FEDERAL COURT OF AUSTRALIA Marketing Advisory Services v Tasmanian Football League Inc [2003] FCA 245 PRACTICE AND PROCEDURE – costs – bill of costs – taxation – judicial review of decision of taxing officer – correct test for review of taxation – whether exercise of discretionary decision – presumption in favour of correctness of discretionary decision – whether taxation manifestly wrong – whether error in principle – affirmation unless clearly wrong – review not to be conducted as if judge were original decision maker Federal Court Rules O 62 rr 42, 44(1) Australian Coal and Shale Employees' Federation v The Commonwealth (1956) 94 CLR 621 applied House v The King (1950) 81 CLR 513 applied Market Advisory Services (MAS) v Football Tasmania Ltd [2002] doubted Schweppes' Ltd v Archer (1934) 34 SR (NSW) 178 applied Titan v Babic [1995] FCA 813 considered Wheaton v Football Tasmania Limited [2001] FCA 1518 cited MARKETING ADVISORY SERVICES v THE TASMANIAN FOOTBALL LEAGUE T5 OF 2001 HEEREY J HOBART (HEARD IN MELBOURNE) 19 MARCH 2003 IN THE FEDERAL COURT OF AUSTRALIA TASMANIA DISTRICT REGISTRY T5 OF 2001 BETWEEN: MARKETING ADVISORY SERVICES APPLICANT AND: TASMANIAN FOOTBALL LEAGUE INC FIRST RESPONDENT FOOTBALL TASMANIA SECOND RESPONDENT JUDGE: HEEREY J DATE OF ORDER: 26 MARCH 2003 WHERE MADE: MELBOURNE (HEARD IN HOBART) THE COURT ORDERS THAT: 1. The applicant's notice of motion dated 7 January 2003 is dismissed. 2. The applicant pay the second respondent's costs. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA TASMANIA DISTRICT REGISTRY T5 OF 2001 BETWEEN: MARKETING ADVISORY SERVICES APPLICANT AND: TASMANIAN FOOTBALL LEAGUE INC FIRST RESPONDENT FOOTBALL TASMANIA SECOND RESPONDENT JUDGE: HEEREY J DATE: 26 MARCH 2003 PLACE: MELBOURNE (HEARD IN HOBART) REASONS FOR JUDGMENT 1 By a notice of motion dated 7 January 2003 the applicant seeks review under O 62 r 44(1) of the Federal Court Rules of a decision of the taxing officer, District Registrar Alan Parrott, made on 13 January 2003. 2 The proceeding commenced by an application filed on 25 January 2001. The applicant claimed that on 25 January 1994 it entered into an agreement with the first respondent the Tasmanian Football League Inc (TFL) for the production of weekly and annual football publications. The agreement was made on the basis that the applicant would pay a lump sum and a percentage of gross sales in consideration of the TFL granting it publishing and distribution rights. The parties were apparently unable to reach agreement for the continuation of this agreement beyond 1994. The applicant claimed that in 1995 and in subsequent years the TFL infringed its copyright in certain designs and graphics. 3 At the conclusion of the 1998 football season the second respondent Football Tasmania Ltd (Football Tasmania) was formed to take over the control and management of Australian Rules Football in Tasmania. On 25 February 1999 the TFL went into members voluntary liquidation and on 3 March 2000 it was deregistered. 4 In its application the applicant alleged that the liabilities of the TFL "devolved by novation" upon Football Tasmania and that it was liable to pay damages for loss of incomes and loss of profits by utilising the design concepts in question. 5 On 26 October 2001 Marshall J heard a notice of motion brought on behalf of Football Tasmania seeking to have the application dismissed for failure to disclose a cause of action and for being an abuse of process. His Honour upheld this application: Wheaton v Football Tasmania Limited [2001] FCA 1518 (at times the title to this proceeding seems to have been in the name of the applicant's principal Mr Jon Wheaton). His Honour ordered that the costs of Football Tasmania be paid by the applicant as follows: "(a) Those costs incurred on or before 23 September 2001 shall be paid on a party/party basis. (b) Those costs incurred after that date are to include all costs except insofar as they are of an unreasonable amount or have been unreasonably incurred so that subject to the above exceptions the second respondent will be completely indemnified by the applicant for his costs." 6 In substance his Honour held that there had been no devolution of the assets and liabilities of the TFL to Football Tasmania which at law would make the latter liable to the applicant for breaches for damages for alleged infringement of copyright. An appeal to the Full Court was dismissed: Market Advisory Services (MAS) v Football Tasmania Ltd [2002] FCAFC 165. 7 On 30 November 2001 Football Tasmania filed a bill of costs. The taxation took place on 27 March 2002 and on 7 May 2002 the taxing officer issued a Certificate of Taxation for $13,787.60 together with costs of taxation fixed at $750.00. On 31 July 2002 I made an order the effect of which was to give leave to the applicant to file out of time objections to the decision of the taxing officer pursuant to O 62 r 42. As already mentioned, by a decision on 30 January 2003 the taxing officer rejected those objections. 8 On the present application Mr John Wheaton appeared in person. He is not a legal practitioner. His objections may be summarised as follows. 1. Some items have been charged at $220 per hour as counsel. 2. There were excessive times charged for allegedly simple tasks. 3. The amount of taxation and reconsideration differed from the assessment made by the taxing officer pursuant to O 62 r 42, ie $11,500.60. 9 The approach to the review of a taxing officer's decision is authoritatively laid down in Australian Coal and Shale Employees' Federation v The Commonwealth (1956) 94 CLR 621 at 626-629. The statement of the law by Kitto J in that case has come to be, along with House v The King (1950) 81 CLR 513 at 532-534, the classic formulation of the applicable principles applied generally to judicial review of discretionary decisions. His Honour said (at 628) 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". His Honour adopted the statement of Harvey CJ in Eq and Street J in Schweppes' Ltd v Archer (1934) 34 SR(NSW) 178: "In appeals as to cost, 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 in discretion only is involved, and will do so freely on a proper case, using its own knowledge of the circumstances [authority cited] but it will in general terms 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." 10 In Titan v Babic [1995] FCA 813 Finn J applied that statement subject to a "possible qualification" alluded to by Olney J in Pacific Dunlop Ltd v Australian Rubber Gloves [1993] FCA 562, a qualification on which Finn J found it unnecessary to express any opinion. In Pacific Dunlop Olney J said (at 10): "A review is not an appeal and in the absence of any guidance from the rules it is appropriate that the review be conducted as if the judge were the original decision-maker. This is particularly so in the case of the exercise of power pursuant to federal legislation in view of the Constitutional limitations on the exercise of Federal judicial power. The numerous judicial determinations made in respect of reviews conducted under similar rules are of course helpful but ultimately, it is for the reviewing judge to come to a conclusion as to what is necessary and proper in a particular case." 11 In G A Flick Federal Court Practice at [4480/1] in the annotation to O 62 r 44 there is reference to Titan v Babic and the statement in Schweppes' Ltd v Archer is set out. The annotation then goes on the note the "possible qualification that because of the constitutional limitations on the exercise of federal judicial power, the review should be conducted in this court as if the judge were the original decision-maker". The annotation does not identify Pacific Dunlop as the source of the "possible qualification". 12 I must say that I do not agree with the statement in Pacific Dunlop. The statement that it is appropriate that the review be conducted as if the judge were the original decision-maker seems to be in flat contradiction to the thrust of Australian Coal and Shale, even though that authority is cited earlier in the judgment. Moreover, I do not understand how the fact that there are Constitutional limitations on the exercise of federal judicial power strengthens the opinion therein expressed. As already noted, Australian Coal and Shale states principles which have long been applied to the review of a vast range of discretionary decisions by courts exercising federal judicial power. It has not been suggested that such reviews are to be conducted as if the judge were the original decision-maker, indeed the reverse is the position. 13 As to the hourly rate of $220 as counsel the taxing officer referred to O 62 r 35 which provides: "When a practitioner acts in the capacities of both barrister and solicitor, or in the capacity of counsel, instructed by his partner acting as a solicitor, the taxing officer may allow such sum as a counsel's fee as the taxing officer in his discretion thinks just and reasonable having regard to the practice of allowing such fees as are permitted by the Supreme Court Rules of the State or Territory concerned." 14 The relevant Tasmanian rule is rule 863(11) of the Supreme Court Rules 2000 (Tas): "If a practitioner draws any document or appears as counsel, the taxing officer is to allow to the practitioner any counsel's fee as may be proper even though the practitioner may also be acting as solicitor in the proceeding, but if the practitioner has acted both as a solicitor and as counsel then the taxing officer in fixing the fees is to have regard to that fact." 15 The taxing officer noted that as a matter of practice he allows practitioners who appear in the Federal Court as both solicitor and counsel the hourly rate as counsel that they would be entitled to charge in the Supreme Court of Tasmania. Mr Abel advised $220 was the hourly rate that he was entitled to when appearing in the Supreme Court and the taxing officer accepted that. Further, the taxing officer did not consider that the rate of $220 per hour was unreasonable or excessive. 16 Mr Abel is a practitioner of some eighteen years standing. I find no error of principle in the approach the taxing officer has taken. Nor do the amounts charged appear manifestly excessive. 17 The second issue concerned items 22, 33, 35, 43 and 51. It is alleged excessive time has been charged for what was said to be simple tasks. In particular it was said that item 22 charged six hours in lieu of two hours as being more reasonable and item 51 was a charge of thirty hours in lieu of four hours being more reasonable. Item 22 was "Attending as Counsel to consider instructions from John William Woods Liquidator and to draw affidavits of John Williams Woods and Guy Frederick Abel six hours @ $220 per hour $1320". Item 51 was "To counsel's fee on brief including research of all relevant Case Law in relation to copyright and relevant legislation, research of all relevant case law in relation to dismissal of Applicant's claim and striking out of Applicant's claim, security for costs, stay of proceedings and abuse of process of Court, drawing and engrossing Notice of motion, preparation and drawing of written submissions to be submitted to Court and List of Authorities to be provided to Court plus fee in time for general care and attention (as per Counsel) 30 hours @ $220 per hour $6,600." 18 The taxing officer stated that he had examined Mr Abel's files and was satisfied that the time spent in respect of each item claimed in the bill has been accurately recorded. The taxing officer expressed the view that none of the above amounts were unreasonable amounts or had been unreasonably incurred. He did not accept the applicant's contentions of what would be a more reasonable amount of time. Indeed in respect of item 51 the taxing officer noted that although the item seeks to claim an amount for general care and attention it does not actually do so. Had that been done a further amount could have been claimed in addition. The taxing officer noted that in giving his decision Marshall J quoted extensively from the written submissions prepared by Mr Abel. 19 The conclusion of the taxing officer was a question of fact. It has not been suggested that he mistook Mr Abel's record of time spent or that the evaluation of the reasonableness of that time was based on some wrong principle. No ground for review has been established. 20 Finally it is true that the assessment of $11,500.60 was substantially less than the amount taxed, but that in itself does not show any error. It is inherent in the assessment procedure of O 62 r 46 that it may be higher or lower than the figure which emerges on a detailed taxation. 21 The applicant has not established any error and the notice of motion should be dismissed with costs. I certify that the preceding twenty- one (21) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey. Associate: Dated: Counsel for the Applicant: Mr Wheaton appeared in person Counsel for the Respondent: G F Abel Solicitors for the Respondent: Wallace Wilkinson & Webster Date of Hearing: 19 March 2003 Date of Judgment: 26 March 2003