The Supreme Courts’ inherent supervisory jurisdiction (lawyers’ fees) Part 2

2. The inherent supervisory jurisdiction of the Supreme Court

Woolf v Snipe (1933) 48 CLR 677 is a decision of the High Court in its original jurisdiction, constituted by Sir Owen Dixon who observed at 678-679 that ‘The superior Courts of law and equity possess a jurisdiction to ascertain, by taxation, moderation, or fixation, the costs, charges, and disbursements claimed by an attorney or solicitor from his client,’ and that there were three sources of that jurisdiction:

    • That ‘founded upon the relation to the Court of attorneys and solicitors considered as its officers.[1] This jurisdiction … enables it to regulate the charges made for work done by attorneys and solicitors of the Court in that capacity, and to prevent exorbitant demands.’
    • That to determine by taxation or analogous proceeding the amount of costs whenever a contested claim for costs comes before the Court which it has jurisdiction to determine.[2]
    • The statutory jurisdiction (now found in the Legal Profession Uniform Law).

Lissenden v Dellios [2021] VSC 520 is a decision very much in the same vein as Re Jabe, discussed below. Judicial Registrar Englefield observed, in a passage cited with approval by the Costs Judge in Keybridge Capital Ltd v Macpherson Kelley Pty Ltd [2022] VSC 831:

‘While this inherent jurisdiction to reduce solicitor-own client costs has been applied in reported decisions that involve exorbitant demands or serious professional misconduct, that does not mean that the Court’s inherent jurisdiction to deal with solicitor-own client costs is limited to such cases. The inherent power of a superior court cannot be restricted to defined and closed categories. The inherent jurisdiction of the Court to deal with a party’s solicitor-own client costs does not require a threshold determination of a certain qualifying level of misconduct by their solicitors, it applies when the need arises to ensure that legal costs are ‘fair and reasonable and no more.’[3]

Rather, the jurisdiction is exceptionally broad and flexible, ‘to do justice in the premises when dealing with one of their own officers’.[4] The Court is not limited by technicalities, and does not engage in a fixed determination of legal rights, but ‘determines whether one of its officers should be held to ethical and honourable behaviour’.[5]

It is not necessarily all bad news for lawyers. The jurisdiction has two purposes:

    • to ensure that lawyers are remunerated properly; and
    • to ensure that lawyers are not remunerated in excess of what is reasonable.[6]

It seems to me that the first purpose of the Court’s inherent jurisdiction might be useful in those cases where litigants seem to be taking steps collusively to diddle their respective lawyers of their fees, often in fruits of litigation relief applications.

Resort to the inherent jurisdiction is said to be discretionary, but in Re Morris Fletcher & Cross’ Bill of Costs (1997) 2 Qd R 228, in which the Court ordered a practitioner to give to his client a bill of costs and that it be taxed in circumstances where there was no statutory power to do so, Fryberg J said at 233:

‘The making of an order for delivery of a bill is a matter of discretion, but it can fairly be said that the courts lean toward ordering delivery. In Parramatta River Lodge Pty Ltd v. Sunman (1991) 5 B.P.R. 12,038 at 35 12,046 Young J. has said:

“The whole tone of most of the cases has been that a solicitor is the officer of the court and, no matter how inconvenient it might be, the court expects that in accordance with the highest standard of the profession the solicitor will give a fully detailed list of charges to 40 the person liable to pay the bill and if asked will submit the bill for moderation by an officer of the court. That is the price of being a member of an honourable profession: that is the price of being admitted by this court to practice law in this State.”’

Some recent applications of the inherent jurisdiction in the costs law space are explored in section 5 of this paper.  Meanwhile, the old cases reveal that recourse has been had to the inherent supervisory jurisdiction in the following instances:

    • A solicitor of the Crown to whose charges the relevant statute regulating lawyers did not extend had his bill taxed, and costs of the taxation were awarded against him by analogy with a precursor of the 15% rule, even though the statutory provision had no application to Crown solicitors: R v Bach (1821) 9 Price 349 :147 E.R. 115;
    • A solicitor withheld from the settlement of a dispute which did not go to proceedings an amount on account of fees.The statute permitted the taxation only of costs of proceedings.  The Court taxed the fees anyway: Re Barker (1834) 6 Sim 476.
    • The London agents of an English law firm gave a single bill for all of the agency work done for the year.The principals sought taxation of the bill insofar as it related to only one of the matters in which the agents had acted.  The relevant statute did not permit (but did not prohibit) taxation of only part of a bill.  The House of Lords said that the courts could in their inherent jurisdiction tax part of the bill anyway, and it was no impediment to exercising that jurisdiction that the summons for taxation sought exclusively to invoke the statutory jurisdiction: Storer & Co v Johnson and Weatherall (1890) 15 App Cas 203.
    • An applicant for taxation was out of time and the statutory test for an extension was not satisfied.The Court was sufficiently excited about some of the claims in the bill, however, that it marked those claims in red pen and directed the Taxing Master to ‘inquire and state whether any and which of the [marked items] … are fair and proper to be allowed and to what amount respectively.’: In re Park (1889) 41 Ch D 326.  (The propriety of such a course was reiterated in Jones & Son v Whitehouse [1918] 2 KB 61 by the Court of Appeal, but the court there declined because it was insufficiently excited about the prospect that there had been overcharging.)
    • In In re a Solicitor [1961] 2 All ER 321; [1961] Ch 491, the Court taxed a bill where the applicant was out of time to seek taxation and the relevant statute said no order for taxation under the statute could be made in those circumstances. The Court held that it could tax the bill in its inherent jurisdiction, and was moved to do so.
    • In Re Ladner Downs and Thauberger (1983) 149 DLR (3d) 21, the British Columbia Supreme Court found inherent jurisdiction to tax paid bills taxation of which was not afforded by the relevant statute. At 30 the Court rejected any notion that the jurisdiction should be exercised only in exceptional circumstances.
    • In Steedman v Golden Fleece Petroleum Ltd (1987) 73 ALR 317, the Federal Court was convinced by Ariel Weingart to tax Keith Hercules’ costs as between solicitor and client even though the usual way for that to occur was in the Supreme Court of Victoria, so as to avoid the wastage of two taxations, one in the Federal Court as between party and party and one in the Supreme Court as between solicitor and client, finding such a power to tax costs as between solicitor and client to be incidental to the Federal Court’s power to award costs between parties (at 319).

[1] Section 25 of the Legal Profession Uniform Law makes all Australian lawyers (i.e. people who have practising certificates in any Australian jurisdiction) officers of the Supreme Court of Victoria, which may extend the Court’s supervisory jurisdiction. The NSW Court of Appeal did not hesitate to act in its inherent jurisdiction in Hartnett v Bell [2023] NSWCA 244 even though the lawyers presumably did their work in enforcing a mortgage over NSW land through proceedings in the NSW courts principally in Queensland where their only office was located: [114].

[2] See Branson v Tucker [2012] NSWCA 310.

[3] Lissenden v Dellios [2021] VSC 520 at [42], cited in Keybridge at [48]. The best authority for this point is now Hartnett v Bell [2023] NSWCA 244 [123.18]

[4] Storer & Co v Johnson & Weatherall (1890) 15 App Cas 203, 206; Harrison v Tew [1989] 1 QB 307, 320; Pryles & Defteros v Green (1999) 20 WAR 541 at [23].

[5] Atanaskovic v Birketu Pty Ltd [2020] NSWSC 573 at [80]-[81]; Hartnett v Bell [2023] NSWCA 244 at [103], [123.12].

[6] Sutton v Sears [1960] 2 QB 97 at 102; Electrical Trades Union v Tarlo [1964] Ch 720, 724; Re Ladner Downs and Thauberger (1983) 149 DLR (3d) 21 at 30; Harrison v Tew [1989] 1 QB 307, 320; Pryles & Defteros v Green (1999) 20 WAR 541 at [22]; Re Jabe [2021] VSC 106 at [44]; Hartnett v Bell [2023] NSWCA 244 [123.16].

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