Case: House v The King [1936] HCA 40 ; (1936) 55 CLR 499
Outcome: cited
The respondent's case, put shortly, is that the appeal is against an exercise of a "judicial discretion": cf House v The King [1936] HCA 40 ; (1936) 55 CLR 499 at 504; but neither the grounds of appeal nor the appellant's submissions disclose an appellable error in the circumstances. 27 Before dealing with the appellant's grounds, four general and/or contextual matters should be mentioned. First, it is clear from his Honour's reasons and from the transcript of the costs hearings on 4 and 6 December 2007 that the Federal Magistrate made plain to the parties that he was disposed to make a lump sum award to bring to an end what already had been a protracted litigation. As I earlier indicated, the appellant has not challenged his Honour's decision to make such an award, although it has been impugned obliquely by the repeated assertions that taxation should have been ordered and, if it had, a much lesser sum would have been payable by way of costs. 28 Secondly, I have referred above to the common practice of the use of evidence of the actual costs and disbursements charged to a successful party as providing the starting point for an estimation of an appropriate lump sum award. As again is clear from his Honour's reasons (at [36]), he was both aware of this practice (and, for that matter, of Mr Williams' prior involvement in giving such evidence in intellectual property cases) and how it might assist in arriving at an appropriate estimate of costs. It is, in my view, quite erroneous to assert that the Federal Magistrate engaged, or considered he was engaging, in a form of taxation, notwithstanding that Mr Williams gave evidence of what he expected would be the taxed amount payable on the sum billed. His Honour rightly chaffed at being asked to engage in a defacto taxation. At the 6 December costs hearing, he observed: HIS HONOUR: Could I interrupt you, Mr Hennessy. This matter seems to be proceeding pretty much like a taxation at this stage. It seems to me that what we're trying to do is avoid a taxation, so that you have to justify every particular item. In fact doesn't Mr Williams say that the discount really takes into account all of these arguments that might be presented about this taking too long or that not being completely on point or an issue has been won here or an issue lost there. Is that the case, or am I misunderstanding Mr Williams' evidence? MR HENNESSEY: With respect, both Mr Williams' evidence and what has just fallen from your Honour are precisely right. 29 Thirdly, both before his Honour, and again before me, counsel for the appellant engaged in a detailed dissection of the invoices exhibited to Mr Williams' affidavit descending into matters such as alleged excessive charging and services, account not being taken of "victories", the scales of costs for disbursements and lawyer's fees of various jurisdictions, the incidence of GST, etc. While it, doubtless, was open to him to comment upon the invoice and upon Mr Williams' evidence, he neither cross-examined Mr Williams nor put on evidence (expert or otherwise) on costs. Much in his submissions was in consequence devoid of any evidentiary foundation. It clearly was open to his Honour to accept Mr Williams' evidence as he did: see reasons [37]. I earlier indicated there is no ground of appeal challenging Mr Williams' evidence or the Federal Magistrate's reliance upon it. It is difficult to resist the conclusion either that counsel did not understand the function performed by the 50% discount in his Honour's estimation of the appropriate sum, or that he simply disputes the percentage chosen. The latter of these, though, is not reflected in any ground of appeal. 30 Fourthly, it again is clear from the transcript that the issues relating to the assessment agitated before me were raised before his Honour. It also is clear that considerable latitude was given to counsel for the appellant in raising issues before his Honour. As the Federal Magistrate said at the 6 December costs hearing: HIS HONOUR: ... I wanted to give Mr Scragg every opportunity to put everything that he has, and he certainly has taken every point, as you say. It could never be said that he hasn't closely examined it all and brought up every possible argument, but really, I approach it somewhat differently, I think. I think I'm entitled to approach it somewhat differently. 31 In making this observation his Honour clearly was adverting to the objective in making a lump sum award and to the function of the discount rate to be applied in estimating an appropriate sum of costs. On the appeal, counsel for the appellant has sought to turn the latitude given him in raising "every possible argument" into a means of attack on the decision under appeal. It is said that, as the reasons did not disclose that the Federal Magistrate expressly addressed his arguments, his Honour has not taken them into account. It is perfectly clear that, as on the appeal, counsel raised a range of "arguments" which clearly were not relevant given his Honour's decision not to order costs to be taxed, or which necessarily were rejected given his Honour's acceptance of Mr Williams' evidence. Equally, when one has regard to the function performed by the discount rate chosen by his Honour, it is obvious, in my view, that account was taken of matters raised by Mr Scragg to the extent that they were relevant, or were not inconsistent with the evidence accepted by his Honour. Again I would note that there is no ground of appeal based on inadequacy of the Federal Magistrate's reasons though this appears to inform the above challenge to the reasons. 32 Turning briefly to the grounds of appeal, almost all of which have been implicitly rejected in what I have already said, I will merely note the following. 33 The ground 1 challenge to the practitioner's charge out rates "allowed" (which it is complained were higher than Adelaide rates) was the major matter raised by the Federal Magistrate with counsel for Autodesk Australia. Having regard to the facts that negotiations over the copyright were being held in Sydney prior to the institution of the Adelaide proceeding and that an advantage in those negotiations was being sought in initiating a proceedings in Adelaide (albeit one doomed to failure), it is unsurprising that Sydney lawyers were engaged for the purposes of the proceedings and that, in selecting the starting point for the lump sum estimates, the Sydney rates (being the actual rates charged the respondent) were employed but were then discounted. In short, the appellant misapprehends the process employed by the Federal Magistrate. It was not a taxation. The same comment can be made of grounds 2(a) and 2(b), but with the additional emphasis that a function of the discount is to avoid the necessity for engaging in detailed examination of the "allowances" referred to in those grounds. For my own part, given that the application was dismissed at the appellant's request and was in any event doomed, I do not consider that an "issues based" approach to costs, even if a taxation had been made, would have been appropriate in this matter. I need not enlarge upon this. Grounds 3 and 4 appear to relate to costs incurred in the New South Wales proceedings. It is to be noted that the invoice exhibited to Mr Williams' affidavit erroneously included a minor amount from those proceedings which amount was removed from the process of calculation at the 6 December hearing. A related allegation that an identical affidavit was used in both proceedings was conceded by Autodesk Australia, but the evidence is that it was prepared for the Adelaide proceedings. It was in consequence properly included in the costs incurred in that proceeding, howsoever it may be dealt with for costs purposes in the other proceedings. Ground 5 is simply misconceived. Ground 6 is at best a challenge to the fairness of the award made and, on the material before his Honour, I am not satisfied that the alleged unfairness has been made out. As to ground 7, I merely say in light of the matter's history, there was ample justification for his Honour taking the course he did. The course of this appeal is further testament to the need for finality and economy perceived by his Honour. 34 I will order that the appeal be dismissed with costs. I certify that the preceding thirty-four (34) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finn. Associate: Dated: 16 July 2008 Counsel for the Appellant: Mr P Scragg Solicitor for the Appellant: Peter Scragg and Associates Counsel for the Respondent: Mr J Hennessy Solicitor for the Respondent: Gilbert + Tobin Lawyers Date of Hearing: 13 June 2008 Date of Judgment: 16 July 2008 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2008/1051.html