Clone Pty Ltd v Players Pty Ltd (No 13)

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 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
The two hearings were to consider the following issues.
The 24 April 2025 hearing
The threshold questions for this hearing were, first, at what point in time should Clone’s entitlement to interest on costs be determined to commence to run from, pursuant to the Court’s discretion, this being either from the date of the certificate of the taxing officer, or from an earlier date such as the date of Vanstone J’s costs order, or from when Clone had paid the relevant costs and disbursements.
Secondly, after having determined this first question, the Court should calculate, based on its answer to the above, Clone’s actual interest entitlement up and until the date of the three offers made by Players.
The subsequent hearing
This subsequent hearing should consider and determine related issues, first, whether Players had relevantly “beaten” any of their three formal offers of settlement, and second, if the Court determined that they had done so, what would the consequences be in terms of Clone’s entitlement to interest on costs after the date of the offers, being 20 February 2008.
Given the existence of the offers, Players had understood that only the two threshold questions were to be argued on the 24 April date fixed for hearing.
However, having read Clone’s 7 March submissions, it appeared to Players that Clone was seeking to argue and quantify its entitlement to interest on costs through to the present day without any antecedent determination of the two threshold questions.
Players also noted that in its submissions Clone had raised new arguments which had not been previously referred to seeking inter alia to impugn the validity or operability of Players’ settlement offers.
In support of Players’ application for a two-phase process, they referred to Lexis Nexis Civil Procedure South Australia[1] in the context of r 264(7) of the Supreme Court Civil Rules 2006 regarding interest on costs, and to Burford v Allan.[2]
[1] Volume I at [R264.125].
[2] (1997) 68 SASR 217.
Players further noted that many of the matters raised in Clone’s submissions had concerned the “second phase” issues which should be determined only after the two threshold questions had been. They wrote that it was accordingly premature for the Court to consider the second phase issues at the 24 April 2025 hearing.
Letter from Clone to Players 19 March 2025
In their correspondence, Clone said that the 24 October 2024 orders required, broadly speaking, evidence, submissions and argument on interest and had defined the scope of the argument to occur. Irrespective of the debate as to what had occurred, there was no utility in a further splitting of the hearing, and, to the contrary, it was in the interests of each party and the Court to promptly resolve all outstanding matters. There was no reason why they could not all be dealt with at the April hearing. Under the timetable, Players had 35 days to respond to Clone’s submissions and Clone considered that this was ample time for them to do so. Nowhere had they suggested that they could not be ready for such an argument, nor was there any suggestion that there was an efficacy in a further splitting of issues.
Letter from Players to Clone 20 March
Players complained that it its submissions of 7 March 2025, Clone had improperly referred to the content of Players’ settlement offers. These offers had been made pursuant to the then applicable r 187(4) of the Supreme Court Rules 1987 (1987 Rules) which provided that a formal offer of settlement must be filed in a suppressed file and not disclosed to the trial judge or adjudicating officer unless all questions to which the offer was relevant had been determined. Self‑evidently, Players observed, all questions to which their formal offers of settlement were relevant had not been determined, so they invited Clone to immediately apply to the Court to uplift (remove) its submissions from the file and to then file in their place redacted or amended submissions removing any reference to the offers. The breach of the subrule was directly relevant to the correctness of the matters raised in Players’ 18 March letter concerning the need for split hearings.
On the same date, 20 March, Clone wrote to the Court directly (with Players’ consent) referring to the above correspondence between the parties, and requesting that the Court call on the matter urgently to ventilate and resolve the areas of uncertainty and disagreement as to the scope of the argument which had been fixed for 24 April.
Subsequently, a directions hearing was fixed for Wednesday 26 March, and at a hearing on that date Mr B Roberts KC made submissions for Clone and Mr J Whitington for Players.
I reserved my decision.
Players’ submissions
Mr Whitington summarised the background to the matter as set out above. He further articulated the two threshold questions which he submitted the Court needed to determine before the matter went any further. The first was for the Court to decide a date from when interest would commence to run. It had a broad discretion, he said, provided in s 114(2) of the Supreme Court Act, and the case law, including Burford v Allan[3] and Osborne v Kelly & Anor,[4] was instructive.
[3] (1997) 68 SASR 217.
[4] (1999) 75 SASR 392.
There were three conceivable starting points. The first was the date when the Court as taxing officer issued a certificate, the second was the date of the relevant judgment or costs order made by Vanstone J, and the third was the date when Clone had paid its costs and disbursements to its solicitors before the date of judgment (Mr Ericson had alluded to this approach on 24 October 2024).
Accordingly, it was submitted, the first threshold question for the Court to decide with respect to interest was which of the three scenarios – or any other intermediate scenario – was the relevant starting point. Then, the Court could calculate interest, but only up to 20 February 2008, being the date on which offers of settlement had been served by Players.
Mr Whitington also indicated that Clone had disclosed the amount of these offers. He submitted that they should not have done this by reason of r 187(4) of the 1987 Rules, and noted that as previously alluded to by Mr Ericson, the offers had included interest. Accordingly, the Court first needed to determine how much interest was allowable up and until 20 February 2008, because this would subsequently enable a consideration or determination of whether Players had relevantly beaten any of their offers, or not.
There was a dispute between the parties as to whether the question of “beating” an offer, bore on the question of interest, and he referred in this regard, to Burford v Allan, which likewise involved a calculation of interest, where Matheson J had alluded (obiter, at page 225) to the possibility of an offer of settlement being into account in respect of interest.
Mr Whitington also referred to Osborne v Kelly where in his reasons[5] Doyle CJ had cited and quoted from the relevant passage of his own decision in an appeal from Matheson J’s judgment in Burford v Allan.[6] Doyle CJ referred in his reasons in Burford v Allan[7] to the concept of the interests of justice dictating the exercise of any discretion in respect of s 114(2).
[5] Osborne v Kelly (1999) 75 SASR 392 at 397.
[6] Burford v Allan (1998) SASC 6693 per Doyle CJ, Millhouse, and Nyland JJ.
[7] [1998] SASC 6693.
Mr Whitington submitted that in conformity with these decisions the Court had a broad discretion with respect to the provisions of s 114(2), and this necessarily embraced the consideration of relevant offers. If a paying party had beaten its offer and the receiving party had not been kept out of its money because it ought to have accepted it, this consideration must be in the interests of justice, and was a matter to be considered within the broad discretion of the Court. Accordingly, the offers had to be relevant to the interest entitlement of Clone, so it followed that because the offers should not be seen by reason of r 187(4)(a) of the 1987 Rules, all questions to which the offers were relevant had not been determined and for this reason there should be a two-phase process for the determination of interest.
He explained that in relation to the first phase, the Court would need to embark upon and determine this without knowing the offers, because if they were known, that might subjectively influence its decision making regarding the exercise of its discretion, which would be inappropriate, and would breach r 187(4) of the 1987 Rules. It followed that a phased or staggered process was essential. Further, Clone’s submissions of 7 March 2025 should be uplifted from the Court file and replacement submissions filed, because if the Court saw the amount of the offer this could affect its decision making on the two threshold questions. Once the replacement submissions were filed, Players could then respond, although an extension of time would be necessary because the deadline was fast approaching. He submitted the 24 April hearing would need to be adjourned and a new regime put in place for the filing of submissions.
Finally, Mr Whitington submitted, the foreshadowed attack by Clone on the form of the offers made might be academic, but this would depend on the circumstances.
Clone’s submissions
In reply, Mr Roberts KC argued that Players’ submissions were entirely misconceived. The position was clear, interest needed to be dealt with before costs because the offers might be relevant to the question of costs. The Court had never been told that there would, or should be, a first stage to deal with the matters relevant to the interest calculation itself, and such an approach would be entirely circular. The orders had been made in conformity with Mr Ericson’s submissions without denial having been made by Mr Cogan, and what was now necessary was to deal with all matters germane to interest. Clone had acted entirely and in conformity with the 24 October 2024 orders, and it was inappropriate for interest to be determined in staged or artificial ways.
He said that Players had embarked on an ill-conceived approach to keep Clone out of its money, involving the long running proceedings which had been ultimately found to be flawed in principle, ending with the Full Court reinstating Clone’s position, and culminating in the High Court Appeal in Clone’s favour. Additionally, Players had agitated damages issues leading to further delays in the taxation exercise. Ultimately when the Court came to exercise its discretion under s 114, it could consider the whole of the circumstances in determining a just position in relation to interest. In conformity with the case law, if costs had been paid on a periodic basis based on interim invoices, this was itself a reason (not necessarily determinative) for interest to run from the date of payment thereof, although the Court could consider the totality of the circumstances. What Players was asking the Court to do was to consider only certain circumstances relating to the period between the dates of payment and the offer date. The discretion under s 114 related to an entitlement to interest at large, and the approach urged by Players was unsupported by authority, as neither Burford v Allan (Full Court) or Osborne v Kelly supported their argument. Under the construction of r 187(4) of the 1987 Rules urged by Players, one could never refer to the offers on the topic of costs themselves. When it came to the stage in the proceedings when the offers themselves became germane to the matter of issue, this was when the offer was deployed, and customarily this was at the point when the offer was made on the question of costs.
Mr Roberts noted that in Burford v Allan, it was evident both from the Master’s decision at first instance, and the review of that decision by Matheson J, that the offers themselves were before the Court when determining the question of interest. Clone was not submitting that the Court was foreclosed from having regard to the offers if Players had put them before it. It could weigh up in all the circumstances and award interest back to the date of relevant payments, and if Players wanted to deploy the offers, they could. There was nothing untoward about them doing so – this was the position in Burford v Allan. However, what Players could not do was to invite the Court to consider the whole of the circumstances relating to interest, yet not the matter that they said was relevant to interest, namely, an offer. He queried how the Court could consider the appropriate exercise of the discretion, namely, a single award of interest referrable to the whole of the circumstances of the costs of Clone up to the present point.
He acknowledged that there had been circumstances where on a taxation, interest was one of the broad questions considered, and a broad axe was applied in an overall assessment of interest and this sat within the breadth of the discretion under s 114.
If the Court was considering all the circumstances to make an award of interest, it followed that it should not make a confined order as had been urged by Players. What Clone was asking the Court to do was to assess interest until the present time, considering the whole of the circumstances from the date of payment until present, rather than a snapshot up to the point in 2008.
Mr Roberts indicated that he had been unable to locate any authority where offers had been made relevant to a question of interest. More relevantly, if offers were relevant to a question of interest, then that would be something that would apply in the general jurisdiction of the Court, not in relation to questions of costs, but rather in the application of s 30C of the Supreme Court Act. He had been unable to find any authority where offers were relevant to interest as distinct from being relevant to costs. He observed that r 188 of the 1987 Rules, dealing with the implications of the making of an offer, could be considered on the question of costs in a particular way, but it did not say anywhere that it bore a relation to questions of interest.

Mr Roberts finalised his submissions by referring to the fact that at an earlier time in these proceedings Hargrave J had ordered that Clone pay to Players substantial amounts of interest referable to sums which had been payable when the Court had set aside the orders made by Vanstone J. In compliance with these orders, Clone had paid the interest amounts, but when the High Court had overturned Hargrave J’s decision, the amounts were required to be repaid. This served to illustrate, he submitted, that this was not a case where the Court could simply determine the question by a snapshot in time. Rather, it needed to consider the totality of the dealings, which did not include a confined or quarantined period, or alternatively ruling only on some parts, or ruling tentatively as to the totality, but rescinding the amount when something more came before the Court. The concept of the general jurisdiction of the Court was that there should not be a fragmentation of issues or arguments or appeals. There would be an innate unfairness in attempting to fragment a matter artificially and the proposition was both wrong in principle and contrary to r 187 of the 1987 Rules.
Players’ submissions in reply
During his submissions in reply, Mr Whitington contended that Clone had completely misunderstood what the Court was being asked to do. He was not saying that on the first threshold question of when interest should be determined to run from, the Court could not consider anything past the offer date of 20 February 2008, as all the matters after that date would be relevant to its broad discretion under s 114 as to the starting point of interest. However, reference could not be made to the offers on the first threshold point, because that would be putting the cart before the horse, as this this might subjectively influence the Court’s decision. Clone was not being shut out of its arguments on the first primary question concerning the Hargrave J decision, the payment back of interest by Players, and the decision of the High Court, and it could call in aid all matters in the second phase of the argument because the effect of the offers would then have been determined. But the Court should not look at the offers until it had made this first determination, because, as had been put, this might influence its determination. What was being proposed by Players as to the two-stage process had been clearly set out its 18 March letter. The process would not be inefficient.
Legislative provisions and case law on interest on costs
Legislation
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.
In Chakravarti v Advertiser Newspapers Ltd,[12] the Full Court made similar observations. In ex tempore reasons which Doyle CJ gave on its behalf, he referred again to the proper application of s 114(2). Although it was not necessary for the Full Court to decide the matter, and further remarks made in that case were not binding, the Full Court said with reference to s 114(2)(b) (at 46-47):
We add, for what it is worth, that in our opinion it would not be appropriate for a taxing officer to proceed on the basis that interest will be payable from the date of the judgment, unless the taxing officer is persuaded otherwise.
We say that because in our opinion, to approach the matter on that premise would be to ignore the words of the statutory provision. The statutory provision gives to the taxing officer a wide discretion, and that discretion is not to be exercised on the basis of any prima facie starting point which has to be to displaced. It we are wrong in that and there is a starting point, then the starting point appears to be the date of the certificate of the taxing officer: cf Burford v Allen (1996) 189 LSJS 497 at 507 Matheson J.
[12] (1998) 201 LSJS 44.
In Osborne v Kelly,[13] an appeal involving the question of the date from which interest on costs awarded in a judgment should date, Doyle CJ (Mullighan and Wicks JJ concurring), referred to his decisions in both Burford v Allan and Chakravarti v Advertiser Newspapers Ltd, and held at [63] and following:
[63]In a case in which the plaintiff has not paid costs, and has not agreed to pay interest on costs, the discretion under s 114(2)(b) in relation to the date from which interest runs is not to be exercised on the basis of a general principle that interest on costs and disbursements should run from the date of the judgment awarding costs or from some earlier date at which the costs were earned. To so decide would not be a proper exercise of the discretion. My main reason for so concluding is that the award of costs is intended as a partial indemnity against expense incurred. As the plaintiff’s argument was mainly based upon a contention that such a principle was applicable, that suffices to dispose of the main argument advanced by the plaintiff.
[64]The taxing officer’s approach was correct in principle. Nevertheless, the appeal should be allowed to enable the taxing officer to reconsider the question of interest in the light of the two matters identified by me. There is no reason for any broader reconsideration of the question of interest.
[65]If a plaintiff has paid the costs, wholly or in part, the subject of a taxation, or has agreed to pay interest on them, that will be a circumstance which might justify an award of interest from judgment, or even from an earlier date. I mention again the reservation that I expressed earlier relating to an agreement to pay interest on unpaid costs.
[66]If the defendant has been guilty of delay, or of an unreasonable approach to the taxation of costs, the taxing officer might well fix a date earlier than the date of the certificate from which interest is to run. In such a case it is not easy to see how the date could be a date earlier than the judgment.
[67]I emphasise that it remains necessary to consider all relevant factors.
[68]In the light of the matters that have arisen for consideration in the course of the appeal, my view is that s 114(2)(b) should confer a power on a taxing officer to award a lump sum by way of interest, in addition to the power to fix a date from which interest is to run. Adjusting the date from which interest is to run will, in many circumstances, be a rather crude device. It is undesirable that the question of interest should give rise to lengthy argument about the selection of a date which will fairly compensate a plaintiff. The power to award a lump sum would inject some flexibility into the process which would avoid artificial arguments over the choice of a date.
[13] (1999) 75 SASR 392.
Confidentiality of settlement offers
Rule 187 of the 1987 Rules was in operation as at the date of the offers made by Players, by reason of the proceedings having been issued in 2004, prior to the introduction of the 2006 Rules.
Rule 187 of the 1987 Rules refers to the making of a formal offer by a party to any other party to compromise any claim in the proceeding either in whole or in part. Rule 187(4) provides:
(4)A formal offer of settlement must be filed in a suppressed file and must not be disclosed to the trial judge (or the adjudicating officer) unless:
(a) all questions to which the offer is relevant have been determined.
It was one of a series of rules relating to settlement offers and how they operate. The replacement 2006 rule, r 187(5), which came into operation on 4 September 2006, provided that a settlement offer was to be filed in an envelope marked “formal offer – not to be opened accept in accordance with the Order of a Judge or Master”. This rule was later substituted by an amendment which came into operation on 1 December 2015.
Subsequently, in the present Uniform Civil Rules, which came into operation on 18 May 2020 and were last amended on 1 January 2025, the issue of confidentiality concerning settlement offers is referred to in UCR 132.3. This rule provides that unless the Court otherwise orders, or it is expressed to be an ‘open offer’, a formal offer document must be treated as confidential and not disclosed to the Court (noting that UCR 132.3(3) provides, inter alia, that this does not prevent production to the Court or the tender in evidence of a formal offer document on an issue of costs after final determination by the Court of the substantive issues in the proceeding other than costs).
In the Commentary to r 187(5) of the 2006 Rules in Lexis Nexis Civil Procedure South Australia,[14] the learned author observed that although on appeal there was no absolute rule that offers could not be disclosed, it was nevertheless probably undesirable where the appeal was as to the quantum of damages, referring to two UK authorities.
[14] Vol I at [6R187.70].
In Mason v Mason,[15] a decision of the Court of Appeal, Denning MR, with whom Harman and Winn L. JJ agreed, found that the rule that a payment into court had been made should not be communicated to the Court at the trial of an action until all questions of liability and the amount of debt or damages had been decided should be extended to the Court of Appeal, observing that it would be less embarrassing to the Court if it did not know of the payment into court.[16]
[15] [1965] 3 All ER 492.
[16] At 493.D.
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).
The dangers of the Court knowing the amount of an offer in such circumstances were recognized by the UK Court of Appeal in Mason v Mason and Thornton v Swan Hunter Shipbuilders Ltd, even though there was no such rule applicable in that Court.
During the first phase of submissions, Clone will not be shut out of its arguments concerning the Hargrave J decision, the payment back of interest by Players, and the decision of the High Court. This has been conceded by Mr Whitington in his submissions.[19]
[19] T23.24 and following.
However, once the Court has made its determination on the issues as to how much interest is allowable up and until the 20 February 2008 date, unfettered by any knowledge of what has been offered, then the second phase of the two-stage submissions can be ventilated, namely following the disclosure of the offers and their effect, there can be enable a consideration or determination as to whether Players has relevantly beaten any of their offers, or not, as the case may be, and the consequences of this.
The taxation has been very lengthy, and it is in the interest of all parties, and the Court, that it be concluded as soon as possible. However, the benefits of a more seemingly efficient and less time-consuming process would be greatly outweighed by the prejudice which may be caused were the offers made by Players to be before the Court, thereby subjectively influencing its decision-making regarding the exercise of its discretion on the issues arising in the first phase of the two-stage process urged to be set in place.
Clearly, ultimately the fact of any offers and their effect will be relevant. This is clear from the case law, and has been conceded by Mr Whitington. However, what should not occur is any disclosure of the offers prior to the commencement of the second phase of the argument, which would both be prejudicial and contrary to the rule.
The Court will accommodate as much as possible the prompt calling on of the second phase of the interest assessment once the first phase has been resolved.
Orders
The following orders are made.
1.The award and assessment of interest on Clone’s costs is to be undertaken in two separate hearings:
(a) First, a determination as to the point in time when Clone’s entitlement to interest is to commence to run and after that determination, and based on the Court’s answer, a calculation made as to Clone’s actual interest on the cost entitlement calculated on the amounts allowed for solicitor’s charges, counsel fees, and disbursements, up to and including the date of Players’ offers dated 20 February 2008.
(b) Second, a determination as to whether Players have relevantly “beaten’ their offers, and if they have, the consequences in relation to the period from the date of these offers until finalisation of the proceedings. If Clone seeks to challenge the validity of Players’ offers, that exercise will also be undertaken in the second phase.
2.The registry is to uplift Clone’s submissions filed 7 March 2025 (FDN 348) pursuant to r 12.1(m) of the Uniform Civil Rules 2020.
3.Clone is at liberty to file and serve redacted or amended submissions removing any reference to the content of any Players formal offers of settlement.
4.The Court will proceed with the hearing fixed for 24 April 2025 at 10:00 am but in lieu of a contested hearing this will be a directions hearing only for the purpose of fixing a timetable for the provision of responding submissions by Players and an argument date for the first of the hearings referred to in these orders. Such a date will be fixed at the earliest possible time.
5.Costs of the argument reserved.
6.Liberty to apply.

[2025] SASC 49

11 April 2025