FEDERAL COURT OF AUSTRALIA Miller v Wertheim [2004] FCA 988 PRACTICE & PROCEDURE – costs – bill of costs – taxation – judicial review of decision of taxing officer on reconsideration. Federal Court Rules, O 62, r 44 Australian Coal and Shale Employees Federation v Commonwealth (1953) 94 CLR 621 followed. Cachia v Westpac Financial Services Ltd [2003] FCA 817 referred to. In the Marriage of Butler and Glendowan; re Bowdens' Bill of Costs (1980) 6 Fam LR 502 referred to. Sundell v Queensland Housing Commission (1954) 94 CLR 531 followed. ELIANA FREYDEL MILLER V PETER WERTHEIM AND STEPHEN ROTHMAN N 1464 OF 2001 BEAUMONT J 2 AUGUST 2004 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 1464 OF 2001 BETWEEN: ELIANA FREYDEL MILLER APPLICANT AND: PETER WERTHEIM AND STEPHEN ROTHMAN RESPONDENTS JUDGE: BEAUMONT J DATE OF ORDER: 2 AUGUST 2004 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The motion for review of the taxing officer's decision on reconsideration be dismissed. 2. The applicant pay the respondent's costs of the motion. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 1464 OF 2001 BETWEEN: ELIANA FREYDEL MILLER APPLICANT AND: PETER WERTHEIM AND STEPHEN ROTHMAN RESPONDENTS JUDGE: BEAUMONT J DATE: 2 AUGUST 2004 PLACE: SYDNEY REASONS FOR JUDGMENT Beaumont J: introduction 1 By a notice of motion filed on 24 March 2004, the applicant seeks review under O 62 r 44(1) of the Federal Court Rules of a decision made by a Deputy District Registrar of this Court (the 'Taxing Officer') on 4 March 2004. 2 The substantive proceeding concerned an action brought under the Racial Discrimination Act 1975, which was summarily dismissed by a Federal Magistrate. The applicant appealed that decision. On 27 May 2002, the Full Court granted leave to appeal, but dismissed the appeal with costs (see Miller v Wertheim [2002] FCAFC 156). 3 On 21 May 2003, the respondents filed a Bill of Costs ('the Bill'). On 5 August 2003, the Taxing Officer provided an estimate of $8,150.00 for the Bill, if it were to be taxed. The applicant objected to the estimate and the matter proceeded to taxation on 10 November 2003, where the Bill was taxed at $11,530.53. The total Bill, however, was $12,231.53, which included the $546.00 taxing fee and $155.00 cost of attendance, as the applicant had failed to obtain a variation in her favour of greater than 15 per cent (pursuant to O 62 r 46(4A)). 4 The applicant again objected to the Bill and applied to have the matter reconsidered. 5 On 4 March 2004, the Taxing Officer provided his reasons for decision on reconsideration. The practical effect of that decision was that a reduction of $459.03 was made from amounts previously allowed on the taxation, and the sum of $155 was awarded to the respondent in relation to the costs of the reconsideration. Accordingly, the Certificate of Taxation issued on 4 March 2004 for $11,927.50. The regulatory framework 6 Order 62, r 11 of the Rules provides that '[e]very taxation of costs and every decision of a taxing officer shall be subject to review by a Judge'. Under O 62 r 42(1A), a 'party to the taxation who objects to the decision may apply to the taxing officer to reconsider his decision.' O 62 r 43 obliges the taxing officer to reconsider the decision to which objection is made, and to provide reasons for his decision on reconsideration, upon request. 7 Order 62, r 44 further provides as follows: 'Review (1) Where a taxing officer gives a certificate in accordance with his decision on reconsideration … and pursuant to that rule a party requests the taxing officer to state his reasons for the decision, the Court shall, on motion by any party interested, review the decision of the taxing officer on reconsideration. … (4) On the review, unless the Court by order otherwise directs: (a) further evidence shall not be received; and (b) a party shall not raise any ground of objection not either stated in a statement of objection or raised before the taxing officer. (5) Subject to subrule (4), on the review, the Court may: (a) exercise all the powers and discretions of the taxing officer in relation to the subject matter of the review; (b) make orders for the alteration of the certificate; (c) make orders for the remission of any item to the same or any other taxing officer for taxation; and (d) make such other orders as the nature of the case requires.' Current Application 8 The motion seeks a review of the Taxing Officer's decision on reconsideration, an order that the decision (that is, the Certificate of Taxation dated 4 March 2004) be set aside and reimbursement of the initial taxing fee of $546.00. 9 The grounds on which those orders are sought are contained in an affidavit sworn by the applicant, dated 24 March 2004, as follows: '… 3. The applicant requests that the taxation fee of $546.00 be refunded to applicant pursuant to [Order 62 r 9(1)(d), and 9(2)(d)] because: (a) The taxing officer says, "The respondent requested an adjournment as the taxation fee had not been paid … . The taxation thus could not proceed". (b) The fact is that the Respondents did not pay, did not offer any excuse for non-payment, at the same time arriving late and generally unprepared. [The applicant then sets out passages from Order 62 r 9(1) and (2).] (c) The Registrar writes that the delay was "an unnecessary frustration". (d) The estimate of the costs of the Bill wa[s] inaccurate as the "total" of Bill of Costs was corrected after the "estimate" was given. 4. The total figure for the Bill was $5,228.03 less than the actual costs. The Registrar admits "I cannot recall if I noticed this when I assessed the Bill". The mistake was corrected after the estimate was given. [The applicant then sets out a passage from Order 62 r 46(3).] The Registrar was asked to show the figures for working out the estimate, but declined. Depending on the final total of the Bill the margins from the "estimate" are any of the following: Three Possible Totals - deduct "estimate" = Possible Margins $14,982.11 - $8,150.00 = $6,832.11 $9,754.08 - $8,150.00 = $1,604.08 $13,458.36 - $8,150.00 = $5,308.36 The estimate should be a true and fairly accurate reflection of the Bill, not a haphazard one. The Registrar … says "I cannot recall if I noticed this when I assessed the Bill." 5. The Respondents did not object to the estimate. 6. The applicant has the right in law to redress any other matters that the applicant feels are wrong in the Bill … . … 8. The Registrar wrote … that "the respondents amended final page of Bill at 10th Nov. [2003] appointment". This was after the initial "estimate" of the Registrar. 9. The appeal to the Federal Court depended on an application. In respondents' submissions, … it is written "There is no application for leave to appeal." The respondents' solicitor and counsel collaborated on the submissions. The solicitor perused the application, checked the indices and Appeal Papers. The counsel read the brief, made further reading and preparation, without noticing the application. This repeated error of the solicitor and counsel is charged for repeatedly and should not be. 10. The respondents' submissions had two pages of its five pages taken verbatim from the [annexed] submissions from the Court below. A copy of the submissions with indicators next to the sections was given to the [Taxing Officer] at the reconsideration as evidence to the Notice of Motion. … 11. Respondents did send a copy of the Bill … under a Supreme Court heading and it is that one to which the applicant refers in the Notice of Motion …, in this matter filed on 24 Nov 2003. 12. The applicant objects to the following words of the [Taxing Officer] "In my view these remarks by the applicant are offensive and unsubstantiated." The respondents did not submit that they were offended by the applicant's legitimate claims substantiated by evidence. The remarks by the [Taxing Officer] show an unwarranted personal involvement. The applicant disputes: time taken by counsel, charges for duplication of documents, charges for a "list of authorities" the applicant never received, G.S.T., charges for duplication of error and the original error duplicated, excessive charges per hour as on 22nd Oct '01 in the Federal Magistrates Court the respondents sent the applicant a Bill of Costs with $250.00 [per] hour charge for counsel and on 27th May '02 the charge is $300… [per] hour. The applicant submits that fees for omission of work done originally and repeatedly by the solicitor and counsel should not be borne by the applicant. The applicant submits that more time than was necessary was claimed by counsel. 13. The … [Taxing Officer] in his decision uses the word "reasonable" to justify counsel's fees. In Commonwealth Bank v Human Rights and Equal Opportunity Commission & Anor 80 FCR 78 (1997) Sackville J. [at 115] said "… reasonableness is a question of fact and requires all the relevant circumstances to be taken into account." 14. (a) On 23rd May [2002], The respondents filed submissions accompanied by a letter which is headed "By Courier" … . (b) The applicant received no "List of Authorities from the respondents supposed to be filed on 24 May [2002], the next day according to the Registrar… . The respondents in their reply did not object to applicant's saying that there was no list of authorities. 15. The [Taxing Officer] wrote, … "[counsel for the respondent] set aside the day to prepare." Applicant submits that counsel may estimate the time for studying a case, but must use only the time actually taken and must be prepared to continue with unrelated work or at leisure. Counsel submits that the matter was simple, … . 16. [Referring to counsel's fees for further reading and preparation] – two hours was sufficient for this procedure. …' 10 The applicant goes on to submit that the Taxing Officer failed to take into account evidence submitted by the applicant at the reconsideration, namely the respondents' submissions that the matter was a simple one; and that the Taxing Officer took into account an irrelevant matter in stating that the applicant wished the case to be heard for longer than one day (citing Australian Coal and Shale Employees' Federation v The Commonwealth (1956) 94 CLR 621). 11 In her affidavit, the applicant then sets out a list of the items in the Bill which she claims should be reduced, including solicitor's costs (which she claims should be reduced by $1,440.00), GST (which, it is asserted, should be reduced by $459.00), the taxing fee in the amount of $546.00 (which, she asserts, should be refunded entirely) and counsel's fees (for which the applicant claims only nine and one half hours at the rate of $250.00 per hour plus GST should be allowed). 12 Finally, the applicant relies on two cases in support of her claims. First, Sundell v Queensland Housing Commission (1954) 94 CLR 531, at 533 per Webb J (in discussing a taxing officer's decision to substantially reduce counsels' fees): '… although the appellant displayed wisdom in securing the services of one of the ablest leading counsel in Australia, even at the cost of paying him a fee determined by his great eminence at the Bar, still, having regard to the nature of the case, I am unable to conclude that the taxing officer must have applied a wrong principle or made a mistake in making so great a reduction in counsels' fees. Neither the law nor the facts were complicated.' 13 Secondly, the applicant cites In the Marriage of Butler and Glendowan; re Bowdens' Bill of Costs (1980) 6 Fam LR 502 at 511 per Lindenmayer J: '… if a solicitor takes some step which is unnecessary having regard to the matter for which he was retained, or the taking of which is not in accordance with his instructions, he can be deprived of his costs in relation thereto.' Reasons of the Taxing Officer 14 The objections set out in the applicant's affidavit were raised before the Taxing Officer and are dealt with in his reasons of 4 March 2004. In summary, the Taxing Officer states: · The $546.00 taxation fee was payable pursuant to O 62, r 46(4A), (which, it will be recalled, provides that the party filing the notice of objection 'shall bear the costs of taxation of all parties from the date of filing the notice' unless, on taxation, that party obtains a variation in its favour of 'at least 15% of the estimate of taxed costs, or of the amount provisionally taxed'). It had no connection with the adjournment sought by the respondents because the fee had not been paid. · The submissions regarding failure to check the appeal index properly (see par 9 of the applicant's affidavit, set out above) cannot be accepted because a claim for perusing a document does not equate to a claim for understanding the document; and the adjournment and order to file an amended appeal index were the result of the draft not being in the proper form. · The minor error, whereby an officer of this Court was incorrectly named in the Bill, (which was one of the items listed in the applicant's objections to the solicitor's costs) does not justify the amount being removed from the bill. · In relation to the claim that part of the respondent's submissions were replicated (see par 10 of the applicant's affidavit, above), the basis of the charge is for drawing the necessary document, based on folios. The claim can be made even if material has been obtained from another source, provided it is not substantial. · There was no basis for the objection to the cost of '[a]ttending to serve Bill … on [applicant]' on the basis that the Bill was originally placed under a Supreme Court of New South Wales heading (see par 11 of the applicant's affidavit, above), as the Bill appeared to be in the correct form for this Court. · Counsel fees charged were 'reasonable and within the range allowed by taxing officers in the Court, considering the experience of [counsel], the nature of the matter and the questions of law involved.' Conclusions on the MOTION 15 The principles applicable to the present application are set out in Australian Coal, above,at 628, which adopted the following statement of Jordan CJ in Schweppes' Ltd v Archer (1934) 34 SR (NSW) 178at 183: '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 … 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.' (Emphasis added). 16 This is an authoritative statement, although some differences of opinion as to the nature of a review by the Court of a decision of a taxing officer may emerge on particular facts. The authorities analysing the issue were considered by Hely J in Cachia v Westpac Financial Services Ltd [2003] FCA 817. In my view, the Court should proceed here in accordance with the principles enunciated by Jordan CJ in Schweppes' Ltd above. The applicant's claims do not raise any question of principle, and in my view, the applicant has not established that the discretion of the Taxing Officer miscarried in any way. 17 The two further cases relied on by the applicant do not, in my opinion, assist her claims. It was held in Sundell, above, that the quantum of counsel's fees is a matter for the taxing officer's discretion and is not open to review unless a wrong principle has been applied or a mistake made. In the present case, the Taxing Officer neither applied the wrong principle, nor made a mistake. 18 In Butler and Glendowan, above, after stating the passage relied on by the applicant (above at [13]), Lindenmayer stated (at 511) that a taxing officer 'should be slow to set himself up as an arbiter of a solicitor's competence in the handling of a matter … and that he should do so only after the fullest possible investigation of all the facts and circumstances in connection therewith'. Again, what constituted necessary conduct by the respondent was a matter within the Taxing Officer's discretion and the present circumstances do not warrant interference by this Court. 19 Accordingly, the notice of motion should be dismissed with costs. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Beaumont. Associate: Dated: 2 August 2004 Solicitor for the Applicant: The applicant appeared in person Solicitor for the Respondents: Geoffrey Edwards & Co Date of Hearing: 7 June 2004 Date of Judgment: 2 August 2004