Australian Coal & Shale Employees' Federation v Commonwealth [1953] HCA 25; (1953) 94 CLR 621 (8 May 1953)

HIGH COURT OF AUSTRALIA

AUSTRALIAN COAL AND SHALE EMPLOYEES' FEDERATION v. THE COMMONWEALTH [1953] HCA 25; (1953) 94 CLR 621

Practice

High Court of Australia
Kitto J.(1)

CATCHWORDS

Practice - Taxing officer - Bill of costs - Taxation - Certificate - Signed immediately after completion of taxation - Effect - Objections - Re-opening of taxation - Alteration - Application to High Court for order to review - Decisions involving discretionary judgments - Presumption in favour of correctness - Affirmation unless clearly wrong - High Court Rules, O. LIV., rr. 53, 54, 55, 67.

HEARING

Sydney, 1953, February 9, 10; May 8. 8:5:1953
REVIEW OF TAXATION.

DECISION

May 8.
The following written judgment was delivered by:-
KITTO J. The plaintiffs in this action apply by summons for a review of the March 1951. The Rules of Court which are applicable are those which were in force prior to 1st January 1953, and it is to them alone that I shall refer. (at p623)

2. The taxation took place on 29th and 30th July 1952. On the latter date, after the taxation had been completed, the taxing officer signed a certificate at the foot of the bill stating that he had taxed the bill and allowed it at the sum of 1,813 pounds 6s. 10d. The rules gave to a party dissatisfied with the disallowance of the whole or any part of any items of a bill a right to object to such disallowance and to apply to the taxing officer to review the taxation in respect of the same: O.LIV, r. 53. This right, however, was conferred subject to a time limit: the objection had to be delivered to the other party and carried in before the taxing officer before the signing of the certificate or allocatur or such earlier time as might be fixed by the taxing officer. In this case, the taxing officer signed his certificate on the very day on which he completed the taxation, and no objection had at that time been delivered or carried in. Later on the same day, however, the taxing officer purported to grant an application made to him by the plaintiffs' solicitor by telephone, for an extension of time for fourteen days in which to carry in objections. On 11th August 1952, the plaintiffs' objections were received by the taxing officer, under cover of a letter dated 8th August 1952, in which the plaintiffs' solicitor requested the taxing officer to consider the objections and furnish his decision thereon, with grounds and reasons, within one month. The taxing officer referred, in letters to the parties dated 11th August, to the question of receiving further evidence. He eventually fixed 27th August 1952 for the hearing of the objections, and the plaintiffs' solicitor informed him by letter that he did not desire to adduce any representations other than those made on taxation and those contained in the objections. (at p623)

3. The taxing officer, having considered the objections, gave his decision, with the grounds and reasons therefor, in a document signed by him on 23rd October 1952. This document included a certificate allowing the bill of costs at the sum of 1,270 pounds 12s. 6d. The explanation of the difference between this sum and the sum mentioned in the certificate which had been placed at the foot of the bill of costs on 30th July 1952 is that the taxing officer not only had considered and dealt with the objections made by the plaintiffs but also had reconsidered the whole of each item in respect of which the disallowance of a part had been objected to, and had in several instances increased the amount taxed off. (at p624)

4. On 11th November 1952, the plaintiffs took out the present summons for review of the taxation. On the hearing of the application the plaintiffs contended, inter alia, that the taxing officer exceeded his powers in adopting the course which I have just described, and contended that his function on consideration of the objections was confined to reconsidering and reviewing the taxation "upon such objections" and giving "his decision thereon". (at p624)

5. It must first be observed that the action of the taxing officer in signing his certificate of taxation on 30th July 1952 ended the time within which the plaintiffs might deliver and carry in objections: R. v. Kingston-upon-Hull District Registrar; Ex parte Norton (1944) 1 All ER 546 . The taxing officer had a general power under r. 67 to extend the time for any proceeding before him, but in my opinion this power did not enable him to grant the extension which he purported to grant on 30th July, because he had already signed his certificate. Upon so doing he became functus officio and no longer had power to modify his taxation upon consideration of objections. (Even if the rules had enabled him to grant the extension it would not have been proper to do so on an ex parte application: In re Barrett (1894) 20 VLR 11 .) (at p624)

6. But the signing of the certificate was irregular, because it was done so soon after the completion of the taxation that the plaintiffs' solicitor did not have the opportunity which the rules contemplate to deliver and carry in objections. The taxing officer, needless to say, acted in complete good faith, as he showed very clearly by agreeing later on the same day to the plaintiffs' request for further time for objections. He did not intend to deprive the plaintiffs of their right of objection, but that was the actual result of his signing the certificate when he did. In these circumstances the certificate could, and doubtless would, be set aside if an application for that purpose were made, so as to restore to the plaintiffs the right of which they had been inadvertently deprived: In re Furber (1898) 2 Ch 538, at pp 539, 540 ; Re Brougham (1926) SASR 423 ; Dowden v. Shire of Cranbourne (1933) VLR 255, at p 260 . But it is unnecessary to set it aside, because the action of the taxing officer in purporting to extend the time for objections and proceeding to consider them when eventually they were carried in, considered in the light of the fact that the defendants have all along acquiesced in that course, amounted in my opinion to a revocation of the taxing officer's certificate by consent of the parties; and I shall deal with the matter on that footing. (at p625)

7. What, then, is the power of a taxing officer who, not yet having given his certificate of taxation, is considering objections to his disallowance of portions of particular items? Clearly the rules governing objections do not provide for his considering anything but the objections. The words "upon such objections" in r. 54 are not surplusage; they plainly limit the scope of the duty which the rule creates. Indeed it has been pointed out that objections ought to be carefully framed, for it is to those and those alone that the taxing officer's answers are directed: Perry & Co. Ltd. v. T. Hessin & Co. (1913) 30 RPC 193, at p 199 . But apart altogether from the duty to reconsider the allowance or disallowance objected to, the taxing officer has power, in my opinion, to re-open his taxation in respect of any item in the bill at any time before he signs his certificate or allocatur. Until then he has not completed the taxation of the bill: Chitty's Archbold, 12th ed. (1866), vol. 1, p. 125, and he is therefore at liberty to change his decision upon any item as to which he thinks that he has made an error. I take the view, however, that when objections have been carried in a taxing officer ought not to alter his taxation adversely to the objecting party, unless he forms a clear opinion that the interests of justice so require. The possibility that unfortunate misconceptions may arise should be recognized as an important restraining consideration. (at p625)

8. But where, in respect of any item, the taxing officer does decide to tax off still more than the amount which is the subject of objection, he should appreciate that it is incumbent upon him to afford to the party adversely affected an opportunity to carry in objections to the new disallowance. (at p625)

9. This the taxing officer omitted to do in the present case. The effect of incorporating in the one document his certificate and the grounds and reasons for his decision on the objections was that his fresh disallowances could not be made the subject of objection and application for review. His decision to overrule objections to original disallowances gave rise to a right in the plaintiffs under r. 55 to apply to a justice for an order to review the taxation as to the item or part of an item to which the objections had related. But under the rule, the plaintiffs could not apply for an order for review in respect of a part of any item if the opportunity to object to the disallowance of that part had been inadvertently denied them by the immediate signing of the certificate. As Lord Esher M.R. said in Shrapnel v. Laing (1888) 20 QBD 334: "Upon such an application (i.e. for review) it is necessary that the person who seeks a review should shew that he has taken his objections to the taxation when before the master. The applicant is bound by those objections, and the only question for the Court is whether they are to be sustained or negatived. In all other respects the taxation must be taken to have been right" (1888) 20 QBD, at p 337 . See also Bates v. Gordon Hotels Ltd. (1913) 1 KB 631, at pp 636, 637 The authorities I have cited in reference to the certificate of 30th July 1952 show that in these circumstances there is jurisdiction in the court to set aside the certificate of 23rd October 1952; and I am prepared to make an order to that effect if an application for the purpose is made to me. The effect of making such an order would be that the present application would become incompetent, for the locus standi of the plaintiffs to maintain the application is that they are parties dissatisfied with a certificate of the taxing officer: r. 55. As things stand at the moment (and on the footing that the certificate of 30th July 1952 is out of the way), I can decide the objections now on the file, in so far as they have not already been acceded to by the taxing officer, but I cannot give any binding decision as to the additional disallowances, to which, for want of opportunity, no objections have yet been brought in. As, however, the whole matter has been fully argued before me, I think the course which is most in the interests of the parties is that I should express my views on all outstanding questions, and then adjourn the application to enable the plaintiffs to apply for an order setting aside the certificate of 23rd October 1952, to carry in such objections as they may be advised to the new disallowances, and to apply for a review, if necessary, in respect of those objections in addition to the objections already before me. I should expect, of course, that the parties would endeavour to shorten this procedure as much as possible by agreement. (at p626)

10. Argument was addressed to me on the general topic of the attitude which ought to be adopted, on an application such as the present, to decisions of the taxing officer on questions of quantum. No doubt there are to be found, in some of the cases on the subject, statements to the effect that the discretion of a taxing officer will not be interfered with by a judge unless the taxing officer has erred on a question of principle, and not at all on a mere question of quantum; see, for example, Alsop v. Lord Oxford [1833] EngR 606; (1833) 1 My & K 564 (39 ER 794) ; Re Catlin [1854] EngR 481; (1854) 18 Beav 508 (52 ER 200) ; In the Estate of Ogilvie (1910) P 243, at p 244 ; Coon v. Diamond Tread Co. (1938) Ltd. (1950) 2 All ER 385 . So, too, there are to be found in many of the cases decided upon the wider question as to the proper attitude of a court of appeal to any judgment given in exercise of a discretion, statements appearing to limit the function of the appellate court to correcting errors of principle. Yet in that wider area it is clear that such statements are not exhaustive. I shall not repeat the references I made in Lovell v. Lovell [1950] HCA 52; (1950) 81 CLR 513, at pp 532-534 to cases of the highest authority which appear to me to establish that the true principle limiting the manner in which appellate jurisdiction is exercised in respect of decisions involving discretionary judgment is that there is a strong presumption in favour of the correctness of the decision appealed from, and that that decision should therefore be affirmed unless the court of appeal is satisfied that it is clearly wrong. A degree of satisfaction sufficient to overcome the strength of the presumption may exist where there has been an error which consists in acting upon a wrong principle, or giving weight to extraneous or irrelevant matters, or failing to give weight or sufficient weight to relevant considerations, or making a mistake as to the facts. Again, the nature of the error may not be discoverable, but even so it is sufficient that the result is so unreasonable or plainly unjust that the appellate court may infer that there has been a failure properly to exercise the discretion which the law reposes in the court of first instance: House v. The King [1936] HCA 40; (1936) 55 CLR 499, at pp 504, 505 . So, too, in my opinion, the exercise of the jurisdiction to review a taxation of costs is subject to no narrower limitation than that which was stated by Bovill C.J. and Brett J. in Hill v. Peel (1870) LR 5 CP 172 : - "A very wide discretion must necessarily be left to the taxing officer, which must be exercised by him after a careful consideration of the particular circumstances of each case; and where, after properly considering the matter, the master has arrived at a decision, it lies upon those who impeach his decision to satisfy the Court that he is wrong. Where a principle is involved, the Court will always entertain the question, and, if necessary, give directions to the master; but, where it is a question of whether the master has exercised his discretion properly, or it is only a question as to the amount to be allowed, the Court is generally unwilling to interfere with the judgment of its officer, whose peculiar province it is to investigate and to judge of such matters, unless there are very strong grounds to shew that the officer is wrong in the judgment which he has formed" (1870) LR 5 CP, at pp 180, 181 . (at p628)

11. I take it to be true that the decision of the taxing officer as to quantum is generally speaking final, and that it must be a very exceptional case in which the Court will even listen to an application to review such a decision: In the Estate of Ogilvie (1910) P, at p 245 . But the authorities as a whole (not omitting to notice White v. Altrincham U.D.C. (1936) 2 KB 138 ), do not establish as an absolute proposition that a judge will never review a taxing officer's decision on a question of quantum only. Swinfen Eady L.J. said in Slingsby v. Attorney-General (1918) P 236, at p 239 , after quoting the passage from Ogilvie's Case (1910) P, at p 245 to which I have referred: "The decision of the taxing master is not absolutely final, even on a question of quantum"; and so it has been held several times in Victoria, where the view has been accepted for many years that a taxing officer's decision on quantum will be corrected if the judge concludes that "he has clearly made a mistake": In re Melbourne Parking Station Ltd. (1929) VLR 5, at p 89 ; House v. Life Insurance Co. of Australia Ltd. (1930) VLR 165 ; Dwyer v. National Trustees Executors & Agency Co. of Australasia Ltd. (No. 3) (1940) VLR 366 ; Carrazzo v. Weyman (1944) VLR 207 ; McCoughtry v. Schrick (1947) VLR 342 ; see also, Russo v. Russo (1953) VLR 57 . I respectfully adopt the summary of the law on this matter which was made by Jordan C.J., with the concurrence of Harvey C.J. in Eq. and Street J., in Schweppes' Ltd. v. Archer (1934) 34 SR (NSW) 178; 51 WN 71 . His Honour said: - "In appeals as to costs, the principles to be applied are these. The Court will always review a decision of a Taxing Officer where it is contended that he has proceeded upon a wrong principle, for the purpose of determining the principle which should be applied; and an error in principle may occur both in determining whether an item should be allowed and in determining how much should be allowed. Where no principle is involved, and the question is, whether the Taxing Officer has correctly exercised a discretion which he possesses and is purporting to exercise, the Court is reluctant to interfere. It has undoubted jurisdiction to review the Taxing Officer's decision even where an exercise of discretion only is involved, and will do so freely on a proper case, using its own knowledge of the circumstances: Western Australian Bank v. Royal Insurance Co. (1908) 7 CLR, at p 388 ; Clark, Tait & Co. v. Federal Commissioner of Taxation [1931] HCA 26; (1931) 47 CLR 142, at pp 145-146 , but it will in general interfere only where the discretion appears not to have been exercised at all, or to have been exercised in a manner which is manifestly wrong; and where the question is one of amount only, will do so only in an extreme case" (1934) 34 SR (NSW), at pp 183, 184; 51 WN, at p 73 . (at p629)

12. (His Honour then proceeded to consider the specific items objected to and having stated his opinion upon them made an order standing over the application generally.) (at p629)

ORDER

Order accordingly.