Clone Pty Ltd v Players Pty Ltd (No 6) - [2023] SASC 56

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
CLONE PTY LTD v PLAYERS PTY LTD (No 6)
[2023] SASC 56
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 - SOLICITOR'S PROFIT COSTS - OTHER MATTERS
Rulings on a Taxation of costs.
Federal Court Rules (Cth) order 62, r 19, sch 3 item 11; Legal Costs South Australia Service; Quick on Costs (online edition); Supreme Court Rules 1987 (SA) sch 10, r 262.1; Supreme Court Rules 2000 (Tas) sch 1, item 17; Supreme Court Rules 2006 (SA) r 262.1; Uniform Civil Rules 2020 (SA) sch 6, r 191.2; Victorian Supreme Court (General Civil Procedure) r 2015, order 63; Victorian Supreme Court (Chapter I Appendices A and B Amendment) r 2017, referred to.
Baronglow v Willing (SADC) Master Norman 27 February 2007 (unreported) ; McCoombes v Curragh Queensland Mining Limited [2001] QDC 142; Slingsby v Attorney-General [1918] P236 at [241]; Re Cosedge [1885] 209 SJ 306; Re Snell [1877] 5 Ch D 815 at 826 ; Pesce, Costs in taxations in the Family Court 1988 ; Fat-Sel v Brambles Holdings [1984] FCA 204; Kuek v Devflan Pty Ltd & Anor [2009] VSC 91; Players Pty Ltd v Clone Pty Ltd [2009] SASC 186; Ralkon Agricultural Co Pty Ltd v Aboriginal Development Commission (unreported) FCA 11 March 1986, Fisher J, Number G50 of 1981 , considered.

CLONE PTY LTD v PLAYERS PTY LTD (No 6)
[2023] SASC 56
Supreme Court – Civil Application

NORMAN AJ: This is a continuing taxation of the costs of the applicant Clone in these proceedings. In these reasons the applicant will be referred to as “Clone” and the respondent as “Players.”
Background
The costs now being taxed are those claimed by Clone in its itemised Schedule of Costs filed on 11 March 2008, FDN 146, being two volumes containing five parts for separate time periods with a total of 6008 items.
The taxation of the Schedule was completed on 29 June 2021; however, large number of items were reserved. The remaining items have since been grouped into discrete topics, and these are now being taxed in progression.
Two issues have recently been argued. These relate to the approach to be taken in the case of the “bulk” perusals of documents (meaning a large volume of documents), and secondly whether an allowance should be awarded for collating and binding transcripts of evidence for counsel. There appear to be few, if any, South Australian authorities on these issues, and in Clone’s bill there are multiple claims for such attendances.
Perusals of bulk documents
Background
Items presently being taxed include the perusal of numerous documents and groups of documents by Clone’s solicitors. In some instances, perusals…

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: [2023] SASC 56
Decision Date: 18 April 2023

CaseChat Overview and Summary

Clone Pty Ltd, the plaintiff, filed a lawsuit against Players Pty Ltd, the defendant, to resolve a dispute concerning the taxation of costs. The case was heard in the Supreme Court of Victoria. The primary focus of the litigation was the calculation and allowance of costs associated with the perusal of a large volume of documents, particularly the extent to which these costs could be charged on an hourly basis rather than the standard A4 page rate.

The court needed to decide whether the onus lay on the party seeking to allow charges for perusals on an hourly basis, and if so, what evidence would be necessary to support such a claim. Furthermore, the court had to consider whether the party was obligated to record the time spent on the perusal of documents, given the provisions in the Victorian Supreme Court (General Civil Procedure) Rules 2015, and the implications of failing to do so.

The court held that the onus of establishing that perusals should be charged on an hourly basis rather than the standard A4 page rate did indeed lie with the party seeking to make such a claim. This was akin to a dispensation power, and reasons were needed for its application. The court further clarified that the obligation to record the time spent on the perusal of documents was necessary to ensure that proper records were maintained, as per the relevant rules. The court noted that the absence of such records could result in the disallowance of costs, as it would be difficult to ascertain whether time had been spent in re-reading the documents. The court emphasised that the burden of proof lay on the party seeking to claim the higher rate, and that failure to adequately record the time spent on perusals could lead to a reduction in the allowable costs.

The court ordered that the costs associated with the perusal of documents would be assessed based on the A4 page rate unless the party seeking the higher hourly rate could provide adequate evidence to support such a claim. Additionally, the court emphasised the importance of maintaining accurate records of the time spent on perusals to avoid the disallowance of costs.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

In his Commentary at [290.240] “Victoria,” the learned Author notes that the Victorian Supreme Court (General Civil Procedure) Rules 2015 (“VSCR 2015”) Order 63 deals with costs, and he observes that with respect to items 8, 9, and 10 “Perusals, Scanning and Examination” the perusal allowances can give very high rates of recovery, and may be the sort of items which are likely to attract the attention of a taxing officer’s discretion to reduce the scale allowance. He further notes that in the Federal Court, a taxing officer may have regard to the time spent in reviewing documents in relation to the allowance review of documents. For this reason, he notes it may be necessary for solicitors to keep clear time records of document review. ConsiderationOnus of establishing that perusals should be charged on a time basis Mr Ericson has submitted that the onus lies on the person seeking to allow charges for perusals on a time basis, in this instance Players, and that it is necessary to show some reason why it would be inappropriate to apply the general rule. It is akin to a dispensation power, he has argued, and reasons are needed for its application. I accept this submission. A reading of the Scale Item and the Note makes clear that the default provision at item 5 of the Tenth Schedule provides for perusals to be claimed on a per A4 page basis (with two applicable monetary amounts), and the dispensation is provided by Note J, which provides an hourly rate in lieu where there is a perusal of a “large volume” of documents, in which case “an hourly rate may be allowed by the taxing officer in lieu of a perusal fee”. Pointedly, the Note uses the word “may.”Obligation of a party to record the time spent on a perusal of documents This issue was raised in Kuek by Beach J, who agreed with the taxing master’s findings that even the absence of a file note altogether would not be conclusive on the point, and that the time recorded on a particular file note was also not definitive. This was because the quantum of the Victorian scale item was pegged at a sum to recognise that a document was read more than once. The fact that it was read more than once did not have to be established, and that there would be no point in recording how long it took on each occasion the document was read. The point of including a perusal/scanning item in the scale was to avoid having to establish all the time spent in looking at each document on each occasion the document was read such that the taxing master would have a responsibility to assess whether on each occasion it was necessary or proper to do so. As indicated, however, the South Australian scale is different, and the Court has a discretion to allow perusals on a time spent rather than a page basis. Mr Cogan referred to 06SCR r262.1 and UCR r191.2 which both require that a party must retain an adequate record of its costs, and submitted that the details provided in the Clone’s Summary and the redacted costs records did not tie in adequately to the work undertaken, as they were not adequately connected to the perusals. He said that if no records were kept of perusals on further dates, there was no way of knowing whether in fact time had been spent in re-reading them or not. He said that the Note as to bulk perusals required that proper records should be kept by the solicitors undertaking the work.