The Supreme Courts’ inherent supervisory jurisdiction (lawyers’ fees) Part 5

5. The Costs Court is given certain powers of the Supreme Court

Section 17D(1)(h) gives the Costs Court any jurisdiction given to it under any Act (including the Supreme Court Act) or by the Supreme Court’s rules, a provision which might seem at first glance to be redundant, but which might be intended to avoid arguments that procedural rules are inapt to be read as granting jurisdiction.[1]

A. Section 17D(2) (ancillary powers)

As Bell J observed in Owerhall v Bolton & Swan Pty Ltd, s. 17D(2) of the Supreme Court Act 1986 gives the Costs Court such powers of the Court (defined to mean the Supreme Court) as are necessary to enable it to exercise its jurisdiction. This can be described as providing the Court’s ‘ancillary powers’.

Even if a taxation for costs is not a civil proceeding in the Supreme Court for the purposes of the Civil Procedure Act 2010, perhaps the Costs Court is given the Supreme Court’s powers under that Act by s. 17D(2) on the basis that they are ancillary powers necessary to enable it to exercise its jurisdiction.  On the other hand, query whether they are necessary.

In Gadens Lawyers v Beba Enterprises Pty Ltd [2012] VSC 519, Emerton J suggested in considered obiter dicta at [22] that even before a summons for taxation was issued, the Costs Court would have jurisdiction to order that a solicitor give a non-associated third party payer ‘sufficient information to allow [it] to consider making, and if thought fit to make, an application for a costs review,’ under s. 3.4.38(7) of the Legal Profession Act 2004.[2] Her Honour explained:

‘In my view, the legislature could not have intended that responsibility for one small part of the review process, albeit one that may be anterior to any application for costs review, be taken out of the hands of the Costs Court and vested in the judges of the Trial Division.’[3]

Her Honour obviously considered that jurisdiction may impliedly be given to the Costs Court by legislation, and a close reading of her remarks show that she was not relying on the Court’s ancillary powers in s. 17D(2).  Rather she was relying on a power impliedly given to the Costs Court by the Legal Profession Act 2004, i.e. she was relying on s. 17D(1)(h).

B. The Civil Procedure Act

Section 65C(1) of the Civil Procedure Act 2010 gives an extraordinarily broad costs power in civil proceedings to the courts which it covers:

‘In addition to any other power a court may have in relation to costs, a court may make any order as to costs it considers appropriate to further the overarching purpose.’

‘Costs’ is not defined, but order 60 of the Supreme Court Rules uses ‘costs’ to refer equally to costs claimable between parties to litigation and costs claimable by solicitors from their clients, e.g. r. 63.37(2), a matter the drafter of the Civil Procedure Act 2010 may be taken to have been aware of, and the Act has been used to adjust interests as between solicitor and own client.

The ‘overarching purpose’ is ‘to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute’: s. 7, and s. 8(1) says:

‘A court must seek to give effect to the overarching purpose in the exercise of any of its powers, or in the interpretation of those powers, whether those powers– (a) in the case of the Supreme Court, are part of the Court’s inherent jurisdiction, implied jurisdiction or statutory jurisdiction.’

Whether the Civil Procedure Act 2010 has direct operation in the Costs Court depends on whether a taxation of costs in the Costs Court is to be regarded as a civil proceeding in the Supreme Court for the purposes of its application provision, s. 4 read with the relevant definitions in s. 3.  It is routinely assumed that the Act does govern Costs Court proceedings.  One indicator that suggests the assumption is correct is that limb (r) of the s. 3 definition of ‘substantive document’ excludes ‘a summons for taxation of costs’, a provision which would be otiose, or nearly so, if the Act did not apply to taxations in the Costs Court in the first place.  Things would certainly be a lot simpler if the Costs Court were a court specifically mentioned in the Act’s application provisions.

C. Rule 63.35

Then the Supreme Court Rules bestow further powers on the Costs Court, which would be recognised by s. 17D(1)(h) of the Supreme Court Act 1986. Rule 63.35 provides that:

‘On a taxation of costs under this Order, in addition to any powers conferred by any Act, the Costs Court has the same powers which an Associate Judge has on the hearing of an application in a proceeding.’

Rule 77.01 says that, subject to O77, an associate judge may give judgment or make any order including any judgment or order in the exercise of the inherent jurisdiction of the Court. Order 77 says that ordinarily, an Associate Judge is not to hear the trial of a proceeding, unless directed to do so by a Justice of the Court.

The provision gives rise to three questions of interpretation:

    • What does ‘On a taxation of costs’ mean?
    • What does ‘under this Order’ mean?
    • What does ‘the Costs Court’ mean?

For the reasons which follow, it is arguable that what the provision means is that the Costs Court, however constituted, may exercise the Supreme Court’s inherent jurisdiction from the moment a summons for taxation, whether within time or not, is filed.

(i) ‘On a taxation of costs’

When I invoke r. 63.35 to argue that the Costs Court may exercise the Supreme Court’s inherent jurisdiction, the counter-argument is sometimes – we are only at a preliminary stage; we have not yet arrived at the taxation proper, or – you are out of time and the Costs Court will not have jurisdiction until the Supreme Court gives you leave to proceed out of time.

‘Taxation of costs’ is defined by r. 63.01(1) as ‘the assessment, settling, taxation or review of costs’. There can be no doubt that both party-party taxations of costs and solicitor-client taxations of costs are referred to (the latter is called ‘costs assessment’ under the Uniform Law).

But is there a ‘taxation of costs’ as soon as the summons for taxation is filed, or only once the preliminary issues about costs disclosure, costs agreements, and basis of taxation are sorted and the line by line hearing has started? The answer, I suggest, is the former. In Gallin v SC Lawyers [2020] VSC 80, Macaulay J exercised the Costs Court’s jurisdiction under a r. 63.51 referral from the Costs Court of ‘a question arising on a taxation’. The question was whether the applicant’s summons for taxation should be dealt with out of time. He said it should. Since, as Keogh J said in Owerhall v Bolton & Swan, a river cannot rise above its source, Macaulay J must have found that from the moment there was an out of time summons for taxation, it could be said that a question arose ‘on a taxation’.[4]

(ii) ‘under this order’

Order 63 applies to costs payable or to be taxed under the rules of the Supreme, County or Magistrates’ Courts, or under any order of any of those courts, or under any Act: r. 63.01(3). Broad as that scope is, not everything referred to the Costs Court will be within it. In Elvin v Davey [2022] VSC 214, a Magistrate referred to the Costs Court the quantification of compensation awarded under s. 29 of the Civil Procedure Act 2010. Keogh J found at [195] that such compensation is not ‘costs’ and so the Costs Court was not being asked to conduct a ‘taxation of costs’.  The same might be said of certain purported referrals to the Costs Court by the Appeal Costs Board.

(iii) ‘Costs Court’

References in the Supreme Court Rules to the Costs Court are to be read as references to the Costs Court constituted by a Costs Judge or by a judicial registrar; and to an exercise of a power of the Costs Court by a judicial registrar, Costs Registrar or a Deputy Costs Registrar: r. 1.13(2)(d).

D Can the Costs Court exercise the inherent jurisdiction through r. 63.35 and s. 17D(1)(h) where it does not otherwise have jurisdiction?

Can the Costs Court invoke the inherent jurisdiction to tax costs in circumstances where neither ss. 17D(1)(a)-(g) nor s. 17D(2) give it jurisdiction to do so, on the basis that s. 17D(1)(h) recognises the grant of the Supreme Court’s inherent jurisdiction to the Costs Court by r. 63.35?  In Keybridge Capital Ltd v Macpherson Kelley Pty Ltd, discussed below, the Costs Court seems to have said, in considered obiter dicta — yes, it can.

[1] Woolf v Snipe (1993) 48 CLR 677; Keybridge Capital Pty Ltd v Macpherson Kelley Pty Ltd [2022] VSC 831; see also the last paragraph of section 1 of this paper, above.

[2] As an aside, in Reardon v Hall & Wilcox [2016] VSC 188, McDonald J wondered at [7] whether the consequence of this finding was that the Costs Court had jurisdiction to the exclusion of the Supreme Court generally, but again, the possibility of resort to the Court’s inherent jurisdiction seems not to have occurred to the parties.

[3] Emerton J’s reasoning in this case does not seem to have been brought to Bell J’s attention in Owerhall v Bolton & Swan Pty Ltd [2015] VSC 417.

[4] See Stephen Warne, ‘Who can hear an application to extend time for taxation?’ The Australian Professional Liability Blog, 22 July 2022.

Print Friendly, PDF & Email

Leave a Reply