The Gazette 1967/71

Taxation of Costs: Review of Taxation

Following of Trust Funds

In 1960 James Birrell Limited introduced a pensions and insurance scheme for their employees. In the arrangements which they made with the insurance company they provided that if the scheme were discontinued, members benefiting under the scheme, if they were in the company's service at the date of discontinuance, would be entitled to the full accrued benefits secured by the contributions up to that date. The company later intimated to the insurance company, though not to the employees affected, the discontinuance of the scheme and on 3rd May 1965 the insurance company drew a cheque for £1,915 17s. in favour of the ocmpany. This represented the benefits to which the employees were entitled on discon tinuance of the scheme. The company paid that cheque into its No. 2 bank account. On 15th October 1965 the company went into liquidation. From the date of lodgment of the cheque until the account was closed by the liquidator, the credit balance on No. 2 account was at no time less than the sum of £1,915 17s. On the other hand, the company's No. 1 account was consis tently overdrawn to an extent in excess of the credit balance on No. 2 account. In the liquidation the employees claimed to be ranked in full for the sum of £1,915 17s. The liquidator, however, gave them an ordinary rank ing for their claims. The employees appealed against the decision of the liquidator. In sustaining the appeal, the Lord Ordinary (Lord Fraser) said :— "The main argument for the liquidator pro ceeded on the basis that the tempus inspiciendi was the date of liquidation. The argument was that the company itself before liquidation had applied the cheque towards payment of its debt to the bank. . . . But in my opinion, that is not what occurred. ... It may be that if the bank had wished to do so it could have insisted on sett ing off the sum at credit of No. 2 account against the sum at debit of No. 1 account and thereby reduced the total amount of the company's in debtedness. But the bank did not in fact do so and the two accounts remained distinct until several months after the liquidation had begun." Lord Fraser in his judgment noted and disposed of a further argument for the liquidator that the tempus inspiciendi was the present and that since July 1966, the sum due to the employees had been "so inmixed with the company's funds as to be incapable of disentanglement". His Lordship re fused to accept that contention on the ground that if it were to prevail then the liquidator by 44

This was an application to the High Court to review the decision of the Taxing Master. Coun sel had advised that two Senior Counsel be re tained, but the solicitor decided to brief only one. The solicitor having been unsuccessful, his bill of costs was prepared and it came before the Taxing Master for taxation. The Taxing Master reduced senior counsel's brief fee and refreshers and also reduced junior counsel's brief fee and refreshers proportionately. He disallowed objec tions on review of taxation. His Lordship considered the Rules of 1893, 1905 and 1962 and said that the Court when hearing an application to review is now obliged to consider and adjudicate upon the amounts allowed by the Taxing Master for any items which appear in the bill. The court must have regard to the fact that the Taxing Masters have more knowledge and experience of costs than most judges and should not lightly reverse a deci sion of a Taxing Master on the amount allowed for any item in the bill. This did not, however, absolve the Court from the obligation imposed on it by the Rules of considering the matter, because the same evidence is before it as was before the Taxing Master. His Lordship accordingly did not regard himself as precluded by earlier decisions from reviewing the amounts allowed by the Taxing Master on any bill whether it be between party and party or between solicitor and client. On a taxation of a bill between solicitor and own client the amount of charges which were not expressly or impliedly approved by the client should be allowed if they were reasonably. The fees in this case were reasonable because : 1. While it is the usual practice in Ireland to brief two senior counsel in actions in the Court the retainer of one senior counsel only in circumstances in. which two seniors would be allowed on taxation of a bill as between party and party is a most material element in the determination of counsel's fees. 2. The fees charges were not of an unusual nature. 3. The case raised difficult questions of law, 4. The solicitor thought the fees were reason able and paid them. (Martin J. Lavin v. Bridget Walsh and in the matter of a Bill of Costs, Bridget Walsh to J. F. Williams & Co.).