Civil Mining & Construction Pty Ltd v Wiggins Island Coal Export Terminal Pty Ltd - [2024] QSC 28

SUPREME COURT OF QUEENSLAND

CITATION:Civil Mining & Construction Pty Ltd v Wiggins Island Coal Export Terminal Pty Ltd [2024] QSC 28

PARTIES: CIVIL MINING & CONSTRUCTION PTY LTD
(plaintiff)
v
WIGGINS ISLAND COAL EXPORT TERMINAL PTY LTD
(defendant)

FILE NO: BS No 6050 of 2013
DIVISION: Trial Division PROCEEDING: Review of cost assessment

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:     8 March 2024
DELIVERED AT:     Brisbane
HEARING DATE:    7, 8, 9 and 31 August 2023 JUDGE: Muir J
ORDER:The Order of the Court is that by 4.00pm, Friday 22 March 2024, the parties are to:
(a) email to my associate, draft Final Orders consistent with my findings (and costs, if those orders can be agreed); and
(b) if necessary, file and serve written submissions as to costs, no longer than two pages, and deliver a copy of the submissions by email to my associate.

CATCHWORDS: COSTS – COSTS ASSESSMENT – APPLICATION FOR REVIEW – COSTS ON THE STANDARD BASIS – CLAIM
– COUNTERCLAIM - where the parties alleged errors in the costs assessor’s approach to whether the costs claimed were standard costs necessary or proper for the attainment of justice
- whether the costs statement complies with the requirements of r705 UCPR - whether the notice of objection complies with r706 UCPR - whether the costs assessor provided adequate reasons.
PLAINTIFF APPLICATION FOR REVIEW – COSTS ASSESSOR – WRONGFUL DISALLOWANCE – PREPARATION COSTS – COUNSEL FEES – ADEQUACY OF COSTS ASSESSOR’S REASONS – APPOINTMENT OF COSTS – CARE AND CONDUCT COSTS - whether the
costs assessor wrongly disallowed costs incurred prior to the
commencement of the proceeding - whether the costs assessor provided inadequate reasons - whether certain costs were necessary or proper for the attainment of justice.
whether the costs assessor wrongly disallowed costs relating to expert evidence obtained in the proceeding – whether the costs relating to expert evidence were necessary or proper - whether the costs assessor wrongly disallowed costs paid for various counsel briefed in the proceeding – whether work undertaken prior to the trial as “preparation” could be capped – whether the allowance for “preparation time” should be reduced – whether the costs assessor erred in including certain items in the allowance for preparation fees.
whether the costs assessor erred in reducing counsels fees – whether the costs assessors decision to limit counsels fees should be set aside – whether the costs assessor wrongly disallowed counsels costs associated with a mediation of the proceeding – whether the costs assessor made an error of law by disallowing certain fees incurred to brief new counsel – whether there was a duplication of costs – whether the costs assessor erred in making percentage reductions in counsel fees.
whether the costs assessor was manifestly wrong in exercising his discretion to disallow the claim/counterclaim costs - Whether the costs assessor erred in apportioning the claim/counterclaim costs in the manner that he did - whether the costs assessor failed to give adequate reasons for his decision to exercise his discretion to disallow the claim/counterclaim costs.
whether the costs assessor erred in disallowing care and conduct costs – whether the costs assessor was manifestly wrong in exercising his discretion to disallow these “Care & Conduct Costs” – whether the costs assessor failed to give adequate reasons for his decision to exercise his discretion in the way he did – whether the costs assessor erred in law by failing to provide adequate reasons – whether the costs assessor wrongly sustained an objection which led to the wrongful disallowance of the uplift under r 691(5) UCPR
DEFENDANT APPLICATION FOR REVIEW – COSTS ASSESSOR – ADEQUACY OF PARTICULARS –
OBJECTIONS – LIBAILITY FOR COSTS - whether the costs assessor erred in allowing certain cost items for “examining various documents” – whether there were adequate particulars to support a reasonable assessment that the work claimed by certain items were necessary or proper.
whether the costs assessor erred in rejecting certain objections – whether those errors would warrant the court making orders under r 742 UCPR to refer the costs items back to the costs assessor for reconsideration.
whether the costs assessor erred in his decision relating to the liability for costs of the assessment and the cost of his fees – whether the costs assessor took into account an incorrect and irrelevant consideration.
Building and Construction Industry Payments Act 2004 (Qld) Civil Proceedings Act 2011 (Qld) s 78, s 79
Uniform Civil Procedure Rules 1999 (Qld) r 416, r 472, r 679, r 691, r 702, r 705, r 706, r 742
Supreme Court (General Civil Procedure) Rules 2015 (Vic), r 63.34.3
Alucraft Pty Ltd (in liq) v Grocon Limited [2001] VSC 477 Assets Development Co Ltd v Close Brothers and Co. [1900] 2 Ch 717
Attorney-General of New South Wales v Kennedy Miller Television Pty Ltd (1998) 43 NSWLR 729
Australia & New Zealand Banking Group Ltd v Alirezai (No 2) [2002] QSC 205
Australian Coal and Shale Employees Federation v The Commonwealth (1953) 94 CLR 621
Barristers’ Board v Palm Management Pty Ltd [1984] WAR 101
Bartlett v Higgins (1901) 2 KB 230
Civil Mining and Construction Pty Ltd v Wiggins Island Coal Export Terminal Pty Ltd [2017] QSC 85
Clark v Malpas (1863) 31 Beav 1253
Clark, Tait & Co v Federal Commissioner of Taxation (Cth)
(1931) 47 CLR 142
Club Marconi of Bossley Park v AVR Services NSW Pty Ltd
[2002] NSWSC 584
Codelfa Construction Pty Ltd v State Rail Authority (NSW)
(1982) 149 CLR 337
Commission v Nation (1995) 57 FCR 25
Drew v Makita (Australia) Pty Ltd [2009] 2 Qd R 219 Electricity Generation Corporation t/as Verve Energy v Woodside Energy Ltd (2014) 251 CLR 640
Ernest v Partridge (1863) 2 New Rep 232
Gladstone Area Water Board v AJ Lucas Operations [2015] QSC 52
Green v Hoyle [1976] 2 All ER 633
Hennessey Glass and Aluminium Pty Ltd v Watpac Australia Pty Ltd (2007) QDC 057
Higgins v Nicol (No 2) (1972) 21 FLR 34
House v The King [1936] 55 CLR 499
Hunter v Hunter [2015] QSC 181
Innes v The Electoral Commission of Queensland & Ors
[2022] QSC 122
Innes v Electoral Commission of Queensland & Anor [2023] QCA 88
Jenkins v GJ Coles & Co Ltd [1993] 1 VR 155
King v Allianz Australia Insurance Limited [2015] QCA 101
Laming v Jennings [2018] VSCA 335
Levetus v Newton (1883) 28 Sol. J. 166
McCoombes v Curragh Qld Mining Limited [2001] QDC 142 Menegazzo v PricewaterhouseCoopers [2017] QSC 172 Midway Oil and Storage v Continental Contractors (1929) AC 88
Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd
(2015) 256 CLR 104
Nashvying Pty Ltd v Giacomi [2009] QSC 31
Pathway Investments Pty Ltd v National Australia Bank Limited [2012] VSC 97
Picamore Pty Ltd v Challen [2015] QDC 67
Pinehurst Nominees Pty Ltd v Coeur De Lion Investments Pty Ltd [2015] QSC 122
Re Feez Ruthning’s Bill of Costs [1989] 1 Qd R 55 Remely v O’Shea & Ors (No 2) [2008] QSC 218 Rivington v Garden [1901] 1 Ch. 561
Russells (a firm) v McCosker [2018] QDC 080
Schmid v Skimming [2020] VSC 493
Smith v Madden (1946) 73 CLR 129
Swan v Bank of New Zealand (1890) 24 SALR 20
The City of Warrnambool v Tabone, unreported, 25 August 1992 BC9203233
Thompson v Cavalier King Charles Spaniel Rescue (Qld) Inc
[2020] QCA 2
Toomey v Scolaro’s Concrete Constructions Pty Ltd (in liq)
[2001] VSC 477
W & A Gilbey Ltd v Continental Liqueurs Pty Ltd (1964) NSWR 527
Wide Bay Conservation Council Inc v Burnett Water Pty Ltd (No 9) (2011) 194 FCR 250
Wiesac Pty Ltd v Insurance Australia Ltd (No 3) (2021) 7 QR 642
Wiggins Island Coal Export Terminal Pty Ltd v Civil Mining & Construction Pty Ltd [2001] QCA 8
Williams v AusNet Electricity Services Pty Ltd (No 3) [2017] VSC 528

COUNSEL: B O’Donnell KC with B Wacker for the plaintiff
P L O’Shea KC with S Eggins for the defendant

SOLICITORS: Thomson Geer for the plaintiff
Corrs Chambers Westgarth for the defendant

Part one: Overview The applications

This is the determination of cross applications by the plaintiff (“CMC”) and the defendant (“WICET”) under r 742 of the Uniform Civil Procedure Rules 1999 (Qld) (“UCPR”) to review a costs assessor’s assessment of CMC’s costs of its claim awarded in the substantive proceeding.
That proceeding concerned a construction dispute over works undertaken by CMC (as the contractor) for WICET (as the principal) at the Wiggins Island Coal Export Terminal near Gladstone between September 2011 and March 2013. CMC’s claim totalled around $14.5 million for variations and delays, and WICET’s counterclaim was for overpayments, repayments and damages totalling around $12.5 million. After a seven week trial before Flanagan J (as his Honour then was) in 2016, a judgment on liability and certain aspects of quantum was delivered on 19 May 2017.¹ A final judgment on quantum was delivered on 26 March 2018.² CMC was awarded
$3,562,586.38 plus interest on its claim (plus GST of $356,258.65) with a further order for return of its bank guarantee, and WICET was awarded the sum of
$2,936,844.61 plus interest on its counterclaim.³ After various appeals, WICET was ordered to pay CMC’s costs of the claim, and CMC was ordered to pay WICET’s costs of the counterclaim.⁴
On 15 October 2021, CMC served WICET with a costs statement claiming some 19,000 separate items totalling nearly $11 million [$10,729,265.16] as its costs on the standard basis. On 19 March 2022, WICET filed a Notice of Objection in two parts: the first is 82 pages and contained 14 broad General Objections; the second contained Excel spreadsheets with specific objections to a significant proportion of the 19,000 items claimed. On 10 May 2022, CMC provided a detailed (214 page) response to the Notice of Objection. On 16 January 2023, CMC served a supplementary costs statement seeking $339,838.81 as its costs associated with the costs assessment process.
Like the substantive proceeding, the costs assessment process was expensive, hard- fought, and protracted; taking around one and a-half years to be finalised. On any view, Mr Philip Roberts (the costs assessor appointed by the parties on 16 June 2022 to assess CMC’s costs) was faced with a mammoth task. Unsurprisingly, his fees alone were over $325,000. When delivering his reasons Mr Roberts described the

Civil Mining and Construction Pty Ltd v Wiggins Island Coal Export Terminal Pty Ltd [2017] QSC 85 at [1]-[16] per Flanagan J.
Civil Mining and Construction Pty Ltd v Wiggins Island Coal Export Terminal Pty Ltd [2018] QSC 60.
Separate orders were made with the difference between the amounts of the two judgments, once interest and GST were added, was $1,796,368.55 (in CMC’s favour).
Order dated 31 January 2022; Civil Mining and Construction Pty Ltd v Wiggins Island Coal Export Terminal Pty Ltd [2020] QSC 1 (“the Costs Judgment”). WICET’s costs of its counterclaim are yet to be assessed (although a costs statement and notice of objection have been prepared). WICET appealed the costs order. Wiggins Island Coal Export Terminal Pty Ltd v Civil Mining & Construction Pty Ltd [2021] QCA 8; (2021) 7 QR 1 (“Costs Appeal Judgment”).

process as an “extremely challenging assessment” with the costs statement and objections reflecting “the intense combat that had preceded their delivery to me.”⁵

On 10 March 2023, Mr Roberts issued his final costs certificate in the amount of
$6,605,189.25 (which included $64,163.73 as the costs of the assessment process).⁶ On 22 December 2022 and 11 April 2023, he provided written reasons for his assessment following requests by WICET to do so. These reasons – which are analysed in more detail during the course of these reasons – are in different forms but included spreadsheets with item-by-item reasoning (with varying levels of detail).
By their current applications, the fierce and unyielding battle between the parties continues. Although their respective legal teams thankfully endeavoured to make the review manageable by providing detailed written submissions, working bundles and schedules, and by categorising the issues for determination.⁷

Grounds of review

CMC confined its grounds of review to alleged errors by the costs assessor in his assessment of standard costs under the following five headings:
(a)Ground one: Pre-commencement costs;
(b)Ground two: Mitchell Brandtman costs;
(c)Ground three: Counsel’s costs;
(d)Ground four: Claim/counterclaim costs; and
(e)Ground five: Care and conduct costs.
WICET articulated three alleged errors by the costs assessor on the following grounds:
(a)Ground one: The assessor erred in allowing certain cost items for “examining various documents” despite there being inadequate particulars to support any reasonable assessment that the work claimed by those items was necessary or proper;
(b)Ground two: The assessor erred in rejecting WICET’s objections in “General Objection 1B” in the Notice of Objection. The costs assessor erred in wrongly rejecting WICET’s dual form of objections; and

Letter dated 22 December 2022 from Mr Roberts to the parties; Exhibit SGS-115 to Speechly Affidavit; letter is also marked for identification “K”.
Earlier certificates of 9 November 2022 and 9 December 2022 (amending the 9 November certificate) were later agreed by the parties to be void on the basis that they were premature and were replaced by the certificate of 10 March 2023. But before this (on 1 December 2022), WICET requested the costs assessor provide reasons for assessment relevantly about CMC’s various claims for “examining”. That issue is discussed under that heading later in these reasons. The final sum of $6,605,189.25 in the costs certificate of 10 March 2023 is comprised of $1,655,946 for disbursements (including CMC’s share of the costs assessors assessment of the bill of $327,764.80, which was paid in equal proportions by the parties with CMC’s portion then included as part of the disbursement payable by WICET); and
$4,717,621 for professional fees; [total of $6,541.025.52] plus the sum of $64,163.73 in respect of the plaintiff’s supplementary costs statement of 16 January 2023 ($37,167.13 for professional fees and
$26,996.60 for disbursements).
For example, the costs assessor schedules were helpfully enlarged, colour-coded and bound into six large A3 folders totalling 800 pages for the purpose of this review. Marked for identification “S”.

(c)Ground three: The assessor erred in determining that WICET must pay all the assessor’s fees in respect of the assessment and all of CMC’s costs of the assessment.

In order to analyse these grounds, it is necessary to have some understanding of the nature, scope and conduct of the substantive proceedings.

The substantive proceedings

CMC was engaged by WICET under a written contract dated September 2011 to perform a package of bulk earthworks and civil works for a coal export terminal near the Port of Gladstone.⁸ The delivery of those works was delayed by 208 days.
Disputes arose, and on 4 January 2013 an adjudication pursuant to the Building and Construction Industry Payments Act 2004 (Qld) (“BCIPA”) was commenced by CMC. The adjudication included claims under the Contract described as:
(a)The Earthworks Claim (also referred to as Variation 141);
(b)The Piling Claim (also referred to as Variation 142);
(c)The Pyealy Creek Bebo Arch Claim (also referred to as Variation 103);
(d)The Delay Claim (also referred to as Variation 17);
(e)The Haul Roads Claim (also referred to as Variation 30 or the GPN Borrow Pit Claim);
(f)The Environmental Management Claim (also referred to as Variation 90); and
(g)The Geolon 600 Claim (also referred to as Variation 63).
On 16 February 2013, CMC was awarded $9,308,081.53 in the adjudication decision. But it did not recover any amounts for the Earthworks Claim, Piling Claim, GPN Borrow Pit Claim; and only partially recovered amounts claimed for the Pyealy Creek Bebo Arch Claim, Delay Claim, Geolon 600 Claim, and Environmental Management Claim.
On 26 April 2013, CMC brought a second adjudication application under the BCIPA and on 5 June 2013, CMC was awarded another $2,845,972.39, which included further amounts of $458,030.00 for the Delay Claim and $447,939.65 for the Pyealy Creek Bebo Arch Claim.
On 3 July 2013, CMC commenced proceedings which included the following claims:
(a)The Earthworks Claim,
(b)The Piling Claim;
(c)Additional amounts for the Pyealy Creek Bebo Arch Claim and Delay Claim; and

The works under the Contract involved the preparation of a rail receival facility, an overland conveyer to deliver the coal to a stockyard area, materials handling and sampling systems, a single berth with ship loader, associated channels, wharves, serves, and administrative facilities.

(d)Amounts for the GPN Borrow Pit Claim, Geolon 600 Claim and Increased Environmental Management Claim.

On 31 July 2013, WICET filed a defence and counterclaim. It defended CMC’s claims and sought the payment of moneys from CMC by way of alleged overpayments and an entitlement to liquidated damages. These correlated counterclaims did not raise any claims that had a separate factual basis to the claims brought by CMC. But on 27 February 2015, WICET amended its defence and counterclaim and introduced additional new counterclaims unrelated to the matters the subject of CMC’s claim.
The trial took place before Flanagan J (who also case managed the proceeding leading up to the trial) in late 2016 and involved:
(a)36 hearing days;
(b)nine primary lay witnesses giving extensive evidence as to disputed facts;
(c)eight expert witnesses giving opinion evidence as to delay, disruption, quantum and surveying results; and
(d)extensive and detailed written submissions and a 304 page judgment.
The litigation had all the hallmarks of a “classic building and construction dispute.”⁹ It was variously described by Flanagan J as “complex”, “lengthy and hard fought.”¹⁰ In terms of liability: CMC enjoyed success on all of its claims; and WICET on its Final Certificate and Variation 17 claim, but not on its claims for liquidated damages, adjudication fees and interest under the BCIPA, the OLC Claim, and the Environmental Management Claim.¹¹ In the end, when considered in the context of a percentage of their total claims, Flanagan J captured the end result as both parties achieving “not dissimilar results” in being awarded a “substantial monetary judgment.”¹²
Against this general background it is necessary to understand the legal principles relevant to applications for review under UCPR r 742.

Applications for Review

The starting point is UCPR r 742, which empowers the court to review a cost assessment decision and relevantly states as follows:

“742 Review by court

(1) A party dissatisfied with a decision included in a costs assessor’s certificate of assessment may apply to the court to review the decision.

…

(3) The application must—

As that expression was used by Palmer J in Club Marconi of Bossley Park v AVR Services NSW Pty Ltd [2002] NSWSC 584 at [16].
Costs Judgment at [67], [73] and [81].
Costs Judgment at [66].
Costs Judgment at [67].

(a) state specific and concise grounds for objecting to the certificate; and
(b) have attached to it a copy of any written reasons for the decision given by the costs assessor; and

…
(5)   On a review, unless the court directs otherwise—
(a)     the court may not receive further evidence; and
(b)     a party may not raise any ground of objection not stated in the application for assessment or a notice of objection or raised before the costs assessor.

(6)   Subject to subrule (5), on the review, the court may do any of the following—
(a)     exercise all the powers of the costs assessor in relation to the assessment;
(b)     set aside or vary the decision of the costs assessor;

(c)     set aside or vary an order made under rule 740(1);
(d)     refer any item to the costs assessor for reconsideration, with or without directions;
(e)     make any other order or give any other direction the court considers appropriate.

…
[Underlining added]

The following eight guidelines for conducting a review under UCPR r 742 (some of which overlap), emerge from the authorities:
(a)First: The onus lies on those who seek to impeach the costs assessor’s decision to satisfy the court of the error;¹³
(b)Secondly: An application to review involves the exercise of discretion so it is analogous to an appeal.¹⁴ It follows that the well-known principles pertaining to an appeal against the exercise of a discretion, as set out in the House v The King [1936] 55 CLR 499 at 505, are applicable: the court may interfere with a costs assessor’s exercise of discretion where it is demonstrated that the costs assessor has either acted upon a wrong principle, failed to exercise a discretion, or exercised a discretion in a way that was manifestly wrong;¹⁵
(c)Thirdly: A decision of a costs assessor will be manifestly wrong if it was not open on the facts or not within the costs assessor’s lawful discretion;¹⁶

Australian Coal and Shale Employees Federation v The Commonwealth (1953) 94 CLR 621 at 627- 628 per Kitto J.
See Nashvying Pty Ltd v Giacomi [2009] QSC 31 at [4].
See the discussion by Flanagan J in Wiesac Pty Ltd v Insurance Australia Ltd (No 3) (2021) 7 QR 642 at [12]-[14].
Ibid at [48].

(d)Fourthly: There is a strong presumption in favour of the correctness of a costs assessor’s decision such that it should be affirmed unless the judge on review is satisfied that it is clearly wrong;¹⁷
(e)Fifthly: Ordinarily, the discretion of the costs assessor will not be interfered with on review unless the costs assessor has erred on a question of principle;¹⁸
(f)Sixthly: Where the decision involves quantum only, it is, generally speaking, final, and it must be a very exceptional case in which the court will even listen to an application to review such a decision;¹⁹
(g)Seventhly: In practice, it is necessary to show there has been some specific error or that the outcome is so obviously inappropriate there is an undisclosed error in the exercise of the assessor’s judgment; it is not sufficient for the reviewing court to take the view that if it had been performing the assessment, a different amount would have been assessed;²⁰ and
(h)Finally: If there is an error, it is appropriate (if in a position to do so) for the court of review to exercise the relevant judgment itself.²¹

Some of the grounds of review are underpinned by alleged errors in the costs assessor’s approach to whether the costs claimed were standard costs necessary or proper for the attainment of justice.

Costs on the standard basis

Under the heading, “Disposition of the costs of the proceedings” the orders made by Flanagan J (which were upheld on appeal) were as follows:²²
“1. WICET pay CMC’s costs of the claim.
2. CMC pay WICET’s costs of the counterclaim.”
It follows from UCPR r 702(1), that the costs assessor was required to assess CMC’s costs (of the claim) on the “standard basis”; a well-established expression formerly used to describe “party and party” costs.²³
The assessment process was approached by both sides (in the review applications) and before the costs assessor, on the basis that the effect of the orders was that the reference to “costs of the claim” was to CMC’s standard “costs of the proceeding”. I have therefore proceeded on that basis too.
Rule 679 of the UCPR relevantly defines “costs of the proceeding” as follows:

Australian Coal and Shale Employees Federation v The Commonwealth (1953) 94 CLR 621 at 627-
628.
King v Allianz Australia Insurance Limited [2015] QCA 101 at [18] (Mullins J, (as her Honour then was) with whom Philippides JA and Burns J agreed).
Australian Coal and Shale Employees Federation v The Commonwealth (1953) 94 CLR 621 at 627-
628.
Picamore Pty Ltd v Challen [2015] QDC 67 at [7]-[8] per McGill KC DCJ.
Ibid at [7]-[8] per McGill KC DCJ.
Costs Judgment at [82].
Hennessey Glass & Aluminium v Watpac Australia [2007] QDC 57 at [23] per McGill KC DCJ.

“costs of the proceeding mean costs of all the issues in the proceeding and includes—
(a) costs ordered to be costs of the proceeding; and
(b) costs of complying with the necessary steps before starting the proceeding; and
(c) costs incurred before or after the start of the proceeding for successful or unsuccessful negotiations for settlement of the dispute.”

Rule 702 of the UCPR provides:

“702 Standard basis of assessment

(1) Unless these rules or an order of the court provides otherwise, a costs assessor must assess costs on the standard basis.
Note—
Costs on the standard basis were previously party and party costs— see rule 743S (Old basis for taxing costs equates to new basis for assessing costs).

(2) When assessing costs on the standard basis, a costs assessor must allow all costs necessary or proper for the attainment of justice or for enforcing or defending the rights of the party whose costs are being assessed.” [Underlining added]

This begs the question (and it is plainly the question that the costs assessor was required to answer as part of his assessment on the items claimed): were the costs necessary or proper for the attainment of justice? Necessary or proper costs have been described as costs incurred to enable a party to conduct the litigation or establish its case.²⁴ They are not confined to the “bare minimum necessary to enable a party to conduct litigation – and no more.”²⁵
Rather, on any ordinary reading of the rule, the addition of the words “or proper” broadens the scope of the test and envisages a wider ambit of charge.²⁶ These words have discrete and distinct meanings and are “not interchangeable.”²⁷ The authorities establish that a rigid or narrow approach should not be taken to an assessment of the costs necessary or proper for the attainment of justice.²⁸
Costs have been described as “necessary” if the litigation could not have been carried on reasonably without them, and “proper” if it was reasonable for a client with a competent solicitor to have incurred those costs in carrying on the litigation;²⁹ or similarly, whether the costs were reasonably necessary or proper “for the adequate

Smith v Buller (1875) LR 19 Eq 473.
Smith v Buller (1875) LR 19 Eq 473 at 475 referred to at [23] in Hennessey Glass.
W & A Gilbey Ltd v Continental Liqueurs Pty Ltd [1964] NSWLR 527 at 534; Hennessy Glass at [24] with reference to Francis v Francis and Dickerson [1956] P 87 at 95.
Wiesac at [6].
See also Hennessey Glass at [26]; Francis v Francis and Dickerson [1956] P 87 at 95.
Hennessey Glass at [24].

conduct of the case, incurred to maximise the prospect of success.”³⁰ There must be some real relationship between the work that was carried out and the subject matter of the litigation (once that is commenced).³¹ The question is not (as Applegarth J relevantly observed) “whether a party seeking its own maximum advantage would engage a counsel of a particular level of experience or skill” for a particular number of days, nor is it “whether one member of the bar will present the case better than another.”³²

The nature and circumstances of a particular case is an important determinant.³³ With care required not to be affected by hindsight.³⁴ As Flanagan J relevantly observed in Wiesac:³⁵
“[6][A] distinction is drawn between the words ‘necessary” and “proper”…The test is to be applied by reference to the circumstances that existed when the costs were incurred, and the defendant should not be penalised for incurring costs that were reasonably and proper at the time but which, with the benefit of hindsight, may not have been strictly necessary given the eventual course of the proceeding.” (Footnotes omitted)
The following (frequently cited and well approved) observations of Asprey J in W & A Gilbey Ltd v Continental Liqueurs Proprietary Ltd [1964] NSWR 527 remain a salient reminder and summary of the overall and correct approach to be taken on this issue:³⁶
“A taxing officer in a party and party taxation should allow a successful litigant, in whose favour an order for costs has been made, a just and reasonable amount in respect of each item claimed in such litigant’s bill of costs where such item was, in fact, incurred on behalf of the litigant by his solicitor in respect of some step or matter in the litigation which either (i) was necessarily taken or performed for the attainment of justice or the maintaining or defending of the litigant’s rights in the circumstances of the particular case, or, (ii) although not necessarily taken or performed for such purposes, would reasonably have been taken or performed for any of those purposes by a solicitor acting at the time when it was taken or performed without extravagance in conformity with the then situation of the case and not in conflict with the statutes and rules, the practice of the court, and the usages of the legal profession appertaining to such a case.
In determining whether an item of costs is “necessary” or “proper”, the taxing officer would have regard to the facts in issue between the parties’ litigation as disclosed by the pleadings and to all facts which render probable the existence

Hennessey Glass at [27] with reference to Stanley v Phillips (1966) 115 CLR 470 at 486 per Taylor and Owen JJ.
See Pathways Investments Pty Ltd v National Australia Bank Limited [2012] VSC 97 at [3].
Lee v Abedian [2017] QSC 022 at [73].
Hennessey Glass at [26] with reference to the observations of Barwick CJ at p 478 in Stanley.

³⁴W & A Gilbey Ltd at 534-535 per Asprey J with reference to the observations of Sachs J in Francis v Francis and Dickerson (1956) P 87 at 96.

Wiesac at [6].
W & A Gilbey at 534-5; cited with approval in King v Allianz Australia Insurance (2015) 71 MVR 182 at [19]; W & A Gilbey (page 534) cited with approval by Martin J (as his Honour then was) in Pinehurst Nominees v Coeur De Lion Investments [2015] QSC 122 at [61].

or non-existence of the facts in issue including those matters which would affect the weight or credibility of any such facts. But, in making his decisions upon these matters, the taxing officer should place himself [or herself] in the position of the solicitor sitting in his [or her] office chair engaged in the task of preparing the case for trial and, to use the words of Sachs J in Francis v Francis and Dickerson at 96: “…in particular, care must be taken not to be affected by what is colloquially termed ‘hindsight’.” The question of the necessity for or propriety of any item of costs should be judged by the state of things known or which ought reasonably to have been known to a diligent solicitor at the time when the expenditure was made, or the liability therefore was incurred.”
[Underlining added]

The grounds of review canvass a myriad of issues including the validity of the initial costs statement, the form of the notice of objections and many aspects of the costs assessor’s processes and approach to the assessment.

The Costs Statement and Notice of Objection

The parties’ applications and written submissions are underpinned by allegations of inadequacies in the initiating court documents filed as part of the costs assessment process. On the one hand, WICET submitted that the costs statement does not comply with the requirements of UCPR r 705 (2); and on the other hand, CMC submitted that WICET’s notice of objection does not comply with the requirements of the UCPR r 706.
The particular complaints about CMC’s costs statement and WICET’s notice of objection are dealt with where they arise during the course of these reasons. But it is necessary to have some factual understanding of these documents and of the legal requirements as provided for in the UCPR.
Costs statement
Rule 705(2) of the UCPR relevantly sets out the requirements for a costs statement as follows:
(2)   The costs statement must—
(a)     contain sufficient details to enable the party liable to pay the costs to understand the basis for the costs, prepare an objection to the costs statement and obtain advice about an offer to settle the costs; and
(b)     if practicable, have attached to it copies of all invoices for the disbursements claimed in the costs statement.
[Underlining added]

The practicalities and limitations of costs statements being fully particularised was recognised by Bradley J in Innes v Electoral Commission of Queensland [2022] QSC 122 as follows:³⁷
“[60]I have examined each of the two costs statements. Each of them lists in chronological order the items of costs claimed, noting the date, assigning a sequential item number. Each has a description for each item and the sum claimed as the costs for it (which are divided between disbursements and professional fees). Each has a cumulative sub-total at the bottom of each page. At the end of each costs statement, there is a total of outlays and a (grand) total of outlays and professional fees.
[61]Mr Innes is not a lawyer. He acted for himself in the CDR application. He prepared, filed and served various documents on ECQ and Mr Jamieson. He was served with documents that each of those other parties relied upon. He appeared at each hearing day. So, he has personal knowledge of the progress of the CDR application, the documents filed, served and read and the appearances.
[62]Considering the knowledge of Mr Innes of the CDR application and the circumstances of it more generally, I am satisfied that each of the two costs statements is sufficient to enable a person in the position of Mr Innes to understand the basis for the costs stated in each item, to prepare an objection to it, and to obtain advice about any offer to settle the costs by either ECQ or Mr Jamieson, or by both of them.” (Footnotes omitted)
[Underlining added]
The costs statement prepared by CMC is lengthy and claims over $10.7 million in costs on the standard basis. It is introduced by a 10-page submission which includes:
·an overview of the dispute;
·the claims;
·a history of the litigation; and
·details about the length, complexity and outcome of the trial, together with an outline of the main protagonists (that is the non-expert and expert witnesses, solicitors and senior and junior counsel involved in the litigation).
The costs statement itself is over 2,500 pages long and contains over 19,000 items setting out each of the costs (including disbursements claimed). These items are listed in chronological order with an assigned sequential number and the date noted. Each item has a brief description of the task said to have been undertaken (sometimes with the initials of the person carrying out the task) and the sum claimed as costs for that

Innes v The Electoral Commission of Queensland & Ors [2022] QSC 122 at [60]-[62]. This decision was upheld on appeal; see Innes v Electoral Commission of Queensland & Anor [2023] QCA 88 per Bond JA, Gotterson AJA and Wilson J.

task. For items which included a claim under Item 9 of Schedule 1 of the Scale of Costs, the total amount of time claimed for that item is also included.

The solicitors for CMC billed a total amount of $11,809,135.09 to CMC through 125 invoices. However, the actual costs were higher as some extra disbursements for expert witness reports, dispute resolution services, witness fees and transcripts were paid by CMC directly.³⁸ The total of these additional costs was not apparent. Regardless, and on any view, the total amount of costs of $10,729,265.15 that CMC sought from WICET was extraordinarily high – and it is understandable that it caused some scepticism on WICET’s part about whether that sum was recoverable as CMC’s necessary or proper costs on the standard basis.
Notice of objection
The requirement for objections to any costs statement are set out in UCPR r 706 as follows:

“706 Objection to costs statement

(1)    A party on whom a costs statement is served may, within 21 days after being served, object to any item in the statement by serving a notice of objection on the party serving the statement.
(2)    The notice of objection must—
(a)     number each objection; and
(b)     give the number of each item in the costs statement to which the party objects; and
(c)     for each objection—concisely state the reasons for the objection identifying any issue of law or fact the objector contends a costs assessor should consider in order to make a decision in favour of the objector.

(3) The reasons for objection may be in abbreviated note form but must be understandable without further explanation.
(4) If the same objection applies to consecutive or nearly consecutive items in a costs statement, the notice need not separately state the reasons for objecting to each of the items.
(5) Also, if there are a number of associated items, the objection may be in the form of an objection to a common issue related to the associated items.”
[Underlining added]

WICET’s notice of objection is also lengthy. It is underpinned by a covering submission of 82 pages, containing 13 “General Objections”. The General Objections contain various sub-general objections. For example, General Objection 1: “Manner of preparation of the costs statement” has two Sub-General Objections; 1A and 1B.

See letter of 19 August 2022 from CMC’s solicitors to the costs assessor. Exhibit SGS-40 to the affidavit of Speechly. This letter was also marked in a bundle for identification “Q”.

General Objection 7: “Costs related to the Delay Claim” has three alternatives. Sub- general Objection 1B is 18 pages long.

The General Objections also attach “Specific Objections” comprising of Excel spreadsheets that detail the specific objections to individual items in the costs statement. Those Specific Objections then cross-refer to some, but not all, of the General Objections.
The notice of objection did not state how the General Objections were to be applied to each item in the costs statement. But on this review application, WICET submitted that the purpose of the General Objections was to raise a “common objection” in respect of a number of “associated items” as permitted by UCPR r 706(5) and that where the Specific Objections referred to the General Objections they were also to be taken as a Common Objection.
I accept that a reference to general objections in a schedule of specific objections is not unusual in the costs assessment process because it avoids repetition. There is also no reason why a notice of objection might not consist of multiple documents (as was the case here).³⁹ But the usefulness of any particular method depends on the type and complexity of the litigation. In some cases, such a multifaceted approach may only serve to add another layer of complexity to the assessment itself – resulting in a far more cumbersome and expensive process then necessary. Which is what the costs assessor found in the present case.
It is instructive, too, that in the initial summary of its overall objections to the costs statement, WICET made a number of submissions questioning the integrity and veracity of the costs statement and the need for the costs assessor to undertake a detailed process of verification, including relevantly as follows:
“1.6Because of the misguided manner in which the Costs Statement has been prepared, WICET has significant reservations as to the veracity of the Costs Statement and the level of the costs claimed therein. Even if certain claim items are permissible under the Scale (which is denied), the rolled-up and general description of the items makes them difficult to interrogate. Because the Costs Statement seeks every advantage, WICET has doubts as to whether the costs described were incurred at all.
1.7By its Costs Statement, CMC claims approximately $10.7M That is a staggering amount for a claim for costs on the standard basis—and even more extraordinary in circumstances where the net result to CMC based on the claim and counterclaim was an award of approximately $600,000. Based on its own costs incurred in the proceeding, WICET expects that CMC’s claim for $10.7M is, in fact, a majority of CMC’s actual costs. Again, CMC is not entitled to its costs on an indemnity basis.
1.8The result is that neither WICET nor any Assessor can have any confidence in the Costs Statement prepared by CMC.

Russells (a firm) v McCosker [2018] QDC 080 at [36] to [38] per Farr SC DCJ.

1.9WICET of course recognises that it must pay to CMC the costs of the claim. However, WICET cannot be compelled to pay for items which are not properly claimable on the standard basis by the application of the Scale. The Costs Statement needs to stand on its own. To the extent it is defective, it should fail. For a substantial number of items, CMC has not properly made a claim and WICET has been unable to properly form objections.
1.10For any items that the Assessor is minded to consider:
(a)     CMC should produce its invoices, accounts and file in full; and
(b)     The invoices and accounts should be the subject of a line- by-line comparison with the Costs Statement for the purposes of verifying the items;
(c)     Further, CMC should be asked to demonstrate that it has in fact incurred and/or paid the costs the subject of the claim.”

[Underlining added]

Verification process undertaken by the costs assessor

The latter submission to the costs assessor included a request that for any items the assessor was “minded to” consider, some form of verification by him was essential, (particularly for time-based entries). This request is consistent with the observations of McGill DCJ in Picamore Pty Ltd v Challen [2015] QDC 67 at 24 as follows:
“[24]There was a general objection in relation to a large number of items in the invoices that the amount of times claimed to have been spent on a particular task was excessive and unreasonable, and many of the items were reduced on this basis, although a number of items were reduced on the related basis that the material on the file did not adequately demonstrate that the amount of time claimed had in fact been spent on that item. That is really a separate point. The onus is on the practitioner to show that there is an entitlement to charge the amount sought to be recovered for the legal services performed, and to justify by file notes or other appropriate means the amount of the charge by showing that it does reflect legal services actually provided. If the amounts claimed are not adequately documented, it follows that the claims must be disallowed, or allowed only to the extent that they are properly documented, unless it is apparent from other material or the logic of the situation that some amount of time must have been spent on the task in question.”
[Underlining added]
WICET conceded to the costs assessor that “verification is a significant task for any assessor” but that it was prepared to assist in this task if the invoices and accounts are produced on an open basis to it. The problem with the latter offer is, of course, that there will often be an “information asymmetry” between the party entitled to costs

and the party liable to pay costs due to a solicitor’s file ordinarily containing confidential and privileged material. Indeed, ss 78 and 79 of the Civil Proceedings Act 2011 (Qld) recognise that a costs assessor may need to review such material in assessing costs and the legislation preserves confidentiality and privilege accordingly.

Both applications for review proceeded on the following bases:⁴⁰
(a)First: WICET requested that a detailed verification exercise was warranted by the costs assessor;
(b)Secondly: CMC produced its invoices, accounts and solicitor’s files to the costs assessor for the purpose of such a verification being undertaken by the costs assessor; this included a ShareFile link of all tax invoices requested;
(c)Thirdly: WICET requested that the costs assessor advise how he anticipated to conduct the verification exercise;
(d)Fourthly: The costs assessor confirmed to both parties that he was verifying each item of expenditure claimed on the database he had assembled – on a line- by-line basis, but that he would be making his “own decision” on the “further process” required to achieve a just and equitable outcome for both parties; and
(e)Fifthly: The parties were asked on notice whether the court might be assisted in communicating with the costs assessor in dealing with the applications for review.⁴¹ But no submissions were subsequently made or received by either party on this issue.
In the circumstances outlined above, I am satisfied that:
(a)the exact process undertaken by the costs assessor to verify each item are unknown. But with the benefit of access to CMC’s file, he was in the “unique” and best position to decide the most appropriate process for examining CMC’s costs and to make appropriate allowances and reductions;
(b)the costs assessor undertook the detailed verification exercise that WICET requested; and
(c)that it is reasonable to infer, (as I do), that as part of that process, the costs assessor accessed, reviewed, and checked the relevant documentation contained in CMC’s solicitor’s files if, and when, he considered it necessary to do so.

The assessment process

Rule 706 of the UCPR then relevantly provides as follows:

“706 Objection to costs statement

(1) A party on whom a costs statement is served may, within 21 days after being served, object to any item in the statement by serving a notice of objection on the party serving the statement.
(2) The notice of objection must—

See bundle of correspondence marked for identification “Q”.
T3-84 ll 1-21.

(a)     number each objection; and
(b)     give the number of each item in the costs statement to which the party objects; and
(c)     for each objection—concisely state the reasons for the objection identifying any issue of law or fact the objector contends a costs assessor should consider in order to make a decision in favour of the objector.

(3)   The reasons for objection may be in abbreviated note form but must be understandable without further explanation.
(4)   If the same objection applies to consecutive or nearly consecutive items in a costs statement, the notice need not separately state the reasons for objecting to each of the items.
(5)   Also, if there are a number of associated items, the objection may be in the form of an objection to a common issue related to the associated items.”

The procedure on assessment is set out in UCPR r 720 relevantly as follows:

“720 Procedure on assessment

(1)A costs assessor appointed to carry out a costs assessment is to decide the procedure to be followed on the assessment.
(2)However, the procedure must be -
(a)appropriate to the scope and nature of the dispute and the amount dispute; and
(b)consistent with the rules of natural justice; and
(c)fair and efficient.

…
(4) Without limiting subrule (1) or (2), the costs assessor may decide to do all or any of the following-
(a)hear the costs assessment in private;
(b)carry out the costs assessment on the papers without an oral hearing;
(c)not be bound by laws of evidence or procedure applying to a proceeding in the court;
(d)be informed of the facts in any way the costs assessor considers appropriate;

(e) not make a record of the evidence given.” [Underlining added]

The matters for consideration within the discretion of a costs assessor are set out in UCPR r 721 as follow:

“721 Discretion of a costs assessor

In assessing costs, a costs assessor must consider the following—
(a)     any other fees and allowances payable to the solicitor or counsel for other items in the same proceeding;
(b)     the nature and importance of the proceeding;
(c)     the amount involved;
(d)     the principle involved;
(e)     the interests of the parties;
(f)      the person who is to pay the costs, or the fund or estate out of which the costs are to be paid;
(g)     the general conduct and cost of the proceeding;
(h)     any other relevant circumstances.”

Rule 738 of the UCPR then expressly provides that a party may submit a written request for reasons to a costs assessor for any decision included in the costs assessor’s certificate. That occurred in this case. Rule 738(2) requires the costs assessor to give written reasons for the decision.
The adequacy of the costs assessor’s reasons permeates both applications.

Adequacy of Reasons

The requirement for a decision maker to provide reasons is obviously important because it enables an unsuccessful party to decide whether to carry matters further. But the extent of the reasons necessary is a function of the nature of the work being undertaken. As Martin J (as his Honour then was) observed in Pinehurst Nominees Pty Ltd v Coeur de Lion Investments Pty Ltd [2015] QSC 122:⁴²
“…The assessor is not in the same position as, say, a judge who is required to set out, in some detail, the reasoning behind the making of findings.”
Depending on the circumstances, a costs assessor may express reasons quite briefly. As Martin J also observed in Pinehurst Nominees, a number of matters suggest that an assessor will satisfy the requirements of r 738 of the UCPR by providing abbreviated reasons. These include:

Pinehurst Nominees Pty Ltd v Coeur de Lion Investments Pty Ltd [2015] QSC 122 at [31].

(a)First: The requirement in s 738(2)(a) that the reasons be provided within 21 days from when they are requested; and
(b)Secondly: The style of the reasons will respond to the form of objection and the request for reasons. Objections may be expressed by experienced practitioners in abrupt terms. An assessor, who is an expert, can also provide a truncated response. In some cases, a few words is enough, although if a request is made further reasons may be necessary.⁴³

It has long been accepted that decisions as to costs (more generally) “do not require the same degree of elaboration as other decisions” and the extent of the reasons depend on “the nature of the issues for determination” and “the function to be served by the giving of reasons.⁴⁴ These observations are consistent with Martin J’s observations in Pinehurst Nominees and are equally apposite to reasons in a costs assessment in my respectful view.
In the present case, I accept that the costs assessor’s reasons for either allowing or disallowing particular items were brief at times. The costs assessor’s reasons are discussed in more detail under that heading in Part three of the reasons. But in my view, the criticism of this brevity and of his reasons generally is not justified and overlooks the facts and circumstances of this case and, in particular, the following six matters:
(a)First: The substantive proceedings were lengthy and raised many complex and varied issues;
(b)Secondly: The costs assessor was required to determine whether thousands of items were necessary or proper standard costs in the context that CMC appeared to have claimed nearly all of their actual costs of the litigation;
(c)Thirdly: The assessment process was not made easier by the approach to objections taken by WICET;
(d)Fourthly: The evidence shows that the costs assessor was clearly frustrated by the constant demands of the parties during the process and their (at times) unsolicited submissions and views about the correct approach to the assessment;
(e)Fifthly: The costs assessor had access to CMC’s solicitor’s file and a Sharefile link containing tax invoices for the amounts claimed for the purpose of verifying the claims and making the assessment; and
(f)Finally: The uncontested evidence was that he was “verifying each item of expenditure on a database he had assembled on a “line by line basis” and that he would decide the best process to achieve a just and equitable outcome for both parties.”
In these circumstances, it is reasonable to infer, as I do, that the costs assessor established a process of verification that he considered was the most expedient and appropriate to the case and that he carefully considered each item claimed, taking into

Pinehurst Nominees from [32] to [35], with reference to Attorney-General of New South Wales v Kennedy Miller Television Pty Ltd (1998) 43 NSWLR 729.
Costs Appeal Judgment at [81] with reference to Drew v Makita (Australia) Pty Ltd [2009] 2 Qd R 219 at 237.

account all relevant matters in the circumstances outlined, including the parties’ submissions.⁴⁵

In the circumstances of this case, I am therefore not satisfied that in general terms the costs assessor’s reasons are inadequate. I have otherwise addressed more specific issues raised about the costs assessor’s reasons where necessary and relevant throughout the course of these reasons.
Turning now to address each of the review applications. First CMC’s.

Part two: CMC’s application for review Ground one: pre-commencement costs

CMC claims that the costs assessor wrongly disallowed costs incurred prior to the commencement of the proceedings totalling $256,771. It is instructive to observe at the outset that WICET objected to all of CMC’s pre-proceeding costs (prior to 27 May 2013), but the costs assessor in fact allowed a significant number of these items.
CMC’s complaint regarding pre-proceeding costs relates to 490 cost items, which it has split into the following two categories:
(a)First: Costs paid to Critical Control Pty Ltd, and costs related to an adjudication that took place pursuant to the BCIP prior to the proceeding; and
(b)Secondly: Other costs.
CMC raised the following three grounds of error in support of this ground:⁴⁶
(a)First: The costs assessor was manifestly wrong in exercising his discretion to disallow the pre-proceeding costs;
(b)Secondly: The costs assessor erred in finding that the pre-proceeding costs were not necessarily or properly incurred in connection with the claim; and
(c)Thirdly: The costs assessor failed to give adequate reasons for his decision to exercise his discretion to disallow the pre-proceedings costs.
CMC’s argument was not that the costs assessor asked himself the wrong question, but rather that his decision to disallow certain pre-proceeding costs (because he did not consider they were necessary or proper for the attainment of justice), was plainly wrong. Senior Counsel for CMC submitted that the error of principle was that the costs assessor took into account irrelevant matters such as the fact that Critical Control were used in the adjudication.
Against this, WICET argued that no reviewable error of principle had been identified by CMC. WICET also submitted that there was no discernible error in the costs decision because CMC’s solicitors knew that any reports obtained from Critical Control in the adjudication could not be used in future litigation, as it was engaged

King v Allianz Australia Insurance Limited [2015] QCA 101 at [33].
CMC’s amended application at [1(a)]. The items listed in Table 1 of the Schedule to the application are defined as the “pre-proceeding costs”.

by CMC in the initial project (the subject of the dispute) and therefore was not independent.

CMC submitted that WICET should not be permitted to run the latter argument before me as it was not a matter raised in their notice of objection, as required by UCPR r 742(5)(b).⁴⁷ I accept this point was not raised in WICET’s notice of objection but I am satisfied that WICET ought to be allowed to raise it now because it is relevant to the issue of whether these costs are necessary or proper; and the fact that Critical Control lacked independence as a trial expert is no surprise to CMC as that fact was well known to it. It was also a fact before the costs assessor, because CMC’s solicitor’s file (which the costs assessor had access to throughout his assessment) included correspondence identifying that Critical Control performed a project role and therefore could not act as an expert in the litigation.
To the extent necessary, I therefore grant WICET leave under UCPR r 742(5)(b) to run this argument.
Before addressing each of the two categories of costs, it is necessary to deal briefly with the third ground of error raised by CMC - the alleged inadequacy of reasons.
Inadequacy of reasons
The costs assessor reasons for disallowing a number of pre-proceeding costs were varied. Some examples are as follows:
(a)“objection sustained see paragraph 4 of the objections”: see eg costs items 1-8;
(b)“objection sustained insufficient nexus to trial”: see eg cost item 9;
(c)“objection sustained no relevance showing” (or similar): see eg costs items 21- 32;
(d)“objection sustained, Critical Control used for adjudication”: see eg costs items 172, 656, 1374, 1451-1453, 1534-1552, 1625-1628;
(e)“objection sustained relevance to litigation queried” (or similar): see eg costs items 177-247; and
(f)“objection sustained subject to adjudication”: see eg costs items 248-507.
These reasons, although truncated, sufficiently outline the costs assessor’s reasoning for not accepting that the items claimed were necessary or proper. This finding is supported by the fact that in developing its argument in support of this ground, CMC clearly understood the approach the costs assessor took.
For these reasons, and for the reasons outlined under the heading “Adequacy of Reasons” earlier in this judgment, I do not accept CMC’s submission that the costs assessor failed to give adequate reasons for his decision not to allow some of the pre- proceeding costs.

CMC’s complaint that WICET “snuck” in the argument overlooks that the issue was raised in WICET’s written submissions in response to CMC’s application for review.

Critical Control and adjudication costs

CMC submitted that costs from Critical Control and the adjudication costs were necessary or proper for the attainment of justice for the following four reasons:
(a)First: Critical Control provided reports in respect of the matters the subject of CMC’s claims;
(b)Secondly: These reports were not only used in the adjudication but also as a basis for pleading their claims and instructing experts in the proceeding;
(c)Thirdly: The work done by Critical Control was adopted (in part) by Gerard King, one of CMC’s experts at the trial; and
(d)Fourthly: Both the Critical Control and adjudication costs were incurred by CMC in seeking to resolve the disputed variations and Delay Claim.
The fourth submission was not advanced before the costs assessor and there is no evidence to substantiate it.
CMC maintained before the costs assessor (in its reply to submissions to him) that:
(a)the work done by Critical Control was adopted by King Planning as part of developing the claim;
(b)that the factual events listed in the Critical Control report aligned with the factual events claimed in CMC’s pleadings and relied upon by Mr King in his delay report; and
(c)its solicitors performed work which formed the basis of factual instructions around the issues in dispute which remained relevant for the duration of the proceedings.
It is uncontroversial that Critical Control was engaged by CMC as an expert delay analysis programmer, and that Critical Control prepared a number of reports about delay and disruption on CMC’s behalf for the adjudication. It is also uncontroversial that these reports were not relied upon by CMC at trial but were referred to as particulars in the first iteration of the statement of claim. But it cannot be overlooked that the amended statement of claim on 18 September 2023 removed reference to these reports and they were not expressly referred to afterwards.
The delay expert who was retained by CMC for the litigation was ultimately Gerard King from King Planning.⁴⁸ CMC’s submissions about the use of the work done by Critical Control were not necessarily supported by any evidence. There were, unsurprisingly, general alignments between the facts set out in the report of Mr King and the Critical Control reports, but otherwise there were, in fact, no references in Mr King’s report to the work undertaken by Critical Control.

The result is that neither WICET nor any Assessor can have any confidence in the Costs Statement prepared by CMC.
…
For any items that the Assessor is minded to consider:
(a)    CMC should produce its own invoices, accounts and file in full; and
(b)   the invoices and accounts should be the subject of a line-by-line comparison with the Costs Statement for the purpose of verifying the items;
(c)    further, CMC should be asked to demonstrate that it has in fact incurred and/or paid the costs the subject of the claim.
Verification of CMC’s claim is essential - in particular for time-based entries... “
[Underlining added]

It follows that, not only did WICET expressly assert that items of work were never performed, it demanded a strict and thorough verification process needed to be undertaken by the costs assessor before he approved any items claimed. The costs assessor’s observations that WICET did not make specific objections about any items never having been undertaken is not therefore strictly correct. But I do not consider that anything turns on this observation for the following five reasons:

T3-11 l 36.
WICET’s notice of objection at [1.6] to [1.12].

(a)First: The costs assessor’s observations must be considered in the context of the overall assessment process, including his views about the notice of objection;
(b)Secondly: As these reasons reveal, I am satisfied that the strict verification process was undertaken by the costs assessor in this case;
(c)Thirdly: The costs assessor’s reasons expressly recognised the significant reduction in the amount claimed by CMC;
(d)Fourthly: I am not satisfied that these observations are demonstrative of any error on the costs assessor’s part in determining the appropriate orders as to costs on the assessment; and
(e)Fifthly: As the analysis below further reveals, I am not satisfied that any error in the exercise of the costs assessor’s discretion to award costs has been demonstrated in the circumstances of this case.

Otherwise, at first blush, there is some obvious force to WICET’s submission on this issue given the substantial reduction in the costs claimed by CMC. But on review, it is immediately apparent that WICET’s submissions fail to recognise two important matters:
(a)First: While CMC had originally claimed approximately 91 per cent of its actual costs which were considerably reduced on assessment – it still recovered a substantial amount of its costs on the standard basis in circumstances where WICET had taken the stance that CMC was not entitled to any costs without any proof or verification; and
(b)Secondly: The assessor took into account the reduction in the costs claimed to those recovered in awarding costs as he did. For example:
(i)by Item 19402 CMC claimed the costs of drafting the costs statement in the sum of $161,278.92. But this was reduced by 25 per cent (so only
$117,971.04 was allowed);¹⁷² and
(ii)in CMC’s supplementary costs statement, a claim of $339,838.81 was claimed as CMC’s assessed costs (of the assessment process). But only
$64,163.73 was allowed.
As the following observations from P McMurdo J (as his honour then was) in Hunter v Hunter [2015] QSC 181 reveal, a costs assessor is required to balance a number of competing considerations in undertaking the costs assessment process and is to be afforded a broad discretion when balancing those considerations in determining the costs of the assessment:¹⁷³
“The assessor then considered whether some of the burden of the costs of the assessment should be borne by the present respondents. He correctly took into account the outcome of the costs assessment. That was a relevant consideration because where claims in a costs statement are substantially reduced by the assessor, it can be said that the costs

Items 19403 and 19404 claimed for producing and copying the costs statement – those claims were reduced by 25 per cent as well.
[2015] QSC 181 at [35].

of the assessment have been increased through the fault of the party which presented the costs statement. But that was not the only consideration: it was also relevant for the assessor to consider the nature and extent of the objections. In this case, the assessor noted that the applicant appeared to have an objection to every item. And he noted that her objections were not framed by reference to the relevant principles and rules and that at least some of them were entirely without merit. In my view, there was no error in the exercise of his discretion in deciding to apportion the costs of the assessment as he did.”
[Underlining added].

It follows that the costs assessor’s exercise of his discretion, in terms of the costs of the assessment, required him to make a balanced assessment of the appropriate order as to costs in all of the circumstances of this case. Those circumstances included the following relevant matters:
(a)the costs assessment process was incredibly hard fought and elongated – taking over one and a half years to resolve;
(b)the costs assessor’s findings (which I have found were open for him to have made) about the unsatisfactory nature and form of the dual format of the notice of objections filed by WICET; and
(c)that CMC was compelled to prepare a costs statement and to have its costs assessed in order to obtain payment of them. The costs of preparing the costs statement could not have been avoided by it. To the extent that the costs statement was reduced – that fact was taken into account.
As the following extract from his reasons show, the costs assessor balanced the impact of the notice of objection against the reduction of costs awarded to CMC:¹⁷⁴
“…despite the reduction the Plaintiff sustained…I ultimately decided that the Plaintiff should receive the benefit of the costs of the assessment, as I also considered that WICET’s Objections would have had to traverse a similar if not identical range in any alternative scenario.”
As the person tasked with such a huge undertaking, the costs assessor was in the best position to make a reasoned and balanced assessment of the appropriate orders as to costs in all of the circumstances of this case. Whilst it was open for him to have made a different order as to costs, I am not satisfied that any discernible error in his reasoning has been established or that his ultimate decision about costs was clearly wrong. It was, I am satisfied, open for the costs assessor to have determined costs as he did.

Part Four: summary of outcomes of the applications.

It follows that the outcome of this decision is that it is unnecessary for the costs assessment to be remitted back to the costs assessor for any further consideration.

Costs assessor’s reasons dated 12 April 2023 at [10(d)].

I direct that by 4.00pm, Friday 22 March 2024, the legal representatives for the parties liaise and formulate draft orders [including any agreed orders as to costs] in accordance with these reasons, which includes providing for the costs certificate to be varied consistent with the parties agreement, that the correct amount for care and conduct is $892,232.86.¹⁷⁵
The variations to the costs certificate and orders consistent with my findings are as follows:
In terms of CMC’s application, that:
The costs assessor’s decision to limit Mr O’Donnell KC’s daily rate to

$9,000 per day is set aside and a daily rate of $10,000 is allowed;¹⁷⁶ and

2.The costs assessor’s decision to limit Mr Doyle KC’s daily rate to $9,000 per day is set aside and a daily rate of approximately $14,600 is allowed;¹⁷⁷and
3.CMC’s application is otherwise dismissed.

(b) That WICET’s application is dismissed.

As to costs, the fact that CMC enjoyed success on two aspects of one of its five grounds of review and that WICET was unsuccessful on all three of its grounds of review, suggests that the appropriate orders as to costs are that WICET is to pay:
20 percent of CMC’s costs of its application for review; and all of CMC’s costs of WICET’s application for review.
However, there may be other factors that warrant different orders being made. While I encourage the parties to agree the appropriate costs orders, I will allow further submissions to be filed and served and a copy emailed to my associate addressing the issue of the costs of the applications (if necessary), by 4.00pm 22 March 2024.

Orders

The Order of the Court is that by 4.00pm, Friday 22 March 2024, the parties are to:
(a)email to my associate, draft Final Orders consistent with my findings (and costs, if those orders can be agreed); and
(b)if necessary, file and serve written submissions as to costs, no longer than two pages, and deliver a copy of the submissions by email to my associate.
Pursuant to the document marked for identification “H”; T1-58 l 46.

¹⁷⁶See paragraph [107] to [109] of these reasons. This will require a recalculation of the amount the costs assessor allowed at the lower rate using the higher rate- with the need for the costs certificate to be varied accordingly.
¹⁷⁷See paragraphs [124] to [128] of these reasons. Again, This will require a recalculation of the amount the costs assessor allowed at the lower rate using the higher rate that Mr Doyle KC actually charged- with the need for the costs certificate to be varied accordingly.

Citations

Civil Mining & Construction Pty Ltd v Wiggins Island Coal Export Terminal Pty Ltd [2024] QSC 28

Most Recent Citation

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Thompson v Cavalier King Charles Spaniel Rescue (Qld) Inc [2024] QSC 197

Civil Mining & Construction Pty Ltd v Wiggins Island Coal Export Terminal Pty Ltd (No 2) [2024] QSC 64

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Statutory Material Cited

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Civil Mining & Construction Pty Ltd v Wiggins Island Coal Export Terminal Pty Ltd [2017] QSC 85

Civil Mining and Construction Pty Ltd v Wiggins Island Coal Export Terminal Pty Ltd (No 3) [2018] QSC 60

Civil Mining & Construction Pty Ltd v Wiggins Island Coal Export Terminal Pty Ltd [2020] QSC 1

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