McDonald v State of South Australia (No 2)
[2008] SASC 234
•26 August 2008
SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
MCDONALD v STATE OF SOUTH AUSTRALIA (No 2)
[2008] SASC 234
Judgment of The Honourable Justice Anderson
26 August 2008
PROCEDURE - COSTS - RECOVERY OF COSTS
PROCEDURE - COSTS - TAXATION - PARTICULAR ITEMS - DISBURSEMENTS - PARTY'S EXPENSES
PROCEDURE - COSTS - TAXATION - PARTICULAR ITEMS - DISBURSEMENTS - WITNESSES
PROCEDURE - COSTS - TAXATION - PARTICULAR ITEMS - COUNSEL'S FEES
COSTS OF SELF-REPRESENTED PLAINTIFF
Plaintiff successful at trial - argument on costs - costs by way of lump sum - items in dispute - whether certain items allowable - solicitors' and barristers' costs for earlier representation - plaintiff seeks his own costs and costs for secretarial services provided by wife - whether contract existed between plaintiff and his wife for secretarial services - defendant's claim for pre-trial costs and some costs of trial.
Held: Insufficient detail to determine solicitors' and barristers' costs - referral for inquiry by a master - plaintiff's own costs for appearing in person not allowed - no contract between plaintiff and his wife - costs for secretarial services not allowed.
Cachia v Hanes & Anor (1994) 179 CLR 403; Rowan v Cornwall (No 6) (2002) 220 LSJS 187, considered.
WORDS AND PHRASES CONSIDERED/DEFINED
"Costs actually incurred."
MCDONALD v STATE OF SOUTH AUSTRALIA (No 2)
[2008] SASC 234Civil
ANDERSON J. I gave judgment for the plaintiff and published reasons in this matter on 21 May 2008. I then heard argument on the question of costs.
The parties have agreed that I should deal with the question of costs by way of a lump sum. The claim for costs made by Mr McDonald amounts to 74 items, which he has set out in a document to which he has annexed various receipts and invoices to substantiate his claim.
There have been several documents exchanged between the parties which have narrowed the issues somewhat but there are still a considerable number of items in dispute.
Costs agreed by defendant
I will indicate those items which have been agreed, and I will do that at the outset. Those items are set out in the following table.
Item No Particulars Cost 1 Mr Crompton’s airfare 1,650.00 3 Mr D. McDonald’s air fare 1,948.80 9 Courts Administration Authority 88.00 10 Courts Administration Authority 5,380.00 11 Courts Administration Authority 9,415.00 12 Courts Administration Authority 5,380.00 16 Minter Ellison 385.00 61 Stockbridge health Centre 40.00 66 – 73 inclusive Legal services 511.00
Costs initially claimed but abandoned by plaintiff
Mr McDonald has conceded that he is not entitled to any costs in respect of the following items which he had initially claimed:
Item No
Particulars Cost 5 Wendy Finster 686.00 7 Minter Ellison 418.00
8 Crown Office Queen Councillor (sic) 770.00 17 Duncan Hannan Basheer 55.00 34 Air fares to Sydney 440.00 36 Train fares and taxi 50.00 41 to 60 inclusive Being various medical and associated expenses 2,262.00
62 – 65 inclusive Being further medical accounts 270.00 Miscellaneous Superannuation, costs of retraining and costs of having to move from Adelaide to find employment 68,396.00
Items remaining in dispute
(i) Parking fees and travelling expenses
Mr McDonald has claimed parking fees for the days when he attended court and also his fees for travelling to and from court. It is my view that he is not entitled to any costs for the items claimed for car parking and travel. These amounts are not recoverable as party and party costs, regardless of whether the person is represented or unrepresented.
(ii) Printing and other costs
He has also included a claim for printing and associated costs. In relation to the claim for printing and associated costs, I will later deal with a claim that has been made for the secretarial services provided by Mr McDonald’s wife. For the same reasons expressed there, I do not allow the printing and associated costs associated with Mrs McDonald’s work or for work done by Mr McDonald. They are not recoverable on a party and party basis.
(iii) Solicitors’ and barristers’ costs
A large area of dispute is in relation to solicitors’ costs and counsel fees. Dr Gorman was retained as counsel to give advice and apparently was involved in attending at and advising Mr McDonald in relation to a mediation which took place. There is no clear distinction in the accounts provided as to what Dr Gorman actually did in relation to this trial as distinct from the mediation. The plaintiff has not provided further details, as I suggested he might when these matters were argued.
Likewise, in relation to the claims for Johnston Withers, Macri Solicitors, Griffin Hilditch and Michael Hegarty & Associates, together with the associated counsel fees of Mr Tokley, there is a lack of detail as to what precisely was attended to by each of those organisations or persons and at what stages of the pre-trial procedure. The defendant claims that there is obviously overlap involved here. Whilst that seems possible, I would be surprised if there was no entitlement at all to some of the costs claimed. I would also be surprised if there was not a considerable amount of work done by solicitors for which costs were recoverable. At the moment the defendant only concedes the sum of $578.47 for the costs of Michael Hegarty & Associates. I am sure that there must be other solicitors’ costs to which Mr McDonald is entitled for work done by his solicitors at the times he was represented.
It is impossible for me, on the information presently available, to deal with this matter in any meaningful way. It seems that the only sensible course to take is to refer this question for inquiry by a master. If there is any further relevant information to be provided, then it can be provided at the direction of a master, within such time and in such form as the master requires. The master will have to determine whether there is duplication in the fees claimed and whether Mr McDonald has an entitlement to the amounts claimed.
The largest of these solicitors’ accounts is that of Michael Hegarty & Associates. Again there is a lack of information as to what it is that was actually done and at what stage. The defendants are suggesting that there was an associated action in the District Court which may have occupied a considerable amount of time and in respect of which some of these accounts were rendered. Again, it is up to Mr McDonald to provide further information so that the master can determine this aspect.
An amount of $2,670.80 was charged by Mr Tokley for his counsel fees. His memo of fees does set out the details. I would have thought that at least some of those fees would be recoverable, but again, that is for the master to determine.
(iv) Australian Investigators
In relation to Australian Investigators, the information provided is far from clear. The defendants have conceded that in respect of the three amounts claimed respectively for $800 in two accounts and $692 in another account, they would be prepared to allow an overall amount of $425. Again, I will leave this for the master, if Mr McDonald is not prepared to accept the amount offered.
(v) Witness accommodation
In relation to the items claimed for both Mr Compton and Mr Damien McDonald for accommodation expenses, as the defendant has pointed out, both witnesses apparently stayed with their parents whilst they were in Adelaide to give evidence, and as such no actual expenses were incurred. In those circumstances I am not prepared to allow anything for those items.
(vi) Wendy Finster
As to the amount claimed for the psychologist’s report from Wendy Finster, it is true that two pages of that report were put before the court by way of exhibit, but it is also correct that most of Ms Finster’s claimed expenses have not been allowed. The document, exhibit P72, was tendered as an assistance to the court for background purposes. I ruled that Ms Finster could not express an expert’s opinion. Mr McDonald is not entitled to any costs for the preparation of this report.
(vii) Preparation and research by Mr McDonald
Mr McDonald has claimed substantial amounts for his own work, including his research and preparation for the court case. The amount he claimed for himself was $50,000. There are no details given in relation to Mr McDonald’s claim. In any event, Mr McDonald is precluded from recovering the amounts as costs: see Cachia v Hanes & Anor (1994) 179 CLR 403
That High Court decision precludes Mr McDonald from recovering anything for his own work. On the basis of that authority, I do not allow Mr McDonald anything for his own costs.
(viii) Claim for secretarial services furnished by Mrs McDonald
Mr McDonald has also claimed $30,720 for the services provided by his wife, Mrs Rhoda McDonald, as a professional typist. It is claimed that Mrs McDonald performed 1,024 hours work at $30 per hour between 2002 and 2008.
The documents produced by Mrs McDonald and provided during the trial were of a high standard. Mrs McDonald is an experienced professional typist, having worked in large legal firms in Adelaide for some years. The documents provided included summaries of argument at various stages during the trial and during final submissions and were of considerable assistance to both the court and to the opposition.
Mrs McDonald deposes in an affidavit of 27 June 2008 that she has an agreement with her husband that she is to be paid for the work she performed. Mrs McDonald states in her affidavit:
My husband and I agreed that I would be paid at the going rate for my professional services in word processing and that he would pay me in lieu of the court case. The alternative to having this work done was to send it to an outside agency which would have been less convenient and more expensive.
This work was not done on a voluntary basis and it was not done as a family friend. My husband engaged my professional service to carry out this work on a part time basis at an agreed rate.
To date he owes me $30,000 in back pay for the professional services I have provided in word processing in the past 5 years.
Mr McDonald has not provided any further details as to this alleged agreement. There is no basis by way of any invoices to justify the actual work done, details of what was done and at which stage, or whether there is any overlap with work done by solicitors. Mrs McDonald’s affidavit was not challenged by the defendant by any contrary evidence, but the defendant submits that the affidavit evidence is not sufficient to establish any proper basis for a claim for costs.
Specifically, the defendant submits that there is no evidence that any actual expense was incurred; and that no verbal contract existed between Mr McDonald and his wife for the secretarial services she provided. They submit that the terms of the alleged contract, such as rate of remuneration, commencement date and period of the contract, have not been deposed to. Furthermore, the amount claimed is based on an estimate only and is not substantiated by any records, tax invoices or time books.
The High Court notes in Cachia (at 414) that costs “are intended to reimburse a litigant for costs actually incurred”. (Emphasis added). The Macquarie Dictionary defines “incur” as to become liable or subject to through one’s own action. The Shorter Oxford English Dictionary defines “incur” as to render oneself liable to. The Butterworths Australian Legal Dictionary defines “incurring a debt” as:
To sustain or become liable for money, goods or a service. The debt owing to another party by virtue of an agreement giving rise to a legal duty to pay.
The question of whether a debt was actually incurred therefore depends on whether there was a valid contract in place. If a contract existed, then Mr McDonald would have incurred a debt to Mrs McDonald which he may be entitled to claim as costs. On the information before me, I do not have sufficient evidence to ascertain the terms of any contract and therefore I am not prepared to award any costs for this item. Very simply, the information is so vague that it does not assist in ascertaining the terms of the alleged contract.
As I have said, it is my view that there is insufficient evidence to establish a contract. Therefore this matter is not distinguishable from the decision in Cachia as explained by Debelle J in Rowan v Cornwall No 6 (2002) 220 LSJS 187 at [16]. Mrs McDonald’s work, because it cannot be established as having been performed under a contract, must unfortunately go unrewarded.
Defendant’s claims for its costs pre-trial
The defendant claims costs for items, to which they say they are entitled, relating to matters argued pre-trial. They have set out a summary of these pre-trial costs, including the orders which were made. In all but two cases the orders were that the costs of the applications were to be the defendant’s costs, and in some cases there was the notation that the costs should include counsel fees. The total of the pre-trial amounts claimed by the defendant comes to $7,946.08. That total did not include an amount of $686 for items claimed for the hearing on 13 October 2006. It seems that this was omitted from the total in error. I am prepared to exercise a broad discretion and allow the defendant the sum of $7,500 for these pre-trial costs. They have orders in their favour and the amounts claimed are based on the scale fees.
Defendant claims some costs of trial
In relation to trial costs, the defendant maintains that it should be entitled to a sum of $2,750, basically to reflect one and a half days of the trial which the defendant says was taken up with the issues on which the plaintiff was unsuccessful.
That is not a reasonable basis for arguing costs, in my view. The fact is that the plaintiff was successful in his claim, and although not successful on every aspect of his claim, he was nevertheless awarded just under $400,000 in damages. I would therefore not allow anything for this item for the defendant.
Conclusion
Therefore the defendant is entitled to a set-off of $7,500 against the final amount awarded to Mr McDonald. I order that the defendant pay to the plaintiff the sum of $17,297.80 and that in relation to the claim for solicitors’ costs, barristers’ fees and Australian Investigators’ fees the matter be referred to a master.