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Gorakhram Sadhuram Vs. Pirozsha Maneckji Javeri (No. 1) - Court Judgment

LegalCrystal Citation
SubjectOther Taxes;Civil
CourtMumbai
Decided On
Case NumberO.C.J. Suit No. 1768 of 1929
Judge
Reported inAIR1933Bom92; (1933)35BOMLR93
AppellantGorakhram Sadhuram
RespondentPirozsha Maneckji Javeri (No. 1)
DispositionApplication dismissed
Excerpt:
costs-taxation-party and party costs-attorney and client costs-separate defendants having the same attorney but different sets of counsel-separate sets of costs-instructions charges-taxing master-discretion-interference by court-practice.;generally speaking, in taxation as between party and party only those costs are allowed which are strictly necessary for the purposes of the prosecution of the litigation, while in taxation as between attorney and client a party is allowed as many of the charges which he would have been compelled to pay to his own attorney as being costs of the suit which fair justice to the other party would admit.;an attorney's right to recover coats as against his own clients arises out of his professional employment, and it is the attorney's duty to see that his..........tip unnecessary costs without proper advice. if, therefore, he claims items in excess of party and party costs from his own client, the expenses must be such as are not unusual or extraordinary, unless the solicitor takes care to protect himself by the express authority of his client which he must obtain after he has clearly explained to the client that the costs in respect of such expenses will probably be disallowed as between party and party. if he does not do so, such costs may be altogether disallowed, unless the solicitor is able to show some valid reasons for incurring the expenses without obtaining the necessary authority. the same principle is stated in kemp on costs, at p. 270.4. it is clear, however, that no hard and fast rule can be laid down for determining what expenses may.....
Judgment:

Wadia, J.

1. [After setting out facts as above his Lordship continued:] Defendants Nos. 5 and 6 took three objections to the taxation of the bill of costs of defendants Nos. 1 and 2 and defendants Nos. 5 and 6 as between attorney and client. The first objection was that the Taxing Master was wrong in allowing charges for briefs and fees for the hearing and final disposal of the suit to two sets of counsel, one set appearing for defendants Nos. 1 and 2, and another appearing for defendants Nos. 5 and 6, though all were represented by the same firm of solicitors, Messrs Hiralal and Co. The second objection related to the amount of refresher payable to Mr. Gharekhan, advocate, who was a junior counsel in the case. At first Mr. Setalvad was briefed with Mr. Varma for defendants Nos. 1 and 2, and Mr. Taraporewala with Mr. Gharekhan for defendants Nos. 5 and 6, but before the hearing commenced a change was effected by asking Mr. Taraporewala and Mr. Varma to appear for defendants Nos. 1 and 2 and Mr. Setalvad and Mr. Ghare khan to appear for defendants Nos. 5 and 6. In the bill of costs Messrs. Hiralal and Co. have charged 15 G.Ms. as refresher for Mr. Gharekhan. Defendants Nos. 5 and 6 allege that Mr. Gharokhan's refresher was fixed at 4 G.Ms. a day from the very commencement of the hearing, and they allege an oral agreement under which this refresher of 4 G.Ms. was further reduced to 2 G.Ms, from and after March 27, 1930, during the course of the hearing. Messrs. Hiralal and Co, denied the agreement. The third objection related to the item of instruction charges for briefing counsel for the hearing on behalf of defendants Nos. 5 and 6.

2. As I have stated before, defendants Nos. 1 and 2 and defendants Nos. 5 and 6 appeared at the hearing by separate counsel instructed by the same solicitors, and on taxation as between attorney and client the Taxing Master has allowed the costs of both sets of counsel. One of the English rules of taxation which is to be found in Order LXV of the Supreme Court Rules, Rule XXVII, Regulation 8, runs as follows:-

Where the same solicitor is employed for two or more defendants, and separate pleadings are delivered or other proceedings had by or for two or more such defendants separately, the taxing officer shall consider in the taxation of such solicitor's bill of costs, either between party and party or between solicitor and client, whether such separate pleadings or other proceedings were necessary or proper, and if he is of opinion that any part of the costs occasioned thereby has been unnecessarily or improperly incurred, the same shall be disallowed.

3. This rule does not preclude the Chamber Judge from interfering with the decisions of the Taxing Master on the question of the allowance of separate defences and the appearance of separate counsel at the trial, for it has been held that this is really a matter of principle. In Ager v. Blacklock and Co. (1887) 56 L.T. 890 Kekewich J. held that it was not purely a question of the Taxing Master's discretion, and his ruling was followed in A.G. Spalding v. A.W. Gamage, Limited [1914] 2 Ch. 405 in which the Judges differed from the decision in Beattie v. Lord Ebury (1873) 29 L.T. 419 in which the Vice-Chancellor refused to interfere with the discretion of the Taxing Master. With regard to taxation, however, there is a well-recognised difference with regard to the principles upon which costs are taxed as between party and party and as between attorney and client. Generally speaking in taxation as between party and party only those costs are allowed which are strictly necessary for the purposes of the prosecution of the litigation, while in taxation as between attorney and client a party is allowed as many of the charges which he would have been compelled to pay to his own solicitor as being costs of the suit which fair justice to the other party would permit. This is the principle on which, generally speaking, an opposing party is in certain cases made to pay the costs of the other side as between attorney and client. In the present application for review of taxation the question is one relating to the costs which may or may not be allowed to a solicitor against his own client on taxation as between attorney and client. A solicitor's right to recover costs as against his own client arises out of his professional employment, and it is the solicitor's duty to see that his client does not run tip unnecessary costs without proper advice. If, therefore, he claims items in excess of party and party costs from his own client, the expenses must be such as are not unusual or extraordinary, unless the solicitor takes care to protect himself by the express authority of his client which he must obtain after he has clearly explained to the client that the costs in respect of such expenses will probably be disallowed as between party and party. If he does not do so, such costs may be altogether disallowed, unless the solicitor is able to show some valid reasons for incurring the expenses without obtaining the necessary authority. The same principle is stated in Kemp on Costs, at p. 270.

4. It is clear, however, that no hard and fast rule can be laid down for determining what expenses may be called unusual or extraordinary. Each case depends on its own facts and upon the rival contentions of the parties thereto. Counsel referred to In re Blyth & Fanshawe (1882) 10 Q.B.D. 207 in which the Appeal Court disallowed the expenditure regarding short hand notes of evidence, and Baggallay L.J. laid down the rule at p. 210 as follows:-

I take it to be the general rule of law, and an important rule which is to be observed in almost all cases, that if an unusual expense is about to be incurred in the course of an notion, it is the duty of the solicitor to inform his client fully of it, and not to be satisfied simply by taking his authority to incur the additional expense but to point out to him that such expense will or may not be allowed on taxation between party and party whatever may be the result of the trial.

5. This rule was followed by the Master of the Bolls in In re Broad and Broad (1885) 15 Q.B.D. 420 in disallowing the costs of employing a third counsel at the hearing of an appeal. The rule was also followed by Buckley and Kennedy L. JJ. in Roney & Co., in re [1914] 2 K.B. 529 in which there was a question of the costs of the shorthand notes of certain arbitration proceedings, but Vaughan-Williams L.J. strongly dissented. There is an earlier case of Osmond v. Mutual Cycle and Manufacturing Supply Company [1899] 2 Q.B. 488 in which the cost of certain shorthand notes was expressly allowed, because in that case such cost was not considered an unusual and unnecessary expense. It was the trial of a patent action comprising many complicated and scientific details. Moreover, the parties had, with the express sanction of the Judge, agreed that a shorthand writer's notes of the evidence should be taken. It was there held that the rule laid down by Baggallay L.J. in In re Blyth & Fanshawe only applied to ordinary cases in which there was no necessity to take shorthand notes. I have merely cited these cases in order to show that even in the matter of such an unusual expense no uniform and hard and fast rule has been laid down by the Courts. Reference was also made to the judgment of the Appeal Court in Bagshaw v. Pimm [1900] P. 148 in which a testator was alleged to have made three different wills on three different dates. The plaintiffs as executors propounded the third will, defendants propounded the first will, and all the four defendants impeached the execution of the second and the third will. The defences were in almost identical terms, and the Court upheld the first will. The Taxing Master held that the interests of defendants Nos. 3 and 4 were sufficiently protected by defendants Nos. 1 and 2, and the Chamber Judge upheld his decision, but it was reversed by the Appeal Court. Lindley M.R. went even so far as to say that if the separate representation by counsel was only by way of caution and not in any way oppressive or embarrassing, separate sets of costs for counsel should be allowed. There are also two other cases in which the same principle as to unusual costs is laid down. In re Snell (a Solicitor (1877) 5 Ch. D. 815 shows that a solicitor must not incur unusual costs without special instructions from his client. In In re J.C. Smith (1844) 2 D. & L. 376 it was laid down that before a solicitor could charge for unusual costs his client must have been made aware that he could recover none of these costs from the opposite party.

6. The question, therefore, for me to consider is whether the employment of two sets of counsel was on the facts and the contentions in this case a reasonably necessary and proper expense, or was unusual or extraordinary. Counsel appearing for the solicitors, Messrs. Hiralal & Co., argued that there is no question of any unusual expense arising in this case, because it is usual for solicitors to brief two counsel in a long cause of this nature, and that defendants Nos. 5 and 6 cannot be allowed to say that the costs of their counsel should have been shared by counsel appearing for defendants Nos. 1 and 2. This contention, however, in my opinion, does not really clinch the point in dispute. Admittedly there was one suit, and there was a common solicitor instructing the parties. Defendants Nos. 1 and 2 appeared by one set of counsel, and defendants Nos. 5 and 6 appeared by another, and the contention is that if only one set of counsel had been briefed for all the four, the costs would have been so much less for defendants Nos. 1 and 2, and also for defendants Nos. 5 and 6. The solicitors, however, incurred more costs by briefing two separate sots of counsel, and that was an unusual expense, and defendants Nos. 5 and 6 are not debarred from putting forward this contention merely because they are not supported in it by defendants Nos. 1 and 2. The question, however, as I have said before, depends upon the facts of the case and the contentions of the parties and the respective defences. My attention was drawn to the plaint and the written statements of defendants Nos. 1 and 2 and defendants Nos. 5 and 6 in the case. The pleadings are long and set out the various points in dispute. Plaintiffs state that they carry on business as merchants and commission agents in Calcutta and Bombay, and they filed the suit for a declaration that an agreement dated July 15, 1929, entered into between the parties to it on certain terms and conditions with the object of manufacturing sugar from Mhowda flowers was not valid, and binding on thorn because of certain alleged fraudulent representations made by defendants Nos. 4 and 5 to the plaintiffs Minim who executed the agreement, also because the Minim had no authority to execute it, and because in any event the agreement had not been confirmed by them. Plaintiffs and defendants Nos. 1 to 4 were the partners under the agreement. The other defendants were confirming parties. Defendants Nos. 5 and 6 who carried on business in the name of Lallubhai Pragji & Co. wore, under a previous agreement of May 21, 1929, which was confirmed by the suit agreement, the selling and the buying agents of the partnership. They were not partners under the suit agreement. As such selling and buying agents they stated that they had sold certain Mhowda flowers to the partnership, and plaintiff's had to pay to them the sum of Rs. 66,000 odd for a part of the flowers and Rs. 105 for the rent of a godown in which they were stored. In or about August 1929, they claimed Rs. 36,840 as earnest in respect of the remaining portion of the flowers which they said had been agreed to be purchased by the plaintiffs. Plaintiffs did not pay the amount, and defendants Nos. 5 and 6 appointed their arbitrator. The arbitrator proceeded with the award in the absence of the plaintiffs, and awarded a sum of Rs. 38,000 odd to defendants Nos. 5 and 6. Plaintiffs, therefore, also prayed in the suit for a declaration that the award was not valid and binding upon them, and there is also a specific prayer, viz., prayer (e), in which the plaintiffs pray for a decree against defendants Nos. 5 and 6 for the sum and interest mentioned therein.

7. Defendants Nos. 1 and 2 in their written statement contended that they believed that the alleged fraudulent representations made by defendants Nos. 4 and 5 were untrue, and that the Munim had authority on behalf of the plaintiffs to execute the agreement. Defendants Nos. 5 and 6 denied the alleged fraudulent representations in fact on behalf of defendants Nos. 4 and 5. They also joined in the defence that the Munim had authority, and they further contended that the award was binding upon the plaintiff's. Defendants Nos. 1 and 2 counterclaimed Rs. 3,72,000 against the plaintiff's for loss of profit for the breach of the agreement, and defendants Nos. 5 and 6 counterclaimed against the plaintiff's for Rs. 2,75,000 for loss or damage on account of the breach by the plaintiffs in not purchasing the remaining portion of the Mhowda flowers. On these allegations different written statements were filed, different affidavits of documents were made, different retainers were sent to counsel, and at the hearing counsel, as I have said before, appeared separately for defendants Nos. 1 and 2, and for defendants Nos. 5 and 6.

8. The principle of taxation in such cases is laid down in Bannehr and Porter's Guide to Costs, 12th Edn., p. 867, which runs as Mows :-

Defendants appearing by the same solicitor, however numerous or diverse they or their interests may be, can have but one bill of costs; but this will not limit their representation in Court. If their interests are diverse, separate counsel may appear in Court, and their charges will be allowed.

The point for consideration, therefore, is whether the interests of defendants Nos. 1 and 2 and defendants Nos. 5 and 6 were so diverse as to warrant their appearance by separate counsel at the hearing. The fact that counsel were instructed by one and the same firm of solicitors, and the fact that each witness called by the plaintiffs was examined only by one leading counsel on either side and not by the other, are not in themselves conclusive, any more than the sending of special retainers and the filing of separate appearances; for if it was an improper and unusual expense to have briefed two sots of counsel, it would be incidentally also improper to have sent special retainers and filed separate appearances. It was, however, conceded in argument that one written statement could not have been filed by defendants Nos. 1. and 2 and by defendants Nos. 5 and 6, even though some of the defences were common. In my opinion it cannot be said that because one counsel could have represented all the four defendants at the hearing, it was not necessary to brief counsel separately, because in that case it would follow that however different the defences may be, provided there was no sharp conflict between them, separate counsel cannot be briefed, or if briefed, separate costs cannot be allowed, as it can be argued that one counsel can always take care of all the defendants and urge all their defences, the interests of the defendants regarding their mere opposition to the plaintiffs being generally identical. This to my mind is not the proper test. The test is whether there is a reasonable probability of there being a substantial difference in the two defences, and whether, therefore, the solicitor is reasonably justified in briefing two sets of counsel. As was pointed out by Sargant J. in A.G. Spalding v. A.W. Gamage, Limited [1914] 2 Ch. 405 :-

It is extremely awkward for counsel when the cases of two sets of defendants are at all different to throw themselves first into the defence of one set of defendants, and afterwards into that of the other set of defendants, although there may not be any material incompatibility between them.

9. In that case costs of separate counsel were allowed. In the case before me it was argued that defendants Nos. 1 and 2 were in no way interested in the arbitration proceedings in which defendants Nos. 5 and 6 were interested. But counsel for defendants Nos. 5 and 6 argued that all were jointly interested in attacking the agreement, and if the agreement was successfully attacked, the arbitration proceedings and the award would have gone by the board. That again to my mind is not the proper test, for, according to the observation of Sargant J., which I have just referred to, the same extremely awkward and embarrassing position, would have arisen in this case, if defendants Nos. 1 and 2 and defendants Nos. 5 and 6 were represented by the same set of counsel. There are numerous cases in which parties are not entitled on questions of costs to sever in their defences. In Bull v. West London School Board (1876) 34 L.T. 674 separate costs of two surveyors working in partnership and who merely appeared in certain interlocutory proceedings for discovery were not allowed, because it was held that they were not entitled to sever in their defences, though as a matter of fact the partnership had been dissolved before they appeared separately. Each case, as I have said, depends upon its own facts ; and considering the facts and contentions of this case, considering that the counterclaims of defendants Nos. 1 and 2 and defendants Nos. 5 and 6 are based on different causes of action, considering also the fact that defendants Nos. 5 and 6 are alone concerned with the award and with prayers (d) and (e) in the plaint, and considering also that there is a charge of fraud against defendants Nos. 4 and 5 which had to be specifically answered by defendants Nos. 5 and 6, I am of opinion that the solicitor properly exercised his discretion when he arranged for his clients to appear separately by different sets of counsel. It was not, in my opinion, necessary for him, therefore, to have, under the principle which I have referred to above, explained to his client that the extra cost of engaging two sets of counsel would be disallowed on taxation between party and party, and to have obtained the client's express authority. Before I conclude this portion of the judgment I may refer to Rule 546(1) of our High Court Rules which provides that:-

No costs are to be allowed on taxation which do not appear to the Taxing Officer to have been necessary or proper for the attainment of justice or defending the rights of the party or which appear to the Taxing Officer to have bean incurred through overcaution, negligence, or mistake, or merely at the desire of the party.

It was argued that this rule applied to taxation as between attorney and client, and that therefore the solicitors were not justified in incurring an expense which was not necessary or proper for the attainment of justice or for defending the rights of defendants Nos. 1 and 2 and defendants Nos. 5 and 6. In the first place this rule has been held to apply to taxation as between party and party only. See Parashuram Shamdasani v. Tata Industrial Bank : AIR1926Bom18 ; and looking at the other subdivisions of Rule 546 it is clear that its provisions are meant to apply to taxation as between party and party only. I have already dealt with the question as to whether or not the costs of separate sets of counsel was necessary or proper, and if Rule 546(1) was at all applicable, I would say that the employment of two separate sets of counsel was necessary and proper for the attainment of justice and defending the rights of the defendants in this case.

10. [After dealing with the second point the judgment proceeded.] The third objection refers to the instruction charges allowed by the Taxing Master on behalf of defendants Nos. 5 and 6. I may say here that as a rule the Chamber Judge does not interfere with the discretion of the Taxing Master, except in extreme eases where there has been gross abuse or a serious mistake, or when the Taxing Master has acted on a wrong principle, or applied an altogether wrong consideration. See Turnbull v. Janson (1878) 26 W.R. 815 and In the Estate of Ogilvie; Ogilme v. Massey (1910) 103 L.T. 154 and Slingsby v. Attorney-General (1918) 119 L.T. 104. That this Court has the right to interfere with that discretion is not denied, and it has been laid down in Parashuram Shamdasani v. Tata Industrial Bank, following the English rules of taxation, that the decision of the Taxing Master is not final even on the question of quantum. The instruction charges are charges which are payable to a solicitor for all his trouble and expense in collecting evidence and in preparing the case for the final hearing, and various factors have to be taken into account in fixing the figure. Taking the nature of the case, the evidence, the correspondence, and all the other trouble that was involved in preparing the case into consideration, I cannot say that the discretion exercised by the Taxing Master in allowing Rs. 10,000 for instruction charges on behalf of defendants Nos. 5 and 6 was unjustifiably exercised, or that the figure is in any way improper and excessive.

11. In the result this application for review by the Chamber Judge of the Taxing Master's certificate must be dismissed with costs. Counsel certified.


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