Pipes Holdings Pty Ltd & Another v Alan Towill & Another [1998] ACTSC 97 (18 September 1998)

Last Updated: 13 October 1999

Pipes Holdings Pty Ltd & Another v Alan Towill & Another

[1998] SCACT 97 ( 18 September 1998)

CATCHWORDS

ADMINISTRATIVE LAW - review under Administrative Decisions (Judicial Review) Act - whether error of law in decisions of Registrar not to tax solicitor and client bill of costs and to make orders for costs of applications for extensions of time under Part XV of Legal Practitioners Act.

COSTS - solicitor and client - statutory regime for taxation by Registrar - ouster of Court's inherent jurisdiction - limits of power of review under Administrative Decisions (Judicial Review) Act.

Administrative Decisions (Judicial Review) Act 1989

Legal Practitioners Act 1970, Part XV, s180, s181

Interpretation Act 1967, s11(a) and s13

Supreme Court Act 1933, s47(1)

Federal Proceedings (Costs) Act 1981, (Cth)

Baalman v Dare Reed (Solicitors) (9 March 1984, Gallop J, Supreme Court of the Australian Capital Territory, unreported) referred

Scurr v Brisbane City Council [1973] HCA 39; (1973) 133 CLR 242 referred

No. SC 70 of 1998

Coram: Miles CJ

Supreme Court of the ACT

Date: 18 September 1998

IN THE SUPREME COURT OF THE )

) No. SC 70 of 1998

AUSTRALIAN CAPITAL TERRITORY )

BETWEEN: PIPES HOLDINGS PTY LTD

ACN 067 217 494

First Applicant

AND: HOWES POWRIE ROWE,

SOLICITORS

Second Applicants

AND: ALAN TOWILL,

REGISTRAR, SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

First Respondent

AND: MACPHILLAMY DONALD,

BARRISTERS AND SOLICITORS

Second Respondents

ORDER

Judge Making Order: Miles CJ

Where Made: Canberra

Date of Order: 18 September 1998

THE COURT ORDERS THAT:

1. The Registrar's decisions made on 9 January 1998 be set aside and the proceedings be remitted to the Registrar with the direction to proceed according to law and in accordance with these reasons.

1. This is an application made under the Administrative Decisions (Judicial Review) Act 1989 (the ADJR Act) for an order of review in respect of decisions made by the Registrar on 9 January 1998. The decisions of the Registrar were expressed in the form of orders in a document which may be reproduced as follows:

"IN THE SUPREME COURT OF THE )

) No. SC 808 of 1997

AUSTRALIAN CAPITAL TERRITORY )

PIPES HOLDINGS PTY LIMITED V GBT CORPORATION PTY LIMITED:

TAXATION OF SOLICITORS COSTS

REASONS FOR DECISION

Coram : Registrar A. Towill

Date of Order : 9 January 1998

Where Made: : Canberra ACT

IT IS ORDERED THAT:

1. There be no taxing of the bill of costs lodged with the Court outside the time period specified in paragraph 180(1)(a) of the Legal Practitioners Act.

1. HPR pay MD's costs of and incidental to the two applications for an extension of time with leave to HPR and MD to make any submissions on the issue of costs."

2. Part XV of the Legal Practitioners Act 1970 (the Legal Practitioners Act) introduced a statutory regime for the supervision of costs charged by a solicitor to a client. That supervision is carried out by the Registrar of the Court.

3. The application for review calls for consideration and interpretation of s180 and s181 of the Legal Practitioners Act which are in the following terms:

"180. Notice for taxation

(1) A person to whom a statement is delivered under this Part may -

(a) within 1 month after delivery of the statement; or

(b) within such further time as the Registrar allows,

give notice to the Registrar, to the solicitor by whom the statement was delivered and, if the person is not the solicitor's client, to the client that the person giving notice wishes to have the amount payable by him or her determined by taxation.

(1) Notwithstanding subsection (1), a person is not entitled to give notice under that subsection after judgment has been entered in proceedings for the recovery of the costs of disbursements, or any part of the costs or disbursements, specified in a statement delivered under this Part.

(2) Subsection (1) applies whether or not the costs or disbursements to which a statement relates have been paid.

(3) The Registrar shall not allow further time for the giving of notice under subsection (1) unless the Registrar is satisfied that it was not practicable for notice to be given within 1 month after the delivery of the statement.

181. Form of notice etc.

(1) A notice under subsection 180(1) shall be in writing and shall be accompanied by the statement to be taxed and a copy of the statement.

(2) Where notice is given to the Registrar under subsection 180(1), the Registrar shall fix a time and place for the taxation and shall give notice of the time and place so fixed to the person requesting the taxation and to the solicitor concerned."

4. As Gallop J pointed out in Baalman v Dare Reed (Solicitors) (9 March 1984, Supreme Court of the Australian Capital Territory, unreported), the Registrar has no authority in relation to the taxation of costs as between solicitor and client except in pursuance of the powers conferred upon the Registrar by Part XV of the Legal Practitioners Act. His Honour summarised the conditions necessary for the exercise of those powers:

"The circumstances giving rise to that jurisdiction are that the solicitor has delivered to the client an itemised statement of the costs and disbursements claimed by the solicitor, the client has given notice to the Registrar and to the solicitor that he wishes to have the amount payable by him determined by taxation, the Registrar has fixed a time and place for the taxation and has given notice thereof to the client requesting the taxation and to the solicitor concerned."

5. This statutory regime placing the power in the Registrar appears to oust at least part of the inherent jurisdiction of the Court as it previously existed in relation to the charging of costs as between solicitor and client. Whilst the Court is given a statutory power of review of the decision of the Registrar as to any item in a statement of costs and disbursements (s186) the Court has no power under any provision of the Legal Practitioners Act to control the Registrar in the exercise of power under Part XV until the Registrar makes such a decision. No such decision has been made in the present case.

6. Whether the Court has a residual and general power to make orders for the issue of any of the prerogative writs directed towards the control of the Registrar in the exercise or purported exercise of power with regard to the taxation of solicitor and client costs does not need to be decided. The present application is made pursuant to s5(1) of the ADJR Act.

7. In order to understand the nature of the application and of the Registrar's decision of which judicial review is sought, it is necessary to say something of the factual background. The first applicant (Pipes) engaged the second respondents, a firm of solicitors (MD), to act for it in proceedings in the Tenancy Tribunal and in some related proceedings in this Court. On 10 April 1997 MD sent to Pipes a statement of their costs and disbursements relating to those proceedings. That statement is not in evidence. Pipes then engaged another firm of solicitors, the second applicants (HPR), to act on its behalf in relation to the costs and disbursements which MD sought to claim.

8. On 23 May 1997 HPR applied on behalf of Pipes to the Registrar for an extension of time in which to exercise the right to request MD to give to Pipes an itemised statement of the costs and disbursements claimed by MD. On 3 June 1997 the Registrar, exercising power under s179(1A) extended the time, and on 10 June 1997 HPR made the request on Pipes' behalf to MD to give to Pipes an itemised statement of the costs and disbursements.

9. On 18 September 1997 (it may have been 11 September, but nothing turns on that) MD gave HPR the itemised statement of costs and disbursements requested.

10. On 7 October 1997 HPR wrote to the Registrar in the following terms:

"PIPES HOLDINGS PTY LIMITED -v- GBT CORPORATION PTY LIMITED - TAXATON OF SOLICITOR/CLIENT COSTS

I wish to advise that on 18 September 1997 we received a letter from Macphillamy Donald enclosing bills of cost in taxable form. I wish to advise further that I am instructed to have the amount payable by my clients determined by taxation. I have advised Messrs Macphillamy Donald of this and no doubt they will lodge the bills of cost for taxation in due course.

I look forward to notification of the date set down for taxation, in due course."

11. The letter of 7 October 1997 was not accompanied by the itemised statement given by MD to HPR on 18 September 1997 nor by any copy of that statement.

12. The itemised statement, or a copy of it (it is not clear which) was subsequently delivered to the Registrar. According to the Registrar's reasons, published at the same time as his decisions on 9 January 1998, the itemised statement was "lodged with the Court" sometime in November, that is to say more than a month after 18 September.

13. A dispute arose about whether the Registrar should fix a time and place for the taxation of the itemised statement. Without resiling from their position that the Registrar was bound so to proceed, HPR applied to the Registrar for further time in which to give notice under s180(1) that they wished to have the amount payable determined by taxation.

14. Having entertained representations by letter from both MD and HPR, the Registrar came to the view, first, that because of the absence of the accompanying statement and copy of that statement to the letter of 7 October 1997, the letter did not constitute notice within s180(1), and further, that he was not satisfied under s180(4) that it was not practicable for notice to be given within one month after the delivery of the statement.

15. The Registrar delivered written reasons. They conclude with the following paragraphs:

"In these circumstances I am not satisfied in this case that I have a discretion to extend time for the giving of notice outside the terms of sub-section 180(4) of the LPA. I therefore decline to tax the bill of costs which was lodged with the Court outside the time period specified in paragraph 180(1)(a) of the LPA.

I propose to order that HPR pay MD's costs of and incidental to the applications both in respect of the application for the extension of time pursuant to paragraph 179(1A)(c) of the LPA and in respect of the application for the extension of time pursuant to paragraph 180(1)(b) of the LPA. ......"

16. The decisions so expressed were more formally refined into the terms appearing earlier in these reasons.

17. Under s5(1) of the ADJR Act, a person aggrieved by a decision of an administrative character made under an enactment (other than a decision specified in Schedule 1) may apply to the Supreme Court for an order for review of the decision on any one of a number of specified grounds, including ground (f), that is that the decision involved an error of law whether or not the error appears in the record of the decision.

18. It is common ground between the parties to the application that the decision of the Registrar that "there be no taxing of the bill of costs", although couched in the terms of an order and published as if part of the record of the Court, was in truth a decision of an administrative character pursuant to an enactment within s3 of the ADJR Act. The enactment was of course the Legal Practitioners Act.

19. Having regard to the provisions of Part XV of the Legal Practitioners Act, I think that it is probably correct that the Registrar's decisions were of an administrative character within the meaning of s5(1) of the ADJR Act, but the issue not having been the subject of contest, this case should not be regarded as having any value as a precedent on that point of law.

20. Counsel for the applicants submits that the Registrar fell into error of law in his interpretation of the application of s180 and s181 of the Act. The first alleged error was to the effect that a notice purporting to be given under s180(1), but which is not accompanied by the statement to be taxed and a copy of that statement as required by s181(1) is not a valid notice for the purposes of s180(1) or for the purposes of a taxation of solicitor and client costs under Part XV of the Act. Thus, so it was submitted, the letter of 7 October 1997 being a valid notice under s180(1), the Registrar's decision that "there be no taxing of the bill of costs" was based upon and vitiated by that error of law.

21. The second alleged error of law relied upon related to the Registrar's interpretation of s180(4) of the Act and the Registrar's ruling that he was not satisfied that it was not practicable for notice to be given within one month after the delivery of the statement.

22. Mr. Corr of counsel submitted that a purposive approach to Part XV of the Legal Practitioners Act should be adopted, as mandated, or at least encouraged, by s11(a) and s13 of the Interpretation Act 1967. On such an approach Part XV is to be seen as an exercise in consumer protection in which it was not intended by the legislature that procedural requirements should reduce or negate the interests of the clients of solicitors, and the interests of the public, in ensuring that solicitors' charges are kept to a reasonable level. Thus, according to the submission, s181(1) should not be construed so as to mean that the statement and copy of the statement required to accompany the notice should be taken to be part of the notice. Alternatively, so it was submitted, s180 and s181 should not be read together literally so as to require that a notice not so accompanied is invalid for the purposes of the statutory scheme of taxation. It was submitted that if so read the legislation would lead to results which were both absurd and oppressive. For instance, s181(1) would require all three documents (the notice, the original statement and a copy of the statement) to be delivered to the Registrar, to the solicitor by whom the statement was delivered, and if the person making the request is not the solicitor's client, to the client. Apart from the physical impossibility of giving the single original statement to more than one person, the requirement to give the original statement back to the solicitor who delivered it in the first place is an exercise in futility. Surely the legislature did not intend such clumsiness.

23. Mr. Erskine for the respondents submitted that the potential harshness of a literal reading of s180 and s181 was intended to be avoided by the conferring of power on the Registrar to allow further time under s180(1). However, in my view, it is significant that that power is restricted by s180(4), which prohibits the Registrar from allowing further time unless satisfied that it was not practicable for notice to be given within one month after delivery of the statement. That single ground is a very narrow ground for the granting of further time to give notice under s180(1), and does not go very far towards relieving the harshness of a literal reading of s180 and s181.

24. I think that it is of significance that the Legal Practitioners Act does not appear to be directed towards prescribing a sanction for failure to comply with s181(1). The succeeding subsection, s181(2), does not follow logically from s181(1). In particular, s181(2) is not directed towards compliance or non-compliance with s181(1), but prescribes a certain consequence to follow the giving of a notice under s180(1), namely the conferring of a power and, probably the casting of a duty, on the Registrar to fix a time and date for the taxation. Indeed, in the present case the Registrar appeared to be of the view that his power to tax the statement of costs was dependent upon fixing a time and date in accordance with s181(2). His view in this respect was not challenged. I think that it was correct.

25. However, I accept the submission on behalf of the applicants that the requirement in s181(1) that a notice under s180(1) be accompanied by the statement to be taxed and a copy of that statement is directory in nature and not mandatory. To give the words the mandatory effect contended for would give absurd and oppressive results as already indicated. Furthermore, the reference to "the statement" is ambiguous in that, in the context, it is not clear whether it means the very same statement that the solicitor delivered or a copy of that statement. The statutory scheme of taxation of costs by the Registrar clearly works better if the directory interpretation is made, since substantial compliance will not invalidate a failure to comply where no one is prejudiced by that failure: Scurr v Brisbane City Council [1973] HCA 39; (1973) 133 CLR 242 per Steven J at 256.

26. It follows that the notice given to the Registrar in the form of the letter of 7 October 1997 should not have been regarded as invalid. Further, I think that the directory approach to the legislation required, or at least entitled, the Registrar to regard the lodging of the statement in November 1997 as sufficient compliance with s181(1) to require a positive decision to fix a time and date for the taxation.

27. I am conscious that the statutory scheme for supervision of solicitor and client costs has been given by the legislature to the Registrar and that it is no longer the function of the Court to exercise supervision except as provided in the Legal Practitioners Act and the ADJR Act, but I do make the observation that the powers of the Registrar under Part XV of the Legal Practitioners Act should not be exercised in such a way as to make it appear that they are exercised in the jurisdiction of the Court. For that reason, unless and until the powers of the Court are invoked, documents lodged with the Registrar for the purpose of taxation of costs as between solicitor and client should not be entitled, or otherwise appear as if documents in a proceeding in the Court. In particular, any decision made by the Registrar in exercising power under Part XV should not be couched in the terms of an order.

The Registrar's order for costs

28. The respondents did not seek to support the Registrar's order that HPR pay MD's costs in respect of the application for further time under s179(1A) and in respect of the separate application for further time under s180(1)(b). Clearly the Registrar had no power to make those orders, or even to make a decision in respect of the costs of those applications. Enough has been said already about the nature of the Registrar's powers under Part XV and the distinction between those powers and the powers of the Registrar when exercising the jurisdiction of the Court. In the latter situation, the Registrar has the general power to award costs which are conferred on the Court under s47(1) of the Supreme Court Act 1933. Under Part XV, the costs of taxation of a solicitor and client bill are dealt with by s184. That section requires the Registrar to assess such costs "forthwith after the completion of the taxation". Whether applications made and work done prior to the taxation are "costs of the taxation" will depend on the circumstances, but there is no power to assess them before the completion of the taxation. Further, under s185 the Registrar must issue a certificate of taxation upon completion of taxation. There is no power to issue any certificate before the completion of taxation.

29. The Registrar's decisions will therefore be set aside. The consequence will be that the matter will be remitted to the Registrar for further consideration according to law and in accordance with these reasons.

30. I will hear the parties on the question of costs of this application to the Court and on the application of the Federal Proceedings (Costs) Act 1981 (Cth). It is unfortunate that what started as a proceeding in the Tenancy Tribunal has had to proceed this far, when the Tenancy Tribunal was established in order to keep the resolution of disputes over tenancies cheap and speedy. However, the Court must adjudicate on the rights and liabilities of parties to proceedings before it and the incurring of legal costs and allocation of liability for costs in such proceedings are inevitable.

I certify that this and the nine (9) preceding pages are a true copy of the Reasons for Judgment herein of his Honour, the Chief Justice.

Associate:

Date: 18 September 1998

Counsel for the applicants: G.C. Corr

Instructing solicitors: Howes Powrie Rowe

Counsel for the first respondent: D. Kettle

Instructing solicitors: ACT Government Solicitor

Counsel for the second respondent: C.M. Erskine

Instructing solicitors: Macphillamy Donald

Date of hearing: 3 September 1998

Date of judgment: 18 September 1998