FEDERAL COURT OF AUSTRALIA

Cachia v Westpac Financial Services Limited [2003] FCA 817

PRACTICE & PROCEDURE – costs – bill of costs – taxation – judicial review of decision of taxing officer on reconsideration – whether the review of the taxing officer’s decision must be a review de novo

Federal Court Rules O 62 r 4(1), r 8, r 11, r 12, r 19, r 42, r 42(1A), (2), r 43, r 43(1)(a), r 44, r 44(1), (4), (5), (5)(a), r 45, r 46 (3)(a), (3)(b)

High Court Rules O 71 r 89(1)

Australian Coal & Shale Employees’ Federation v The Commonwealth (1953) 94 CLR 621 followed

Boys v Australian Securities Commission [2001] FCA 1440 not followed

Cachia v Westpac Financial Services Limited [2000] FCA 1576 referred to

Cachia v Westpac Financial Services Limited [2000] FCA 16 referred to

Charlick Trading Pty Ltd v Australian National Railways Commission [2001] FCA 629 applied

Gambotto v WCP Ltd (1995) 182 CLR 432 referred to

Higgins v Nichol (No 2) (1972) 21 FLR 34 applied

In Marriage of Locke (1992) 112 FLR 238 mentioned

Jet Corporation of Australia Pty Ltd v Petres Pty Limited & Ors (1985) 64 ALR 265 mentioned

Marketing Advisory Services v Tasmanian Football League Inc [2003] FCA 245 followed

Martin v Commonwealth Bank of Australia (1995) 14 Leg Rep 10 applied

Pacific Dunlop Ltd v Australian Rubber Gloves (17 August 1993, unreported) not followed

Ralkon Agricultural Co. Pty Ltd v Aboriginal Development Commission & Anor (11 July 1986,unreported) considered

Raybos Australia Pty Ltd v Tectran Corporation Pty Ltd (1987) 62 ALJR 148 applied

Sanders v Snell (No 2) (2000) 174 ALR 53 applied

Schweppes’ Ltd v Archer (1934) 34 SR (NSW) 178 followed

Titan v Babic (11 October 1995, unreported) considered

Western Australian Bank v Royal Insurance Co (1908) 7 CLR 385 considered

SALV LAURENCE CACHIA v WESTPAC FINANCIAL SERVICES LIMITED

NG 3723 OF 1996

HELY J

8 AUGUST 2003

SYDNEY

THE COURT ORDERS THAT:

1.         The motion for review of the taxing officer’s decision on reconsideration is 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.

REASONS FOR JUDGMENT

Background

1                     On 25 February 2000 orders were made that the applicant’s application be dismissed and that the applicant pay the respondent’s costs of the application: see Cachia v Westpac Financial Services Limited [2000] FCA 161.  An appeal by the applicant to the Full Court was subsequently dismissed: Cachia v Westpac Financial Services Limited [2000] FCA 1576.  On 23 November 2001 an application by the applicant for special leave to appeal to the High Court was refused.

2                     On 1 December 2000 the respondent filed a bill of costs pursuant to the order made on 25 February 2000.  The bill contained 550 items totalling $131,107.69.  On 28 February 2001 in accordance with O 62 r 46 (3)(a) and O 62 r 46 (3)(b) of the Federal Court Rules (‘the Rules’), the registrar notified the parties that it had been estimated that the respondent’s costs were likely to be taxed at approximately $95,000.  The applicant did not accept this estimate. He filed a notice of objection objecting to 494 of the items in the respondent’s bill.  The bill then proceeded to a full taxation.

3                     The bill was taxed by Deputy District Registrar Segal (‘the taxing officer’) on 26 November, 4 and 11 December 2001, involving a total hearing time of approximately ten hours.  At this hearing, the applicant represented himself.  Ms Higinbotham, a solicitor and costs consultant, appeared on behalf of the respondent.  At the hearing before the taxing officer each objected item was examined against the terms of the applicant’s written notice of objection.  Where the nature of the objections so required, the respondent was required to produce documentary proof of the work done.  After hearing oral submissions from both parties, the taxing officer gave a decision whether to allow the item, wholly or in part, or to disallow the item.  He also gave short oral reasons.  The result of the taxation was to allow a total of $91,351.60 in respect of the items in the bill.

4                     As the applicant did not achieve a variation of at least 15 per cent of the estimate of taxed costs, the taxing officer allowed a sum of $2,724.00 in relation to the costs of the taxation under O 62 r 46(4A).  Accordingly, the respondent’s costs were allowed in the total amount of $94,075.60.

5                     On 4 January 2002 the applicant applied, by Notice of Motion under O 62 r 42(1A) and (2), for the taxing officer to reconsider his decision and to state his reasons.  Attached to the Motion was a detailed ‘statement of objections’.  In the statement of objections, the applicant identified six categories of objections as follows:

‘1         costs relating to negotiations to settle the  litigation;

2          costs which may be termed “of a private nature” arising out of the relationship of the respondent and its legal representatives;

3          costs relating to the re-opening of the hearing on 9 February 2000;

4          costs which are extravagantly or not costs effectively incurred;

5          costs associated with the “independent expert” on the prima facie evidence that he was not independent and the Court was misled; and

6          costs, generally and particularly.’

6                     The taxing officer invited the respondent to file and serve a written response to the applicant’s statement of objections.  The respondent did so on 19 February 2002.  The applicant’s Motion was then listed for hearing on 11 April 2002.

7                     In a letter dated 25 February 2002 the applicant wrote to the registry objecting to the respondent’s written response:

‘On the grounds that there is no provision in the Rules of Court on which such a document may be filed and served, and that the document does not contain – nor does it purport to contain – anything not previously put to the taxing officer in the taxation process.’

8                     The applicant also requested that the hearing scheduled for 11 April 2002 be vacated, that the taxing officer reconsider his decision on the papers and state his reasons in the absence of the parties.  The applicant put to the taxing officer that the only purpose of a reconsideration under O 62 r 43 is the provision of written reasons by the taxing officer for decisions taken on the original taxation to assist a judge in a review of the taxation, and for this purpose, he did not wish to put anything additional to that filed by him on 4 January 2002.

9                     The taxing officer determined that the hearing on 11 April 2002 should proceed, because the taxing officer was required to reconsider decisions made on taxation to which objection was made in the motion for reconsideration, and to give his reasons for his decision on reconsideration.

10                  However, both parties informed the taxing officer that they were content to rely on the facts and submissions put by them on the taxation, and did not desire to participate further in the reconsideration.  Nonetheless, and with the agreement of the parties, the taxing officer proceeded to reconsider decisions earlier made on the taxation in the absence of the parties and without any assistance from them except to the extent that this was furnished by the applicant’s statement of objections and the respondent’s written response.

11                  On 30 December 2002 the taxing officer provided his reasons for decisions on reconsideration.  The practical effect of that decision was that:

(a)        a reduction of $1,084 was made from amounts previously allowed on the taxation;

(b)        the sum of $1,081 was awarded to the respondent in relation to the costs of the reconsideration; and

(c)        the respondent’s costs were allowed in a total amount of $94,072.60.

On 30 December 2002, in accordance with O 62 r 43(1)(a) of the Rules, the taxing officer issued a certificate of taxation in the amount of $94,072.60.

Current application

12                  By Notice of Motion filed on 21 January 2003, the applicant seeks review under O 62 r 11 and O 62 r 44(1) of the Rules of the decision of the taxing officer on reconsideration.  The motion seeks a review of the decision of the taxing officer dated 30 December 2002, and that the certificate of taxation dated 30 December 2002 be set aside.

13                  The grounds on which those orders are sought are contained in an affidavit of the applicant dated 21 January 2003 filed in support of the motion.  The grounds may be summarised as follows:

1.         the filing of the respondent’s response was the result of illegitimate contact between the taxing officer and the respondent’s solicitors.  This vitiated the taxation because the taxing officer thereby descended into the arena, and acted in a manner contrary to the rules of natural justice;

2.         the taxing officer failed to bring to bear an independent mind on the reconsideration.  This is evidenced by his effective quotation of whole paragraphs from the response in his reasons for decision on reconsideration;

3.         the taxing officer erred in requiring a further hearing to be held on 11 April 2002.  What he should have done was simply to reduce to writing his reasons for the decisions originally made on taxation; and

4.         the six categories of objections referred to in the motion for the taxing officer to reconsider his decision are repeated.

The regulatory framework

14                  Where costs are ordered to be paid to any person, that person is entitled to his taxed costs: O 62 r 4(1).  Bills of costs and fees are to be taxed, allowed and certified by a taxing officer: O 62 r 8.  Every taxation of costs and every decision of a taxing officer is subject to review by a judge: O 62 r 11.  Order 62 r 12 entitles solicitors to charge and be allowed the fees set forth in the Second Schedule in respect of matters referred to in that Schedule.  O 62 r 19 provides:

‘On every taxation the taxing officer shall allow all such costs, charges and expenses as appear to him to have been necessary or proper for the attainment of justice or for maintaining or defending the rights of a party, but except as against the party who incurred them, costs shall not be allowed which appear to the taxing officer to have been incurred or increased –

            (a)        through over-caution, negligence or misconduct;

            (b)        by payment of special fees to counsel or special charges or expenses to witnesses or other persons; or

            (c)        by other unusual expenses.’

15                  Under O 62 r 42 a party to the taxation who objects to the decision of a taxing officer may apply by motion to the taxing officer to reconsider his decision.  The applicant is required to file or subscribe to the notice a statement of objections.  O 62 r 43 obliges the taxing officer to reconsider the decision to which objection is made, and upon request by the party and by reference to the objections to his previous decision, to state his reasons for his decision on reconsideration.

16                  O 62 r 44 provides for review by the Courtof the decision of the taxing officer on reconsideration.  O 62 r 44(4) and (5) provide as follows:

‘(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 the 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.’

17                  O 62 r 45 provides that on completion of the taxation the taxing officer is to issue a certificate of taxation which, in the event of non-payment, can be incorporated into an order.

Review of costs by the Court

18                  The most commonly cited statement of the principles applicable on a review by the Court of a decision of a taxing officer is that formulated by Jordan CJ with the concurrence of Harvey CJ in Eq and Street J in Schweppes’ Ltd v Archer (1934) 34 SR (NSW) 178, which was endorsed by Kitto J in Australian Coal & Shale Employees’ Federation v The Commonwealth (1953) 94 CLR 621.  At SR 183 Jordan CJ said:

‘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.’

(citations omitted)

19                  There has been some difference of opinion between judges of this Court as to whether that formulation is applicable in the Federal Court.  In Ralkon Agricultural Co. Pty Ltd v Aboriginal Development Commission & Anor (11 July 1986,unreported) Foster J rejected a submission that the effect of O 62 r 44(5)(a) was to make the review a hearing de novo, and his Honour applied the principles enunciated in Australian Coal & Shale Employees’ Federation (supra) and in Schweppes’ (supra).  In Pacific Dunlop Ltd v Australian Rubber Gloves (17 August 1993, unreported) Olney J expressed the view that 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 a power pursuant to federal legislation in view of the constitutional limitations on the exercise of federal judicial power.  In Titan v Babic (11 October 1995, unreported) Finn J noted a possible qualification to the proposition that the applicable principles are as formulated by Jordan CJ in Schweppes, namely that alluded to by Olney J in Pacific Dunlop, but because of the view which Finn J had formed on the motion before him, it was unnecessary for him to express any opinion on the matter.

20                  The issue arose again in the decision of Carr J in Boys v Australian Securities Commission [2001] FCA 1440.  After citing the passage from the judgment of Jordan CJ in Schweppes as cited above, Carr J expressed the view that the position in the Federal Court was somewhat different.  Carr J agreed with the decision of Olney J in Pacific Dunlop, that the review of a taxing officer’s decision must be a review de novo.  The matter arose again in Marketing Advisory Services v Tasmanian Football League Inc [2003] FCA 245 where Heerey J disagreed with the statement of Olney J in Pacific Dunlop, to which I have referred.  At [12] Heerey J said:

‘The statement that is appropriate that the review be conducted as if the judge were the original decision-maker seems to me to be in flat contradiction to the thrust of Australian Coal & 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 & 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.’

No reference is made by Heerey J to the decision of Carr J in Boys. 

21                  When exercising its functions under O 62 r 44 the Court is not, in the strict sense, entertaining an appeal from the taxing officer.  It is reviewing his/her taxation: Western Australian Bank v Royal Insurance Co (1908) 7 CLR 385 at 388; Raybos Australia Pty Ltd v Tectran Corporation Pty Ltd (1987) 62 ALJR 148, 150.  Nonetheless, Toohey J said in the latter case that where what is involved is the review of discretionary items in the widest sense of the term, involving no question of principle, then the applicable test is that enunciated in Schweppes and adopted by Kitto J in Australian Coal & Shale Employee’s Federation.  In Martin v Commonwealth Bank of Australia (1995) 14 Leg Rep 10 Toohey J again said that those were the principles to be applied when reviewing a taxing officer’s decision.  Where the question is one of the exercise of discretion by the taxing officer, the Court is reluctant to interfere, but will do so in a proper case.

22                  In Sanders v Snell (No 2) (2000) 174 ALR 53 at 56 Kirby J held that the review contemplated by O 71 r 89(1) of the High Court Rules (cf O 62 r 11 of the Federal Court Rules) is not a hearing de novo of the decision of the Court’s taxing officer and that the ordinary principles governing the review of administrative decisions, and in particular, those in the nature of decisions concerning practice or procedure apply.  Kirby J adopted the statement of Jordan CJ in Schweppes’ as a correct formulation of applicable principles.

23                  In Marriage of Locke (1992) 112 FLR 238 Baker J considered the issue in the family law context where the rules, in material respects, follow the form of the Federal Court Rules.  His Honour held that a review is not in the nature of a rehearing of the taxation procedure, and essentially applied the principles enunciated in Australian Coal & Shale Employees’ Federation and in Schweppes’.

24                  Not every decision made by a taxing officer is in the nature of a discretionary judgment.  For example, in the present case there was a dispute upon taxation as to the effect of an order which I made that the respondent should pay any increased costs by reason of the adjournment of the hearing from December to February of the following year.  The construction and operation of that order was a matter which the taxing officer was called upon to decide, but his decision in that respect does not involve the exercise of any discretion.  However, where what is involved is the exercise of a discretion, or the formation of a value judgment, rather than some question of principle, then I would respectfully agree with Heerey J that the Court should proceed in accordance with the principles enunciated by Jordan CJ in Schweppes’ and adopted by Kitto J in Australian Coal & Shale Employees’ Federation.  Insofar as Carr J suggests that the position of the Federal Court is somewhat different, I would respectfully disagree.  The nature of a ‘review’ of a taxing officer’s decision in the Federal Court is no different from the nature of that ‘review’ in the High Court, even though the High Court Rules, and the Federal Court Rules in relation to the ‘review’, are not identical.  It follows that I also do not agree with the proposition that the review of a taxing officer decision must be a review de novo.  What is involved in a ‘review’ of a decision will depend upon the nature of the decision and the ground on which it is sought to be impeached.

Particular objections

The response vitiates the taxation

25                  When the taxing officer received the applicant’s statement of objections on 4 January 2002 he invited the respondent’s solicitors to file and serve a written response.  That invitation was not, as the applicant contends ‘illegitimate contact’ between the taxing officer and the respondent’s solicitors, nor was it as the applicant contends, unlawful contact behind the scenes.  Jet Corporation of Australia Pty Ltd v Petres Pty Limited & Ors (1985) 64 ALR 265 at 271-272 confirms that a taxing officer is required to comply with the requirements of natural justice.  It is his duty to see that the parties interested in the review are treated fairly and he is bound to afford the respondent an opportunity of replying to the applicant’s statement of objections.

26                  The taxing officer was not guilty of any impropriety in inviting the respondent to file and serve a written response to the applicant’s statement of objections.  Rather, the taxing officer was proceeding in a manner which was consistent with his duty.

Failure to bring an independent mind to bear

27                  In some paragraphs of his reasons for decision on reconsideration the taxing officer said in relation to particular items ‘I adopt as my reasons the explanations given by the respondent in the response at …’.  That does not signify any failure on the part of the taxing officer to bring an independent mind to bear in relation to those items.  It simply indicates that the taxing officer agreed with the justification advanced by the respondent for those items.  There is no substance in this complaint.

A pointless hearing

28                  Even if the applicant were correct in his contention that there was no need for a hearing in relation to the motion for the taxing officer to reconsider his decision, the fact that the taxing officer endeavoured to conduct such a hearing leads nowhere.  In any event, the applicant’s contention that a hearing was not required because all that the taxing officer was required to do was to record in writing the reasons for the decisions which he made on taxation misconceives the taxing officer’s role on the reconsideration for which r 43 provides.  On a reconsideration under r 43 the taxing officer is required to reconsider his original decision and to give reasons for his decision on reconsideration.  It is consistent with the rules of natural justice that the taxing officer should give both parties an opportunity of being heard before embarking upon that reconsideration.  Whether they choose to take advantage of that opportunity is a matter for them.

The six categories

Costs relating to negotiations to settle the litigation

29                  On the taxation, the taxing officer allowed a number of items relating to settlement negotiations.  The applicant objected to those items on the ground that settlement negotiations are not allowable where costs are awarded on a party/party basis.  There is no such general principle.  It was specifically rejected by Mansfield J in Charlick Trading Pty Ltd v Australian National Railways Commission [2001] FCA 629 at [89] –[94].  In Higgins v Nichol (No 2) (1972) 21 FLR 34 at 57-58 Joske J recognised that negotiations for settlement are part of the ordinary course of the conduct of litigation.  Accordingly, the applicant has not established the error in principle for which he contends.

30                  The applicant also asserts that Items 445-450 which consist of settlement negotiations that occurred on 25 February 2000 are not chargeable because the litigation ended with the delivery of judgment on that date.  This contention overlooks the fact that it was the applicant himself who initiated the settlement negotiations, hence the fact that they occurred after delivery of judgment is immaterial.

Private nature costs

31                  The applicant objected to a group of 70 items on the ground that they are not ‘necessary or proper’ within the meaning of that expression in O 62 r 19.  In respect of a majority of these items, the applicant simply submitted that they are ‘not party/party costs’ or that they were not necessary or that the work was of a private nature.  The taxing officer considered each of these objections.  In relation to some of them he reduced the amount claimed, either because the time claim was excessive or because the amount to be allowed was in his discretion, or because the correct charge was less than the charge made.  In relation to others of the items he accepted the justification for the item given by the respondent in its response.  No question of principle is involved and the applicant has not identified any particular error which the taxing officer made beyond repeating his original, tersely expressed, objection to the item in question.

32                  During the course of submissions, the applicant put to me that if the respondent chose to employ lawyers, then the lawyers were seized of the litigation and there was no need for communications between solicitor and client as the solicitor was charged with the conduct of the case.  There is no principle to this effect and the expenses in question appear on their face to have been reasonably and properly incurred.  I am not satisfied that the taxing officer made any reviewable error in relation to these items.

Costs relating to the reopening of the hearing on 9 February 2000

33                  On 16 December 1999 the respondent applied for an adjournment of the proceedings because counsel for the respondent was unaware that in the applicant’s reply to the respondent’s defence, he had raised an issue as to the application of the decision of the High Court in Gambotto v WCP Ltd (1995) 182 CLR 432.  I granted the adjournment application in order to afford the respondent an opportunity, if it wished, of calling evidence on that claim.  However, I ordered that any increased costs by reason of the matter being adjourned to February 2000 should be paid by the respondent.  When the hearing resumed on 9 February 2000 evidence was given by an expert accountant, Mr Prothero, as to the fairness of the proposal which the applicant was seeking to impeach in reliance upon the decision in Gambotto.  I mention now, because it may become relevant later, that I rejected criticisms of inadequate research and bias which the applicant levied against Mr Prothero.  However, the Gambotto claim failed for reasons which I explained in the judgment which I gave on 25 February 2000.

34                  It was the applicant’s contention that the effect of the order which I made on 16 December 1999 was that the respondent should pay the costs of the adjournment application and of all the costs of the continuation of the hearing on 9 February 2000.  That was not the order which I made.  The only order which I made was that the respondent should pay any increased costs by reason of the adjournment, and the taxing officer correctly concluded that the effect of this order was to exclude any such costs from the costs to which the respondent was otherwise entitled under the general order for costs which I made.

35                  The items to which the applicant took objection under this heading fall into three broad categories.  The first (346-436) are what might be described as miscellaneous items in relation to the preparation and presentation of the expert’s report.  So far as I can determine from looking at the items, they appear to be of a type which would have been incurred whether or not an adjournment had been obtained in order to secure the preparation of that report.

36                  The second group of items (486-490) consists of fees paid to PriceWaterhouseCoopers in connection with the preparation of those reports, the preparation and submission of an affidavit by Mr Prothero, attendances at conferences and at Court.  Again, these items are not within the costs order which I made against the respondent on 16 December 1999.

37                  The third category of items (546-550) consists of counsel’s fees paid to Mr Robert Weber for preparation and for attendance at the hearing on 9 February 2000.  Mr Nye Perram had been engaged as junior counsel for the respondent, but he was unavailable in relation to the resumed hearing.  It was therefore necessary for Mr Weber to get up to speed before he could step into Mr Perram’s shoes.  The costs incurred in Mr Weber getting up to speed are not costs for which Mr Cachia is responsible because of the order which I made on 16 December 1999.  However, the taxing officer disallowed much of the preparation time claimed in relation to Mr Weber because he was of the view that the disallowed charges were excluded from the final costs order by reason of the order which I made on 16 December 1999.  The taxing officer was correct in the view which he reached in this respect.  No error has been shown in the exercise of the taxing officer’s discretion as to the quantum of the fees which should be disallowed in that respect.

38                  Two other points should be made.  First, the applicant asserts that it was not necessary for the case to be reopened as I subsequently found that the Gambotto issue failed for reasons which were not dependent on the evidence of Mr Prothero.  The Gambotto point was an issue which was raised by the applicant, and the respondent was entitled to meet it both on the factual level as well as on the more general level.  Second, the applicant asserts that I was misled because Item 269 in the bill is an entry against the date 12 November 1999:

‘Perusing reply to Second Further Amended Statement of Claim – 12 Fols’

for which a fee of $30 was charged and allowed.  I was not misled.  Mr Bates saw the reply prior to the hearing as did his assistant, and there was some discussion of the reply between them.  Evidence to that effect was given at the hearing.  The problem which later emerged was that, through an error, the reply was not conveyed to counsel, who were ignorant of it until the hearing had almost concluded.  It was counsel’s lack of awareness of the reply which the solicitors had perused that led to the adjournment. 

Costs which are extravagantly or not cost effectively incurred

39                  The applicant objected to a group of 84 items on the ground that they are not allowable costs under O 62 r 19.  Again, there is no dispute as to the proper interpretation or application of r 19 and no question of principle has been identified as arising in relation to any of these claims.

40                  In relation to Items 316, 319, 323, 480, 491-504, 531-545 and 548-550 the taxing officer disallowed some part of (or in one case, the whole of) the amount claimed upon the basis that the amount claimed was not appropriate in the case of the party/party taxation.  Nothing has been placed before me and nothing has been put to me which would indicate that the taxing officer’s discretion miscarried insofar as he allowed some amount for these items.

41                  In relation to the other items, the taxing officer adopted as his reasons for allowing the item the justification put forward by the respondent in its response.  Beyond repeating his objection to the allowance of those items nothing was put to me by the applicant to suggest that the taxing officer’s decision was wrong.

42                  A judge who is called on to review the decision of the taxing officer on reconsideration is not obliged to re-tax the bill himself nor is he equipped to do so.  There is at least an initial onus on the party seeking to set aside the certificate of taxation to identify some defect or deficiency in the taxing officer’s reasons on reconsideration which would warrant interference with the taxing officer’s decision.  No doubt the Court could intervene if some error was patent on the face of the decision, but that is not the case here.  The reasons put forward in the respondent’s response, and adopted by the taxing officer as his reasons appear to provide a sound foundation for the conclusions which the taxing officer reached. 

43                  To take an example, the first items objected to are Item 22-23.  The basis of the objection is ‘not cost effective’.  The taxing officer’s decision in relation to those items was ‘permitted by scale in the amount claimed’, and he adopted the respondent’s response to that effect as correct.  The applicant does not say why the decision on reconsideration was wrong apart from repeating his original objection.

44                  To take another example, objection was taken to Items 239, 240 and 246-250 upon the ground:

‘New barrister engaged.  Applicant ought not to be burdened with costs relating to change of barristers.’

In fact the ‘new barrister’ was Mr Rares SC who was briefed as senior counsel.  The respondent in its response contended that the briefing of senior counsel was necessary and proper and the taxing officer accepted this contention.  No submissions were put to me by the applicant that the costs incurred in briefing senior counsel did not meet the O 62 r 19 test, and my own impression from having presided at the hearing is that the case was one which was appropriate for the briefing of two counsel.

45                  No question of principle has been raised in relation to any of these items, no particular error in the exercise of the taxing officer’s discretion is identified by the applicant, no error is patent on the face of the taxing officer’s reasons and it is neither necessary nor appropriate for me to go through all of these claims on an item by item basis recording the decision which I would have reached had I been the taxing officer, assuming that I was qualified to undertake that task.  It is sufficient for me to find, as I do, that the taxing officer addressed the objections raised by the applicant, exercised the discretion which was vested in him in relation to the items to which objection was taken, and did not do so in a manner which is manifestly wrong.

Costs associated with the ‘independent expert’

46                  Mr Prothero was called by the respondent on the reopened hearing on 9 February 2000, and was put forward by the respondent as being an independent accounting expert.  His affidavit, and its annexed report were read.  Three broad objections were taken by the applicant to the allowance of the costs associated with the preparation and presentation of Mr Prothero’s testimony.  First, the applicant contended that he was not in truth an independent witness, and I was misled by assertions on the part of the respondent that he was.  This aspect of the object was not pursued on the motion because the applicant regarded this issue as being one which could not be adequately and effectively dealt with in a taxation hearing, but should be adjudicated upon elsewhere.  Thus I need not deal with this aspect of the complaint.  Second, Mr Prothero was put forward as an independent witness, but the disbursements, which were allowed were payments made to PriceWaterhouseCoopers, rather than to Mr Prothero and should be disallowed for that reason.  Third, the charges made by PriceWaterhouseCoopers were extravagant.  An analysis of the time spent by three people within PriceWaterhouseCoopers on the preparation of the report was put forward with a view to establishing what was said to be considerable overlap and duplication.

47                  The taxing officer, both on the taxation and on reconsideration, approached the matter upon the basis that it was Mr Prothero, rather than his assistants, who was the expert witness with commensurate costs.  Accordingly, the taxing officer embarked upon an exercise of determining whether and to what extent there was any duplication in the work performed by officers of PriceWaterhuoseCoopers.  He came to the conclusion on taxation that there was considerable duplication, which was not allowable on a party/party basis, and he reduced the fees charged by PriceWaterhouseCoopers by a considerable amount.  On reconsideration he reduced those amounts by a further $1084.00 from the total of the amounts allowed for these items on the taxation.

48                  The taxing officer’s reasons for decisions on reconsideration show that he accepted that fees charged by PriceWaterhouseCoopers could not be reasonable to the extent that they exceed the amounts which could have been allowed had Mr Prothero performed the same work, and that costs resulting from duplication of effort should not be allowed.  This was a correct approach in principle to the resolution of the question and nothing has been put before me to show that the discretion which the taxing officer exercised in determining the quantum of the appropriate charges in any way miscarried.

Costs, generally and particularly

49                  The applicant objected to a group of 170 items mainly on the grounds that the costs of the claims are ‘unknown’ and the claims were an ‘overcharge’.  In the applicant’s affidavit filed in support of the Notice of Motion for review it was asserted that the cost charged on some items is too high, that the suit was standard legal practice for the respondent’s lawyers and it did not involve unusual complicated work, and much work, including perusal of documents, is duplicated.  The overall costs claimed for such a case is said to be out of all proportion to the substance of the litigation and is prohibitive to the pursuit of justice.  The applicant contends that an upper limit as to the costs of such proceedings ought to be imposed and that the Court should not become the reserve of wealthy corporations.

50                  Particular items in the bill were objected to on this basis.  The taxing officer gave his decision in relation to those items.  Again, the applicant did not put any submissions or other material before me, beyond repeating his original objections, which showed that the taxing officer was in error in the decisions to which he came on reconsideration.  My own assessment of this case is that it was quite a complex one, and the fact that the applicant chose to appear for himself, rather than engaging legal assistance, increased its complexity.  No question of principle has been exposed in relation to any of the items claimed under this heading.  Nor has the applicant identified any particular error on the part of the taxing officer in dealing with his objections, nor is any such error manifest upon a reading of the taxing officer’s reasons for decision on reconsideration.

51                  The motion for review of the decision of the taxing officer on reconsideration should be dismissed with costs.

Associate:

Dated:              8 August 2003