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- Unreported Judgment
MAGISTRATES COURTS OF QUEENSLAND
Fletcher v Demag Cranes and Components Pty Ltd  QMC 9
DEMAG CRANES AND COMPONENTS PTY LTD
Complaint - Application for costs
29 May 2020
30 October 2019
Magistrate C Press
1. The complaint is dismissed.
2. The complainant pay the defendant’s costs in the sum of $724,183.05.
INDUSTRIAL LAW – Workplace Health and Safety Complaint
COSTS – upon dismissal – quantum of costs – special difficulty, complexity or importance – Solicitor’s costs, Counsels’ fees, Expert’s fees and disbursements
Justices Act 1886 (Qld), ss 158 (1), 158A (1) & (2), 158B
Justices Regulation 2014 Schedule 2
Hickey v Crime and Misconduct Commission (2008) QDC 340
Schloss v Bell, Bell v Schloss (2016) ICQ 017
Bell and Anor v Unimin Australia Pty Ltd (2013) QMC 3
Bell v Townsend and Ors (2014) QMC 30
Hennessey Glass and Aluminium Pty Ltd v Westpac Australia Ltd (2007) QDC 57
Mr G Rice QC for the complainant i/b Office of Work Health and Safety Prosecutor (Qld)
Mr S Holt QC for the defendant i/b Harmers Lawyers Sydney
- This is an Application by Demag Cranes and Components Pty Ltd (“the defendant”) for costs under the Justices Act 1886 (“the Justices Act”). It arises out of a prosecution by the Complainant alleging an offence by the Department under the Work Health and Safety Act 2011 (“the WHS Act”).
- On the first day of the trial schedules to commence on 20 May 2019, the Complainant indicated that he would offer no evidence against the Defendant. The complaint will ultimately be dismissed.
- The power to award costs by the Magistrates Court in a criminal prosecution is granted and governed by Division 8 of the Justices Act.
- Relevant to this application are 158(1), 158A(1) and (2) and 158B of the said division which provides as follows:
158 Costs on Dismissal
- (1)When justices instead of convicting or making an order dismiss the complaint, they may by their order of dismissal order that the complainant shall pay to the defendant such costs as to them seem just and reasonable.
- (2)When a complaint is before a Magistrates Court which the court has no jurisdiction to hear and determine the court shall order the complaint to be struck out for want of jurisdiction and may order that the complainant pay to the defendant such costs as to the court seem just and reasonable.
158A Exercise of discretion in relation to an award of costs
- (1)Despite section 158(1), justices who dismiss a complaint may make an order for costs in favour of a defendant against a complainant who is a police officer or public officer if the justices are satisfied that it is proper that the order for costs should be made.
- (2)In deciding whether it is proper to make the order for costs, the justices must take into account all relevant circumstances, including, for example–
and the explanation or evidence could have avoided a prosecution; and
- (a)whether the proceeding was brought and continued in good faith; and
- (b)whether there was a failure to take appropriate steps to investigate a matter coming to, or within, the knowledge of a person responsible for bringing or continuing the proceeding; and
- (c)whether the investigation into the offence was conducted in an appropriate way; and
- (d)whether the order of dismissal was made on technical grounds and not on a finding that there was insufficient evidence to convict or make an order against the defendant; and
- (e)whether the defendant brought suspicion on himself or herself by conduct engaged in after the events constituting the commission of the offence; and
- (f)whether the defendant unreasonably declined an opportunity before a charge was laid–
- (i)to explain the defendant’s version of the events; or
- (ii)to produce evidence likely to exonerate the defendant;
- (g)whether there was a failure to comply with a direction given under section 83A; and
- (h)whether the defendant conducted the defence in a way that prolonged the proceeding unreasonably; and
- (i)whether the defendant was acquitted on a charge, but convicted on another.
158B Costs for division
- (1)In deciding the costs that are just and reasonable for this division, the justices may award costs only–
- (a)for an item allowed for this division under a scale of costs prescribed under a regulation; and
- (b)up to the amount allowed for the item under the scale.
- (2)However, the justices may allow a higher amount for costs if the justices are satisfied that the higher amount is just and reasonable having regard to the special difficulty, complexity or importance of the case.
- Schedule 2 of the Justices Regulation 2014 (“Schedule 2”) is apposite also and relevantly provides:
Part 1 General
1 Scale sets out amount up to which costs may be allowed
This scale sets out–
- (a)the only items for which costs may be allowed for part 6, division 8 and part 9, division 1 of the Act; and
- (b)the amount up to which costs may be allowed for each item.
Note- A higher amount for costs may be allowed under section 158B(2) or 232A(2) of the Act.
2 Item of costs covers all legal professional work
An item in part 2 covers all legal professional work, even if the work is done by more than 1 lawyer
3 Only necessary of proper costs may be allowed
A cost is to be allowed only to the extent to which-
- (a)incurring the cost was necessary or proper to achieve justice or to defend the rights of the party; or
- (b)the cost was not incurred by over-caution, negligence, mistake or merely at the wish of the party.
Part 2 Amounts up to which costs may be allowed for legal professional work
Work for hearing of complaint up to and including day 1
Instructions and preparation for the hearing, including attendance on day 1 of the hearing
up to $1,500.00
After day 1
For each day of the hearing after day 1
up to $875.00
Other court attendances
Court attendance, other than on the hearing of the complaint
up to $250.00
Part 3 Disbursements (including disbursements to witnesses and interpreters)
5 Disbursements, other than to witness for attending
Court fees and other fees and payments (other than allowances to witnesses to attend proceedings) including allowances to interpreters, and travelling, accommodation and other expenses of a lawyer acting as advocate, may be allowed to the extent they have been reasonably incurred and are paid or payable.
- It is not in dispute that the Complainant, being an employee and officer of the State prosecuting authority, is a public officer within the meaning of s 158A of the Justices Act.
- Any order for costs in favour of the Defendant must be just and reasonable and the Court must be satisfied it is proper to make the order (s 158 (1) and s 158A (1));
- In determining whether it is proper to make the order for costs the Court must take into account all relevant circumstances including matters listed in s 158A (2);
- The Defendant may (and does) seek an amount higher than the item amounts in Part 2 Schedule 2;
- Any cost allowed must have been necessarily or properly incurred (s 3 Part 1 Schedule 2); and
- In order to award costs higher than the Schedule 2 scale items the court must be satisfied the higher amount is just and reasonable having regard to the special difficulty, complexity or importance of the case.
- The Complainant concedes that it is proper for an award of costs to be made in the Defendant’s favour. For reasons subsequently explained herein, in dealing with all relevant circumstances including matters referred to in s 158A (2), this Court is satisfied that pursuant to s 158A (1) of the Justices Act it is proper to award costs in the Defendant’s favour against the Complainant.
- The Complainant does also concede that an amount higher than the scale items of Part 2 Schedule 2 is appropriate.
- The contentious issue in this matter is the appropriate “just and reasonable” amount of costs having regard to the special difficulty, complexity or importance of the case as required under s 158B (2) of the Justices Act.
- The Defendant seeks “just and reasonable” costs comprising Professional (Solicitors’ fees), Counsel’s fees, Expert’s fees, travel, photocopying and courier fees in the sum of $763,757.59. The Complaint contends that an appropriate “just and reasonable” amount for the costs is $132,541.08.
- The Prosecution itself arises out an incident that occurred at the premises of Australian Steel Operations (known as “ARC”) in North Rockhampton on 11 October, 2012. An employee was working in the vicinity of an overhead gantry crane owned and operated by the employer and occupier, ARC. The crane derailed, descending onto the employee who suffered fatal injuries.
- The Defendant was the manufacturer and installer of the crane. Apparently, the Defendant is a Corporation based in Germany manufacturing, installing and servicing cranes throughout the world.
- The Complaint itself was initially made on 20 June 2014. It alleges breach of s 32 of the WHS Act. That Act commenced operation on 1 January 2012. Principally, it is alleged that the Defendant’s offending encompassed issues relating to design, installation and commissioning of the crane in or about May 2010 and, issues relating to servicing of the crane in April and June 2012.
- The Defendant relies on the following affidavits:-
- Affidavit of Sudhir Sivarajah affirmed 1/7/19 filed 5/7/19 (“affidavit 1”);
- Affidavit of Sudhir Sivarajah affirmed 2/7/19 filed 5/7/19;
- Affidavit of Sudhir Sivarajah affirmed 23/8/19 filed 2/7/19;
- Affidavit of Sudhir Sivarajah affirmed 24/10/19;
- Affidavit of Graham John Robinson sworn 20/8/19 filed 21/8/19;
- Affidavit of Graham John Robinson sworn23/8/19 filed 6/8/19; and
- Affidavit of Graham John Robinson sworn 18/9/19.
- The Complainant relies on the following affidavits:-
- Affidavit of Rebecca Jane Lloyd affirmed 18/7/19 filed 19/7/19; and
- Affidavit of Rebecca Jane Lloyd affirmed 2/9/19.
- None of the above Deponents were called for cross examination.
- In support of their respective positions as to the appropriate “just and reasonable” costs order the parties have raised several issues in relation to the proceedings including, inter alia; the difficulty, complexity and importance of the case, the conduct of the parties, a jurisdictional issue and errors.
Special Difficulty, Complexity and Importance
- During the course of this prosecution the Complainant commissioned two Engineers to prepare Expert reports as follows:-
- Dr K Berg dated 18 October 2013 containing 32 pages, dated 1 October 2013 containing 24 pages and dated 8 October 2013 of 25 pages; and
- Dr F Grigg dated 20 June 2014 containing 29 pages.
- The Defendant obtained the following Engineering reports:-
- Mr R Baird dated 3 May 2019 containing 41 pages; and
- AMOG Consulting (Mr R Shedlock and Mr G Farrow) dated 17 April 2019 containing 82 pages.
- These reports disclose complex engineering issues that relate to design, specifications and installation of the gantry crane, causation of the derailment, application of design and installation standards of both Australia and Germany, and, maintenance and servicing of the gantry crane.
- The Defendant’s solicitor, Mr Sivarajah deposes in his affidavit 1 that the prosecution brief consisted of seven folders plus a further brief of supplementary expert material. At paragraph 10 of the said affidavit the solicitor deposes as to the nature of the material contained in those briefs. The above Engineers’ reports are exhibited to that affidavit. It is apparent that preparation of these reports has required a high degree of technical, mechanical and engineering expertise and knowledge, and, understanding and application of concepts of physics. Understandably, the reports include mathematical calculations and diagrams. I do find that the case did involve special difficulty of high degree, was complex to a similar degree and, was of high importance. The importance of the case generally and to the defendant will be subsequently dealt with.
Course of the Case
- The difficulties in this case were compounded by the arduous legal course it proceeded on. As stated, the proceedings were commenced on the 20 June, 2014. There were marked difficulties in particularisation of the charge. These difficulties are encapsulated in the well detailed chronology appearing as Tab 8 to affidavit 1 of Mr Sivarajah. The chronology is not disputed by the Complainant. The course of proceedings included considerable communications relating to particulars, eleven directions hearings, an appeal to the District Court and a stay application.
- There was ultimately seven versions of the complaint, all except the first amending particulars. According to the Defendant, subsequent to the filing of the seventh and final amended Complaint on 8 May 2018, the Defendant then obtained its two Expert reports from R Baird (3/5/19) and AMOG Consulting (17/4/19). The Baird Report addresses the allegations of the final complaint and the opinions of Dr Berg and Dr Grigg. The AMOG report deals with the application of Engineering Standards referred to in the final complaint. It also addresses the cause of the derailment and aspects of deterioration of the crane, appropriate servicing and maintenance, and, responsibility for same.
The Jurisdictional Issue
- The WHS Act commenced operation on 1 January 2012. The Complainant and the Defendant agree and the Court accepts that many of the alleged acts or omissions comprising the particulars of the complaint could not have been properly prosecuted by the Complainant as they related to conduct that occurred prior to 1 January 2012 (commencement date of the WHS Act). These particulars are hereinafter referred to as the “2010 particulars”. There are further particulars that are not subject of this impediment and relate to servicing and maintenance issues. These particulars are hereinafter referred to as the “2012 particulars”.
- Further, the parties agree and the Court accepts that the transitional provisions of the WHS Act did not permit the prosecution of the acts or omissions subject of the 2010 particulars and that these acts or omissions do constitute the majority of the alleged particulars of the complaint.
- Accordingly, much cost associated with litigating the 2010 particulars has proved, for both parties, otiose.
- In considering what is just and reasonable the Defendant submits that the charge was unsustainable and destined to fail. The Complainant contends that the convenient and logical course would have been to resolve the jurisdictional issue at an early stage, thus limiting particulars of the complaint and appreciably reducing the legal costs.
- There is no direct evidence indicating when the Defendant first became aware of the jurisdictional issue. In oral submission the Defendant suggests that its solicitors commenced investigating the issue in January 2019. However, is does appear that the Complainant did not become aware of this issue until it was raised by the Defendant. Indeed, the Complainant says in his submission, that the issue “went unappreciated by the Complainant”.
- The Complainant does accept that there is no obligation on the Defendant to alert the Complainant to such jurisdictional issue, but rather the failure to do so is an issue that the Court must consider when determining “just and reasonable” costs. He submits that it was always open to the Defendant to alert the Complainant to this jurisdictional issue. However, the Complainant cannot point to any clear evidence as to when the Defendant became aware of the issue. The Complainant contends that the Defendant knew of the jurisdictional issue and deliberately kept it for the trial, or that the Defendant was not properly advised.
- I find that submission self-defeating. The Complainant must have also been wrongly advised and for a longer period.
- The earliest the jurisdictional issue could have been given due consideration by the Defendant was 8 May 2018 when the seventh and final complaint was filed. It would seem incongruous for the Complainant, who was the prosecuting authority, to highlight fault on the part of the Defendant when they clearly did not countenance the issue throughout the long process of particularisation.
- On the evidence before me, I reject the submission that the Defendant knew of the issue and deliberately withheld the information. There is no evidence before me from which the Court can deduce that conclusion on the balance of probabilities.
- The jurisdictional issue has not been determined in this matter. Such issues are not always easily determined as they can encompass some degree of complexity and/or ambiguity especially relating to transitional provisions. I find it was reasonable for the Defendant to proceed preparing its defence on the basis of the particulars subject of the seventh and final amended complaint. That preparation includes briefing Counsel for advice and preparation for trial.
- The Complainant relies on authorities as follows for the proposition that the Defendant’s failure to raise the jurisdictional issue affects the discretion to award costs:
- The Defendant submits that the above authorities relied on by the Complainant do not relate to Criminal prosecutions but Civil actions and have no application here. I accept that submission. It is of course a fundamental principle of the accusatorial system of Criminal Justice that the burden of proof rests upon the prosecution and that an accused cannot be compelled to assist in discharging that onus. That principal was restated by the High Court in X7 v Australian Crime Commission.
- I do not consider that the failure to bring an interlocutory application moderates the Defendant’s position as far as the “just and reasonable” requirement is concerned for these reasons:-
- There is no evidence suggesting that the Defendant did not alert the Complainant to the issue in a timely fashion.
- The Defendant did not hide the issue and allow the matter to proceed through trial thereby burdening both parties with substantially more legal costs.
- The issue of jurisdiction has never been determined.
- The prosecution of the Complaint was already protracted due to the particularisation difficulties and further application/s could have prolonged the matter even further.
- Until such time as the Complaint was properly particularised, the Jurisdictional issue could not have been properly considered or ventilated. The Complainant concedes that in respect of the 2010 particulars and the 2012 particulars that “bundling them together seems likely to have masked the problem”.
Complaint Expert Errors
- As part of the consideration of “just and reasonable”, the Defendant contends that the Complainant unnecessarily added to costs of the proceedings by raising allegations and material facts of a complex and technical nature that were incorrect and without foundation. In addition to the jurisdictional issue, the Defendant directs attention to errors contained in Dr Berg’s report which the Defendant says were relied on in preparing the complaint. The Defendant also highlights errors by the Complainant in understanding Dr Berg’s report.
- In particular, errors identified are:-
- Dr Berg had the railhead comprising sloping side flanks. This was incorrect, with Dr Grigg in his subsequent report finding that the side flanks were parallel and not sloping.
- Dr Berg calculated the span to wheel base ratio to be 7.446 and therefore in contravention of the Australian Standard which recommended the ratio not exceed 7. Apparently, when the guide rollers were fitted the ratio achieved was 7 and not contravening the standard. Whilst Dr Berg acknowledged this discrepancy, the complaint was prepared on the basis of contravention of the Standard.
- The amended complaint alleged it was the responsibility of the Defendant to check the alignment of the rails when in fact it was contractually the responsibility of the occupier and employer, ARC.
- The Complainant does not dispute the aforesaid errors. These errors go to the manner of investigation and indeed also demonstrate the complexity and difficulty of the matter.
Quantum of Costs
- As stated previously, the Defendant seeks costs and disbursements of $763,757.59 whilst the Complainant proposes a figure of $132,541.08.
- Costs awarded under the Justices Act are not awarded as a punishment against an unsuccessful party (see Latoudis v Casey ) but as a form of compensation to a successful party.
- In relation to quantum, the Defendant relies on the evidence of Mr Graham Robinson, Barrister who has prepared a report in relation to the costs issue and is exhibited to his affidavit filed 21 August 2019. The figures contained in that report are updated by a further affidavit filed 26 August 2019.
- Mr Robinson deposes as to his expertise and experience on the issue of assessment of legal costs. In summary, which experience includes, inter alia:
–Barrister at law since 1984;
–Appearances in the Full Court and Court of Appeal regarding costs for over 30 years;
–Experience in Supreme Court and District Court taxations for 22 years and thereafter from 2007 as a Court Appointed Costs Assessor;
–Assessment of hundreds of cost claims;
–Appearances in Taxation before the High Court, Federal Court and Family Court;
–Preparation of hundreds of objections to cost claims; and
–Lecturing and publishing of works on legal costs.
- I consider that Mr Robinson is experienced and expert in Legal Cost Law, Assessment and Taxation.
- No expert evidence was led by the Complainant in relation to Costs.
Solicitor’s Fees (Legal Professional Work)
- The Defendant seeks Solicitor’s fees in the sum of $190,130.73 whilst the Complainant proposes $20,625.00.
- Unlike disbursements, Solicitors’ fees obtainable in respect of legal professional work is limited by Part 2 of Schedule 2. As stated previously it is not disputed that a higher amount of costs (in excess of that allowable by s 158B (1) of the Justices Act) is appropriate in this matter. The Defendant has incurred legal professional fees in the sum of $950,653.37 (see Affidavit 1 of Mr Sivarajah).
- The scale items of Part 2 of Schedule 2 only allow - the sum of up to $1,500.00 for instructions, preparation and first day of hearing, for each day of hearing thereafter up to $875.00 and up to $250 for other Court attendances (“Scale items”).
- According to affidavit 1 of Mr Sivarajah (paragraph 21), after amendment, the legal professional fees according to the scale of Part 2 of Schedule 2 calculate to $6,875.00. This figure would not seem to be disputed as far as its calculation is concerned.
- The principles to be applied in determining the quantum that is ‘just and reasonable’ under s 185B (2) of the Justices Act were considered by Shanahan DCJ in Hickey v Crime and Misconduct Commission  where His Honour said as follows:
 “The respondent submits that the scale should be used as a guide in arriving at a quantum of costs if I am satisfied it is just (and reasonable, in relation to the costs of the summary trial) to allow coasts above the scale.
 To my mind, it is clear that the legislature has limited the discretion to award costs to successful defendants in criminal prosecutions as a matter of policy. That policy is based on the public interest of ensuring that the bringing of proper prosecutions is not fettered by the prospects of extensive costs orders being made in the event of unsuccessful prosecutions. Any award of costs above the scale must be made with that principle in mind. No authorities have been placed before me where solicitor/client costs or indemnity costs have been awarded in these circumstances.
 The costs to be awarded must be …. ‘just and reasonable” in relation to the summary trial. The amounts to be awarded must be made bearing in mind the policy of the legislation. The scale in the regulation is a clear indication of that policy as it bears little relation to present day economics. However, to my mind the legislative intent is clear.”
- The term “just and reasonable” is not defined in the Justices Act and must be given its usual meaning.
- The Complainant submits that in other cases where the s 158 (B)(2) uplift has been allowed, the costs have been calculated as a multiple of the Scale items. Ultimately, in Hickey’s case, His Honour, applied a multiplier of three to the figure derived from the Scale items for Solicitors’ fees. It is not clear why that particular multiplier was selected other than that it was considered appropriate.
- In Schloss v Bell, Bell v Schloss (2016) ICQ 017 solicitor’s fees of $224,835.00 were sought and Deputy President O’Connor applied the multiplier of 3 of the scale items yielding $19,625.00.
- Similar application of the 3 times multiplier in this case would yield a sum of $20,625.00 for solicitors fees (i.e. 3 x $6,875.00). This is the figure proposed by the complainant for legal professional work (Solicitors’ fees).
- The Complainant also submits that the 2010 particulars should have been removed earlier rendering the proceeding less complex and difficult. That contention is subsequently dealt with under the heading “Counsels’ Fees”.
- The Defendant contends that the three times multiplier methodology was appropriate in Hickey’s case but should not apply here as it fails to render a “just and reasonable” amount.
- Further, the Defendant highlights:-
- The protracted interlocutory proceedings relating to particularisation and for which the Defendant was put to substantial cost;
- That the case involved technical issues requiring extensive expert evidence; and
- That allegations of material facts were not supported by the Complainant’s own expert evidence or were incorrect.
- This Court accepts that the application of the three times multiplier in this matter does not yield a “just and reasonable” sum for solicitors’ costs. The application of a three times multiplier was appropriate in Hickey’s case but is not appropriate here. The primary consideration must be what is “just and reasonable” having regard to all relevant circumstances including special difficulty, complexity or importance of the case. This is particularly apposite here, as it was a matter of special difficulty and complexity to which I have previously referred.
- This case was also of profound importance to both parties. A worker was killed and prosecution would be of considerable industry and public importance. Gantry cranes are not uncommon in heavy industry. The Defendant faced a potential maximum fine of $1,500,000.00. According to the Defendant, 8% of the gantry cranes manufactured and commissioned by the Defendant worldwide are similarly designed. A design, installation or servicing fault would likely affect the Defendant’s reputation and business. The outcome of this prosecution would necessarily have been of special importance to the Defendant.
- However, the amount allowed for Solicitors’ fees must take into account the policy consideration referred to in Hickey’s case. That consideration being, that there is public interest in ensuring that prosecuting authorities are not deterred from bringing proper prosecutions by the prospects of extensive costs awards in the event of being unsuccessful. The amount allowed must bear some relationship to the scale.
- Mr Robinson observes in his first affidavit that in Hickey’s case the application of the three times multiplier to the scale amount yielded 30% of the Solicitors fees incurred. Further, in Bell and Anor. v Unimin Australia Pty Ltd  application of the three times multiplier resulted in 48% of the Solicitors’ fees being recovered. However, in that case it was 48% of an amount of $65,904 that had been independently assessed using the Supreme Court Scale. Such assessment is not available here. However, Mr Robinson opines that in his experience Professional Fees assessed on the Supreme Court Scale when compared with the actual fees incurred could be as little as 50%. Therefore, in Bell’s case the allowance could be as little as 24%.
- Mr Robinson arrives at his figure of $190,130.73 by taking 20% of the actual sum incurred. He gives consideration to the possibility that assessed costs could be as low as 50% i.e. $475,326.04. He then reduces the sum further reflecting that the matter is in the Magistrates Court where hourly rates are generally 80% of the Supreme Court Scale and also for the policy consideration as identified in Hickey’s case.
- Whilst Mr Robinson’s approach is well thought and considered, it does have problems. Firstly, there has been no Independent assessment of the Solicitors’ fees that were rendered to the Defendant in this matter. It is not apparent whether those fees were calculated or based on any particular scale. Secondly, the result using Mr Robinson’s methodology is very dependent on the original sum that has been rendered for solicitors’ fees. So, if that initial sum was extravagant, the amount allowed for solicitors’ fees would also reflect an element of extravagance.
- I do not accept that the only methodology, that adequately reflects the principles to which I have referred, must incorporate a multiplier of the Scale items. However, what a multiplier does, is to give the Court sufficient flexibility in exercising its discretion, having regard to the relevant circumstances of the case, but at the same time allow the Court to give due weight to the policy consideration. I do not accept that if a multiplier is used that it must be a multiplier of three.
- This matter encompassed significantly more complex issues than applied in Hickey’s case. It was anticipated that the trial would proceed over two and half weeks with about twenty-nine witnesses of whom four would be expert witnesses (engineers).
- I take the view that the application of a multiplier to the Schedule 2 Scale items should be adopted. An appreciably greater multiplier is appropriate in order to reflect the special difficulty, complexity and importance of the case and all relevant circumstances. Having regard to those factors but acknowledging that the amount of costs awarded must bear some relationship to the scale, I consider that a multiplier of 15 is appropriate in this matter. This yields a figure of $103,125.00 for solicitors’ fees (i.e. 15 x $6,875.00) which I find to be “just and reasonable” and to that extent have been properly and necessarily incurred.
- The Defendant seeks $245,962.55. The Complainant proposes $19,500.00.
- The Defendant seeks costs for two Queen’s Counsel (consecutively engaged) and one Junior Counsel who were briefed throughout the matter.
- Mr Robinson opines that it was necessary and proper to brief Senior and Junior Counsel having regard to the volume of material, the number of witnesses that were to give evidence at the trial, the number of expert witnesses, the extent of cross-examination, complexity of issues, preparatory research and the importance of the charges to the Defendant.
- Mr Robinson has regard to the hourly rates for Counsel that apply for taxation purposes in the Federal Court and the Victoria Supreme Court. Those rates range from $425 to $810 per hour for Senior Counsel and $265 to $540 per hour for Junior Counsel. He considers that the rates charged by Counsel throughout the proceedings are allowable in full under the Justices Regulation. Mr Robinson opines that the work performed was reasonably incurred as required by s 5 Part 3 of Schedule 2 of the Justices Regulation. It is not in dispute that the relevant amounts are paid or are payable.
- Mr Robinson reduces the amount sought by the Defendant by $26,000 in respect of the time attributed to Senior Counsel (Mr Holt QC) familiarising himself with the matter when he assumed the Senior Counsel’s role. Mr Robinson also deducted fees for a later withdrawn invoice and those associated with civil proceedings and the District Court Appeal.
- Although Mr Robinson cannot identify any element in Counsels’ invoices which suggested unnecessary or improper work, he applies a discount of 10% to reflect an anticipated element of same. His rationale being, that from his experience there is generally a small proportion of work that was not either necessary or proper.
- Mr Robinson ultimately calculates and proposes the figure for Counsels’ Fees at $245,962.55.
- In respect of Counsel’s fees, the Complainant submits:-
- That 75% of Counsels’ work was wasted on the 2010 Particulars;
- That any limiting policy principle has not been applied by Mr Robinson; and
- That Counsels’ fees should not be treated as a disbursement quoting Magistrate Gardiner (as His Honour then was) in Bell v Townsend and Ors.. In that case the Magistrate reasoned that Counsels’ fees should be incorporated into the “legal professional work” referred to in Part 2 Schedule 2.
- Ultimately, the Complainant adopts the relevant rate charged by Mr Holt QC of $6,500 and applies a multiplier of 3 to attain the figure of $19,500.
- The Complainant contends that the 2010 particulars represented approximately 75% of the total and final particulars and therefore 75% of the work was unnecessary. I reject the Complainant’s 75%/25% apportionment methodology. Any assessment of causation in this matter required examination of all aspects pertaining to the crane including design, installation and servicing. By necessity, this would also involve investigating application of Standards and contract/s for servicing. If the cause had been obvious then so would have particularisation. Further, the Defendant was entitled to prepare its defence on the particulars provided.
- I reject the Complainant’s submission that Counsels’ fees should not be treated as a disbursement and should be incorporated into the legal professional work. The Defendant rightly points out that in Bell v Townsend it was determined that application of s 185B (2) was not justified and consequently costs had to be in accordance with the scale in Part 2 Schedule 2.
- I find Mr Robinson’s report with respect to Counsels’ Fees is intelligent and carefully considered. He has based his calculations on the Federal Court and Victoria Supreme Court Scales and applied reductions for costs associated with change of Senior Counsel and has applied a 10% reduction to reflect the potentiality of some unnecessary work.
- I also find that it is just and reasonable to allow Counsels’ fees for preparation and not just appearances. The Federal Court Scale permits an allowance for Counsels’ preparation in addition to appearance at the assessor’s discretion.
- Appropriate preparation for trial often results in less hearing time. Indeed, in this matter, preparation by the Defendant appears to have led to the identification of the jurisdictional issue leading to, or partly leading to the Complainant offering no evidence. As a result of the preparation by Counsel the incurrence of further significant costs by both parties has been avoided.
- In all the circumstances, I do find that the appropriate amount being ‘just and reasonable” for Counsels’ fees is the amount claimed by the Defendant in the sum of $245,962.55. That sum having been necessarily and properly incurred and has been paid or is payable.
- The Defendant seeks Experts’ fees of $274,157.96 whilst the Complainant advocates for a sum up to $68,539.49.
- With respect to this cost component, Mr Robinson opines and notes the following:
- That given the Complainant’s three reports of Dr Berg and the report of Dr Grigg, that it was appropriate the Defendant retain experts;
- That there is no evidence that the Defendant’s experts undertook their tasks in an improper way;
- That the number and length of conferences were appropriate;
- That it was appropriate to engage Engineers and obtain the reports;
- That Mr Baird was retained to assist with the issues raised in Dr Berg’s reports and to analyse the Complainant’s case. Mr Baird’s work also assisted in formulating requests for particulars;
- That the hourly rates Mr Baird charged were modest;
- That the AMOG Consulting Report contained two parts – one prepared by expert Engineer, Mr Sherlock that dealt with regulatory and contractual framework in respect of installation and maintenance of the crane. The second part authored by Engineer, Mr Farrow dealt with causation. Limited contributions were made by other Engineers of AMOG; and
- That the rates charged by AMOG Consulting were within range and would generally be allowed on a standard basis of assessment for Engineering Reports.
- The Complainant also highlights the large disparity between his Experts’ fees of $66,850.30 and those incurred by the Defendant of $274,157.96.
- I am mindful of the comments of His Honour Judge McGill SC in Hennessey Glass and Aluminium Pty Ltd v Westpac Australia Ltd where His Honour said:
“ It is dangerous ground for a registrar simply to assert what is an appropriate period of time for an expert to undertake his expert function. Although a registrar is supposed to be an expert in relation to legal costs, and is therefore able to assess on the basis of his expertise about the way in which legal practitioners are expected to perform their functions, there is no reason to think that a registrar has any expertise in relation to any other field of expert knowledge, such as quantity surveying. He was therefore not in a position to make a judgement (in the absence of evidence) about whether or not a quantity surveyor had taken too long to do a piece of quantity surveying. That is the major difficulty with this party of the Registrar’s reasons; he appears to have accepted, without any evidentiary basis, the mere assertion of the Defendant’s Solicitors that the quantity surveyor has taken too long to do his work. …….
 For a non-expert to second guess an expert correctly is a good trick, but only if it works, but if it does not work, it merely serves to demonstrate the inappropriateness of non-expert attemptinga critique of the appropriateness of the way in which the expert went about his work. That it seems to me is the fundamental problem of the Registrar’s reasons. It was not for him to determine how a quantity surveyor should engage in a quantity-surveying task. That is not a matter within his expertise, or rather, such expertise as an assessing registrar is expected to have. His reasons do not suggest that this registrar knows anything about quantity surveying. In the absence of evidence that Mr Callaghan went about what he did as an expert quantity surveyor in an inappropriate manner, which was not before the registrar, there was no proper basis on which the registrar could find that he had not gone about what he was required to do in a proper way. The approach of the registrar to the assessment of what was done by Mr Callaghan in my opinion reflects badly on the registrar.”
- As previously indicated, I reject the Complainant’s 75%/25% apportionment methodology. There is no evidence to suggest that the work and/or associated costs of the Defendant’s Engineers has been extravagant.
- The complexities and difficulties in this matter have been previously highlighted. There were clear problems associated with the Complainant particularising his complaint. Further, there were some inaccuracies in the Complainant’s reports. These matters adding to the importance and extent of work required to be considered by the Experts.
- This case clearly was one where the expert engineering evidence was likely to be most important, if not, crucial. Just prior to trial the Complainant formed the view that prosecution of the matter had no reasonable prospects. In those circumstances, it would be unsatisfactory to use the costs of the Complainant’s Engineering experts as a guide to what is “just and reasonable” and proper.
- In the absence of evidence indicating improper work or extravagance on the part of the Defendant’s experts, this Court is satisfied that a “just and reasonable” amount for their work is the sum of $274,157.96. It is also found that the amounts comprising this expense were necessarily and properly incurred to that extent and have been paid or are payable.
Travel, Accommodation, Photocopy and Courier Expenses
- The Defendant seeks $34,670.72 for travel and accommodation and $18,835.63 in respect of photocopying and courier fees, totalling $53,506.35.
- The Complainant proposes application of his 75%/25% formula to the above incurred expenses yielding a sum of $13,376.59.
- These costs may be allowed as a disbursement to the extent they have been reasonably incurred and are paid or payable (s 5 Part 3 Schedule 2).
- Mr Robinson in his first Affidavit notes that the largest claim is in respect of travel and accommodation associated with conferences in Melbourne with experts and prospective witnesses. I accept that extensive conferencing would have been necessary having regard to the number of witnesses that were to give evidence and that some of those witnesses were experts. I accept that “face to face” conferences would have been necessary considering the complex technical issues that were relative to the particulars of the Complaint.
- For reasons previously given, I reject the application of the 75%/25% methodology.
- I find that the travel, accommodation, photocopying and courier expenses were properly and necessarily incurred, have been paid or are payable and that the sum of $56,506.35 is “just and reasonable”.
Costs of Application for Costs
- The Defendant seeks costs associated with this application itself of $68,409.22 comprising professional fees (Solicitors’ costs) of $26,978.00, Counsel’s Fees of $20,830.00, Expert’s fees of Mr Robinson of $18,625.00 and travel costs of $1,976.22.
- Mr Robinson in his third Affidavit says that the Solicitors’ fees from 20 May 2019 to 16 September 2019, plus five hours allowance for Solicitor in respect of further instructing and time in travelling amount to $134,889.46. He proposes taking 20% to that figure producing $26,978.00 as the “just and reasonable” allowance for Solicitors’ fees. However, this approach assumes that same level of special difficulty, complexity and importance which prevailed in the complaint case itself can also be extrapolated into the costs application.
- On 20 May 2019 the Complainant indicated it would be offering no evidence. So, many of the complex, difficult and important issues of the case largely evaporated. Though, a requisite understanding of those issues was still necessary for purposes of this costs application. Having regard to this underlying complexity, the quantum involved in this application and lack of legal precedent thereto, I am satisfied that this application for costs did entail special difficulty and complexity.
- However, given the circumstance that the trial did not proceed and that such complexity and difficulty associated with this application was appreciably reduced than that of the Complaint itself, I find that in the circumstances, application of a multiplier of 3 to the appropriate Scale items of Part 2 of Schedule 2 will produce a “just and reasonable” result. The applicable scale items for Solicitors’ fees would be as follows:-
30 October 2019 - Item 1 $1,500.00
20 Septemper 2019 - Item 3 $ 250.00
29 May 2020 - Item 3 $ 250.00
- Applying a multiplier of 3 produces a sum of $6,000 for Solicitors’ fees.
- I do consider that it was necessary and proper to engage Senior Counsel and a Costs Expert for the purposes of this application. Similarly, it was necessary and proper for Senior Counsel to attend Rockhampton for purposes of the Application. In conclusion, I find that Counsel’s Fees, Expert’s Fees and travel expenses for purposes of this Application were necessary and proper and have been paid or are payable.
- The “just and reasonable” amounts allowed for costs of this Application for Costs are as follows:
Professional (Solicitors’) Fees $ 6,000.00
Counsel’s Fees $20,830.00
Expert’s Fees $18,625.00
Travel etc. $ 1,976.22
Total Costs to be Paid by Complainant
- The “just and reasonable” costs to be paid by the Complainant to the Defendant upon dismissal of the Complaint are:
Professional (Solicitors’) Fees $103,125.00
Counsels’ fees $245,962.52
Experts’ fees $274,157.96
Travel and Accommodation costs $ 34,670.72
Photocopy and Courier costs $ 18,835.63
Costs on Application (as above) $ 47,431.22
- Published Case Name:
David Fletcher v Demag Cranes and Components Pty Ltd
- Shortened Case Name:
Fletcher v Demag Cranes and Components Pty Ltd
 QMC 9
29 May 2020