal from that decision. That application was heard on 3 June 1994. It was agreed by counsel for the parties that I should treat the hearing of this application as the hearing of the appeal. I was assisted by comprehensive written submissions.

17. I turn now to the six items in relation to the disallowance whereof objection was taken.

1. Instructions for Application for Further Particulars (Item 6(a))
18. It is significant, in my view, that there were three defendants. Accordingly, any step taken, for example, by Mr Sheils, could have been taken on behalf of the other defendants only with their agreement. Further, he could have represented the other defendants as a barrister and solicitor only if they had agreed to him doing so. He could perform work as a solicitor for his partners only because of such agreement and by reason of his possession of a practicing certificate: see TNT Bulkships Ltd v Hopkins [1989] NTSC 42; (1989) 65 NTR 1. At least because of this, it was necessary for Mr Sheils, assuming that he acted for the other two, to be instructed to make the application in question.

19. It is not entirely clear whether, in fact, Mr Scott acted as solicitor, briefing Mr Sheils as counsel, or whether Mr Sheils acted as both with Mr Scott appearing on the hearing to assist Mr Sheils. Whichever was the case, instructions had to be given and received by either Mr Sheils or Mr Scott to make the application in question.

20. Item 6(a) is a fixed fee encompassing all work necessary to advise and obtain authority to proceed with the application in question. It is, in a sense, a "flag-fall" fee. The fee is incurred by reason of the solicitor receiving instructions to make the application in question on behalf of a client. If the instructions are received from two persons in respect of the one application, only one fee is incurred. The usual order when more than one party is represented by the same practitioner is that only one set of costs will be allowed unless some separate work is required as a result. That principle is set out in Oliver, Law of Costs, p.67. In this case there is no suggestion that, under this item, any additional work was required.

21. The item should have been allowed insofar as Mr Sheils, or Mr Scott, was instructed on behalf of his partners. It is unnecessary for me to decide whether, had only one defendant been involved, a fee for instruction to act would have been incurred.

2. Draw and engross Brief to Mr Sheils to appear (Items 12(b) and 15)
22. The Bill of Costs does not provide sufficient particulars to ascertain who it was that drew and engrossed the "brief". It may be that Mr Sheils did it. In any event, Order 65 rule 83(1) Supreme Court Rules would, if the order had been made by this Court, be applicable. The Act does not, in terms, apply the Supreme Court Rules. The Costs Regulations apply only the Fourth Schedule to those Rules. However, I consider that Order 65 rule 83(1) does no more than reflect a necessary consequence of the combination within a firm of the roles of barrister and solicitor in relation to particular litigation.

23. The combination of those roles was considered by Bridge J in Commonwealth of Australia v Magriplis (1962) 3 FLR 47. His Honour noted that, where a solicitor briefs himself as counsel, or briefs a partner as counsel, there is a reduction in the extent of the work required by reason of the fact that the person briefed is not a stranger to the matter. This is a fortiori the case where the person briefed or instructed is also a party to the litigation. His Honour recommended as a general rule that self-briefed counsel should be allowed fees at 75% of the usual rate. Counsel briefed by a partner should be allowed 5/6 of the usual rate. Of course, a taxing officer might, for good reason, vary that allowance in a particular case.

24. The claim referred to Item 12(b). It should have referred to Item 12(h). It was expressed in terms of a "brief". It should have been expressed in terms of preparation of "briefing notes" for use upon the hearing. It was conceded by the plaintiff that such preparation was necessary. It is correct to say that such a concession would not bind the Registrar. However, the concession in question should have led the Registrar to permit amendment of the bill or to regard the claim as if correctly expressed. The taxing officer erred in not allowing a fee accordingly. Whether it should be the same sum or a different amount, is another matter. However, for the purposes of the Fourth Schedule, Order 65 rule 83(1) may be regarded as governing the interpretation of "brief" in items referring to instructions for and preparation of "brief". Due allowance would need to be made for the degree to which the "briefing notes" in question would require less work to prepare than a brief to outside counsel, and additionally, to counsel who was not also a defendant. Accordingly, the disallowance in entirety of these items was in error.

3. Conference with P L Sheils (no item number shown) $110.90
25. The sum claimed indicates an attendance on Mr Sheils by a senior solicitor. Presumably, it took place to prepare for the hearing of the application. It is expressed to be under Item 21. It is not clear who attended on Mr Sheils, or whether this is a charge for Mr Sheils' time, or for that of the person attending on him. That would need to be clarified.

26. A conference between the defendants and the practitioner appearing on the hearing would be inevitable and necessary. Subject to clarification of the nature of the attendance, a charge should have been allowed provided one or more of the other defendants and/or relevant witnesses attended to confer with Mr Sheils.

4. Instructions for Brief on application in Chambers (Item 5(f))
27. The item is incorrectly described. However, there should have been an allowance for "Preparing for trial". Schedule 2 of the Costs Regulations, though not directly applicable, itself equates "Instructions for brief" with "Instructions for brief notes for solicitor". That is consistent with O.65 r.83(1). I have noted that O.65 r.83(1) recognises a general rule applicable to the taxation of bills of costs generally. When "instructions for brief" are claimed by a solicitor who is self-briefed or briefed by another member of her or his firm, a fee should be allowed for "preparing for trial" or "Instructions for brief notes for solicitor".

28. In assessing any such fee, savings by virtue of self-briefing or by a partner or other firm member briefing the solicitor appearing should be considered. However, the scale item in this case is intended to be a minimum fee and should have been allowed accordingly. That allowance is appropriate even if counsel's fees are not appropriate as a separate sum.

5. Attend Counsel to instruct and waiting - 9.55am to 11.00am (Item 21)
29. This was intended to be a reference to Mr Scott's attendance with Mr Sheils on the hearing of the motion. A sum of $166.35 was claimed, but $207.75 was allowed. The allowance of the sum of $207.75 was a consequence of the Registrar's decision to disallow a fee for counsel.

30. The initial question, therefore, is whether it was "necessary or proper" for an instructing solicitor to attend with Mr Sheils when he appeared as counsel.

31. I refer again to Magriplis and the cases therein referred to. The defendants had a choice of three options. Mr Sheils could have appeared self-briefed. He could have appeared, as it appears that he did, with Mr Scott instructing him. Outside counsel could have been briefed, being instructed by a solicitor from Mr Sheil's firm. The latter course would have been the most expensive.

32. Which of those options was, or went beyond, what was "necessary or proper" is a discretionary matter. This was an interlocutory application. The plaintiff conceded in its submissions that Mr Scott had engaged in correspondence with the plaintiff, presumably as a solicitor/litigant. It was a negligence claim against the defendants for conduct in their capacity as solicitors. Proper particularisation of any claim is important. For this claim it was appropriate and important that proper particulars be obtained. It was common ground that Mr Sheils had not been personally involved in the events the subject of the claim. During a matter, a solicitor may at some times be self-briefed and at other times, if it is necessary or proper, be assisted by or briefed by another member of his firm.

33. The Registrar considered that the claim did not meet the "statutory criteria". I take the Registrar's reference to the "statutory criteria" to be a reference to s.250 of the Act. It follows that the Registrar ruled that the attendance of Mr Scott to instruct Mr Sheils was neither "necessary or proper" on a party and party basis. This interpretation of the Registrar's opinion was accepted by the learned Magistrate who agreed with it.

34. In this Court, it would be an unusual case where a practitioner appearing as counsel would not be attended by an instructing solicitor or clerk. It is, at least, usually "proper" if not always "necessary". However, in the Magistrates Court it might well be less usual for an instructing solicitor or clerk to be present. I do not, of course, refer to matters where the attendance of more than one practitioner is obviously not warranted. Mentions and pleas of guilty to minor offences provide obvious examples of that latter category.

35. Having regard to the fact that both the Registrar and the Magistrates Court's most experienced Magistrate, after full argument and, in the latter case, after comprehensive written submissions, were not satisfied that an instructing solicitor was required, I should not interfere with that exercise of discretionary judgment unless satisfied that it was clearly wrong.

36. The test is, in my view, no different to that applied in deciding if fees for two (or more) counsel should be allowed. However, neither the Registrar nor the learned Magistrate seems to have considered whether it was "proper" for a practitioner to attend to instruct Mr Sheils. No reason was advanced as to why it was not "proper or necessary" for such an attendance. It is possible that the Registrar and the Magistrate considered that because Mr Scott was entitled to be present and had an interest in being present as a party, he was not attending as an instructing solicitor. That does not necessarily follow for the reasons I have referred to previously. Whilst it was relevant to bear in mind that both Mr Sheils and Mr Scott were defendants that did not, per se, disentitle them from claiming fees as counsel and instructing solicitor respectively.

37. I would set aside the decision to disallow this item. Whether or not the allowance should be made is another matter. That decision is for the Registrar to make giving due consideration to whether it was either "necessary or proper" for counsel to attend as well as an instructing solicitor.

6. Disbursements - P. Sheils of Counsel fees:

Brief fee on Motion 5/6 of $600.00 - $500.00

38. It is, as I have noted, unclear whether Mr Sheils was self-briefed or briefed by one of his partners. Even had he been the sole defendant, his preparation for and attendance upon the hearing of the application would have been allowable at the usual rates according to the prescribed scale. Due allowance would need to have been made for the lack of need to consult with the client, or clients, in view of the fact that he was also representing himself and his partners. Magriplis clearly contemplates that, if the appearance of a legal practitioner to conduct a matter is "necessary or proper", then a fee may be allowed for counsel's fees in respect of that practitioner.

39. In fixing the sum to be allowed, however, it should be noted that "disbursements" are to be allowed, pursuant to Item 37 of the Fourth Schedule to the Supreme Court Rules "in full", insofar as the same were "properly incurred". Regulation 7(1)(b) requires that the "prescribed percentage" applies to all costs so ascertained. Insofar as it purports to apply to disbursements other than counsel's fees, it would conflict with s.263(1) of the Act which provides that disbursements shall be allowed in full if properly incurred. However, that sub-section expressly excepts counsel's fees. It follows that, if counsel's fees are a properly incurred disbursement in a particular case, they will be allowed as reduced by the "prescribed percentage".

40. The Registrar decided it was "not necessary" to brief counsel and the learned Magistrate agreed. However, as I have noted in relation to the last item, the reasons for doing so were not explained. No reference was made to the alternative basis upon which they might have been allowed.

41. The Registrar adverted to an additional reason for refusing to allow counsel's fees to Mr Sheils. He referred to s.263(2) of the Act, under which some evidence is required that counsel's fees have "been paid".

42. That provision, in my view, only applies to obligations incurred to a person who is not the solicitor or any partner of his or hers. It is meaningless to regard counsel's fees earned by a partner who is briefed by another partner as a debt due from the partnership to the individual concerned. Nor would it represent a debt due to an employed solicitor appearing as counsel. This is because the fee earned by such a practitioner briefed by a partner, when paid to the solicitor's firm, belongs to each partner jointly and severally.

43. Proof of payment provisions whether by rule, regulation or statute, are common. Some rules expressly exempt fees payable to a solicitor acting as counsel in the matter: see Watkins v Alcock (1954) Tas SR 63. Those fees are, nevertheless, properly to be regarded as disbursements: see Bickford v Bickford (1923) SASR 148.

44. However, as Lockhart J observed in Re Dacey; ex parte Chick and Kev Distributors Pty Ltd [1981] FCA 47; (1981) 51 FLR 389, at 392,

The mere fact that a solicitor does not brief counsel and presents a
case himself before the court does not necessarily entitle him to an
additional allowance, even if it be established that he has done work
additional to that which he would have done had he briefed counsel.

45. I also note the terms of s.11 of the Legal Profession Practice Act 1958 (Vic). ((1) Section 11 was repealed by Section 5 of the Legal Professional Practice (Amendment) Act 1985 (Vic). The Act was assented to on 10.12.85 and came into effect on 1.1.86.) That prohibits a solicitor briefing a firm member from receiving costs,

... for instructions to or attendances upon counsel ... or for
attendances at court on trial or hearing or in chambers as solicitor
where he or his partner or partners are also acting and receiving a
fee as counsel for the like attendance and for the same client.

46. Starke J observed, in Crase v Downey (1982) VR 803 that this section was directed at the evil of having the same firm of solicitors charging twice for the same work.

47. There is no such express prohibition in or under the Act. However, the principle underlying the allowance of remuneration to a solicitor/advocate depends on whether it would be reasonable or proper to brief counsel. If so, subject to the qualification expressed in Magriplis, such a solicitor may charge a fee as counsel. It may also be reasonable or proper for a partner or employed solicitor or clerk to attend to instruct that practitioner. In each such case a discretionary judgment has to be made as to what is necessary or proper in the circumstances.

48. Item 22 is expressed to be appropriate for "any other attendance in Court on any hearing without Counsel". Clearly, it would be open to allow a solicitor a fee under that item instead of a fee as counsel. The judgment would need to be made, however, that the matter was not such as would make it "necessary or proper" to brief counsel.

49. The decision made to disallow counsel's fees in the matter did not apply some general rule. His Worship, in delivering his decision carefully and, in my view, correctly, pointed out that it applied to the particular case before him only.

50. It follows that the decision made by the Registrar and that made by the learned Magistrate on review of that decision involved a discretionary judgment.

51. I am, however, troubled by the result arrived at. The matter involved a claim for $50,000.00 for professional negligence. It would be unusual for a firm of solicitors to accept instructions to defend itself. In some cases, it may be unwise to do so. However, the matter was inherently important and, given the sum claimed, of considerable financial significance. The extent to which the professional reputation of the firm was at risk is also unclear. I have no material before me to ascertain whether any important issues of law or practice were raised by the litigation. Prima facie, it would be prudent for such practitioners, instructing other solicitors, to insist that suitably qualified counsel appeared. No doubt it would not be "necessary or proper" to engage counsel as eminent and experienced as Mr Sheils, but that only affects the level of counsel's fees to be considered as properly incurred.

52. However, there is error apparent in some aspects of the Registrar's decision in relation to other items. Those errors were not addressed in his Worship's decision. Neither the Registrar nor the Magistrate indicated that he was looking at the matter from the view of propriety. Reasons should have been advanced as to why it had not appeared, in the circumstances, to be necessary or proper to brief counsel to appear to make the application in question in this case when usually it would be.

53. A decision based on the relevant criteria would require consideration of the matters I have referred to, as well as the usual practice within the Magistrates Court. In all the circumstances, the decision to disallow counsel's fees as claimed should be set aside.

54. I grant leave to appeal and uphold the appeal. Some issues of importance were raised justifying leave notwithstanding the small sums involved.

55. I direct that the defendants have leave to amend their bill of costs to reflect more accurately the claims they make and the terms of the Costs Regulations. I further direct that the matter be then remitted to the Registrar to be taxed in accordance with these reasons.

56. I will hear the parties as to costs.