Clone Pty Ltd v Players Pty Ltd (No 13) - [2025] SASC 49

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
CLONE PTY LTD v PLAYERS PTY LTD (No 13)
[2025] SASC 49
Reasons for the Orders of the Honourable Auxiliary Associate Justice Norman
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - INTERLOCUTORY PROCEEDINGS - TAXATION AND OTHER FORMS OF ASSESSMENT, AND PAYMENT
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - INTEREST ON COSTS
Rulings as to the appropriate mechanism to resolve issues on claims for interest on costs and the costs of taxation itself.
Supreme Court Civil Rules 2006 (SA) rr 187(5), 264(7); Supreme Court Rules 1987 (SA) rr 187, 188; Uniform Civil Rules 2020 (SA) rr 12.1(m), 132.3; Supreme Court Act 1935 (SA) s 114, referred to.
Burford v Allan (1997) 68 SASR 217; Osborne v Kelly & Anor (1999) 75 SASR 392; Burford v Allan [1998] SASC 6693; Chakravarti v Advertiser Newspapers Ltd (1998) 201 LSJS 44; Mason v Mason [1965] 3 All ER 492; Thornton v Swan Hunter Shipbuilders Ltd [1971] 3 All ER 1248, applied.

CLONE PTY LTD v PLAYERS PTY LTD (No 13)
[2025] SASC 49
Civil
Auxiliary Associate Justice Norman
Introduction

In these reasons I will refer the applicant as “Clone” and the respondents as “Players”.
This is the continuing taxation of Clone’s costs of the trial before Vanstone J in these proceedings. The taxation itself has largely concluded, and the only remaining issues are Clone’s claims for interest on costs and the costs of the taxation itself. By agreement, the interest issue will be determined first.
However, a dispute has arisen as to the mechanism for this process. The Court has been informed that following the service of Clone’s claim for costs, Players served three offers for those costs, including interest. Players has accordingly sought a “two-stage” process wherein a determination should first be made as to the point in time when Clone’s entitlement to interest was to commence to run (having regard to s 114(2)(b) of the Supreme Court Act 1935), and second, after that determination, and based on the Court’s ruling, a calculation should be made as to Clone’s actual interest on its cost entitlement. This is to be calculated based on the amounts allowed for solicitors’ fees, counsel fees, and disbursements, up to and including the date of the offers. After those determinations, Players contends, a separate hearing should be held to determine two further issues, first whether Players have relevantly “beaten’ any of their three offers, and secondly, if they have, what should be the consequences in relation to the period after the date of these three offers until finalisation.
Clone, on the other hand, has opposed this two-stage process, contending that there is no utility in a splitting of the hearing, and that all matters should be determined together.
As far as can be ascertained, there are no authorities relating to which of these alternative processes should be adopted.
Background
Clone has been awarded the costs of this action and…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2025] SASC 49
Decision Date: 11 April 2025

CaseChat Overview and Summary

Clone Pty Ltd and Players Pty Ltd were engaged in litigation which resulted in Clone being awarded costs. The primary dispute in this case was the calculation of interest on those costs and the associated costs of taxation. The Supreme Court of the relevant jurisdiction was tasked with resolving these issues. The central legal issues the court had to address included determining the appropriate starting date for calculating interest on Clone’s costs, whether the court should consider offers of settlement made during the taxation process, and the scope of arguments to be considered regarding the interest on costs.

The court began by examining the statutory framework, specifically Section 114 of the Supreme Court Act 1935, which mandates that interest is to be computed from certain specified dates. The court referenced the case of Burford v Allan, where it was held that a taxing officer’s discretion in determining the starting point for interest is not restricted and can consider various factors, including the delay attributable to the party seeking costs. However, the court noted the prohibition in Rule 187(4) which restricts the disclosure of settlement offers to the adjudicating officer unless all relevant questions have been determined. This rule was crucial in deciding that the court should not consider the settlement offers during the current phase of the litigation, as it could unduly influence the court’s discretion on the threshold questions regarding the interest on costs. Consequently, the court ruled that the starting date for interest should be determined based on the date of the certificate issued by the taxing officer, unless there were proper grounds to compute interest from an earlier date.

The court ordered a structured approach to resolve the outstanding issues, setting specific deadlines for the submission of affidavits, written submissions, and scheduling a hearing for argument. The parties were directed to provide a schedule of agreed amounts relating to GST on disbursements, file affidavits regarding interest calculations, and submit written arguments on the scope of the interest on costs issues to be argued. The court also clarified that Players' concerns about the scope of arguments on interest on costs issues would be addressed in a subsequent hearing.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

As far as can be ascertained, there are no authorities relating to which of these alternative processes should be adopted.Background Clone has been awarded the costs of this action and the taxation has been proceeding over a long period. At a hearing on 24 October 2024, when Mr W Ericson with Ms D Paitaridis appeared for Clone and Mr T Cogan with Ms T Hall appeared for Players, I made orders setting out a timetable for the resolution of the outstanding matters, namely the interest on Clone’s costs and the costs of the taxation itself. Mr Ericson submitted that interest had to be dealt with before the costs of taxation, by reason of an offer having been made, and that the amount of interest awarded might well dictate whether it had been beaten. He said that Clone sought to present submissions on this issue, and it would also seek interest from the date of payment of interim invoices. A program would need to be set to allow affidavit evidence to be provided as to when Clone had made payments to its solicitors, with a further time allowed for Players to respond. Written submissions would also be required and an argument date fixed. After discussion, a program was fixed and orders were made as follows:1.The parties are to provide the Court with a schedule of the agreed amounts relating to GST on disbursements by Thursday 7 November 2024;2.The applicant is to file and serve any affidavit relating to interest calculations by Friday 20 December 2024;3.Respondents 7, 8 and 10 are to file and serve any responding affidavits by Friday 14 February 2025.4.The applicant is to file written submissions by Friday 7 March 2025;5.Respondents 7, 8 and 10 are to file responding submissions by Friday 11 April 2025;6.The applicant is to file any submissions in reply, if so advised, by Friday 18 April 2025;7.The matter is set down for argument on Thursday 24 April 2025 at 10:00am with half a day set aside;8.Liberty to apply. Subsequently, the parties corresponded, comparing calculations as to the outcome of the taxation in monetary terms. Clone accepted those made by Players, so the amounts have been agreed and the Court has been notified of this and a table of calculations provided. On 7 March 2025, Clone filed and served its written submissions (FDN 348) in accordance with the timetable. Following this, the parties, through their solicitors, further corresponded setting out their contentions. This correspondence has been disclosed to the Court and can be summarised as follows. Letter from Players to Clone 18 March 2025 Players noted that the 24 October 2024 orders were neither explicit or prescriptive as to the scope of what was properly to be argued regarding “interest on costs issues”, and expressed concern that there might be confusion or misunderstanding as to the precise scope of the matters to be argued. They indicated that they had understood and had been proceeding on the basis that there were two threshold questions respecting interest on costs which were to be argued, and subsequently determined, at the 24 April 2025 hearing, and that there should then be a subsequent hearing

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Section 114 of the Supreme Court Act1935 provides:114—Interest on judgment debts(1) All money, including costs, payable under any judgment or order shall bear interest at the rate from time to time prescribed by the rules of court.(2) The interest shall be computed from the following times:(a) in the case of money other than adjudicated costs, from the time specified in the judgment or order, and if no time is so specified from the date of the judgment or order;(b) in the case of adjudicated costs, from the date of the certificate of the adjudicating officer by whom the costs were adjudicated or an earlier date specified by the adjudicating officer in the certificate.Case law on interest Burford v Allan[8] was a review by Matheson J of an order made by a master on taxation. In taxing the plaintiff’s bill of costs, the master had allowed a lump sum of $85,000 for interest on costs, representing interest calculated from the day of judgment, but reducing the amount by reason of a delay of ten months which he found was attributable to the lack of activity by the plaintiff’s solicitors in pursuing the taxation of costs. Matheson J referred[9] to the provisions of s 114(1), and to the UK decision in Hunt v RM Douglas (Roofing) Ltd.[10] [8] (1997) 68 SASR 217.[9] Burford v Allan (1997) 68 SASR 217 at 223 - 224. [10] [1990] 1 AC 398, Lord Ackner at [404]. At page 225, Matheson J observed as follows:I do not agree with the submission of counsel for the defendant that even since the amendment to s 114(2), interest should be awarded from the date of the allocatur in the normal case. In my opinion, a taxing officer’s discretion is not so fettered. It may be that if I was of the view that his Honour’s decision to allow Dr Fodstad’s fees and disbursements in full was erroneous, that then the closeness of the defendant’s offer in settlement should have been taken into account in the defendant’s favour, but that is now academic. For the reasons given by his Honour, I am not persuaded that the plaintiff’s failure to seek an interim allocatur should have altered his decision. This decision was the subject of an appeal to the Full Court.[11] In his reasons at page 8, Doyle CJ wrote:The starting point is not an award of interest from the date from the date of the judgment by virtue of which the party is entitled to costs. There must be some basis for the exercise of the discretion to order that interest be computed from a time earlier that the date of the certificate, and in particular to order that interest be computed from the date of the relevant judgment. All sorts of matters could be relevant to this question, including delay by the party ordered to pay costs or an unreasonable approach to the taxation of costs which causes delay. Some of the brief remarks made by the master and by the judge are capable of suggesting that the plaintiff had a right to have interest computed from the date of the judgment in her favour, subject only to the defendant establishing some reason to deprive the plaintiff of interest form that earlier date. It may be that that was not what was intended. Reference is made by the master, in particular, to other matters that would support the computation of interest from an earlier date. I merely make the point that, in my opinion, there is no such presumption about the time from which interest is to be computed, and it is a matter of the court being satisfied that there are proper grounds upon which interest should be computed from a date earlier than the date of the certificate, and in particular from the date of the judgment that confers the entitlement to costs.The other two members of the Court agreed with his Honour’s reasons.[11] Burford v Allan [1998] SASC 6693.

Ratio Decidendi

Legal Principle Established

Likewise in Thornton v Swan Hunter Shipbuilders Ltd,[17] Lord Denning MR, with whom Sachs and Stamp L. JJ agreed, the Court of Appeal, although aware that a payment into court had been made, ordered that a discussion in the Court below as to the amount of the payment should be deleted from the papers before it.[17] [1971] 3 All ER 1248.Consideration It is clear from s 114(2) that in the case of adjudicated costs, interest can be awarded either from the date of the certificate of the adjudicating officer or an earlier date specified. The latter includes either the date of judgment or the date of payment or payments by the party recovering costs to his or her solicitor for solicitor’s charges counsel fees and disbursements as the matter has progressed. This is also made clear in the case law, as discussed above. The discretion is wide. It is also clear that an offer of settlement can be considered in respect of an award of interest. In his reasons in Burford v Allan, Doyle CJ referred to the concept of the interests of justice as dictating the exercise of the discretion in respect of s 114(2). The same concept is referred to in his reasons in Osborne v Kelly. It also appears from the reasons of Matheson J in Burford v Allan[18] that in that case it was known to the Court on the taxation and on its review that offers to settle the taxation had been made by both sides. The master had found that in the case of the plaintiff they were somewhat excessive given the final figure, and the defendant’s offers were perceived to be significantly below what could have been considered reasonable. The master saw nothing in the circumstances surrounding those negotiations as having any deleterious impact on the plaintiff’s claim for interest. [18] Burford v Allan (1997) 68 SASR 217 at 224. However, in the present case the situation is different. There is a prohibition set out in r 187(4) from parties disclosing to the adjudicating officer the content of a formal offer of settlement unless all questions to which the offer is relevant have been determined. Although such a provision can be waived by the parties, as appears to have been the case in Burford v Allan, that is not the case here, and Players actively oppose such disclosure. Applying the rule to the present circumstances, the questions which are sought to be “determined” by the Court are those contained in the first threshold question advanced by Players, namely whether interest should run from the date when the Court, as taxing officer, issues a certificate, or alternatively the date of the relevant judgment or costs order made by Vanstone J, or alternatively the date (or dates) when Clone has paid its costs and disbursements to its solicitors prior to the date of judgment. As appears in the correspondence between the parties, and as Mr Whitington has argued, in this phase of the process if the Court knows the form or quantum of the offers, this might subjectively influence its decision making regarding the exercise of its discretion on the two threshold questions, which would be inappropriate, and would breach the terms of r 187(4).