WENTWORTH v WENTWORTH (ESTATE OF THE LATE GEORGE NEVILLE WENTWORTH) SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL MAHONEY AP, PRIESTLEY JA and HUNTER AJA 14 August 1995, 25 August 1995 [1995] NSWCA 505 Taxation of Costs — Decision on review of Master — Considerations available to Court on hearing of appeal — Size of amount of costs — Disproportion between proceedings and costs — Multiplicity of proceedings — Due process requirements APPLICATIONS FOR LEAVE TO APPEAL — Decision of Master on review of Taxation of Costs — Considerations available to be taken into consideration by Court of Appeal on hearing of appeal — Size of amount of costs — Disproportion between proceeding and costs — Multiplicity of proceedings — Application of due process requirements. ORDER Leave to appeal granted upon each application. Costs in each application reserved to Court dealing with appeals. Mahoney AP There are before the Court for determination two applications for leave to appeal against the order for costs made in a proceeding under the Family Provision Act 1982. One application has been made by the plaintiff in the proceeding, Miss Katherine Wentworth ("the plaintiff"); the other has been made by Mr Peter Fitzwilliam Neville Wentworth, the defendant in the proceeding ("the defendant'). In my opinion, subject to the matters to which I shall refer, leave to appeal should be given upon each application. The costs of each application should be reserved to the Court dealing with the appeals: the order to be made for costs will be affected, inter alia, by the extent to which each appeal succeeds and that Court will be in a position better than this Court to deal with that matter. The Court does not ordinarily give reasons for the grant or refusal of leave to appeal. However, there are aspects of these applications which make it appropriate that I refer to some of the matters to which reference has been made in determining that leave to appeal be granted. I shall refer to such matters in general terms and without the qualifications and exceptions which would be necessary to a full and complete statement of the facts or the considerations in question. I shall refer to the facts and the considerations only so far as it is necessary to draw attention to some at least of the matters to which the Court before and on the appeal may feel it appropriate to have regard. THE BACKGROUND FACTS: [1] The applications arise out of the claim made by the plaintiff against the defendant as executor of the estate of her late father. The claim was for an order for a provision for her maintenance and advancement in life. The hearing of the application by Bryson J extended over some nineteen days. An order was made in her favour. The thrust of the judgment of Bryson J was affirmed but the form of the order was varied. 2 UNREPORTED JUDGMENTS On 9 August 1991 Bryson J made orders for costs of the proceedings before him as follows: [2] "(1) That the defendant pay the plaintiffs costs of the proceedings. [3] (2) That the plaintiff pay the defendant's costs reserved on 10 December 1990 and on 30 January 1991. [4] (3) That the plaintiff pay the defendant's costs of the hearing on 27 June 1991." [5] The Court of Appeal declined to interfere with these costs orders. The plaintiff brought in a bill of costs for taxation. The present appeals arise from what ultimately was done upon the taxation of the costs. It is said that the plaintiff brought in her bill of costs at approximately $813,000. The taxation of the bill of costs before the taxing officer Mr Howe extended over twenty-eight days. The taxing officer ordered the plaintiff to pay the defendant's costs of the taxation except for two days, subject to exceptions to which it is not necessary to refer. The total costs relevantly allowed were approximately $280,000. An appeal was brought to the Master, Master McLaughlin, against what the taxing officer had done: he was to review the taxation. What occurred before the Master is stated in the judgments given by the Master on 16 December 1994, 20 March 1995 and 10 August 1995. The appeal to him dealt with a large number of matters. Prior to the initial hearing on 1-2 November 1994, the Master had before him at least three motions filed by the plaintiff. The appeal was not completed within the two days allotted. Accordingly the Master directed that written submissions be furnished of the contentions of the parties. As a result, as the Master recorded, some 202 pages of submissions and supporting material were placed before him. Having considered the submissions, oral and written, the Master said: [6] "Accordingly, I propose in these present reasons for judgment, to limit myself to the matters which I consider were properly before me for hearing on 1 and 2 November 1994. I shall, of course, reserve to the parties liberty to apply, so that, if they cannot, by application of those decisions of principle which I shall make, agree upon the arithmetical effect upon the calculations contained in the taxation of costs, then it will be necessary for me to perform that exercise, which will, then, be decisive of those matters in the review ultimately to be conducted of the Taxing Officer's decision on reconsideration." The Master specified as "the matters which were before me for hearing" the matters referred to in the para(a), para(b) and para(c) on pages 3 et seq in his judgment of 16 December 1994. The matter in para(a) and para(b) may now be put aside; it is the matters in para(c) which were dealt with by the Master and, as far as now relevant, remain to be dealt with. The matters contained in para(c) were divided into six paragraphs. The first three of these (a), (b) and (c) involve the interpretation of orders made by Bryson J and Waddell CJ in Eq as to the costs of or relating to particular days in the proceedings. It is the matters in para(d), para(e) and para(f) which have mainly been in issue and will mainly be in issue in the appeals to this Court. These relate (as I shall describe them compendiously) to "the costs of preparation" (being the costs of preparation for trial by counsel and the solicitor), the costs of the taxation before taxing officer Howe and (as I shall describe them compendiously) the Pt52 items. (These raise for consideration the effect given by the taxing officer Mr Howe to Pt52 R23 in determining the amount to be allowed upon a party and WRENTWORTH v WENTWORTH (ESTATE OF THE LATE GEORGE NEVILLE WENTWORTH) (Mahoney AP) (Mahoney AP) party basis in respect of items such as attendance by the plaintiff's solicitor at conferences, the travelling costs of the plaintiff's solicitor, and other matters identified by the parties as being at issue in this regard). In a judgment of some thirty-seven pages, the Master set out, clearly and precisely, the determinations of principle which he made and which were to be applied in the review of the decisions made by taxing officer Howe. The Master stated his conclusions in respect of the construction of the orders in questions in para(a), para(b) and para(c). In relation to the costs of preparation, he differed in principle from taxing officer Howe and directed a substantially more generous basis of assessment of the plaintiffs costs. In relation to the Pt52 items, he differed from the approach adopted by taxing officer Howe and, in substance, directed that the items in question, relating to the solicitor's attendance at conferences, the solicitor's travelling costs and the other matters, be dealt with upon a basis substantially more favourable to the plaintiff than that adopted by the taxing officer. Because of his decisions in relation to matters (d) and (f), the Master indicated that a different approach should be made to the determination of the costs of the twenty-eight days spent in taxing the costs before taxing officer Howe. The Master was of the opinion that the parties "would be able to perform arithmetical calculations consequent upon" the views expressed by him and adjourned the reconsideration of the taxation to allow them to do so. The parties did not do what was expected of them. Accordingly, the Master took steps directed to the application of the principles enunciated by him to the matters in dispute in the taxation. He directed the parties to set out in a schedule the arithmetical consequences of the application of those principles to the items in the bill of costs and to "serve any additional material" to be relied upon. This was done. On 24 February 1995 the Master directed another taxing officer "without the necessity for the attendance by the parties or their respective legal advisers" to reconsider the disputed items in the light of the principles enunciated by him and the material provided by the parties. He directed "that the plaintiff's bill of costs be remitted for completion of the taxation to a taxing officer" "conformably with" the directions and the principles in question. These latter directions were given by him in private chambers. Thereafter various applications or submissions were made to the Master on motion relating, inter alia, to what he had done and the manner in which he had done it. It was submitted, inter alia, that he had no power to do what he had done and that, in making the orders or giving the directions in question, he had failed to afford the parties, as I shall describe it, due process. Subsequently, taxing officer Irwin reviewed the plaintiff's bill of costs as directed by the Master. He quantified the amount to be allowed on taxation at approximately $463,038.46 and subsequently on 5 May 1995, signed a certificate of taxation for that amount. Taxing officer Irwin concluded that "the taxation proceedings were unnecessarily lengthened to the extent of fifteen per cent directly as a consequence of the manner in which the plaintiff conducted this part of her case", that is, that relating to the costs of the solicitor's time and travelling. He therefore reduced "the costs of the taxation payable by the defendant" by fifteen per cent. Further applications were filed by the plaintiff and by the defendant relating, inter alia, to that certificate of taxation and what had been done relating to it. In his judgment of 10 August 1995, the Master dismissed the motions and indicated 4 UNREPORTED JUDGMENTS that, as the result of the orders made by him on 20 March 1995, he was "functus officio in the matter". As I understand what was said, the Master was of the view that the orders made by him on 20 March 1995 and the consequent reference of the matter to the new taxing officer resulted, upon the issue of the taxing officer's certificate, in the completion of the orders made by him and accordingly of his review of the taxation. Each party applied for leave to appeal to the Court of Appeal against (I put the matter in general terms) the effect of what had been done. The parties assert, and I accept, that as the result of what has occurred it is not necessary for the Court to determine whether the applications for leave to appeal have been filed within the time allowed by the Court; it may be assumed that they were or that, if they were not, the appropriate extension of time has been granted. It was pointed out that it was necessary for the parties to identify the order or orders against which leave to appeal was sought. In due course, following the judgment of the Master on 10 August 1995, the view appears to have been taken by them that the order against which leave to appeal is sought is that made by the Master on 20 March 1995. In my opinion it is proper to identify as the orders to be the subject of the appeals to this Court the order or orders made by the Master on 20 March 1995. It is proper in this regard to record that the parties have called in question the power of the Master to make the orders that he made in the way that he did and they have called into question the power of the Master to commit to taxing officer Irwin the determination of the matters in the manner referred to by the Master in his judgments of 20 March 1995 and 10 August 1995. These are matters which the parties may, if they are so advised, seek to contest upon the appeal pursuant to the leave now granted. 2. IS LEAVE TO APPEAL NECESSARY? [7] The plaintiff accepts that leave to appeal is necessary. The defendant contends that he has an appeal as of right. Mr Lindsay SC, for the defendant, submitted that Pt60 R17 allows a right of appeal to this Court against the ruling of a Master on a review of taxation such as the present; that s102(2)(c) does not impose the necessity for leave to appeal; and that s76 of the Supreme Court Act does not operate so as to bring an order of the kind here in question within the provisions of s102(2)(c) or otherwise. The construction of these provisions has not been fully argued in these applications because the Court has been of the opinion that, if there be no right of appeal, leave should be granted to the extent to which I refer in this judgment. However, as at present advised, I am of opinion that there is no such appeal as of right as is contended for by the defendant. Pt60 R17 grants, in terms, a right of appeal from orders made by a master upon a review of taxation. But that rule, on its proper construction, does not, I think, grant a right of appeal irrespective of the operation of the other provisions of the Act and of the rules. It would, I think, be extraordinary if, notwithstanding that orders for costs falling within para(c) are expressly made subject to leave, any relevant order made by the master on a reconsideration of a taxation of costs should give rise to an appeal as of right. Upon its proper construction, the right of appeal there granted is subject to such other provisions, including s102, as properly relate to appeals. Accordingly, the right of appeal so granted requires the leave of the court if it falls within, eg, para(c) or any other paragraph of s102(2). WRENTWORTH v WENTWORTH (ESTATE OF THE LATE GEORGE NEVILLE WENTWORTH) (Mahoney AP) (Mahoney AP) I am inclined to think that the present case falls within para(c) in that, by operation of s76, the ruling made by the taxing officer or the master on review is a discretionary ruling within that paragraph. But, however that be, the order of the Master to which Pt60 R17 refers is an interlocutory order and accordingly requires leave to appeal. I have accordingly dealt with the applications upon this basis and have concluded that leave to appeal should be granted. 3. CONSIDERATIONS AFFECTING LEAVE TO APPEAL: [8] The grant of leave to appeal is determined by the overall effect of a number of factors. It is not necessary to detail the factors which have been relevant in the present applications. But it is, in my opinion, proper to refer to some of them. A reasonable person cannot but be struck by the fact that the Family Provision proceeding has generated such costs as are now in question. He or she would, I suspect, be surprised that determining the amount of such costs should have taken so long and should have involved such complication. And he or she would, I suspect, be surprised if the law allowed parties to be burdened with costs and complications of the order of those now in question. Ihave, in dealing with these applications for leave, assumed that what has been done, by the parties, the taxing officers and the Master, has been done regularly and in accordance with the procedures available to them. To date, the contrary has not been pressed. But on that assumption, there must I think be concern that such a proceeding, so dealt with, can generate such costs. The Court on appeal may think it necessary to consider whether - even if the costs have been itemised strictly in accordance with the requirements of the law - they are yet too much. The Court may think it necessary to consider whether, notwithstanding what may be justified by the application of the relevant rules, there is a limit to what the Court should allow one party to charge against the other upon such an application. In saying this, I do not direct criticism at the plaintiff or the defendant in this case, or at what they have done. No issue has yet arisen in relation to such matters. I am concerned with whether the Court should consider that there is a limit to what it will order to be paid as costs. There are, amongst others, three aspects of this matter to which reference may be made. These are: the apparent disproportion between the issues litigated in the Family Provision Act proceeding and the legal costs claimed; the multiplicity of the proceedings in relation to the taxation of the costs; and the effect which, apparently, the requirements of due process have had upon the costs incurred by the parties. As to the disproportion factor: The total of the costs incurred by the plaintiff and by the defendant in the Family Provision Act proceeding is not known. But it may be inferred that the costs are great. There is, even at the present stage, some indication of the magnitude of them. The present taxation of costs is concerned with the costs of only one party. It is concerned, not with the totality of the costs incurred by the plaintiff but only her party and party costs. The total costs claimed by the plaintiff were approximately $813,000. The total costs allowed by taxing officer Howe on taxation were approximately $280,000. The total of her party and party costs, in respect of the matters included in the bill of costs or otherwise dealt with in the taxation, as allowed pursuant to the Master's directions and taxing officer Irwin's assessment, is $463,038.46. If it be 6 UNREPORTED JUDGMENTS permissible to make an (experienced) conjecture, the total of the legal costs of the parties from the Family Provision Act proceeding is in the range of $.5 million-$1 million or more. That proceeding was an application by a daughter for provision from her father's estate. There were, no doubt, complications in the application not found in a routine application of that kind. But taking those complications into account, a reasonable person might think that there is an unacceptable disproportion between the issues litigated and the legal costs of doing it. Costs are, of course, ordinarily calculated in a manner which is routine: the accepted heads of charge are itemised, the amount which may be charged in respect of each of item is placed against it, and the charges are totalled. But there may be - a reasonable person might think there must be - a limit upon what, in the end, may be charged. As I have suggested, if a detailed and itemised list, charged in this way, yields an unacceptably high total, it may be thought that the Court can - it may be thought it has a public duty to - reduce the total charge to one which bears an acceptable proportion to that which was litigated. The multiplicity factor: It is conventionally accepted that, as a matter of general principle, a litigant and those advising him/her are entitled to use the processes of the Court in such manner as, within the law, will further their claim. Stated conventionally and as a general principle, in a taxation of costs a litigant may list all of the available items of costs, may make submissions in relation to each of them, and may take such time as is available to do so under the legislation. All exceptions and objections may be taken to what is done, by motion or otherwise. But, again, there must be a limit. If there be a multiplicity of matters and if the time taken in respect of each of them, though legitimate in isolation, in total is unacceptable, there may be a duty upon the Court to call a halt or, at least, to ensure that, by its orders, it does not impose a burden of costs which is beyond what is just. In the present case, there has been a multiplicity of motions: the Master, in his judgments, has referred to a number of them. There has, presumably, been a great multiplicity of items claimed in respect of costs. In the result, the taxation of the costs before taxing officer Howe occupied some twenty-eight days. The Master has had to deal with a number of motions and applications. I shall assume that each item was properly listed and no more than a proper time was taken to deal with each of them. But, even on these assumptions, a reasonable person might think that the time taken was out of proportion to the purpose for which it was taken, viz, the taxation of a bill of costs. It may be that, where there are a multiplicity of proceedings or a multiplicity of items, the costs rules otherwise applicable must be adapted to ensure that what is claimed has an acceptable relationship to the purpose of what was being done, viz, the taxation of a bill of costs. The procedures of the courts are available to be used for what should be done, not what can be done with them. The law expects that the parties and those acting for them will act with a due sense of proportion. It has recently been said, in relation to American lawyers, that there has been a "breakdown in self-discipline among lawyers" and that "... many judges, practitioners, educators and scholars, like sorcerer's apprentices, have slipped off the restraints that there greatest predecessors wore with pride": see Professor Mary Ann Glendon "A Nation Under Lawyers" (1994), at 12-13. It is, in my opinion, appropriate to consider whether restraints of this kind are applicable to the parties to litigation: to WRENTWORTH v WENTWORTH (ESTATE OF THE LATE GEORGE NEVILLE WENTWORTH) (Mahoney AP) (Mahoney AP) consider, at least, whether costs are to be allowed only in respect of an appropriate use of the procedures made available to them. The due process factor: The courts have properly emphasised that litigation must be conducted according to (as the phrase has been adopted) due process: there is a right to be heard, a right to put one's case as one sees it to be, and a right to reply to the case put by the other party. Due process is a fundamental principle of litigation. But process is not an end in itself: it is only a means to the end which litigation seeks, namely, justice. If the adherence to the text of due process prevents the achievement of justice in the particular case, or causes injustice, it must be appropriate to consider to what extent these constituents of due process are to be adhered to in the particular case. At least, it may be proper to consider whether a party is to have the totality of the costs which the adherence to them produces. The requirements of due process, applied literally according to their terms, would require that a litigant be entitled, in a bill of costs, to list the multiplicity of his/her items of charge, however long they may be. The litigant will be entitled to speak, for a reasonable time, in support of each item, the opponent to speak to each of them, and the litigant to reply. There will be a ruling in respect of each of them. And costs will be chargeable for each of these. But if the result of this is that the taxation of a bill of costs extends over some twenty-eight days, a reasonable person may think that the application of the requirements of due process has not produced justice. The purpose of a justice system is that disputes be determined economically (without the use of more resources than is necessary), effectively (so as to put an end to the dispute), timeously (within an appropriate time) and justly. It may be appropriate for the Court to consider whether, if the application of the requirements of due process to the taxation of such a bill of costs requires twenty-eight days, it should intervene. It may, at the least, consider whether it is appropriate that parties who, in the exercise of such rights, extend proceedings so long, should have the costs of doing so. These issues of principle arise for consideration in these applications. Whether the Court on appeal will deal with them is a mater for that Court to determine. But, in my opinion, the fact that they arise for consideration is one of the maters to be taken into account in the decision to grant leave to appeal. Analogous though not identical questions can and may well arise in the application of the Legal Profession Act 1987. Ptl1 Div 6. 4. MATTERS TO BE ARGUED ON THE APPEALS: [9] Ihave referred to the nature of the appeals and of the issues which are apt to arise for consideration upon them. It is proper to make clear that, in relation to the Pt52 maters, the maters which, on her application for leave, the plaintiff claims to be entitled to argue include not merely the maters to which I have referred, namely, the claim in respect of the solicitor's attendance at conferences and the travelling costs of the solicitor. The plaintiff claims to be entitled to deal, in the application of the relevant principles, with other maters itemised by her to which reference has been made in argument. It will, no doubt, be necessary for the Court, in monitoring the appeal, to consider whether and to what extent these maters are to be dealt with and in what manner they are dealt with. The plaintiff in argument submitted that leave to appeal should not be granted to the defendant because, as she contends, the defendant had waived or otherwise lost his right to appeal. It is not necessary in this judgment to detail the submissions made by her. It is sufficient to indicate that, in my opinion, this mater is not such as should be determined upon the present application. If the plaintiff 8 UNREPORTED JUDGMENTS desires to submit that the defendant has effectively lost his right to appeal by waiver or otherwise, that mater should be dealt with on separate motion. Such issues of fact as then arise can be dealt with on that motion. If such a motion is made, it will be for the Court to determine how that mater is to be determined and whether it is to be determined before or as part of the hearing of the appeals. Priestley JA In my opinion the court should grant leave to appeal to both applicants, by making orders in the terms proposed by Mahoney JA. Hunter AJA In this matter, I am of the opinion that leave is required in respect of the subject appeals and that leave to appeal should be granted in each application. I have had the opportunity of reading the observations of Mahoney AP in this matter and am in general agreement with them. Leave to appeal granted upon each application. [10] Costs in each application reserved to Court dealing with appeals. COUNSEL: Claimant/Opponent: MISS K WENTWORTH (in person) Opponent/Claimant: GC LINDSAY SC/MK MEEK SOLICITORS: Claimant/Opponent: RUSSO AND PARTNERS Opponent/Claimant: DUNHILL MADDEN BUTLER