i Pot i) * "JUDGMENT no. 3Q/Bi. CATCHWORDS Practice ~- taxation of solicitor~client costs - whether Federal Court has power to order taxing officer to tax costs rather than Taxing Master of Supreme Court - exercise of discretion. Federal Court of Australia Act 1976 s.23 Federal Court Rules 0.62 R.8 KEITH HERCULES and SONS v. ROGER CHARLES STEEDMAN and MARGARET OLIVE STEEDMAN and GOLDEN FLEECE PETROLEUM LTD No. VG170 of 1987 Sweeney, Lockhart & Sheppard JJ. 18 December, 1987 Melbourne IN THE FEDERAL COURT OF AUSTRALIA ) ) VICTORIA DISTRICT REGISTRY ) No. VG 170 of 1987 ) ) GENERAL DIVISION ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: KEITH HERCULES & SONS Appellant AND ROGER CHARLES STEEDMAN, MARGARET OLIVE STEEDMAN AND GOLDEN FLEECE PETROLEUM LTD. Respondents THE COURT: Sweeney, Lockhart & Sheppard JJ. PLACE DATE Melbourne 18 December, 87 MINUTES OF ORDER THE COURT ORDERS THAT: the appeal be dismissed with costs. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA ) ) VICTORIA DISTRICT REGISTRY ) No. VG 170 of 1987 ) ) GENERAL DIVISION ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: KEITH HERCULES & SONS Appellant AND : ROGER CHARLES STEEDMAN, MARGARET OLIVE STEEDMAN AND GOLDEN FLEECE PETROLEUM LTD. Respondents THE COURT: Sweeney, Lockhart & Sheppard JJ. PLACE Melbourne DATE 18 December, 1987 REASONS FOR JUDGMENT Sweeney J. This appeal arises out of an application made by R.C. and M.O. Steedman ("the Steedmans") in matter vVG69 of 1983 against Golden Fleece Petroleum Limited ("Golden Fleece") claiming damages for breaches of s.52 of the Trade Practices Act 1974, for breach of warranty and for negligent misrepresentation. The claim under the Act failed but the Steedmans succeeded in establishing breach of warranty. On 12 March 1986 Woodward J. entered judgment for Iw e the Steedmans in the sum of $40,050.57, in respect of damages and interest, and ordered Golden Fleece to pay their taxed costs of the proceedings, including any reserved costs. His Honour also ordered that the sum of $15,000, which had been paid into court by Golden Fleece be paid out to the Steedmans' solicitors, who were at that time, as they had been throughout the proceedings, Keith Hercules & Sons ("Hercules"), ain part satisfaction of the judgment. Golden Fleece later paid to Hercules, as solicitors for the Steedmans, the balance of the judgment, $25,050.57. Portion of this sum was, with the authority of the Steedmans, paid by Hercules to counsel and others retained to prepare their case in discharge of their fees and expenses. The balance remaining was then placed in the trust account of Hercules. Golden Pleece was at alli times willing to pay the costs of the Steedmans as between party and party and to proceed to taxation before the taxing officer of the Court, if the amount could not be agreed. However, differences between Hercules and the Steedmans led to assertions by Hercules that they were entitled to a lien over the balance of the moneys which they held and that they would pay nothing to the Steedmans until their costs and disbursements, firstly as between party and party, and secondly as between solicitor and client, had been taxed. Only then would they pay any balance to the Steedmans. It is not necessary for us to determine whether any such lien existed. The Steedmans retained Slater and Gordon as their solicitors er and on behalf of the Steedmans they entered into an arrangement with Hercules that the balance of the moneys held by Hercules be paid into a term deposit account. This was done and the account now stands at about $32,000. On 24 July 1986 Slater and Gordon received two separate bills of costs from Hercules, one in respect of party and party and the other in respect of solicitor and client costs. Hercules warned that, if the Steedmans agreed with Golden Fleece upon the amount of the party and party costs without reference to Hercules or without their consent, they would not release any moneys to the Steedmans until their bills delivered to them had been paid in full. By a notice of motion dated 19 March 1987 the Steedmans sought orders "(a) that a bill of costs dated 23 July 1986 as between solicitor and client delivered by the appellants be taxed pursuant to the provisions of Order 62 Rule 8 of this Court; (b) that a bill of costs dated 23 July 1986 as between party and party delivered to the solicitors for Golden Fleece Petroleum Limited ("Golden Fleece") be taxed; {c) that the taxation of the solicitor and client bill and the party and party bill take place at the same time and before the same taxing officer; (ad) such other orders or directions as to the Court may deem meet; and (e) that the costs of the application be costs in the taxation". Each of Golden Fleece and Hercules became respondents to this motion and both appeared on the hearing of the motion before e Woodward J. as they did on the appeal later made to the Full Court. The course which the proceedings took was summarised by his Honour as follows: "In this matter I have been asked to determine whether the taxation of solicitor-client costs, following a successful action in this Court should be carried out by the District Registrar, as taxing officer of this Court, or the Taxing Master of the Supreme Court of Victoria. Counsel for the applicants (the Steedmans) urges that the arguments of convenience strongly favour the District Registrar of this Court because 1t will fall to him to tax the party-party costs. He also argues that it is appropriate for the Federal Court, as a superior court of record, to retain full control over its procedures and the practitioners who appear before it - so far as their conduct of Federal Court actions is concerned. He does not dispute that, in the absence of a special order of this Court, the solicitor-client taxation would be governed by the Victorian Supreme Court Act and Rules. Counsel for the respondent firm of solicitors formally submitted that the Court had no power to make the order sought, but he conceded that, in the light of the decision of Dixon J. (as he then was) in Woolf v Snipe (1933) 48 CLR 677, this argument was unlikely to succeed. In my view this concession was properly made. Dixon J. held in that case that, 'The superior Courts of law and equity possess a jurisdiction to ascertain, by taxation ... the costs, charges and disbursements claimed by an attorney or solicitor from his client, and that jurisdiction is derived from three sources and falls under three corresponding heads. First, a jurisdiction exists founded upon the relation to the Court of attorneys and solicitors considered as its officers. This jurisdiction, commonly called the general jurisdiction of the Court, enables it to regulate the charges made for work done by Ic er attorneys and solicitors of the Court in that capacity, and to prevent exorbitant demands. Second, when a contested claim for costs comes before the Court it had jurisdiction to determine by taxation or analogous proceeding the amount of costs. Third, there is a statutory jurisdiction ...'. (His Honour then described the statutory provisions applicable in State Supreme Courts.)" Woodward J. went on to hold that the court had power to order that the solicitor and client bill be taxed by its taxing officer, and that, in the exercise of judicial discretion, it was appropriate to make the order that the solicitor and client bill be taxed immediately following the taxation of the party and party bill. He awarded costs in favour of Golden Fleece and the Steedmans, saying of the latter "Successful litigants, who are already in danger of losing much of the benefit of their claim in legal costs, have been put to even further expense over a trivial issue as to where those costs should be taxed, as between solicitor and client. The suggestion that they be taxed along with party-party costs was always a sensible one and no good reason has been suggested to me why the former solicitors should not have co-operated in that course". During the hearing of the appeal we were told that the party and party bill amounted to $97,281.30 and the solicitor and client bill totalled $80,303.91. The party and party bill was for the higher amount because during the course of the litigation, the Steedmans had themselves paid the fees of accountants and other Io experts retained by Hercules, and the amounts for these fees appeared as disbursements only in that bill. Counsel for Hercules acknowledged that his predecessor had conceded before Woodward J. that the argument that the court had no power to order that its: own officer tax the solicitor and client bill was unlikely to succeed but on the hearing of the appeal he pressed the submission. An order may be made by the court, if the circumstances warrant it, that a successful litigant recover against its opponent its costs to be taxed on a solicitor and client basis. If necessary, the amount to which 1t was entitled under such an order would be ascertained by a taxation before the court's taxing officer upon that basis under the terms of Order 62 Rule 8(1) which are as follows: "8. (1) Unless the Court or a Judge in a particular case otherwise orders, bills of costs and fees which- (a) are payable to barristers and solicitors entitled or admitted to practise in the Court in respect of business transacted by them in the Court or its registries; and (b) have been directed by a judgment or order to be taxed or under these Rules are liable to be taxed without express direction. shall be taxed allowed and certified by a Registrar who in these Rules is referred to as the taxing officer". The words "bills of costs and fees which are payable to barristers and solicitors ... in respect of business transacted by e them in the Court" seem to me to be wide enough to empower the making of an order that its taxing officer should determine the amount proper to be recovered from the Steedmans by their former solicitors, Hercules, on a solicitor and client basis. The draftsman of Rules of Court is not called upon 'to deal expressly with every possibility which may arise in practice in relation to costs and fees payable to barristers and solicitors in respect of business transacted by them in the Court and it would be unwise to attempt to do so. If general words are used, one should not shrink from applying their ordinary and natural meaning because there are provisions in State law prescribing the steps which are to be taken by practitioners in relation to the costs they charge their clients in respect of professional work whether litigious or non-litigious. A trial judge may order that the respondent pay the applicant's costs in whole or in part. He may order that the whole bill be taxed on a party and party basis or upon a solicitor and client basis, or he may order that portion of the costs be taxed on one basis and the remainder on the other. Any of these orders would, in my opinion, be covered by the words of Order 62 Rule 8. The power to make Rules of Court is conferred by s.59 of the Federal Court Act 1976, the relevant provisions of which are: "59. (1) The Judges of the Court or a majority of them may make Rules of Court, not inconsistent with this Act, making provision for or in relation to the practice and r procedure to be followed in the Court (including the practice and procedure to be followed in Registries of the Court) and for or in relation to all matters and things incidental to any such practice or procedure, or necessary or convenient to be prescribed for the conduct of any business of the Court. (2) In particular, the Rules of Court may make provision for or in relation to- _ (o) the costs of proceedings in the Court; . tee (t) the fees to be charged by practitioners practising in the Court for the work done by them in relation to proceedings in the Court and the taxation of their bills of costs, either as between party and party or as between solicitor and client". In my opinion, Order 62 Rule 8, construed in the above sense, is within the power conferred by s.59. If, contrary to my opinion, the order made by Woodward J. was not within power because of the provisions of Order 62, Rule 8 I agree with Lockhart J. that it would be authorised by s.23 of the Federal Court Act, for the reasons which he has given. Hercules sought to persuade us that, if the power existed, the order made in the exercise of his Honour's discretion should nevertheless be set aside. This submission had been the issue which was the principal subject of debate at first instance. In my opinion no reason has been shown which should lead us to disturb the orders made. Two separate taxations would require separate attendances and i additional expense and would involve the risk that inconsistent rulings might be given. There may be separate appeals to different courts arising out of the two taxations, that from the taxing officer of this court to a judge of the court (See Order 62 Rule 44) and that from the taxing master of the Supreme Court to a judge of that court (see Order 63 Rule 56 of the Supreme Court Rules). Having regard to the history of this litigation, it 1s by no means fanciful to contemplate that such appeals would be instituted. No doubt, upon completion of the taxations ordered by Woodward J. the matter will, pursuant to the liberty to apply reserved, be brought back before him for suitable directions. I would dismiss the appeal with costs. I certify that this and the preceding eight (8) pages are a true copy of the Reasons for Judgment herein of the Honourable Mr. Justice Sweeney Dated: 18 ZZ. 1987 Associate IN THE FEDERAL COURT OF AUSTRALIA No. VG 170 of 1987 VICTORIA DISTRICT REGISTRY GENERAL DIVISION ON_ APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN : KEITH HERCULES & SONS Appellant AND: ROGER CHARLES STEEDMAN, MARGARET OLIVE STEEDMAN and GOLDEN FLEECE PETROLEUM LIMITED Respondents COURT: SWEENEY, LOCKHART and SHEPPARD JJ. DATE: 18 December. 1987 REASONS FOR JUDGMENT LOCKHART J. This is a sorry case. It is all about costs between solicitors and their clients. Not only are they unable to agree on the proper amount of costs, but the solicitors assert that the Federal Court has no power to determine disputes over costs between solicitors and their clients for work done in the conduct of litigation in this Court. Mr and Mrs Steedman sued Golden Fleece Petroleum Limited ("Golden Fleece") in the original jurisdiction of this Court. They e claimed damages for misleading or deceptive conduct under s. 52 of the Trade Practices Act 1974, for breach of warranty and for negligent misrepresentation. The Steedmans wanted to purchase a service station and restaurant business from lessees of premises owned by Golden Fleece. The Steedmans alleged that, during the course of negotiations, representations were made and warranties were given by or on behalf of Golden Fleece about work that would be performed promptly at the premises if the Steedmans were to buy the business from the outgoing lessees and sign a three year lease from Golden Fleece. They alleged that they purchased the business and went into possession relying upon those representations and warranties, but the promised work was not carried out at all for six months and then only part of it was done. By this time the Steedmans had given notice that they wished to leave the business and transfer the lease as soon as they could find a purchaser acceptable to Golden Fleece. They finally left after running the business for nine months. The learned trial Judge (Woodward J.) held that the Steedmans failed to establish their case under the Trade Practices Act on the ground that, although representations were made on behalf of Golden Fleece as to the work which Golden Fleece would perform and the representations proved to be inaccurate, they were made honestly and with the reasonable expectation that the work would be performed. A claim based on the accrued jurisdiction of this Court for negligent misrepresentation was not pressed by the Steedmans. His Honour found that there was, however, a clear breach by Golden Fleece of a warranty collateral to the lease agreement, namely, a warranty to renovate the kitchen and restaurant areas of the premises shortly after the lease began. His Honour found that the Steedmans were entitled to damages flowing directly from the breach of this warranty and to any consequential damage which would have been in the contemplation of the parties had they foreseen the breach at the time the collateral contract was made. His Honour said that there should be judgment for the Steedmans in the sum of $28,500 with costs to be taxed. However, as counsel for the Steedmans had foreshadowed a claim for interest on the sum awarded, his Honour made no formal orders for entry of judgment, damages or costs and reserved liberty to apply in the light of his reasons for judgment. In due course the Steedmans exercised this liberty to apply and the matter was brought back to his Honour to determine the remaining questions in the proceedings including interest. This was the subject of further evidence and submissions before Woodward J. who, on 12 March 1986, entered judgment for the Steedmans in the sum of $40,050.57 being the amount of damages assessed by him ($28,500) plus interest. His Honour ordered Golden Fleece to pay the Steedmans' taxed costs of the proceedings including any reserved costs and ordered that moneys ($15,000) which had been paid into court by Golden Fleece be paid out to the Steedmans'' solicitors, who were at the time Messrs. Keith Hercules & Sons ("Hercules"), in part satisfaction of the judgment. Golden Fleece later paid to Hercules, as the solicitors for the Steedmans, the balance of the amount of the judgment, namely, $25,050.57. Hercules had therefore received $40,050.57. Portion of this sum was paid by Hercules to various persons who had been retained in connection with the proceedings, including counsel, in discharge of their fees and expenses. We were informed that these monies were paid upon the express written authority of the Steedmans. The balance of the monies remaining was placed in the trust account of Hercules until other arrangements were made to which I refer later. Disputes between the Steedmans and their solicitors, Hercules, then arose or were exacerbated including disagreement about costs. These disputes led, amongst other things, to assertions by Hercules that, until their costs and disbursements, first, as between party and party and, second, as between solicitor and client had been taxed, they proposed to exercise an alleged lien over all moneys held in trust by them and then to deduct therefrom all of their costs and disbursements and remit any balance to the Steedmans. A firm of solicitors, Messrs. Slater & Gordon, was appointed by the Steedmans in place of Hercules some time before 15 April 1986, but apparently after the making by Woodward J. on 12 March 1986 of the orders previously mentioned. A notice of change of solicitors was not filed by Slater & Gordon until 24 October 1986, Hercules and Slater & Gordon entered into an arrangement, with the consent of the Steedmans, to open an account styled "Term Deposit Trust Account" with the Australia and New Zealand Bank Limited. This arrangement was made after and because the dispute over costs had arisen and allows the money credited to the account to bear interest. The account is presently in credit in the sum of approximately $32,000. The account is in the name of Hercules as trustee for the Steedmans. On 24 July 1986 Slater and Gordon received a bill of costs from Hercules in purportedly taxable form with respect to party and party costs and another bill with respect to solicitor and client costs. Hercules asserted that, if the Steedmans proceeded to unilaterally settle the costs and disbursements of the Federal Court re proceedings with respect to Golden Fleece without reference to Hercules or without their consent, they would not release any trust moneys until all of their accounts which had been rendered had been paid. The Steedmans then filed a notice of motion in this Court directed to Golden Fleece and to Hercules, although Hercules was not at the time a party to the proceedings, seeking orders that the two bills of costs of 23 July 1986 be taxed. This motion came before Woodward J. who gave judgment on 11 June 1987. The question before his Honour was whether the taxation of solicitor and client costs should be carried out by the Victorian District Registrar as taxing officer of this Court or by the Taxing Master of the Supreme Court of Victoria. His Honour held that this Court had jurisdiction to make the orders sought by the Steedmans. It was common ground between all parties that Hercules should be added as a respondent to the motion for the purpose of dealing with the questions of costs. His Honour held that considerations of convenience and consistency required that the two bills of costs be taxed in tandem by the District Registrar. His Honour ordered that the solicitor and client bill of costs delivered by Hercules to the Steedmans be taxed by the District Registrar immediately following the taxation of the party/party costs on a date to be fixed by the District Registrar on or after 15 July 1987. His Honour reserved liberty to any party to apply and ordered Hercules to pay the taxed costs of the Steedmans and Golden Fleece of the notice of motion. Hercules appealed to this Full Court from Woodward J.'s order. e The total of the party and party bill of costs submitted by Hercules was $97,281.30 and the total of the solicitor and client bill was $80,303.91. The disparity seems strange, but we were informed by counsel that it is explicable on the basis that the Steedmans had during the course of the litigation themselves paid the fees of accountants and other experts retained by_ Hercules in the conduct of the case. Hence these items appear as disbursements only in the party and party bill. Counsel for Hercules argued before us that, although this Court has wide powers to make orders with respect to costs payable by one party to another in proceedings before the Court, the power does not extend to making orders relating to the taxation of bills of costs on a solicitor and client basis as between the solicitor and client because that is a matter which flows from the retainer of the solicitor by the client. It was argued that questions of this kind are dealt with by State legislation such as the Supreme Court Act 1986 of Victoria. It was also argued that, even if the Court has the necessary power to do this, the discretion exercised by his Honour miscarried. The orders sought in the notice of motion before Woodward J. were that the bills of costs be taxed pursuant to Order 62 rule 8 of this Court's rules and that such other order be made as the Court shall think fit. It was argued before us by counsel for the Steedmans that Order 62 rule 8 was an appropriate vehicle to sustain the orders made by his Honour. That rule provides: "8(1) Unless the Court or a Judge in a particular case otherwise orders, bills of costs and fees which - (a) are payable to barristers and solicitors entitled or admitted to practise in the Court in respect of business transacted by them in the Court or its registries; and (b) have been directed by a judgment or order to be taxed or under these Rules are liable to be taxed without express direction, shall be taxed allowed and_ certified by a Registrar who in these Rules is referred to as the taxing officer. (2) The taxing officer shall appoint a time for taxation on the application of the party entitled to costs in the matter." Order 62 contains many rules relating to costs. Such of them as relate to the taxation of bills of costs are, as I read them, concerned with taxation (either on a party and party or a solicitor and client basis) between parties to proceedings and not as between a solicitor and his client. Rule 8 of Order 62, when read in isolation from other rules in that Order, is literally capable of applying to the taxation of costs directed by Woodward J. in this case, but when the rule is read in the context of the other rules in the Order in which it finds itself it seems to me that it cannot fairly be construed as applying to a taxation of costs of the kind in question here. Section 38 of the Federal Court of Australia Act 1976 provides that, in so far as the rules of this Court are insufficient with respect to matters of practice and procedure of the Court, the rules of the High Court as in force for the time being shall apply Mutatis mutandis, so far as they are capable of application, and subject to any directions of this Court or a Judge, to the practice and procedure of this Court. Order 71 of the High Court Rules relates to costs. Rule (1) of that Order provides: "Subject to the provisions of any law of the Commonwealth and to these rules, the costs of and incidental to all proceedings in the Court and in Chambers, including the administration of estates and trusts, are in the discretion of the Court or a Justice." When rule (1) is read in isolation from the other rules in Order 71 it would probably encompass orders for costs of the kind made by Woodward J. in this case; but whether, when read in the context of the other rules in that Order, it is applicable to cases of which the present one is an example is not a question which I intend to decide. I prefer to base my conclusions on s. 23 of the Federal Court Act for reasons which appear later. Also, unless it is strictly necessary for the Federal Court to do so, I prefer to leave to the High Court the construction of its own rules. There was some discussion before us as to whether the rule making power conferred on this Court by sub-s. 59(2) of the Federal Court Act extends to making rules of the kind required to support taxation of bills of costs as between a solicitor and his client as distinct from taxation of a bill between parties to the litigation. I do not find it necessary to finally decide this question having already concluded that the Federal Court Rules (including the High Court Rules incorporated by reference pursuant to s. 38) do not govern taxations of costs of the kind in issue here. However, as at present advised, it is my opinion that s. 59 does confer sufficiently wide powers upon this Court to make rules concerning taxation of costs as between a solicitor and his client. I refer in particular to the words of sub-s. 59(1): er "The Judges of the Court or a majority of them may make rules of Court, not inconsistent with this Act, making provision for or in relation to the practice and procedure to be followed in the Court (including the practice and procedure to be followed in registries of the Court) and for or in relation to all matters and things incidental to any such practice or procedure, or necessary or convenient to be prescribed for the conduct of any business of the Court." I refer also to paras. 59(2)(o0) and (t) which read: "(2) In particular, the Rules of Court may make provision for or in relation to - (o) the costs of proceedings in the Court; {t) the fees to be charged by practitioners practising in the Court for the work done by them in relation to proceedings in the Court and the taxation of their bills of costs, either as between party and party or as between solicitor and client." Much of the argument before us and it seems also before Woodward J. concentrated on whether this Court's implied jurisdiction extends to supporting the impugned orders as to costs. Jurisdiction and power are often spoken of interchangeably but the two are distinct notions; and the question in this case is not one of jurisdiction but of power. The Federal Court 1s a statutory court, as are today other superior courts of Australia including the High Court. The High Court has the jurisdiction which is conferred upon it by the Constitution and Acts of the Federal Parliament. The Federal Court was established by the Federal Court of Australia Act 1976, sub-s. 19(1) of which provides: "The Court has such original jurisdiction as is vested in it by laws made by the Parliament." In Thomson Australian Holdings Pty. Limited v. Trade Practices Commission (1981) 148 C.L.R. 150 Gibbs C.J., Stephen, Mason«and Wilson JJ. said at 161: "The Federal Court of Australia Act sets up the Federal Court and arms it with certain powers, e.g. ss. 22 and 23. But generally speaking, and apart from s. 32, the Act does not invest the Court with jurisdiction. It leaves it to the Parliament to do so by other statutes (s. 19). This the Parliament has done by other statutes, such as the Trade Practices Act." The jurisdiction of the Federal Court is generally conferred by statutes other than the Federal Court Act itself. In the present case the Federal Court's jurisdiction to hear the application under the Trade Practices Act was derived from that Act. Jurisdiction to deal with the claims at common law depended upon the accrued jurisdiction: see Fencott v. Muller (1983) 152 C.L.R. 570 and Stack v. Coast Securities (No. 9) Pty. Limited (1983) 154 C.L.R. 261. Section 23 of the Federal Court Act 1s the key section for present purposes. It provides: "The Court has power, in relation to matters in which it has jurisdiction, to make orders of such kinds, including interlocutory orders, and to issue or direct the issue of, writs of such kinds, as the Court thinks appropriate." + Though this power is wide it is subject to jurisdictional and other limitations. There must be a matter in which the Court has jurisdiction and the Court 1s restricted to the making of orders of such kinds "as the Court thinks appropriate" in the exercise of its jurisdiction. Section 23 is expressed in plain words which should be given their ordinary meaning. AS was pointed out by the High Court in Jackson v. Sterling Industries Limited (1987) 61 A.L.J.R. 332 and by the Full Court of this Court in the same case (1986) 69 A.L.R. 92 there is no justification for reading down the language of s. 23 so as to restrict the powers of this Court to those which may be the limits of exercise of the power of other courts differently constituted (see in particular per Bowen C.J. at 94). Section 23 is directed to equipping the Federal Court with power to make orders, final and interlocutory, as it thinks appropriate in relation to matters in which it has jurisdiction. As Toohey J. observed in Jackson v. Sterling Industries at 340: "The effect of s. 23 1s to equip the Federal Court with powers arising expressly or by implication, in this case from the Trade Practices Act, and with powers that are incidental and necessary to the exercise of the jurisdiction conferred by that Act and the powers so conferred: see for instance Hughes v. Western Australian Cricket Association (Inc.) (1986) 66 A.L.R. 541. More generally, the section gives to the Federal Court 'the powers necessary for it to do justice in exercising the judicial power of the Commonwealth in matters over which it has jurisdiction' (Ellicott J. in Hiero Pty. Limited v. Somers (1983) 68 F.L.R. 171 at 178; 47 A.L.R. 605 at 612 ..." See also the reasons for judgment of Mason C.J. at 332-3, Brennan J. at 344, Deane J. at 335-6 and Gaudron J. at 344. Life The power of the High Court to direct the taxation of solicitors' bills of costs against their clients was considered by Dixon J. in Woolf v. Snipe (1933) 48 C.L.R. 677, though in a limited context. That was a motion by a solicitor for an order directing the oo Principal Registrar of the High Court to tax his bill of costs against his clients in respect of business transacted in a cause pending therein. The Principal Registrar gave an appointment for the taxation subject to any objection to his authority by any of the parties; but he upheld an objection by the clients that he had no authority, upon the mere application of the solicitor and without any order of the Court or other reference, to tax a bill delivered by the solicitor to his client against the client. He accordingly refused to proceed with the taxation and his ruling was upheld by Dixon J.. In the course of his reasons for judgment his Honour examined the jurisdiction of superior courts of law and equity to tax costs, charges and disbursements claimed by solicitors from their clients. He said that such jurisdiction is derived from three sources and falls under three corresponding heads: "Pirst, a jurisdiction exists founded upon the relation to the Court of attorneys and solicitors considered as its officers. This jurisdiction, commonly called the general jurisdiction of the Court, enables it to regulate the charges made for work done by attorneys and solicitors of the Court in that capacity, and to prevent exorbitant demands. That such a jurisdiction was exercised by the Court of Chancery was never doubted ... The Courts of law appear to have exercised a like jurisdiction aoe After the Judicature Act the existence of the Courts general jurisdiction was completely established. Second, when a contested claim for costs comes before the Court it has jurisdiction to determine by taxation or analogous proceeding the amount of costs. .... Third, there is a statutory jurisdiction derived at first from 2 Geo. II. c. 23, and afterwards from 6 & 7 Vict. c.73 secs. 37-43, the provisions of which form the foundation of Part V. of the New South Wales Legal Practitioners Act 1898 and of Division 2 of Part VIII and sec. 92 of the Victorian Supreme Court Act 1928. Under these provisions a solicitor may obtain an order for taxation of his bill (sc., after the expiration of- a month from its delivery), but the Court has no general jurisdiction to refer a solicitor's bill to taxation upon his own application ..." (pp. 678-9). His Honour did not construe the relevant rule (Order LIV rule 10) of the High Court Rules 1928 as conferring upon the High Court "the independent statutory jurisdiction of the Supreme Court to order the delivery of a bill, much less the powers of that Court relating to the taxation of bills already delivered." Dixon J.'s reasons for judgment contain a useful exposition of the relation between State law and provisions in rules of the High Court for the taxation of solicitors' bills of costs; they provide also a helpful background for considering the question at issue here, though the questions directly involved in the two cases are different. This case 1s not concerned with the construction of any particular rule of the Federal Court. I note in passing that the relevant rule of the High Court under consideration in Woolf v. Snipe is no longer part of the rules of the High Court. The power conferred by s. 23 may be invoked to facilitate the judicial process for various purposes including ensuring the convenient, expeditious and fair conduct of legal proceedings and giving full force and effect to orders of this Court. In my opinion s. 23 confers power upon this Court to direct the taxation of a bill of costs as between a solicitor and his client when the costs are e incurred in connection with a proceeding in this Court; but it would be in a comparatively rare case that the occasion would arise for the exercise of the power. The dispute between Hercules and the Steedmans arose or intensified after the entry of judgment against Golden Fleece. The orders for payment out of the $15,000 and for costs against Golden Fleece were made at the same time as judgment was entered by Woodward J. As I said earlier, the $15,000 was initially held in trust by Hercules until it was paid, by arrangement between the parties, into the ANZ Term Deposit Trust Account together with certain of the balance of the monies paid by Golden Fleece to Hercules, as solicitors for the Steedmans, in discharge of the judgment. There are in evidence letters written by Hercules from which it is plain that the monies are all being held in the special account pending the resolution of this dispute as to costs. The dispute arose out of litigation in this Court, concerns costs incurred here and it is appropriate that it be resolved here. The adjustment of the rights of the Steedmans and Hercules inter se on this question of costs will be determined by the monies held in the ANZ account including the monies paid out of court. Also, Hercules asserts a lien over all monies held in trust for the Steedmans until payment of the full amount of their costs and disbursements. Whether this lien is one which is enforceable at law or in equity is an arguable question, for it may be that the lien as such does not exist in the present circumstances but only gives rise to a right on the part of Hercules to approach this Court for an order charging the monies with payment of their costs and disbursements. This is not, however, a matter on re which it is appropriate for me to express any view. What is clear is that the order of Woodward J. keeps the taxation of costs within this Court in circumstances where it will follow immediately upon the taxation of costs as between party and party. Once the two taxations have been completed both Hercules and the Steedmans will know precisely where they stand with respect to, the monetary obligations of one to the other and the destination of the monies held in trust will be determined. Once the taxation of the bill as between Hercules and the Steedmans has been completed it will presumably be followed by a certificate of taxation issued by the taxing officer. The resolution of the question of costs is assisted and accelerated by the order in question here to achieve what Woodward J. described as "consistency and convenience", Doubtless, once the two taxations are completed by the taxing officer or taxing officers the matter will be brought back to Woodward J. for further directions with respect to incidental matters including orders for payment with a view to bringing this unfortunate dispute between Hercules and their clients to an end once and for all. Order 62 contains rules which may be rendered applicable to the taxation of costs between Hercules and the Steedmans by specific orders of Woodward J. or other Judge of this Court if restored to the list pursuant to the reservation by Woodward J. of liberty to apply: for example, rules 16 (adjournment of taxation), 22 (taxing officer's discretion), 36 (disallowance of unnecessary costs), 42 (objection to decisions of taxing officers), 43 (reconsideration of decisions), 44 (reviews of decisions of taxing officers) and 45 (certificates of taxation). The certificate of taxation of the bill in contention here, once issued, when followed by further directions or orders of the Court for payment of the costs, will be enforceable as orders of the Court made within its powers. The Supreme Court Act 1986 (Vic) provides for the taxation of bills of costs between solicitors and their clients: see ss. 61 to 76. (That Act cannot circumscribe the operation of the Federal Court's power over costs incurred in proceedings within its jurisdiction. Once orders for payment of costs by a party to his solicitor have been made following the issue of certificates of taxation by this Court's taxing officer, they are enforceable throughout Australia. There is no collision between such orders and State legislation relating to costs, including the Supreme Court Act 1986 of Victoria. Once orders for costs are made by this Court there is no need for the operation of and no work to be done by the State legislation relating to taxation. However, the existence of the State legislation and the fact that it can, and usually does, govern disputes over costs between solicitors and clients provide powerful reasons for orders of the kind in question here being made, in the exercise of this Court's discretion, Only in rare cases of which this case is one. Mercifully disputes between solicitors and their clients of the kind here do not often arise and only rarely reach the absurd proportions manifest in this case. Here is a sterile dispute about costs between solicitors and their former clients which is still being waged in this Court with the attendant burden of costs upon Hercules and the Steedmans. The sooner this whole unhappy affair comes to an end the better it will be for everybody. I said before that it is only in rare cases that orders of the kind which were made here would be made by this Court. Disputes between solicitors and clients over costs are primarily to be resolved by the State and Territorial legislation that has existed for many years and is specifically 17. directed to disputes on costs. It is the special facts of this case which called for the orders in suit to be made. The appeal should be dismissed. Hercules must pay the costs of the Steedmans of this appeal and the costs of Golden Fleece of the appeal as a submitting respondent. I certify that this and the preceding sixteen (16) pages are a true copy of the reasons for judgment of the Honourable Mr. Justice Lockhart. Associate LV Cy Dated: 18 December 1987 IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY No. WG170 of 1987 GENERAL DIVISION ~- ern On appeal from a single judge of the Federal Court of Australia BETWEEN : KEITH HERCULES & SONS Appellant AND: ROGER CHARLES STEEDMAN, MARGARET OLIVE STEEDMAN and GOLDEN FLEECE PETROLEUM LIMITED Respondents THE COURT: SWEENEY, LOCKHART and SHEPPARD JJ. DATE: 18 DECEMBER 1987 REASONS FOR JUDGMENT SHEPPARD J.: In this matter I have had the advantage of reading the judgments to be delivered by Sweeney and Lockhart JJ. I agree in their conclusion that the appeal should be dismissed with costs. Like Lockhart J.. I would found the reasons for this conclusion on the provisions of s. 23 of the Federal Court of Australia Act 1976. I have considered the question whether the problem which the case poses is not simply solved by the 2. application of Order 62, rule 8 of the Court's rules. The words of the rule, especially when read in conjunction with para. (t) of sub-sec. 59(2) of the Federal Court of Australia Act which confers the relevant rule making power, are literally wide enough to encompass the making of an order for a taxation of costs to determine the extent of the liability for costs of a party to litigation in this Court to his own solicitor. What, however, has persuaded me that the rule should not receive this interpretation is a consideration of the rules provided for in Order 62 as a whole. It seems to me that the thrust of the Order is to provide for the quantification of amounts of costs which have been ordered, whether as between party and party or solicitor and client, under an order made by the Court whereby one party becomes obliged to pay the costs of another. In some cases an order is not necessary. Taxation follows as a matter of course; see rule 7. The rule which, in my opinion, most clearly indicates the ambit which the Order has is rule 45 which provides that, on completion of taxation, the taxing officer shall issue a certificate of taxation, with a sufficient number of office copies as are needed for the parties responsible for the payment of costs. The certificate of taxation must be served on the party responsible for its payment. If, after 14 days from the date of service of the certificate, the costs remain unpaid, the Registrar shall, at the request of the party in whose favour the costs are awarded, draw up, sign and seal an order in favour of that party for the sum shown in the certificate and enter the same. The procedure provided for in rule 45 is plainly one 3. designed to confer on a party entitled to the benefit of an order for costs an entitlement to an order which will compel payment of the amount due once it is ascertained by taxation. The rule has nothing to say concerning the obligation of a client, who isa party to proceedings in the Court, to pay to his own solicitor an amount due for costs incurred on his behalf. There is no other rule containing any such provision. If it had been intended to encompass taxations as between a. solicitor and his own client, the rules would have made provision for payment of the costs by the client to the solicitor once a certificate of taxation issued. In relation to the power of the Court to make an order of the kind made by the learned primary Judge under s. 23 of the Federal Court of Australia Act, I am in agreement with the reasons given by Lockhart J. for concluding that the section does confer the necessary power. The matter that has principally concerned me is the fact that the orders made by the learned primary Judge contain no consequential order or direction obliging the Steedmans to pay to the Hercules the costs quantified by the taxation. The absence of such an order or direction underlines a matter strongly relied upon by counsel for the Hercules. It was that the order for taxation could have no legal effect because there was no obligation imposed on the Steedmans, either by the rules of this Court or by any order or direction made by it, obliging them to pay the amount of the costs which were to be taxed. This was said to demonstrate that the only course for a solicitor seeking to recover costs to follow. no matter in what Court work is done, is to proceed pursuant to the provisions of 4, the Supreme Court Act 1958 (Vic.), s. 81 or the Supreme Court Act 1986 (Vic.), s. 61. The latter Act came into force on 1 January 1987 and there is a question which of the Acts applies to the circumstances of this case. That is not a question which I consider it necessary to decide. In either case the solicitor's right to sue for his costs in a State court is circumscribed by the need to follow the procedures for the delivery of a bill of costs and the submission of the bill to taxation if that be required by the client. Not until the procedures provided for have been exhausted, is the solicitor entitled to sue for the amount due to him in a court of competent jurisdiction. It follows that when one is considering whether the order made by the primary Judge in the present case is within power, one will not address the question adequately unless one considers whether the Court has power to order, not only that the costs be taxed, but also to order that the amount of such costs when taxed be paid to the solicitor. A taxation without a consequential order for payment could have no legal effect. I have reached the conclusion that the making of an order that the client pay the amount of the costs when ascertained by taxation is within power. This Court, being a superior Court of record and having the powers which it has, particularly those conferred by s. 23, has power to control the amount which a solicitor appearing before it may charge his client. That control would not be complete unless it included the power to order a client to pay his solicitor what was properly due to him for work done for the client in this Court. Such a power, in my 5. opinion. falls well within the powers conferred by s. 23 particularly in the light of the conclusions reached by the Full Court of this Court and the High Court in Jackson v. Sterling Industries Limited (1986) 12 F.C.R. 267: (1987) 61 A.L.J.R. 332. The power is not one which the Court would exercise very often. Usually the matter would be left to be dealt with in the more conventional way under statutes such as the Supreme Court Act 1986 (Vic.). The final matter upon which I wish to comment concerns the relevance of statutes such as the two Supreme Court Acts earlier referred to. These provide a code whereby solicitors must deliver bills to clients before they may bring action to recover costs. Clients may have the bills taxed if they wish. The question is whether the existence of such legislation in some way restricts or cuts down the powers which this Court would otherwise have, or is a matter relevant to the exercise of a Judge's discretion when asked to act under s. 23. In my opinion, the existence of the State legislation and the procedures for which it provides could not affect this Court's power to control charges made by solicitors to their clients for work done in relation to proceedings in this Court. The existence of the procedure is a relevant matter in relation to the exercise of discretion, but his Honour took that matter into account so that there is no basis for saying that his discretion miscarried in this respect. I would add that the reason why it is appropriate for this Court to exercise the power which it has in this case is that, because of the dispute which has arisen between the Hercules and the Steedmans, considerations connected with the 6. saving of time and expense and consistency of outcome demonstrate that the course his Honour decided to take was the onlv sensible one. Because of the view I -have taken. I have not thought it necessary to consider the application of Order 71, rule 1 of the High Court Rules. This was not a matter which was adequately argued and I prefer not to express any opinion on it. | certify that this and the 5" preceding pages are a true copy of the reasons for judgment herein of The Honourable Mr Justice Sheppard, xf Associate paied (2? DECEVEZER /787 vf? Solicitors for Appellant: Counsel for Appellant : Solicitors for First and Second Respondents: Counsel for Pirst and Second Respondents: Solicitors for Third Respondent: Counsel for Third Respondent: Dates of hearing : Keith Hercules & Sons Mr. G.R. Ritter Slater & Gordon Mr. M. Lapirow Russell Kennedy & Co. Mr. M. Crennan 12 and 13 November 1987