THE HIGH COURT

JUDICIAL REVIEW
No. 220 SR 1999
BETWEEN
F. GERARD M. GANNON
APPLICANT
AND

TAXING MASTER JAMES FLYNN
RESPONDENT

Judgment of Ms. Justice Laffoy delivered on 11th May, 2000

BACKGROUND

The Applicant was the defendant in plenary proceedings in this Court entitled “Bernadette Mullen Plaintiff and F. Gerard M.Gannon Defendant” (Record No. 1988 No. 354P). By order of the Court (Barron J.) made on 25th November, 1996 it was ordered that the Applicant pay to Bernadette Mullen (the Plaintiff) the costs of the motion on foot of which the order was made when taxed and ascertained.

The Plaintiff duly presented a bill of costs for taxation and the same was taxed on 13th March, 1998, whereupon certain allowances were made in favour of the Plaintiff. The Applicant, being dissatisfied with certain of the allowances, carried in objections under rule 38 (1) of Order 99 of the Rules of the Superior Courts, 1986 (the Rules). The hearing of the objections took place on 19th November, 1998 before the Respondent. At the hearing of the objections the Plaintiff was represented by Mr. Cook of Cyril O’Neill & Company, Legal

________________________ page break ________________________

2

Costs Accountants, instructed by Arthur Cox, Solicitors, and the Applicant, who is a practising solicitor, appeared in person. At the end of the hearing the Respondent reserved his ruling on the objections.

Subsequently, on 18th December, 1998 the Respondent delivered his ruling on the objections. On each of the three items in issue the Respondent disallowed the objections in their entirety and affirmed his ruling on taxation in relation thereto. Having delivered his ruling, the Respondent, in the absence of the Applicant or any representative on his behalf, acceded to an application by Mr. Cook for the Plaintiffs costs of the objections against the Applicant but adjourned the measurement of the costs to 18th January, 1999. On 18th January, 1999, the Applicant was represented before the Respondent by his solicitor, Alan Gannon, who disputed the power of Respondent to award costs of the objections in reliance on section 27 (6) of the Courts and Court Officers Act, 1995 (the Act of 1995). Despite the assertion that he had no jurisdiction to do so, the Respondent measured the costs at £660 plus Value Added Tax at the rate of 21%.

Following the ruling on the objections, on 11th January, 1999 the Applicant initiated a review to this Court under rule 38 (3) of Order 99 of the Rules seeking a review of the whole of the decision of the Taxing Master dated 18th December, 1998 in respect of all of the objections raised before the Taxing Master. That review is still technically pending in this Court, in that, by consent of the parties it has been adjourned generally with liberty to re-enter.

ORDER GRANTING LEAVE

By order of this Court (Geoghegan J.) made on 14th June, 1999 the Applicant was given leave to apply by way of application for judicial review for an Order of Certiorari

________________________ page break ________________________

3

quashing the order made by the Respondent of 18th December, 1999 in relation to the costs of the objections on three grounds, two of which related to the order having been made in the absence of the Applicant or his representative. While the two grounds in question were argued in the course of the hearing in this Court, it was ultimately agreed that the Court need not determine the issues arising on those grounds. The third ground was that, in making the order, the Respondent had acted without jurisdiction or, alternatively, had exceeded his jurisdiction in that by virtue of Section 27 (6) of the Act of 1995 jurisdiction to make such an order is excluded.

It was contended in the Respondent’s Statement of Opposition that until such time as the review under rule 38 (3) has been considered by this Court the Applicant is precluded from seeking judicial review of the order in relation to the costs of the objections and a similar submission was made on the hearing of this application. The jurisdiction to review given to this Court by rule 38 (3) arises when “any party who is dissatisfied with the decision of the Taxing Master as to any items which have been objected to as aforesaid or the amount thereof’ applies to Court for an order “to review the taxation as to the same items”. The pending motion under rule 38 (3) seeks a review of the taxation of the three items in the Plaintiffs bill of costs in respect of which objections were carried in before the Respondent, whereas on this application what is at issue is whether the order made by the Respondent awarding the costs of the objections to the Plaintiffs legal costs accountants is a valid order, which is a separate issue. In my view, the fact that the motion to review under rule 38 (3) is pending does not preclude the Applicant proceeding with this application. Whether the Applicant succeeds in this application or not, the issues on the review under rule 3 8(3) will remain to be resolved, if the Applicant wishes to pursue them.

________________________ page break ________________________

4

Notice of this application was properly served on the Plaintiff as a party directly affected by the application. However, the Plaintiff did not participate in the application and through her solicitors, Arthur Cox, intimated that she did not want to be heard on the application.

In the events, the only issue which arises for consideration by the Court is whether section 27 (6) of the Act of 1995 precluded the Respondent from awarding the Plaintiffs legal costs accountant their the costs of the objections against the Applicant. This issue, which involves the construction of s. 27(6), is a difficult one.

CONSTRUCTION OF SECTION 27(6)

Section 27 of the Act of 1995 is contained in Part VI of the Act, which is entitled “Taxing Master of High Court”. Section 27 is the only section in Part VI. There are eleven sub-sections in section 27. One extends the taxation process to certain investigations under the Merchant Shipping Act, 1894 and has no part to play in the issue before the Court. Two sub-sections are concerned with the powers of this Court on review of a decision of the Taxing Master, one of them, sub-section (7), being of considerable relevance on the issue before the Court. The remaining eight sub-sections are concerned with the powers and discretions of the Taxing Master and, while one is always wary of generalising as to the effect of statutory provisions, I do not think it inappropriate to comment that the broad thrust of the provisions is reformatory, when the long title, among a long catalogue of objectives of the Act, includes the objective to amend and extend the powers of the Taxing Master of the High Court.

________________________ page break ________________________

5

Sub-section (6) of section 27 provides as follows:

“Without prejudice to the provisions of Order 99, rule 29 (12) and (14) of the Rules of the Superior Courts, 1986 or without prejudice to any enactment regulating the charging of fees payable in the Taxing Master’s Office on the taking up of a certificate of taxation, on the taxation of a bill of costs (whether on a solicitor and client or party and party basis) no solicitor or legal cost accountant or other costs drawer shall be entitled to any fees, disbursements, charges or expenses in relation to the taxation of costs as against the opposing party, but save as against the party who incurred such fees, disbursements, charges or expenses”.

Sub-section (7), which is clearly intended to be complementary to sub-section (6), provides as follows:

“On a review of taxation (whether on a solicitor and client or party and party basis) by the High Court.. .no solicitor or legal costs accountant or other costs drawer retained to present the bill of costs to the Taxing Master.. .shall be entitled to be paid any fees, disbursements, charges or expenses for his or her attendance in Court to give evidence in relation to the bill of costs, save as against the party who incurred such fees, disbursements, charges or expenses.”

In support of his contention that he was not precluded by section 27 (6) from making the order he made on 18th December, 1998, it was submitted on behalf of the Respondent that the expression “on the taxation of a bill of costs’ in that sub-section relates to the initial

________________________ page break ________________________

6

taxation of the costs only and does not relate to the hearing of objections. A statute in relation to legal costs, it was submitted, by analogy to a taxation statute, must be strictly construed and, if the legislature had intended that the provision should apply to the objection stage, that should have been expressly stipulated. It was further submitted that the meaning of the words “no. ..legal costs accountant. ..shall be entitled to any fees.. .as against the opposing party, but save against the party who incurred such fees...” is that a legal costs accountant is not entitled as of right to be paid fees by the other side in respect of work done for the taxation, but he is entitled to be paid by the party retaining him and the party so retaining him, at the discretion of the Taxing Master, may be ordered to be indemnified against such costs by the other side. It was submitted on behalf of the Applicant that the hearing of the objections is encompassed in the phrase “taxation of a Bill of Costs” and to construe the expression as excluding that hearing would be nonsensical. The effect of the provision, it was submitted, is to disentitle a legal costs accountant to any fees etc. in relation to the taxation of the costs as against an opposing party, in the sense that the opposing party has no liability whatsoever for such fees.

In my view, it is quite clear that in enacting Part VI of the Act of 1995 the legislature was cognisant of and was reforming the provisions of the existing costs taxation code as contained in Order 99 of the Rules and the judicial decisions on those provisions. Therefore, in my view, sub-section (6) of Section 27 falls to be construed not only in the context of section 27 as a whole but also against the backdrop of Order 99 and such judicial decisions on Order 99, as are relevant.

Order 99 is divided into parts. For instance, Part I deals with the “Right to costs” and Part III deals with the “Amount of costs”. Part IV, which contains rules 14-37 inclusive, is headed “Taxation of costs” and Part V, which contains rule 38, is headed “Review of

________________________ page break ________________________

7

taxation”. The two provisions of Order 99 which, by its terms, sub-section (6) does not operate on (rules 29 (12) and (14)) are contained in Part IV and expressly provide for a discretion in the Taxing Master to allow a solicitor attending to oppose the taxation, otherwise than as between party and party, proper charges for his attendance (sub-rule (12)), and, in a case of special difficulty and importance involving questions of principle, as part of the costs of taxation, the expenses of counsel appearing before the Taxing Master (sub-rule (14)). Accordingly, in broad terms, notwithstanding the enactment of sub-section (6), the discretion of the Taxing Master is preserved in relation to the fees of a solicitor for his attendance to oppose a solicitor and client taxation and the fees of counsel in exceptional cases. The Taxing Master’s discretion thus preserved is precise and limited.

While Order 99 is divided into parts, presumably for ease of reference, the Order must be read as a whole and on the basis that the provisions of the various parts interact with each other, as is obviously intended. This can be illustrated by reference to the provision which is, perhaps, most frequently quoted by Taxing Masters in their rulings, sub-rule (22) (ii) of rule 37, which lists particular matters which the Taxing Master is required to have regard to in exercising his discretion in relation to any item. While this provision is contained in Part IV, which deals with taxation, it undoubtedly also applies to the hearing of objections which is dealt with in Part V. An even starker illustration is rule 37(18), which I think it is not an exaggeration to say is the fundamental rubric of the taxation code. This provision, which mandates the Taxing Master on every taxation to “allow all such costs, charges and expenses as shall appear to him to be necessary or proper for the attainment of justice or for enforcing or defending the rights of any party” and not to allow costs which appear to him “to have been incurred or increased through over-caution, negligence or mistake, or by payment of special fees to counsel or by special charges or expenses to witnesses or other persons or by

________________________ page break ________________________

8

other unusual expenses”, while contained in Part IV, unquestionably governs every stage of taxation.

Order 99, on it’s proper construction, envisages that there may be three stages in a particular taxation; the initial adjudication on or taxation of the bill of costs; the review of the taxation by the Taxing Master in relation to items objected to by a party; and the review by the Court of the decision of the Taxing Master in relation to matters which have been objected to at the suit of a party dissatisfied with the decision of the Taxing Master. A particular taxation may involve only the first stage, or it may involve the first stage and the second stage or, alternatively, it may involve all three stages. The important point is that on the completion of the taxation process a certificate of taxation is issued by the Taxing Master and this document forms the basis of the entitlement of the party seeking the costs to be paid a certain amount in respect of costs by the party liable for the costs and to have an order of execution for payment of that amount (Order 99, rule 37 (34)). If a particular taxation proceeds to the third stage, by virtue of rule 3 8(6) of Order 99, after the determination by the Court of the review, the matter must be remitted to the Taxing Master “to complete the taxation in accordance with the decision of the Court and to issue the final certificate of taxation”. The taxation of a bill of costs in accordance with Order 99 is a single process, whether it involves one, two or three stages. If it involves three stages, the decision-maker on two of the stages is a Taxing Master, whereas the decision maker on the third stage is a Judge of this Court. If it involves three stages, some of the governing rules in relation to the second and third stages, particularly on procedural matters, are set out in Part V of Order 99, whereas these matters are dealt with in Part IV in relation to the first stage. Neither of these factors detracts from the single process nature of taxation of costs.

________________________ page break ________________________

9

I stated earlier that sub-section (6) and sub-section (7) of Section 27 were clearly intended to be complementary. While the wording of the two sub-sections differs in some respects, I have no doubt that the intention of the legislature was that the effect of the two sub-sections would be to apply the same rules to each of the three possible stages of the taxation process. Moreover I have no doubt that the expression “on the taxation of a bill of costs” in sub-section (6), on its proper construction, comprehends not only the initial adjudication on or taxation of the bill of costs by the Taxing Master, but also, in a case in which it arises, the review by him of the taxation in relation to items which have been objected to in accordance with rule 38(1). It would be illogical to apply different rules to the middle stage of the taxation process to those applicable to the other two stages. Taking section 27 as a whole, in my view, there is not a casus omissus in sub-section (6). Subsections (1) and (2), for instance, which define the powers and the parameters of the discretion of the Taxing Master in relation to the measurement, allowance or disallowance of costs in respect of counsel, a solicitor, an expert witness and other expert “on a taxation of costs as between party and party” are clearly intended to apply to both stages of the taxation process before the Taxing Master. It would be absurd to construe these sub-sections as only applying to the initial taxation. The legislature in enacting provisions which were intended to apply to both stages of the taxation process before the Taxing Master used language which, while not highlighting that two stages might be involved, when it is considered by reference to the provisions of Order 99 is sufficiently comprehensive to cover both stages. There is no material difference, in my view, between the language used in sub-sections (1) and (2) (“on a taxation of costs”), which is also found in sub-sections (4) and (5), and the language used in sub-section (6) (“on the taxation of a bill of costs”). The argument advanced by the Respondent that the strictures of sub-section (6) could be circumvented by reliance on

________________________ page break ________________________

10

sub-section (10), which provides that where part of a bill of costs has been taxed, the costs of taxation, including any duty payable, shall be based on such item or items in the bill as were taxed, does not stand up. Sub-section (10) must be construed and applied having regard to the specific provisions in relation to the imposition of costs of taxation provided for in Order 99 and in the remainder of section 27, including sub-section (6).

As to the effect of the substantive portion of subsection (6), in my view, the Respondent’s submission that the Taxing Master’s discretion to order that the party incurring the fees be indemnified by the opposing party is not sustainable. The manifest intention of sub-section (6) is that, if a party retains a solicitor, or legal costs accountant or other cost drawer, in connection with the taxation of his bill of costs, whether on the initial taxation or on the hearing of objections, the burden of the costs of such retainer shall not fall on the opposing party whether as primary or secondary liability, but shall be borne by the party retaining the professional person. Aside from sub-section (6), the liability of the party to the professional person retained by him would be a matter of contract. The inclusion of an express saver of that liability, it seems to me can be fairly regarded as ex abundanti cautela.

The most curious feature of the difference in wording between sub-section (6) and sub-section (7) is that the words “as against the opposing party” contained in sub-section (6) are not repeated in sub-section (7). It is not necessary for present purposes to express any view on the significance, if any, of that omission: the issue in this matter is governed by sub-section (6). The effect of sub-section (6) in this case, a case concerning a review by the Respondent under rule 38(1), is to render inoperable to the extent indicated in sub-section (6) the discretion the Respondent formerly had under rule 38(2), which was expressed in the following terms:-

________________________ page break ________________________

11

“The Taxing Master may, if he thinks fit, tax the costs of such objections and add them to or deduct them from any sum payable by or to any party to the taxation”.

Since the coming into operation of the Act of 1995 on the 15th day of December, 1995, a Taxing Master has no power or discretion to impose the burden of the cost of retaining a professional person in relation to a review under rule 3 8(1) on the opposing party in indemnification of the party retaining the professional person or otherwise.

Accordingly, the Respondent acted without jurisdiction in making the Order of 18th December, 1998.

ORDER

There will be an Order of Certiorari quashing the Order of 18th December, 1998.