erty tie fe re Se- ne rae a . . s ' —< IQ _IN_THE FEDERAL COURT OF AUSTRALIA ) GENERAL DIVISION ) QLD PET 761 of 1984 ' BANKRUPTCY DISTRICT OF THE SOUTHERN ) - DISTRICT OF THE STATE OF QUEENSLAND ) RE: RAYMOND JOHN HUDSON EX PARTE: CITICORP AUSTRALIA LIMITED Applicant - RAYMOND JOHN HUDSON First Respondent SABSTERN PTY. LIMITED Second Respondent ERICA MAY HUDSON and CARINA OLIVE WICKHAM - Third Respondent TIM MAGUIRE and MICHAEL MAGUIRE Fourth Respondent JENNIFER ANNE SOLLY Fifth Respondent DATE OF HEARING: 22 April 1986 DATE JUDGMENT DELIVERED : 6 May 1986 COUNSED : - for the appellants Mr. W.d. Roberts instructed by Thynne & Macartney - for the respondent Mr. G. Martin instructed by Skinner and Smith gy. A. LYONS ASSOCIATE TO PINCUS J. 6 May 1986 ' — ee CATCHWORDS COSTS - two counsel or one - costs "of" a day -— whether omission of "and incidental to" makes a difference - whether only covers work done on the day mentioned. Pre emt a ee tae Nee ee Bankruptcy Act, 1966, s-167(8) Sete ot ond Jo Hudson - '% OS > Re: Ra Ex Parte: Citicorp Australia Limited & Ors QLD P761 of 1984 PINCUS J. BRISBANE 6 May 1986 " wy ae mw 6 IN THE FEDERAL COURT OF AUSTRALIA ) GENERAL DIVISION es -?) QLD PET 761 of 1984 " BANKRUPTCY DISTRICT OF THE SOUTHERN ) DISTRICT OF THE STATE OF QUEENSLAND ) ~ - or te RE: RAYMOND JOHN HUDSON EX PARTE: CITICORP AUSTRALIA LIMITED i Applicant "RAYMOND JOHN HUDSON oan First Respondent Pay? -... 1. SABSTERN PTY. LIMITED -y Second Respondent ERICA MAY HUDSON and CARINA OLIVE WICKHAM tae we . Third Respondent TIM MAGUIRE and MICHAEL MAGUIRE Fourth Respondent JENNIFER ANNE SOLLY Fifth Respondent MINUTES OF ORDER JUDGE MAKING ORDER: PINCUS J. DATE OF ORDER: 6 May 1986 WHERE, MADE: BRISBANE THE COURT ORDERS THAT: 1. The appeal be allowed. 2. The matter be remitted to the taxing officer for reconsideration in the light of these reasons. NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA ) GENERAL DIVISION are ) | QLD PET 761 of 1984 a ane - BANKRUPTCY DISTRICT. OF THE SOUTHERN ) : DISTRICT OF THE STATE OF QUEENSLAND ) v , eo eo net Titolo Te ' rr "RE: RAYMOND JOHN HUDSON EX PARTE: CITICORP AUSTRALIA LIMITED a a" Applicant 22% : ".s" RAYMOND JOHN HUDSON ihe? . First Respondent to vba SABSTERN PTY. LIMITED Second Respondent ERICA MAY HUDSON and CARINA OLIVE WICKHAM ze te | tet Third Respondent TIM MAGUIRE and MICHAEL MAGUIRE Fourth Respondent ; JENNIFER ANNE SOLLY ! : Fifth Respondent PINCUS J. , 6 May 1986 REASONS FOR JUDGMENT This is an appeal under s.167(8) of the Bankruptcy Act against a decision of a taxing officer in respect of a bill of costs. The taxation in question related to an order of Spender J. in relation to a matter which had been hefore his Honour on 13 and 21 May 1985 and on 14 June. Orders were made 7 UND fete F "7 a, ' "on 4 June that the costs 'of the appellants "of the 13 and 21 May " * 1985 be paid by the 'applicant Citicorp Australia Limited" and that the costs "of today" be paid by the fifth respondent ...". aot <t 7F ae 8 "No question arises with respect to the costs of the 13th and 21st days of May but the appellants make two complaints about the taxation in respect of the costs of 14 June 1985. wos . he Firstly, sey, "say that they were not allowed the costs of two counsel. "The _amount involved, so far as they were concerned, 'was a "sum ¢ of about $15,000 and, except in one respect, it could not be suggested that the appellants' case involved any complexity. The possible exception was that during the course of proceedings "pefore 'Spender Z. it was suggested by the present respondent that some invalidity, of an unspecified kind, might have attached to a transaction in which the appellants engaged. Counsel for the appellants before me urged that, because the nature of the invalidity was unspecified, it might have been of any degree of complexity and therefore the attendance of senior counsel was reasonably required. That argument seems to me to have only a theoretical weight. Counsel relied upon the criterion set out in Kroehn v. Kroehn 15 C.L.R. 137 at 141: "Nould a prudent person not compelled by poverty come into Court in such a case without two counsel?" a After setting out that test, Griffith C.J. said: "In answering that question regard must be had, inter alia, to the importance of the case, the probable duration of the trial, the probability of conflict of evidence entailing the necessity of th argh careful cross-examination, and the general practice : ras to employing two counsel. ° Each" " of" "the, "specific criteria mentioned, in my view, tells PEER 13 ? an "against 'the " appeliante., "The case was, so far as their on : involvement was 'concerned, 'not particularly important; their * position was that of "holders of a fund to which they made no > claim except for costs and commission. With respect to the last Point mentioned, the _general 'practice as to employing two counsel, it would seem to 'ne quite unusual to brief a Queen's "counsel "ina matter of the kind under consideration. e-s = : neget ise. are ori . a wee ahs oe Pa ef 40 oe me rade ove ota die eben eae cmt op yd cnnargey vo! Steesby ot Bee Same " 'The decision of the taxing officer in question was one of a discretionary character, but it is not necessary to rely - ' , upon that factor to uphold the taxing officer's decision. In my view, it was correct. The second aspect of the appeal poses a question of a more difficult kind. * The respondent argued that the costs "of" a particular date can only include amounts paid for work done on that date. By acceptance of this submission, the taxing officer excluded most of the items in the bill; for example, the costs of drawing the brief were not allowed. Counsel for the respondent, Mr. G. Martin, relied on Burgoine v. Taylor (1878) 9 Ch.D. 1 as to the meaning of costs of the day. There, a party was not represented at a hearing because of a mistake on the part of a solicitor. Judgment was entered in default of appearance but, on appeal, the Court of Appeal set the judgment aside "on - 'the terms of the party in default paying the or Rg Me 'costs 'of the (day which 'Anelude al costs thrown away by reason of : "there, the expression "just quoted is plainly capable of :Fineluding costs incurred other than during the day in question. " What ig" "not sO clear, however, is whether the Court of Appeal meant that the 'expression "costs of the day" without any addition & . "includes "costs "Associated with the hearing on the day in -1 SAY nes question. * Did the' Court add. the words "which include all costs SPs ee et RT tke i otra y itd? " » % ~ thrown away by reason of "the "trial becoming abortive" out of an abundance of caution? ar MY ed 'an baie ey Srcptrhs us 7th Sov "9% (1898) 24 v. t. R. 456. There, an order was made for "the costs of the day", . on an adjournment being granted. Hodges J. was asked to determine whether the costs included counsels' fees on brief. He said he aia not 'think those fees were paid to counsel "in respect of that day, and cannot be regarded as part of the costs of the day" {p. 459). He was also asked to consider whether costs for resealing a& subpoena should be allowed and said they should not, remarking: BD _ "The costs of the day do not include every useless expenditure that a party may choose to indulge in. The costs occasioned by the case being postponed are the costs a person will necessarily incur by reason of the postponement, not any sum that such person pleases out of his munificence to pay away eee The costs of the subpoena were disallowed because they were not necessarily incurred, but the remarks of Hodges J. do not support the view that he thought an order for "costs of the day" was Mr. Martin also referred me to Mackellar v. Mackeller -. confined to costs in respect of activities actually engaged in on the day in question." Costs. incurred before or after that day we mE veri ae i mtght have' " peen "in respect oft that aay or "by reason of" the > tee wee 'adjournment. 'It does not appear, then, that these cases are decisive of the point in issue. | The latter of them tends rather in favour wher, " of the appellants. Sought er et vr 1 os rae rea "Had Spender _ Te 'used the "expression "of and incidental , "to", there sould hardy" have "been 'any room for argument. The question whether "and incidental to" makes a difference was discussed by Megarry V.C., sitting with assessors, in In_ re aad " Gibson' 3 "Settlement (1981) 1 Ch. 179. There, an order was made -for the taxation of costs "of and incidental to" certain applications. At p.184 the judge said: "If the order for costs is not for costs simpliciter, but for the costs 'of and incidental to' the proceedings (and this is the language of the order in the present case), the words 'incidental to' extend rather than reduce the ambit of the order. It is. true that in In re Fahy's Will Trusts (£19623 1 W.L.R. 17 it was held at first instance that in an order for the taxation ona common fund basis of the costs 'of and incidental to the negotiations leading up to this order,' the words 'and incidental to' confined the costs to those which were consequent upon the negotiations, and excluded those incurred before negotiations commenced. In that case, however, no cases were cited in argument, and the judge was told that there was no authority on the meaning of the words 'and incidental to,' and what they added to 'costs' in an order for costs. I find great difficulty in seeing on what basis it can be said that the addition of these words drives eut the right to antecedent costs which the Pecheries and Frankenburg cases established. The words seem to me to be words of extension rather than words of restriction. The litigant is to have the costs 'of' the proceedings and also the costs fugue - incidental - "to! " the proceedings. This phrase cannot mean that the costs 'of' the proceedings are to ,be included only it they are also 'incidental "ap Will 'trusts, "Plowman z said there was no authority as to what 1 the words "and incidental to" add to the words "costs of". That _ Seems still to be so with the exceptions that Megarry V.C. : suggests 'that '"inetdental _to" adds something, and that the point ;was briefly "considered by Cussen A.C.7. in Myer v. Myer (1932) are rae - .V.0.R. 322 at 327... & wey weeny No doubt it is difficult for those to whom the practical -task of taxing costs is. entrusted to have to apply refined tests as to the degree of connection necessary between the work done "and the hearing ta which the costs order relates. IT do not disagree with the view of Megarry V.C. that, if anything, "and incidental to" ts additive but I doubt whether the addition of "those words often makes much difference. If costs "of" a proceeding or hearing are allowed, the taxing officer must — consider, with respect to each item in the bill, whether it is ee ee ee reasonably connected with that proceeding or hearing; he should disallow it _if-no—sufficient—connection appears. Preparations for the proceeding or hearing are likely to be sufficiently connected, as is taking out the order resulting from the hearing. Reading the order of Spender J. as a whole, in my view what his Honour intended was that the costs of the hearing, so far as they concerned the appellants, should be paid by Citicorp Australia Limited as to the first two days and by the respondent wa af s Las to the third day. in some circumstances costs "of" a day may 4 7: : have a * nore "Limited scope." His Honour did not intend, here, that 3 a _ Pe | 1 FRIES : ad Se work | not actually done on the 'three days nominated (e.g. ets atte ¥ ht iS delivering = brief 'to. "counsel) should necessarily be disallowed. He left "to the taxing officer the task of dissecting the work oe "claimed for in the bills to see if it related to the first two on days or the third day or" 'to neither. I accept the submission of * Mr. Roberts, for the appellants, that the taxing officer fell sae es 'into 'error "insofar as he acted on the principle that only work rd I . : actually' 'performed on 14 June 1985 could be included in the bill- ~ fr, he Teese, sands tye "ere bank HE naa DB cimieyhal 8 In summary: My tt ei pret ag tere il Ree L. I reject the contention of the "appellant that the taxing . 'officer was obliged to allow two counsel; the case was a fairly small one and there was no reason to expect it to be unduly complex. 2. The taxing officer 'should, however, have allowed the cost- c - . 2 of work done on behalf of the appellant reasonably related to the hearing on 14 June 1985. The appeal will therefore he allowed and the matter remitted to the taxing officer for reconsideration with respect to the second point just mentioned. + ey * ote ye eon Oe ean rhea of rn Mad AEE Le See FS, se Bees t certify that this and the "7 preceding i pages are a truz copy of the reasons for a pe 7 toe we gtep ea te va tr. alt oo - "tebe ben gba EY SMe aca sera3 Wes Peete Bo . . 00 on, 76 tor . wo Tm Lt . - . ve ce _ : L tzTo