Katarina Folk v Leda Limited, Leighton Contractors Pty Limited, Boral Johns Perry Industries Pty Limited and Southern Forktruk Services Pty Limited [1997] ACTSC 56 (14 August 1997)

SUPREME COURT OF THE ACT

KATARINA FOLK v. LEDA LIMITED, LEIGHTON CONTRACTORS PTY LIMITED, BORAL JOHNS
PERRY INDUSTRIES PTY LIMITED and SOUTHERN FORKTRUK SERVICES PTY
LIMITED
No. SC 307 of 1993
Number of pages - 4
Costs

COURT

IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

CRISPIN AJ

CATCHWORDS

Costs - application to review taxation - effect of Order 65 Rule 66 - review by judge of earlier review by taxing officer - rule does not envisage review of taxation by judge without earlier review by taxing officer - inherent jurisdiction to set aside default orders - discretionary considerations.

Supreme Court Rules - Order 65 Rule 66

Crowley v Willis - unreported SCA No. 108 of 1992 - Gallop J 31 January 1994

Ongania v Trimbole unreported - ACT Supreme Court - Gallop J 20 May 1983;

Taylor v Taylor [1979] HCA 38; (1979) 143 CLR 1

Evans v Bartlam (1937) AC 480

Logwon Pty Limited v Warringah Shire Council (1993) 33 NSWLR 13

Dsane v Hagan (1961) 3 All ER 380 at 384

Commonwealth Savings Bank of Australia v Raso (1982) 43 ACTR 3

HEARING

CANBERRA, 1 August 1997 (hearing), 14 August 1997 (decision)

14:8:1997

Counsel for the Plaintiff: Mr R Refshauge

Instructing solicitors: Deacons Graham James

Counsel for the Defendant: Mr R Mildren

Instructing solicitors: Moray & Agnew by their agents

Snedden Hall & Gallop

ORDER

THE COURT ORDERS THAT:

1. The certificate of taxation dated 1 July 1997 be set aside and the matter be remitted to the taxing officer for further taxation of the relevant bill of costs.

2. The applicant pay the respondent's costs of the motion and of the initial taxation.

DECISION

CRISPIN AJ

This is an application for an Order which would have the effect of vacating an order for costs made pursuant to a taxation on 23 June 1997 and remitting the matter to the Taxing Officer for further consideration in the light of various objections which the applicant now wishes to raise. During the hearing of the matter Mr Mildren made it plain that what he was really seeking was an order under Order 65 Rule 66 of the Supreme Court Rules, reviewing the taxation.

Mr Refshauge, who appeared for the respondent, submitted that Rule 66 did not confer any such power. That Rule had to be read with Rules 64, 65 and 67. Rule 64 provides that a party who is dissatisfied with the taxing officers decision may, at any time before the certificate or allocatur is signed, make an objection in writing and thereafter apply to the taxing officer to review the taxation in respect of the grounds and reasons specified in the written objections. Rule 65 provides that the taxing officer shall thereupon review the taxation upon the basis of such objections and in the light of any further evidence adduced. It is this decision which a party who is dissatisfied with the certificate or allocatur may apply to a Judge to review pursuant to Rule 66. Any doubt about this proposition is effectively dispelled by the terms of Rule 67 which provide that an application under Rule 66 shall be heard and determined upon the evidence before the taxing officer and no further evidence shall be received unless the Judge otherwise directs.

It is common ground that no objection was made under Rule 64 and that there was no application for the taxing officer to review the decision. Accordingly, at face value it would appear that Rule 66 simply has no operation. Mr Mildren sought to overcome this difficulty by reliance upon Order 69 Rule 1. That Rule is in the following terms:

"Non-compliance with any of these Rules, or with any rule of practice for the time being enforced, shall not render any proceeding void, unless the Court so directs, but such proceedings may be set aside, either wholly or in part, as irregular, or may be amended or otherwise dealt with, in such a manner, and upon such terms as the Court thinks fit."

This Rule, it is contended, gives the court a wide discretion to dispense with requirements of the rules and to relieve a party from the consequences of non-compliance. However, in my view, the problem which the applicant faces is not, in substance, a mere matter of non-compliance with the Rules. The problem is rather that the application is for an order which Rule 66 does not empower a Judge to make. That Rule only permits an application by a party who is dissatisfied with the certificate or allocatur of the taxing officer as to any item or part of an item which "has been objected to", and the order for review of the taxation must be "as to the same item or part of an item". The Judge may thereupon make such order as he or she thinks just but the Rule provides that the certificate or the allocatur of the taxing officer "shall be final and conclusive as to all matters which have not been objected to in the manner provided in this order". In short, the Rule does not empower a Judge to review a taxation of costs in respect of items to which objection has not previously been taken. The effect is rather to permit a party to apply for a judicial review of the review already undertaken by the taxing officer under Rule 65. The effect of acceding to Mr Mildren's submission would be to transliterate this power into one entitling the judge to consider the initial review as if he or she were the taxing officer rather than reviewing an antecedent decision by that officer. In Crowley v Willis - unreported SCA No. 108 of 1992, 31 January 1994, Gallop J took the view that Rule 66 is wide enough to permit a Judge to remit the matter back to a taxing officer for further review of the taxation in accordance with the reasons expressed by the judge in upholding the application. However, the existence of that power does not derogate from the essential character of the exercise to be undertaken by the judge under the rule. As Gallop J has held on two occasions, that function is to review the decision of the taxing officer in the light of contentions that he or she may have proceeded upon a wrong principle: Ongania v Trimbole unreported - 20 May 1989; Crowley v Willis. In my view Rule 66 does not authorise the making of the present application and Order 69 Rule 1 does not authorise an enlargement of the power in the manner suggested. This view is reinforced by the decision of Blackburn CJ in Commonwealth Savings Bank of Australia v Raso (1982) 43 ACTR 3.

Mr Mildren also submitted that the order could be made in the exercise of the court's inherent power. It is true that the court has inherent jurisdiction to set aside its own judgments. In Taylor v Taylor [1979] HCA 38; (1979) 143 CLR 1 at 16 Mason J held that the Family Court had an inherent jurisdiction to set aside orders made in the absence of a party who had been duly served with the necessary pleading. Kirby J has since suggested that whilst a court of limited jurisdiction may have an implied jurisdiction to so act, only courts of unlimited jurisdiction possess inherent jurisdiction: Logwon Pty Limited v Warringah Shire Council (1993) 33 NSWLR 13 at 16. However there can be no doubt that this court possesses an inherent jurisdiction and that it extends to granting the relief sought unless it can be demonstrated that jurisdiction to do so has been displaced by statute. No doubt such displacement might arise by implication including, in appropriate circumstances by the application of the expressum facit cessare tacitum principle, but in my view neither the terms of the Supreme Court Act nor the Rules to which I have referred give rise to such an implication. Indeed in Commonwealth Savings Bank of Australia v Raso, Blackburn CJ noted that rules of court are an expression of the court's jurisdiction, not sources of it. In that case he recognised that there was power to set aside the certificate of taxation if it had proceeded upon an incorrect principle. In the present case that is not suggested. The applicant rather seeks to invoke the court's inherent power to set aside what is effectively an order of the court which was made without the applicant having heard. I have no doubt that there is power to do so. As Lord Atkin said in Evens v Bartlam [1987] UKPC 2; (1937) AC 473 at 480 "the principle obviously is that unless and until the court has pronounced the judgment upon the merits or by consent, it is to have the power to revoke the expression of its coercive power where that has only been obtained by a failure to follow any of the rules of procedure".

The real question is whether that power should be exercised as the applicant contends. In the present case the affidavit relied upon by the applicant reveals that notice of the taxation was received by the deponent on 16 May 1997 and that the taxation duly proceeded on 23 June 1997. Due to an oversight, that date had not been recorded in the deponent's diary and he had failed to arrange for his Canberra agents to prepare a notice of objection and had also failed to arrange for someone to appear at the taxation. In circumstances not revealed by the affidavit, the deponent on that day apparently realised that the taxation had proceeded or was proceeding in his absence and made a telephone call to the respondent's solicitors to offer an explanation and ask what had been the result of the taxation. Later that day the respondent's solicitor returned the phone call and advised the deponent that there had been no appearance on behalf of his client and that the bill of costs had been allowed in the sum of $15,596.86. The deponent thereupon told him that he would apply to have the order set aside and asked whether he would consent to the taxation order being vacated. The solicitor for the applicants undertook to obtain instructions and get back to him. The affidavit does not refer to any subsequent conversation between the solicitors but does annex a letter dated 11 July 1997 from the respondent's solicitors which refers to a representation said to have been made to their Canberra agent concerning vacation of the taxation order and indicates that any such application would be opposed.

One could readily understand that a busy practitioner may have inadvertently failed to record the date of the taxation in his diary and consequently failed to arrange for someone to attend on his behalf. However, it seems to me that the applicant's failure was rather more extensive than that. As Mr Refshauge points out, the applicant's solicitors had Canberra agents and it was their letter which had advised the deponent solicitors of the date of taxation. That letter also sought advice as to the position which was to be taken in relation to the bill of costs. There was no explanation as to why the Canberra agents did not remind the deponent of the imminence of the taxation or otherwise seek to protect the applicant's interests. More importantly, neither principal nor agent apparently prepared any Notice of Objection pursuant to Order 66 Rule 58. It appears that nothing was done between 16 May and 23 June 1997. Furthermore, whilst the deponent became aware on 23 June 1997 of the fact that the taxation had proceeded and of the quantum of the costs allowed, his affidavit was not sworn until 22 July 1997 and the Notice of Motion was not filed until 29 July 1997. The Certificate of Taxation was apparently filed on 30 June 1997 although it is dated 1 July 1997. Accordingly, even after the applicant's solicitors became aware of the problem they had a further week in which to lodge an objection pursuant to Rule 64 and if that time had proven insufficient could no doubt have contacted the taxing officer to ask that the certificate be delayed pending the filing of a formal objection. There is no suggestion that either course was followed. It should not be assumed that a party already in default may safely ignore remedies available under the rules.

On the other hand, it may have been thought to have been inappropriate to take any further action until the bill of costs had been reviewed and appropriate objections considered. This may have taken some time. There has been no suggestion that the applicant was itself guilty of any default and it is desirable that it have the opportunity of being heard on the taxation. Furthermore, there has been no suggestion that the respondent would suffer any prejudice other than by incurring additional costs if the application were granted.

In these circumstances I propose to order that the certificate of taxation be set aside and the matter remitted to the taxing officer for a fresh taxation. However, the present application was required only because of the applicant's default and the respondent's decision to oppose it was entirely reasonable. Indeed, there were strong grounds for doing so. The applicant should pay the costs of the motion and of the initial taxation.