Clone Pty Ltd v Players Pty Ltd (No 9) - [2024] SASC 59

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
CLONE PTY LTD v PLAYERS PTY LTD (No 9)
[2024] SASC 59
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 - ATTENDANCES
Rulings as to Counsel fees on a taxation of costs.
1987 Rules 101.07(6)(a); 2006 Rules 264(2); Professor Dal Pont Law of Costs (3rd edition); Lexis Nexis Legal Costs (South Australia) , referred to.
Blair v Curran (Adam’s Will) (1939) 62 CLR 464; Players Pty Ltd v Clone Pty Ltd [2006] SASC 118; Players Pty Ltd (in liq) & Ors v Clone Pty Ltd [2015] SASC 133; Clone Pty Ltd v Players Pty Ltd (in liq) [2016] SASCFC 134; Clone Pty Ltd v Players Pty Ltd (in liq) (2018) 264 CLR 165; Churchill v University of Sydney (No 2) [2020] NSWSC 1808, applied.

CLONE PTY LTD v PLAYERS PTY LTD (No 9)
[2024] SASC 59
Supreme Court – Civil Application
Background

NORMAN AJ: This is the continuing taxation of the costs of the applicant (“Clone”) in these proceedings.
In the process of assessing Counsel fees an issue has been raised by the respondents (commodiously described in these reasons as “Players”) as to whether certain discrete items within the Counsel fees claimed by Clone should be disallowed by reason of “serious malpractice” which they submit Clone’s Counsel were found to have engaged in at the 2005 trial before Vanstone J.
Preliminary submissions were presented during the taxation but subsequently as has been agreed by the parties, the matter has proceeded on written submissions.
These comprise of Players’ written submissions filed on 29 November 2023 (FDN 323), including annexures, Clone’s responding written submissions filed on 30 January 2024(FDN 324), Players written submissions filed on 12 February 2024 (FDN 325) in reply, and Clone’s responding written submissions filed on 19 March 2024 (FDN 329).
Although Players made written concessions to their original application, they have nevertheless continued to pursue their objections to certain items within Clone’s Counsel fees, namely the fees relating to the preparation of the written submissions and oral submissions made before Vanstone J.
In essence, the issue for determination involves whether in the circumstances of this case it is appropriate for me as taxing officer to reduce Clone’s counsel fees by reason of the provisions of the applicable 1987 Rule 101.07(6)(a) and the general principles of taxation when Clone holds a costs order in its favour which has been upheld on appeal.
Submissions of the parties
Players’ submissions 29 November 2023
Players contended that certain discrete items of Clone’s Counsel fees should be disallowed by the Court on account of “serious malpractice” findings as to Counsel’s conduct at the 2005 trial before Vanstone J. Although they did not ask the Court to make any new findings with respect to the conduct of Clone’s Counsel, they did rely on…

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: [2024] SASC 59
Decision Date: 30 April 2024

CaseChat Overview and Summary

Clone Pty Ltd sought to reject Players Pty Ltd's submissions regarding costs, arguing for an indemnity basis for the costs of the argument and all incidental matters. Clone also sought an order that the costs of the argument should be certified as fit for Senior Counsel. The dispute involved a complex litigation history, spanning several Supreme Court rules regimes, including the 1987 Rules, the 2006 Rules, and the Uniform Civil Rules 2020. The case had been through various stages of taxation and appeal, with the original orders made by Vanstone J in 2005, which were later varied and then reinstated by the High Court.

The court had to determine the applicable rules governing the taxation of costs, considering the historical context of the litigation and the various rules in force during the litigation. The primary issue was whether the taxing officer could deviate from the original costs order when assessing costs, particularly in light of the 1987 Rules, which defined costs as those necessarily and reasonably incurred. The court also needed to clarify the distinction between the taxing officer's role in assessing costs according to the order and the broader powers of the trial judge to sanction misconduct.

The court concluded that the taxing officer's role is limited to assessing costs in accordance with the terms of the original costs order, and they could not deviate from it by excluding certain costs. The broad power to disallow wasted costs due to recognised conduct is distinct from the broader power to sanction misconduct, which lies with the trial judge or appellate court. The 1987 Rules, specifically rule 101.7(6)(a), applied to the taxation as it had commenced before the commencement date of the newer rules.

Ultimately, the court rejected Clone's submissions and ruled that the taxing officer's assessment of costs should strictly adhere to the original costs order. The court's decision confirmed the limited role of the taxing officer and reinforced the distinction between cost assessment and misconduct sanctions.

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

Clone sought the total rejection of Players submissions and sought the costs of the argument and all incidental matters on an indemnity basis, or at the minimum an order that the costs of the argument should be certified as fit for Senior Counsel.Consideration and Conclusions Several issues have arisen in the parties’ submissions. I have come to the following conclusions.Applicable rules governing the taxation The case has spanned three Supreme Court rules regimes, namely the 1987 Rules, the 2006 Rules, and the Uniform Civil Rules 2020. When Vanstone J delivered her costs order on 25 August 2005 (Order 5) the 1987 Rules were in operation, and rule 101.7(6)(a) thereof provided that in any rule or order, unless the contrary meaning was indicated by the context or other factors, costs as between party and party, or a like expression, meant only the costs which had been necessarily and reasonably incurred by the party in the conduct of the litigation. Although the orders of Vanstone J were varied by Hargrave AJ in the set aside action in 2015, the High Court reversed that order and reinstated the original orders of Vanstone J. The taxation had then commenced (before Withers M) following the original trial, but was suspended during the appeal processes and the Hargrave AJ trial, resuming before myself during the currency of the 2006 Rules and then the UCRs. The UCR transition rule, UCR 1.4 (1) provides that unless the Court otherwise orders, the UCRs apply to a step in a proceeding taken after the commencement date. The taxation is a “step in a proceeding,” and as it had commenced before the commencement date, accordingly the 1987 Rules, including rule 101.7(6)(a) apply to it. This is confirmed in Players’ submissions dated 7 November 2023 at para [27] and is not disputed by Clone in either its 30 January 2024 or 19 March 2024 submissions. Accordingly, the Court is required to consider the dispute between the parties in the context of the application of the 1987 rule 101.07(6)(a). Its terms are set out earlier in these reasons.The proper scope of power on a taxation The judicial function exercised upon a taxation involves an assessment of a party’s costs in conformity with and directed by the terms of the costs order. Whilst the power to make a costs order is broad and almost unfettered, and may be tailored by a trial Judge to exclude certain costs, once it is made the taxing officer carries it into effect by quantifying the costs in accordance with that order. The carving out of a component and acting contrary to the costs order founding the taxation is not open to the taxing officer. There is a clear distinction between the power to disallow on taxation any wasted costs directly resulting from recognised conduct, with the more plenary power, unfettered by direct causation requirements, to sanction a party for misconduct which is solely vested in a trial Judge or an appellate court. These role of a taxing officer by reason of the rules have been summarised in Lexis Nexis Legal Costs (South Australia) at para [2093].