Clone Pty Ltd v Players Pty Ltd (No 5) - [2022] SASC 135

Supreme Court of South Australia
(Civil)
CLONE PTY LTD v PLAYERS PTY LTD (No 5)
[2022] SASC 135
Judgment of Auxiliary Judge Norman a Master of the Supreme Court
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - TAXATION AND OTHER FORMS OF ASSESSMENT - PARTICULAR ITEMS - SOLICITOR'S PROFIT COSTS - PERUSAL
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - TAXATION AND OTHER FORMS OF ASSESSMENT - PARTICULAR ITEMS - DISBURSEMENTS - PARTY'S EXPENSES - TRAVELLING EXPENSES, ATTENDANCE ALLOWANCE ETC
Rulings on Taxation of costs.
Supreme Court Rules 1987 (SA) Schedule 10; Uniform Civil Rules 2020 (SA) r 71.1, 71.2, 195.2(3), 195.8, 195.23; Federal Court Rules (Cth) Schedule 5; Legal Costs South Australia Service, referred to.
D.M Wright & Associates v Murrell (No 2) [2021] QDC 141; Gibson v Drumm & Others [2006] NSWSC 570; Fat-Sel v Brambles Holdings [1984] FCA 204; Kuek v Devflan Pty Ltd & Anor [2009] VSC 91; McCoombes v Curragh Queensland Mining Limited [2001] QDC 142; Players v Clone [2019] SASC 186; Players v Clone [2022] SASC 51; Wentworth v Rogers [2006] NSWLR 484, considered.

CLONE PTY LTD v PLAYERS PTY LTD (No 5)
[2022] SASC 135

Background: In these reasons the applicant will be referred to as “Clone” and the respondents as “Players”. This is a continuing taxation of the costs of the applicant in these proceedings, which are claimed largely pursuant to the ‘Tenth Schedule’ of the Supreme Court Rules 1987 (SA) (“SCR”).
The costs now being taxed are those claimed by Clone in its itemised Schedule of Costs (FDN 146), being two volumes containing five parts for separate time periods with a total of 6008 items. The taxation of the Schedule was competed on 29 June 2021. However, large numbers of items were reserved. The remaining items have since been grouped into discrete topics, and they are now being taxed in progression.
Various issues have arisen in this part of the taxation and points of principle have been argued by Counsel.
In the case of issues relating to perusals of documents and the production of file notes relating to those perusals, a claim for travel expenses to confer with Counsel, and the drawing and engrossing of draft chronologies, the Court’s decision was reserved, and in relation to a claim for attendances of Clone concerning a potential but not proceeded with cause of action, an attendance of a clerk to peruse transcript, and a conversational attendance between two solicitors within the same firm, written reasons are now provided.
Perusals of documents
Items presently being taxed include the perusal of numerous documents and groups of documents, including discovered documents, by Clone’s solicitors.
In some instances, perusals have been claimed on a scale basis (Item 5 of the Tenth Schedule) and in others on a time basis (Item 7 of the Tenth Schedule). Issues have arisen as to whether it is appropriate to use either, or both…

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: [2022] SASC 135
Decision Date: 18 November 2022

CaseChat Overview and Summary

In the case of Clone Pty Ltd v Players Pty Ltd (No 5), the primary issue addressed by the court was the taxation of costs incurred by Clone in the proceedings, with particular focus on the costs associated with the perusal of documents and the claim for travel expenses to confer with counsel. The case involved a dispute over the appropriateness of using a scale basis or a time basis for claiming costs related to the perusal of numerous documents. Players argued that the application of the scale perusal rate resulted in an unreasonable outcome and sought the production of Clone's work in progress and other time entry records to provide guidance on a reasonable allowance of time for the perusal. Clone opposed this request.

The court considered whether there was an inherent discretion to replace a per page perusal fee with an hourly rate. It was established that Note J to the Tenth Schedule permits an hourly rate for the perusal of a large volume of documents, and the decision to allow such perusals on a time basis instead of a scale basis lies within the court's discretion, considering the volume of documents involved. The court held that even if perusals were allowed on a time basis, the traditional lump sum allowance for perusals should be considered in determining the quantum of costs to be allowed.

Regarding the production of file notes to verify perusals, Players argued that UCR r195.2(3) required Clone to produce any documents relied upon at taxation, and time records might be relevant in determining an appropriate perusal rate. The court acknowledged that such records could be relevant but found no error in the Taxing Master’s approach. The court concluded that each case would turn on its own facts, but the volume of documents incorporated in any item of the costs claim would be a relevant factor. The court's decision was reserved on the issues of perusals of documents and the production of file notes. The court's final orders would be issued following further consideration of these matters.

Orders

Orders of the court

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Background

Background to the litigation

Background: In these reasons the applicant will be referred to as “Clone” and the respondents as “Players”. This is a continuing taxation of the costs of the applicant in these proceedings, which are claimed largely pursuant to the ‘Tenth Schedule’ of the Supreme Court Rules 1987 (SA) (“SCR”). The costs now being taxed are those claimed by Clone in its itemised Schedule of Costs (FDN 146), being two volumes containing five parts for separate time periods with a total of 6008 items. The taxation of the Schedule was competed on 29 June 2021. However, large numbers of items were reserved. The remaining items have since been grouped into discrete topics, and they are now being taxed in progression. Various issues have arisen in this part of the taxation and points of principle have been argued by Counsel. In the case of issues relating to perusals of documents and the production of file notes relating to those perusals, a claim for travel expenses to confer with Counsel, and the drawing and engrossing of draft chronologies, the Court’s decision was reserved, and in relation to a claim for attendances of Clone concerning a potential but not proceeded with cause of action, an attendance of a clerk to peruse transcript, and a conversational attendance between two solicitors within the same firm, written reasons are now provided.Perusals of documents Items presently being taxed include the perusal of numerous documents and groups of documents, including discovered documents, by Clone’s solicitors. In some instances, perusals have been claimed on a scale basis (Item 5 of the Tenth Schedule) and in others on a time basis (Item 7 of the Tenth Schedule). Issues have arisen as to whether it is appropriate to use either, or both alternatives, and whether Clone should be required to produce its file notes in relation to perusals. On 6 July 2022, Players sought production of the work in progress and other time entry records of Clone’s then solicitors relating to perusals, so that any records of time spent on the perusal items could be considered in determining whether to allow perusals of large volumes of documents at an hourly rate and, if so, the amount of time to be allowed for such perusals. This request for production of work in progress and other time entry records was opposed by Clone. By agreement, the parties primarily rely on written outlines of argument. Players filed their submissions on 19 August 2022 (FDN 292) and Clone filed its submissions on 2 September 2022 (FDN 293). Supplementary submissions have also been received.Players’ submissions The basis of the Players’ request for production of work in progress and other time entry records is because in their submission the application of the scale perusal rate on various occasions produces an obscure and untenable outcome on the Bill of Costs. For example, they point out that item 424 in the Schedule of Costs is said to be in respect of “perusing documents for inclusion of documents for discovery by Ms Karagiannis (documents numbered 1-165) (500.pp)”. An amount of $3,500 is claimed (being 500 pages at the $7.00 perusal rate). However, if that amount of $3,500 is divided by the highest solicitor attendance rate in the Tenth Schedule (being $250), then the amount to $3,500 would equate to 14 hours of work done by a solicitor. An allowance of 14 hours for reading 500 pages of documents is, it is submitted, on its face unreasonable. For this reason, they seek production of Clone’s work in progress and other time entry records so that any record of time spent can provide guidance to the Court in considering what allowance of time for the perusal would be reasonable.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

Beach J found no error in the Taxing Master’s approach as above.[6][6] [2009] VSC 91 at [22].Consideration There is no inherent discretion to replace a per page perusal fee with an hourly rate. In Fat-Sel the Court held that it had no jurisdiction to reduce amounts claimed for perusals merely because it was considered that an "unreasonable" result would thereby be achieved, that case was decided based on the then Federal Court Order 62 Rule 19, which (subject to a provision which was not applicable in that case) used the words: on every taxation the taxing officer shall allow all such costs, charges and expenses as appear to him to have been necessary or proper for the attainment of justice or for maintaining or defending the rights of a party” (emphasis added). However, Note J to the Tenth Schedule (which applies here) is in different terms. It specifically provides that in cases where a large volume of documents is required to be perused, an hourly rate may be allowed by the taxing officer in lieu of a perusal fee. Having regard to that provision, the task of the court on any claim for such perusals will be whether this should be allowed on a scale basis or on a time basis. If there is a large volume of documents perused on a particular occasion, it will be for the court to determine whether it should exercise its discretion under Note J (or its present equivalent in the UCR Higher Courts Costs Scale). Each case will turn on its own facts, but the volume of documents incorporated in any item of the costs claim will be a relevant factor. However, importantly, even if perusals, or bulk perusals, are allowed on a time basis instead of a scale basis, the court in fixing the amount to be allowed should nevertheless have regard to the fact that perusals are traditionally allowed on a ‘once and for all’ lump sum allowance. This should be considered in fixing the quantum of costs to be allowed.Production of file notes to verify perusals Players’ submissions Players referred to UCR r195.2(3) requiring a claimant, if the claim proceeds to taxation, to at the request of the liable party, produce for inspection any documents on which the claimant proposes to rely. They submitted that the appropriate approach was in respect to each claim for perusals where a bulk rate might be appropriate, to determine whether time records would be of assistance in considering an appropriate perusal and/or examination rate and, if so, to direct the production of any such records. Players submitted that the taxing master in Kuek ultimately took time records for reading documents into account in determining whether to allow the claim at the perusal rate or the scanning rate. The last sentence of paragraph 37 of the taxing master’s judgment supported the proposition that records of time spent may be relevant to allowances for reading documents where the Scale contemplated an allowance on a time basis whether for scanning (as in that case) or pursuant to a discretion (as is the case under the South Australian Scale).Clone’s submissions