TARRY V PRYCE (No.2)
Supreme Court of the Northern Territory of Australia. Kearney J.
13 August and 4 September 1987 at Darwin.

Costs Client obtaining award of costs - Prior agreement between solicitor and client for fixed sum for costs - taxed at higher amount - nature of party-and-party costs - whether solicitor can recover more than amount  agreed  whether other party can be required to pay ore than costs actually incurred - Legal Practitioners Act ss.123 and 129.

Cases applied:
Grundy v Sainsbury (1910) 1 KB 545
Harold v Smith (1860) 5 H&N 381; 157 ER 1229
Loveridge v Brough (1985) 36 NTR 59
R v The Police Magistrate at Hughenden and Reid; exp. Cummings (1915) St R Qd 147

Counsel for applicant Solicitors for applicant

Counsel for respondent Solicitor for respondent

Mr G. Schneider Waters,  James & O'Neil

Ms L. Jenkins Solicitor for the Northern Territory

kea870189
IN THE SUPREME COURT
OF THE NORTHERN TERRITORY OF AUSTRALIA

No.225 of 1986

BETWEEN:
DEAN ARTHUR TARRY
Applicant

AND:
LEONARD DAVID PRYCE

Respondent

CORAM:	Kearney J.

REASONS FOR DECISION

(delivered 4 September 1987)

On 13 April 1987 the applicant succeeded in an appeal to this Court against the severity of a sentence imposed by a Court of Summary Jurisdiction.

Applying the ordinary rule as to costs laid down by O'Leary C.J. in Loveridge v Brough (1985) 36 NTR 59 at 63-4, it was ordered that the applicant have the costs of his application for bail and his appeal. It was directed that the costs be calculated on a party-and-party basis, the amount thereof, as taxed or as agreed between the parties, to be paid to the Master "to be paid over to the appellant [applicant]".

On	7 August 1987 the applicant's costs	were	taxed	
and allowed	in the sum of $4,394.15.			

On	13 August	Mr Schneider,	a	solicitor with the applicant's solicitors, appeared before me for the applicant

and	applied	to informed that the

have	the order of 13 April varied.	I was costs		had	been	taxed	and	allowed	at

$4,087.59; this is correct as far as it goes, but does not take account of the taxing fee of $306.56 assessed after the taxation was completed. Mr Schneider sought a variation of the order of 13 April to the effect that $1,000 of the taxed costs, be paid out to the applicant and that the balance,
$3,087.59, be paid out to the applicant's solicitors.

The reason was, as Mr Schneider explained, that the solicitors had agreed with the applicant that they would charge him a total sum of $1,475, for their professional services in appearing for him in relation to the charge, in both the Court of Summary Jurisdiction and this Court. This was because $1,475 was a sum which the solicitors "felt
he could afford and in view of the circumstances that he

found	himself	in".	The	applicant	has	either solicitors the full stun of $1,475, or $1,000	of uncertain which, but probably the latter.

paid the it;	I	am

The application.

respondent	did	not	oppose	Mr Schneider's

I pointed out that the award of costs to a successful litigant is for the purpose of indemnifying him in respect of the legal costs he has incurred. As the applicant had apparently incurred a total sum of $1,475 by way of costs, I questioned whether he could recover anything more than that sum from the respondent, and whether any amount allowed on the taxation in excess of $1,475 had been properly allowed.

Mr Schneider then informed me that the applicant's solicitors proposed now to render their client an account which he variously described as -

"an account that reflects truly the work that was carried out by his solicitors
... a proper account as to what he really should have been charged in the first place for the work that was carried out, [an amount] that we felt at that time that he couldn't afford to pay ... a formal account in the amount which will have been paid ... by the Crown."

The account, he said, would be for $3,087.59 "representing a proper reward for the work that was done,	less	the	monies

that	he	paid	to	us". order of 13 April.

Hence the variation sought in the

I rule upon the application today.

First I should say I fully appreciate the position in which the solicitors find themselves, having carried out quite lengthy and complex professional legal work for an agreed fee which, in the light of the taxation, appears very modest. It seems that they may possibly have a conflict of interest with their client, on this application, but it is not necessary to deal with that.

Legal costs, in the sense of a monetary evaluation of the remuneration of a solicitor for professional legal work, are controlled by the Court through the system of scales of costs and by the taxation of costs. Taxation involves the examination of a bill of costs, and the determination of the amount, fair and reasonable in the circumstances, to which the successful party is entitled, bearing in mind the scale of costs applicable; see s.123 of the Legal Practitioners Act and Order 64 Rule 54 of the Rules of Court, the guiding Rule in the taxation of costs.

Here the costs were awarded on a party-and-party basis. Such costs are in the nature of an indemnity. As Baron Bramwell put it in Harold v Smith (1860) 5 H&N 381 at 385; 157 ER 1229 at 1231, the principle is -

"	find out the damnification, and then
you	find	out	the costs which should be allowed."

In general, the expenses and costs properly and reasonably incurred in enforcing the successful party's rights should be allowed on taxation; see R v The Police Maaistrate at Hughenden and Reid; exp. Cummings (1915) St R Qd 147 at 155-6. As to the bill of costs herein I note in passing that it is not clear that the requirements of Order 64 Rule 83 were met when the bill was taxed; otherwise, for present purposes the amount of the taxed costs may be taken as representing the costs and expenses reasonably and properly incurred.

However, when making the award of costs in April, the Court was not informed that an agreement existed between the applicant and his solicitors as to the amount he was to be charged. A solicitor may agree with his client as to the costs he will charge for litigious work; see s.129 of the Legal Practitioners Act. Such an agreement is  enforceable if it is just, fair and reasonable, and meets the
requirements of s.129.	Here, the	solicitors	entered	into
such an agreement with the applicant. Section 129(5) of the Act provides:-

"A legal practitioner who is a party to an agreement under this section is not entitled, in respect of work to which the agreement relates, to receive an amount for his costs (including disbursements) greater than the amount specified in, or ascertainable in accordance with, the agreement." (emphasis mine)

.

,.
e •

V

I consider that s.129(5) operates as a statutory barrier in this case to the recovery by the solicitors of more than $1,475 for their costs and disbursements. In the light of the agreement it would be improper and ineffective now to render their client an account in the higher sum.

It is, I think, clear in principle and on authority

that	because	party-and-party	costs		are	awarded indemnity,	the		applicant	who		has	entered	into

as	an such an

agreement cannot recover from the respondent more than the amount of $1,475. To do so would be contrary to justice, to common sense and to the law; see Gundry v Sainsburv (1910) 1 KB 645 at 649, per Cozens-Hardy M.R..

I decline to vary the order for costs of 13 April 1987 in the manner sought by Mr Schneider. I consider that that order should be varied so as to provide that the amount of the applicant's costs, as taxed, but not exceeding in any event the sum of $1,475, (plus the taxing fee), be paid by the respondent to the Master to be paid out to the applicant or his solicitors. Both parties are at liberty to apply. Orders accordingly.