Players Pty Ltd (in Liq) v Clone Pty Ltd - [2019] SASC 186

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
PLAYERS PTY LTD (IN LIQ) & ORS v CLONE PTY LTD
[2019] SASC 186
Reasons for Decision of Auxiliary Judge Norman a Master of the Supreme Court
24 October 2019
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - TAXATION AND OTHER FORMS OF ASSESSMENT - PRINCIPLES OF TAXATION OR ASSESSMENT - FAIR, JUST, REASONABLE, NECESSARY, PROPER ETC
Interim allocatur for costs - rules 271(1) and 274(2)(b)(ii) - expression “impressionistic terms” - fair degree of rigour required on an interim allocator - court required to err on side of conservatism - interim allocatur not appropriate mechanism for resolving contested questions of law - interim allocator appropriate where taxation complex - Solicitors’ charges discussed - communications with counsel on a piecemeal basis - excessive communications re drafting - research of law - excessive perusals - multiple briefs - conferences with in-house counsel - reading judgments and transcripts on a perusal basis - duplication when multiple solicitors involved - Counsel fees - generally inappropriate to consider higher rates than indicator on interim assessment - Interstate counsel - costs of taxation and potential for need to pay refund - caution re interest on costs on interim allocatur - regard to other taxations - Set off between interim allocaturs - costs indemnity principle discussed - Clone’s claim for interim allocaturs in respect of trial allowed at $225,000 and for of appeal allowed at $150,000 - decline to award interim allocator in favour of Players as it could not be said that it must in any event recover an amount on taxation.
Russo v Buck & Ors (No 5) [2010] SASC 27; Johnson Winter and Slattery v MP Investments Nominees Pty Ltd [2013] SASC 157; Rodda v Ian Rodda Pty Ltd [2016] SASC 90; Edwards v Legalese Pty Ltd DC (SA) (unreported) No 5, 14 February 2014 Master Blumberg; Perpetual Executors and Trustees v Colonial Mutual Fire Insurance Co Ltd (1903) 29 VLR 427; Re James McEwan Ltd (1903) 29 VLR 114; Dalgety Australia Operations Ltd v FF Seeley Nominees Pty Ltd (No 2) (1988) 49 SASR 75; Walker v Law Society of Tasmania [1991] Tas R 121; Mainieri v Cirillo (2014) 47 VR 127; Mourik v Marburg [2016] VSC 601; Wentworth v Rogers (2006) 66 NSWLR 474; Baker v Legal Services Commissioner [2006] QCA 145; Trevorrow v State of South Australia (No 7) [2008] SASC 5, referred to.

PLAYERS PTY LTD (IN LIQ) & ORS v CLONE PTY LTD
[2019] SASC 186

These are applications for interim allocaturs. They are consequent upon the decisions made by the High Court in Clone v Players [2018] HCA 12 and by the Full Court in Players v Clone [2013] SASCFC 25.
In these reasons I will refer to the plaintiffs as “Players” and the defendant as “Clone”. I will likewise abbreviate the citations for the reported judgments in this matter to use only those names.
Clone’s claims
On 10 January 2019, Clone filed two claims for costs, one in relation to the trial before Hargrave AJ, Players v Clone [2015] SASC 133, and one relating to the appeal from this decision to the Full Court [2016] SASCFC 134. The trial claim (FDN 89) seeks costs and disbursements in the sum of $1,345,253.57. The appeal claim (FDN 90) seeks costs and disbursements in the sum of $903,584.21.
Players have filed responses to these claims. The response to the trial claim was filed on 7 February 2019 (FDN 93) and the response to the appeal claim was filed on 6 February 2019 (FDN 92). In relation to the trial claim, Players offer totals $196, 906.63 and its response to the appeal claim offers $57,805.48.
Players’ claims
Players filed a claim for costs pursuant to a Full Court appeal judgment [2013] SASCFC 25, in the sum of $724,067.22 (including interest of $210,247.84) together with a further claim dated 13 October 2017 (FDN 88), in the sum of $38,034.04, awarded to it pursuant to order 6 of the Full Court on 8 December 2016. This claim relates to the argument before Kourakis J [2012] SASC 12, which was overturned on the appeal. These orders were undisturbed by the High Court, notwithstanding Clone’s overall win.
Clone has filed a response to Players’ claims on 20 February 2019 (FDN 90), and it offers nil dollars.
As at the present date, none of these claims have proceeded to adjudication.
Clone’s applications for interim allocaturs
Clone has applied for orders for interim allocaturs in its favour.
Its application (FDN 95) filed on 3 July 2019 seeks an interim allocatur against Players in the sum of $600,000 pursuant to an order of the High Court of 21 March 2018. This relates to the trial costs.
Its application (FDN 96) filed on 3 July 2019 seeks an interim allocatur in the sum of $37,080.86, being the aggregate of all costs admitted in full by the Players parties in the Players parties’ response to the claim for costs of 7 February 2019, exclusive of interest. It also seeks an order that the claim for costs with respect to the 2015 trial before Hargrave AJ proceed to a detailed adjudication.
Its application (FDN 100) filed on 30 July 2019 seeks an interim allocatur in its favour in the sum of $600,000 in respect of an order made by the High Court on 21 March 2018. This relates to the Full Court appeal costs.
Its application (FDN 101) filed on 30 July 2019 seeks an immediate payment of $20,969.41, being the aggregate of costs admitted in full by the Players parties in their response to Clone’s claim for costs of 7 February 2019. It also seeks an order that its claim for costs in respect to the 2016 Full Court appeal proceed to detailed adjudication.
Clone’s affidavits
Clone has filed a series of affidavits in support of its application. FDN 97, filed on 3 July 2019, is an affidavit of its solicitor Mr Rydon supporting an application for a detailed adjudication and an interim allocatur with respect to the Hargrave AJ trial. It links with the application, FDN 96.
FDN 102, filed on 30 July 2019, is the second affidavit of Mr Rydon regarding a detailed adjudication and interim allocatur and also links with FDN 96.
FDN 106, dated 6 September 2019, is an affidavit of Ms Emily Hunt in support of Clone’s application for an interim allocatur and is linked to the affidavit of Mr Rydon (FDN 97). Specifically, it relates to the illness of counsel, Mr Karkar QC.
FDN 108, filed on 10 September 2019, is the third affidavit of Mr Rydon, which supplements his first affidavit (FDN 97) and it also responds to Players’ application for costs against Clone.
Objections by Players to affidavits relied on by Clone
At the commencement of the hearing Mr Whitington indicated that Players raised issues with affidavits filed by Clone. The first of the two Michael Rydon affidavits supporting Clone’s applications deposed to the complexities of the issues in the case but Mr Whitington pointed out that Mr Rydon was only a recently admitted solicitor and was not involved in either of the substantive actions. He had limited, if any, capacity to depose to the complexity of the litigation. He did not press this issue too vigorously, he said, as it was a matter of weight rather than admissibility.
Second, in respect to the affidavit of Ms Hunt of 6 September 2019, that had been filed late, given the order that affidavits in reply were to be filed by 20 August 2019. He also raised an objection on the grounds of relevance to Ms Hunt’s affidavit. This concerned the issue of interstate counsel fees and the rates charged by them. Ms Hunt’s affidavit was directed towards issues of why it was allegedly appropriate to retain interstate counsel by Clone and why there was a change of counsel by Clone for the trial – the position had been that Mr Karkar who had originally been retained had become ill. He submitted that the Court could not resolve those contentious issues on this application and that was one of the reasons for Ms Hunt’s affidavit.
Thirdly, in respect to the third affidavit of Mr Rydon, his objection was based on lateness. The order was that affidavits were to be filed by 20 August 2019 and there was no reason why Mr Rydon’s affidavit of 10 September 2019 could not have been filed four weeks earlier.
I do not propose to reject any of these affidavits, however. Whilst there may be objection to the opinions expressed by Mr Rydon, these go to weight. In relation to lateness, each party has had abundant time to prepare their submissions, and no specific prejudice was addressed by Players.
Players’ application for an interim allocatur
Players’ application (FDN 98) dated 22 July 2019 seeks an interim allocatur in the sum of $500,000 in its favour for its entitlement to costs pursuant to the order of the Full Court [2013] SASCFC 25. It seeks a detailed adjudication and the determination of various preliminary issues in relation to the costs of the trial before Hargrave AJ, set out in paragraph 4.4.12, prior to the commencement of the detailed adjudication of those costs.
Players’ affidavits
FDN 86, filed on 28 September 2017, is the fourth affidavit of Mr Whitington which sought a stay of an enforcement order of $500,000 pursuant to an interim allocatur issued on 1 September 2017 by Judge Roder.
FDN 87, filed on 29 September 2017, is the fifth affidavit of Mr Whitington. It provides additional material to his fourth affidavit.
FDN 99, filed on 22 July 2019, is an affidavit of Mr Whitington in support of Players’ application of 22 July 2019 (FDN 98) seeking an interim allocatur in their favour.
FDN 103, dated 22 August 2019, is an affidavit of Mr J Dart, Players’ solicitor, in response to Clone’s application for an interim allocatur of $600,000 with respect to the Hargrave AJ trial. It also responds to the application of 30 July 2019 seeking $600,000 in respect of the Full Court appeal. This affidavit relates to Clone’s applications FDN 95 and FDN 100.
Written submissions
The following written outlines have been provided by the parties.
FDN 104, filed on 5 September 2019, is the submission of Players in support of its application for an interim allocatur of 22 July 2019. It also relates to Clone’s applications of 3 July 2019 and 30 July 2019 which both seek interim allocaturs.
FDN 105, filed on 6 September 2019, is Clone’s summary of argument in support of its applications dated 3 and 30 July 2019 for interim allocaturs to issue.
FDN 107, filed on 10 September 2019, is Clone’s summary of argument in response to Players’ application for an interim allocatur.
FDN 109, filed on 10 September 2019, is an outline of submissions of Players in respect of matters to be heard at argument on 12 September 2019.
Oral submissions
At a hearing on 12 September 2019, I heard oral submissions on behalf of the parties in support of their applications and in opposition to the opponent’s applications. Mr J Whitington appeared with Mr T Cogan for Players, and Mr B Roberts SC with Mr R Bonig appeared for Clone.
Clone’s submissions
In respect of the trial allocatur, Clone indicated that, pursuant to rule 271, it had made an offer in respect of its claim for costs as required by the rule which had not been accepted. It referred to paragraphs 4 and 5 of the Rydon affidavit of 3 July 2019. It had also filed its claim for costs as required by the rule as was verified by paragraph 6 of Mr Rydon’s affidavit of 3 July 2019.
In respect of the appeal allocatur, pursuant to rule 271, it had made an offer in respect to its claim for costs as required by the rule which was not accepted – paragraphs 5 and 6 of the Rydon affidavit of 30 July 2019; and it had filed its claim for costs as required by the rule – paragraph 7 of Mr Rydon’s affidavit of 30 July 2019.
Clone referred to the relevant principles. It submitted that a decision to grant an interim allocatur involved the exercise of the discretion warranted in those cases where it could fairly be said that there was an amount on account of costs which appeared to be beyond any reasonable dispute. It referred to Russo v Buck & Ors (No 5) [2010] SASC 27 at [14]; Johnson Winter and Slattery v MP Investments Nominees Pty Ltd [2013] SASC 157 at [10]; and Rodda v Ian Rodda Pty Ltd [2016] SASC 90 at [22].
Its entitlement to costs arose consequent upon the orders made by the High Court in Clone v Players (2018) 92 ALJR 399 to the effect that Players was to pay to Clone the costs of the proceedings.
The proceedings had been commenced in 2010 and although the trial had originally been scheduled to be heard in December 2014, it had been vacated due to the Full Court disqualifying itself. It was then fixed before an interstate Judge, Hargrave AJ. That trial was conducted over nine days in May and June 2015. On any view, it was a matter of significant complexity. This was evident from the decision of the High Court in Clone v Players. Both Clone and the Players parties had been represented by two senior counsel. Both the Clone and Players parties were represented by one interstate senior counsel. It set out in exhibit “MAR-1” to the Rydon affidavit of 3 July 2019 Clone’s claim for costs which was made up as follows:
Solicitors fees:  $548,000.95
Counsel fees:  $763,803.00
Other disbursements:  $33,449.62
Total  $1,345,253.57
In addition, it sought interest in the sum of $366,203.82 as claimed in paragraph 17 of the Rydon affidavit of 3 July 2019.
It was noted that the Players parties had admitted liability for only $37,080.86 of Clone’s claim for costs – exhibit MAR-1 to the Rydon affidavit of 3 July 2019. It submitted that it was inconceivable that its claim for costs would be reduced to that amount as it represented only 2.75% of the amount claimed, not including interest. It submitted that given the stance taken by Players as to the acceptance of liability for such a small proportion of their claim, and the multitude of issues that they would be seeking to raise on the adjudication, there would inevitably be a substantial delay in adjudicating on the costs. This made it an appropriate case in which to make an order for the immediate payment of an amount on account of costs.
In terms of an assessment as to the appropriate amount for an interim allocatur, the amount sought, namely $600,000, represented 44.6% of Clone’s claim for costs, not including interest. Clone had calculated a sum for interest of $366,203.82 as set out in paragraph 17 of Mr Rydon’s affidavit of 3 July 2019. The basis for these calculations were set out in paragraph 16 of that affidavit. It was a conservative approach given that interest had been calculated only from judgment and not from the date of payment of the relevant expenses. Against this, it could be accepted that the interest entitlement would fall as amounts taxed off but irrespective of this, what was clear was that there would be a substantial amount payable in respect of interest on costs.
It submitted that insofar as the existence of an offer by Players might bear on the issue of interest on costs (referring to Mr Dart’s affidavit, paragraphs 38-40), the offer relied on by Players had only been made on 24 December 2018 and could not affect interest on costs between 8 November 2015 and 24 December 2018 - a period of over three years. It was capable of affecting only that interest that had been calculated as applying from 24 December 2018 to 3 June 2019 – a period of just over five months, and at its highest might affect the interest calculation to the extent of around 12%.
Further, there was, properly, no evidence that would found an inference that the offer might be the ultimate result.
Clone submitted that once interest was taken into account, its claim exceeded $1.7 million. It accepted for the purposes of the argument only the overall percentage recovery rate deposed to in Mr Dart’s affidavit of 22 August 2019 in respect of the adjudication of Clone’s costs of the 2005 Vanstone J trial of 62% - paragraph 37.3 – Clone would recover at least $807,151.80 of its claim for costs in the present action (not including interest). Interest would apply conservatively for at least three years.
Clone referred to the affidavit of Mr Whitington of 22 July 2019 and the affidavit of Mr Dart of 22 August 2019. These related to issues which would be argued on taxation. It submitted that the extent of these issues raised on the adjudication militated in favour, rather than against, the ordering of an interim allocatur. Noting that these affidavits referred to the amounts allowable in the indicator to counsel fees and not higher, it submitted that slavish adherence to the guide was unwarranted and it failed to reflect the accepted principle that complex cases such as the present warranted special consideration.
Noting Players’ objection to the use of interstate counsel, it submitted that the use of interstate counsel was necessary, as was an interstate trial Judge. The circumstances were that the Players parties were calling both Nicholson J, a sitting member of the court, and Mr Whitington QC, senior counsel well known to the preponderance of the bar, precluding all or at least most local barristers from cross examining either of them. Clone referred to the Barrister’s Conduct Rules at [99(e)] and [99(k)].
It submitted that while in cases where it could be said that it was necessary for the attainment of justice for interstate counsel to be briefed, and that such briefing was not an exercise of over caution or something producing payment of unusual fees, then at least many of the items challenged should be allowed. It referred to Dalgety Australia Operations Ltd v FF Seeley Nominees Pty Ltd (No 2) (1988) 49 SASR 75.
Clone noted that the original trial date was in December 2014, however that trial was vacated due to the Full Court disqualifying itself.
Subsequently, Mr John Karkar QC, retained by Clone to represent it at the trial had suffered from a medical issue on 30 April 2015, two weeks before the adjourned trial. This required immediate surgery such that he could not continue to appear at trial, and to replace him Mr Sullivan QC was retained. Clone submitted that where it was reasonable or proper to brief interstate counsel, regard was then to be had to the level of fees usually charged by such counsel: Walker v Law Society of Tasmania [1991] Tas R 121.
It was submitted that while some conservatism might be warranted given the need for resolution of the issues upon an adjudication, the claim for an interim allocatur was only in the order of a 35% allowance once interest was brought into account. It submitted that it was an appropriate case for an interim allocatur to issue but the amount claimed in the application - $600,000 – was conservative. The amount claimed fell within Clone’s current recovery in the “Vanstone J adjudication”, the Court could be satisfied that the amount claimed was within the amount that Clone would indisputably be entitled to at the conclusion of the adjudication and that in all the circumstances an order should be made in Clone’s favour for an interim allocatur in the sum of $600,000.
Clone also addressed its claim for costs with respect to the Full Court appeal. Its entitlement, as with the trial before Hargrave AJ, arose consequent upon the High Court’s orders (order 2(c)) to the effect that Players had to pay Clone the costs of the Full Court appeal. The complexity of the appeal was evident from the matters addressed at paragraph 14 of the Rydon affidavit of 30 July 2019.
Both Clone and the Players parties had been represented by two senior counsel. Clone had been represented by one interstate senior counsel. Players had been represented by two senior counsel.
Clone’s claim for costs was as follows (paragraph 7 of the Rydon affidavit of 30 July 2019):
Solicitors fees  $   335,730.26
Counsel fees  $   546,897.50
Other disbursements   $     20,956.45
$   903,584.21

This claim was in addition to interest on costs and Clone’s claim in that regard was $173,748.10 (paragraph 18 of the Rydon affidavit of 30 July 2019).
Once interest on costs was brought into account, the claim for costs was approaching $1.1 million.
It was noted that Players had admitted liability for $20,969.41 of Clone’s claim for costs (exhibit MAR-3 of the Rydon affidavit of 30 July 2019). This represented 2.3% of the total claim for costs – before interest.
Clone submitted that it was an appropriate case for an interim allocatur to issue. The amount claimed in the application of $600,000 was appropriate, the amount fell well within Clone’s current recovery rate in the Vanstone J adjudication, and finally the Court could be satisfied that the amount claimed was within the amount that Clone would indisputably be entitled to at the conclusion of the adjudication.
In all the circumstances, an order should be made in Clone’s favour for an interim allocatur with respect to the appeal in the sum of $600,000.
Players’ submissions
Players’ submissions in reply are comprised in FDN 109 filed on 10 September 2019. Players indicated that they did not oppose Clone’s prima facie entitlement to an interim allocatur in respect of the net post set-off balance, but said that any interim allocatur should be for a vastly lesser sum than that sought by Clone. It was submitted that the face value of both Clone’s claims for costs were grossly exaggerated and bore no realistic resemblance to the ultimate quantum of costs which would likely be found by the Court to be payable to Clone following a taxation on a party/party basis.
First, it was contended that an interim allocatur hearing was not the appropriate occasion on which to determine contentious matters such as Clone’s claims for interstate counsel fees. It was submitted that at an interim allocatur determination, arguments as to rates above the indicator were inappropriate to consider, although Clone had accepted some conservatism might be warranted given the need for resolution of those issues upon an adjudication. It had nevertheless sought to contend at this hearing that the Court should consider that it was appropriate for Clone to brief interstate counsel so therefore regard ought to be had to the level of fees usually charged by such interstate counsel (paragraph 25.5 of Clone’s submissions).
Players submitted that it was not open for the Court to determine the contentious issue of whether interstate counsel was “required”, and if so whether the rate charged ought to be allowed to Clone on an adjudication at a rate well above the indicator. It was clear from Players’ own application that they sought to have preliminary issues determined before Clone’s claims for costs could proceed and before the hearing of Clone’s interim allocatur applications.
The preliminary issues included the retainer by Clone of two senior counsel – in fact three including Mr Roberts, when the Court had not certified the matter as fit for two senior counsel, secondly Mr Karkar’s fees were claimed as $16,000 per day but no attempt had been made by Clone to apply for an appropriate rate for counsel fees by reference to the Supreme/District Court indicator. Thirdly, Mr Sullivan’s fees were claimed at $12,000 per day but no attempt had been made by Clone to apply an appropriate rate for counsel fees by reference to the indicator.
Players noted that at the hearing before me on 23 July 2019 they had submitted that the Court should first determine at least some of the preliminary issues before the Court proceeded to hear Clone’s interim allocatur applications. This was because they would necessarily bear on the appropriate amount of any interim allocatur. At the same hearing, Clone had submitted that the various preliminary issues sought to be raised by Players should be considered as part of the adjudication process or in any event after the interim allocatur application hearings.
The Court had, in fact, acceded to Clone counsel’s submissions to proceed to hear all of the interim allocatur applications first.
In these circumstances, it was not open for Clone to, in effect, have the Court determine some of the preliminary issues raised by Players as part of the interim allocatur hearings.
The second issue raised was that the action was not certified fit for two senior counsel. This was the testimony of the July 2019 Whitington affidavit at paragraphs 22 and 23. Nor had the action been certified for interstate senior counsel rates. Rather, Hargrave AJ had ordered on 9 November 2015 that “The trial in this action be certified fit for senior and junior counsel”.
The next issue raised was a letter from Finlaysons, solicitors for Clone, to Griffins, solicitors for Players, of 10 May 2017. This letter related to Players then claim for costs in the matter. At that time, Players had been successful in the litigation.
The letter stated in relation to claims for counsel fees then being made by Players, that claims for accommodation and travel were likely to be disallowed as they were likely to relate to accommodation and travel expenses for interstate barristers. Clone had put that the general position was that these would not be allowed on a party/party basis unless it could be affirmatively proven that there were no South Australian barristers capable of handling the matter – Dalgety Australia Operations Ltd v FF Seeley Nominees Pty Ltd (No 2) (supra). Such an allowance was unlikely.
Clone had also discussed counsel fees generally in this letter. It had put that the rates charged by Mr O’Bryan SC, for Players, were significantly above the maximum rates provided for by senior counsel under the indicator. Mr O’Bryan appeared to have charged at $8,000 per day plus GST whereas the maximum rate under the indicator for senior counsel was $4,500 per day.
The Court would not allow $8,000 per day and the mere fact that Mr O’Bryan came from a jurisdiction where fees were higher was not a good ground for allowing him higher fees for an argument in a South Australian court – Dalgety (supra).
There would be significant reductions for those charges, Clone had put. Clone had also put that one of Mr O’Bryan’s invoices was for $4,141.15 for travel and accommodation charges. Under Dalgety v FF Seeley (supra) the extra travel and accommodation expenses for interstate counsel would not be allowed.
Further, it was noted that Mr Whitington’s hourly rate of $550 per hour initially, later going up to $600 per hour and finally to $700 per hour was above the indicator guide rate and would be reduced in any event.
Finally, it had been submitted that there was an excessive use of counsel and interstate counsel and the costs would be significantly reduced on account of this.
Other matters had been raised in the letter of 10 May 2017. Clone had referred to the “once and for all” perusal rule and had commented that perusals by different solicitors and at different times by the same solicitor could not be claimed and would be objected to. There were also various occasions on which two solicitors had attended in court or at a conference but only one solicitor’s attendance should be permitted.
There were claims for solicitor’s personal attendances to effect service but this should be at a clerk rate.
There were claims for drawing file notes of Court attendances but these were objectionable as it was normally expected for the solicitor to make a contemporaneous note of the attendance while in Court.
There would be various claims for amending documents which will be objected to on the principle that normally the amending party had to bear costs.
There were a number of charges for “consideration” of matters which were objectionable. They would either constitute a re-perusal of previously perused documents or would constitute a charge for merely sitting and thinking, which was not chargeable under the Court scale.
Finally, there were occasions when both solicitors and counsel charged for the same work such as drafting the closing submissions in the May 2015 trial. These claims woud be disallowed.
Clone had emphasised that these were only examples of some of the significant substantive deficiencies with Players’ costs claim and it reserved all its rights generally.
Players observed that Clone’s two claims did precisely what they said in their 10 May 2017 letter was impermissible. The claims constituted significant substantive deficiencies. Further, it was submitted that Clone’s claims contained numerous items of claims in respect of solicitors’ fees which it had said in the 10 May 2017 letter were impermissible. These included multiple perusals notwithstanding the once and for all perusal rule, the attendance of two solicitors at Court, multiple claims for amending documents, and solicitor and counsel charging for the same work.
Players also made submissions as to Clone’s costs claim in respect of the 2016 Full Court appeal. In a general observation, it noted that the two day appeal costs claim was for $903,584. It submitted that this was grossly exaggerated and in some respects “ambit” for what was only a two day appeal. Further, Clone had claimed the extraordinary amount of $546,897 in respect of counsel for that two day appeal. The only concession which Clone had made to claiming on the party/party basis was that in general, scale rates had been applied but otherwise the claim was drawn on an indemnity basis in the sense that a vast amount of work which was not claimable as between party and party – which was the only basis on which Clone had entitlement – had been included in its claim for costs. Such claimable work included communications between counsel and instructing solicitors, which had been conducted on a piecemeal basis with continuing and excessive correspondence between them, all of which appeared to have been claimed – and this would not be allowed on an adjudication.
There had been excessive communications claimed in respect of the drafting and repeated redrafting of outlines and other documents. These would likewise not be allowed. There had been substantial claims for research of the law including procedural rules by solicitors – these would not be allowed. There had been the provision of research memos to counsel claimed – these would not be allowed. There had been excessive perusal claims – these would not be allowed. There had been claims for briefs which were in effect nothing more than copies of documents and/or authorities – these would not be allowed. There had been excessive claims made for interactions between solicitors and the client. It would have to be borne in mind that the claim related to an appeal. These claims would not be allowed on an adjudication. Further, claims had been made for numerous amendments to Clone’s notice of appeal but these were not recoverable on a party/party basis.
Clone had retained two senior counsel. Mr Karkar’s fees were $16,000 per day. However, no attempt had been made by it to apply an appropriate rate for counsel fees by reference to the indicator. Claims had also been made for numerous internal conferences with Mr Bill Ericson, an in-house counsel. These would be disallowed on an adjudication. A team of solicitors had been involved and this would not be allowed on a party/party basis.
Players further complained that costs had been claimed by Clone after delivery of the Full Court’s decision on 8 December 2016. It was noted that there were a considerable number of such claims. They predominantly, if not entirely, related to Players’ application for an interim allocatur which came before Judge Roder on 28 June 2017, Clone’s subsequent applications for a stay of the enforcement of the interim allocatur, and Clone’s appeal from Judge Roder’s decision, both of which came before Justice Blue. Players’ submitted that any and all costs claims made by Clone in respect of the period after the delivery of the Full Court decision on 8 December 2016 – which related to the interim allocatur before Judge Roder and the subsequent stay and appeal applications and hearings before Blue J - were improper and unauthorised claims for costs and Clone had not been awarded its costs in respect of those applications or hearings.
In fact, as was pointed out, on 26 June 2017 Blue J had ordered that Clone was to pay Players’ costs in respect of Clone’s interlocutory application (FDN 78) fixed in the amount of $500.
Players addressed Mr Karkar’s fees. Clone had retained two senior counsel for the appeal. Mr Karkar at the rate of $16,000 per day and $1,600 per hour but with no attempt made by it to reduce his rate to those allowed in South Australia under the indicator. In addition, disbursements were claimed solely relating to the fact that Mr Karkar was based in Melbourne. These disbursements included approximately $9,000 comprising his return airfares from Melbourne to Adelaide as well as accommodation in Adelaide.
Mr Karkar had spent 10 days in Adelaide from 20-30 March 20106 and his claim for accommodation was excessive. No attempt had been made by Clone in its claim to apply an appropriate rate for either Mr Karkar’s fees and/or Mr Roberts’ fees – ie. junior counsel rates by reference to the indicator.
It had simply claimed all counsel fees charged to it as if claiming on an indemnity basis. Furthermore, the Court has not certified the matter as fit for two senior counsel. Clearly, the excessive claims for counsel fees would not be allowed by the Court on an adjudication.
Players addressed the Dart affidavit in respect of Clone’s 2016 Full Court claim for costs.
Mr Dart, a solicitor for Players, testified that he had extracted from Clone’s 2016 Full Court claim for costs all fees claimed by Clone for its senior counsel being Mr Sullivan, Mr Karkar and Mr Roberts. Mr Dart had prepared an exhibit to his affidavit, a schedule of counsel fees described as the Sullivan Full Court scheduled (exhibit JFD6), the Karkar Full Court schedule (exhibit JFD7) and the Roberts Full Court scheduled (exhibit JFD8).
Mr Dart had also extracted from the Full Court claim for costs of Clone a schedule of the disbursements such as flights and accommodation arising from the fact that it had briefed interstate counsel. This schedule was exhibit JFD9.
Further, Mr Dart had prepared a schedule of counsel fees and solicitor’s charges which had been claimed by Clone after 8 December 2016. Mr Dart had prepared a schedule of those fees claimed by Clone and this was exhibit JFD10. The amount claimed for that work performed after 8 December 2016 was $71,181.80.
Mr Dart explained in paragraph 21 of his affidavit that after extracting all the counsel fee items claimed in Clone’s 2016 Full Court claim, he had applied the applicable counsel fee rates – the daily rate of $4,500 – in the indicator to each counsel fee. He had included this information in each of the Sullivan Full Court schedule, the Karkar Full Court schedule and the Roberts Full Court schedule. He explained in paragraphs 24, 27 and 30 of his affidavit that by applying the counsel fee rate set out in the indicator to each of those items, a reduction had occurred in the face value of Clone’s claim in respect of their counsel fees.
Mr Sullivan’s fees were reduced by $3,360, Mr Karkar’s were reduced by $279,450 and Mr Roberts were reduced by $37,350. The total sum of the aforementioned reductions in respect of the counsel fees of Mr Sullivan, Mr Karkar and Mr Roberts, the disbursements for interstate counsel and the amount of work performed by Clone after 8 December 2016 was $400,030. Accordingly, the Court should immediately discount the face value of Clone’s 2016 Full Court claim for costs by the amount of $400,030.
Players referred to its own application for an interim allocatur pursuant to the Full Court order in [2013] SASCFC 104. It conceded that it was common ground that the Court should only order one net monetary amount on account of any interim allocaturs to be paid.
In other words, if an allocatur was to be granted in favour of Clone and an allocatur in favour of Players, the two would be set-off against one another and only the net amount, being the difference between the two, should be ordered to be paid.
Players accepted that this approach would result in the net amount being payable to Clone for an interim allocatur, given that in simplistic terms Clone had two costs claims whereas Players had only one. The ultimate question for determination was the quantum of that net post set-off amount payable to Clone by way of interim allocatur.
Players emphasised that the authorities made it clear that an interim allocatur should only be ordered in respect of an amount on account of costs which appeared to be beyond any reasonable dispute. It submitted that the authorities mandated that a conservative approach was to be taken when assessing an amount of costs which was beyond any reasonable dispute.
Players submitted that the “face value” of both of Clone’s claims for costs – in respect of the trial and the appeal – were grossly exaggerated and excessive and bore no realistic resemblance to the ultimate quantum which would be likely to be found by the Court to be payable following a detailed adjudication (taxation). Players said that the interim allocatur in favour of Clone should be for a vastly lesser sum than that sought by it.
Players referred to the affidavits relied upon by it in respect of the applications and these were the third affidavit of Mr Whitington (FDN 77), the affidavit of Mr Whitington filed 22 July 2019 and the affidavit of Mr Dart filed 22 August 2019. Players also relied on its claim for costs filed 23 January 2019 and Clone’s response to it filed on 20 February 2019. Players also relied on its response to Clone’s claim for costs in respect to both the Hargrave AJ trial and the Full Court appeal.
Addressing its own claim for costs, Players pointed out that the Full Court on 14 October 2013 in [2013] SASCFC 104 had required Clone to pay Players parties’ costs of and incidental to the two day hearing before Kourakis J as he then was, on 31 May 2011 and 2 June 2011, and the three day appeal from that decision heard before the Full Court on 17 May 2012 being [2013] SASCFC 25.
The latter order remained unimpeached, notwithstanding Clone’s successful appeal to the High Court. Players had filed its claim for costs on 23 January 2019. Clone had filed its response on 20 February 2019 and had denied liability for each and every item claimed. It had been put that the Players clients were not liable to Griffins Lawyers to pay any of the costs claimed and therefore had no basis on which to seek a costs indemnity from Clone. In summary, Clone had raised a threshold issue being the contention that Griffins Lawyers’ costs agreement did not render Players themselves liable to pay their lawyers for the costs the subject of the Full Court costs orders and in consequence Clone could have no liability to the Players parties in respect of those costs.
It was noted that the threshold issue had been the subject of prior judicial consideration and there was reference to Judge Roder’s hearing on 28 June 2017 (albeit at a time prior to the High Court’s decision). Clone had appealed this decision to Blue J and applied for a stay of the enforcement of the interim allocatur which had been ordered by Judge Roder. A stay was ordered by Blue J, on conditions, and as a result Judge Roder’s decision was adjourned pending the determination of Clone’s High Court appeal. As a result, Clone’s appeal from Judge Roder’s decision, by consent, never proceeded any further.
Players referred to the Griffins Lawyers’ costs agreement. The May 2017 Whitington affidavit had been before Judge Roder at the hearing before him on 28 June 2017. This led to Judge Roder’s reasons for decision of 30 August 2017 awarding the Players parties an interim allocatur.
The key terms of these agreements were set out in paragraphs 32 and 33 of the May 2017 Whitington affidavit. In Players’ submission, the Griffins Lawyers’ costs agreement and Clone’s threshold issue had been considered and determined by Judge Roder in his Honour’s decision. In summary, Players’ position was that Judge Roder’s analysis of the costs agreement was correct and that it should be followed on the current application by Players for an interim allocatur.

The fact that Clone was successful in its appeal to the High Court did not alter or detract from the correctness of Judge Roder’s analysis given that the 2013 Full Court costs orders remained unimpeached, notwithstanding Clone’s successful appeal to the High Court.
In consequence, it was submitted, the Players parties were clearly liable to Griffins Lawyers in respect of the costs the subject of the 2013 Full Court costs orders – which costs are the subject of the Players’ claim for costs of 23 January 2019 – pursuant to the terms of Griffins Lawyers’ costs agreement.
In summary, as it submitted Judge Roder had correctly held, Players contended that the Griffins Lawyers’ costs agreements were binding and enforceable and would establish the requisite legal liability on the part of the Players parties to pay the costs to their lawyers and thus to enable Players to recover those costs from Clone.
Players also relied on Trevorrow v State of South Australia (No 7) [2008] SASC 5, Gray J, to refute the premise inherent in Clone’s threshold issue contention.
Players then addressed the quantum of its claim for costs. This included items for work performed during the period 11 December 2009 to 15 October 2013 but excluded items claimed for the preparation of the claim for costs document itself. The total amount claimed was $724,067 (including GST). The solicitor’s fees totalled $356,209 (including GST). The counsel fees totalled $149,187 (including GST). The Supreme Court fees, transcript fees and printing fees totalled $8,422 (including GST). Players also claimed an amount of $210,247 in respect of interest on costs. However, accepting that having regard to the principles in respect to interim allocaturs, namely that they were only to be issued in respect of costs amounts which were unquestionably owing and appeared to be beyond any reasonable dispute, and having regard to the fact that any interest on costs could only properly be determined once the underlying principal costs entitlement of the party (on which that interest entitlement was founded) had been conclusively ascertained and determined following taxation, the court would be slow to pay too much regard to interest on costs claims of a party when considering appropriate interim allocatur amounts.
Players submitted that, in summary, there could be no serious dispute that it was entitled to an interim allocatur in respect of its costs of and incidental to the significant Full Court appeal hearing which ran over three days leading to the making of the 2013 Full Court costs orders. In contrast, the 2016 Blue J Full Court appeal hearing the subject of Clone’s costs claim only occupied two hearing days.
Addressing Clone’s claim for costs, it emphasised that the face value of both of the claims were grossly exaggerated.
Clone’s summary of argument in response
Clone noted that Players sought an interim allocatur for $500,000 in respect of its costs entitlement resulting from the Full Court order [2013] SASCFC 104. Those costs related to an interlocutory dispute relating to the use of documents. Clone repeated that the decision to grant an interim allocatur involved a discretion warranted in only those cases where there was an amount of costs which appeared to be beyond any reasonable dispute. It referred to Johnson Winter & Slattery v MP Investments Nominees Pty Ltd [2013] SASC 157. It was submitted that of its nature, an interim allocatur was a payment on account and it required a consideration of the final result upon an adjudication and an assessment that something exceeding the interim allocatur would ultimately be recoverable after full argument was heard. It submitted that in the present case, the whole of the monies claimed by Players were in contention by reason of the contested issues arising in respect of the construction of the retainer agreement, and the interaction of those matters of construction with the indemnity principle. There was no amount beyond dispute, and even more fundamentally, no amount would ever be owing to Players because such amount would by swamped by the amounts payable to Clone. Accordingly, the Court should not exercise a discretion to provide any amount to Players by way of interim allocatur.
Clone made the following points in summary:
·First, there was no warrant for an interim allocatur in favour of Players for on any view, Clone would have material amounts owed to it on a net basis, so no monies were “undeniably owed” to Players on a net basis. Accordingly, any set-off applicable to the interlocutory costs order should properly be constructed as part of the final orders and not as part of a hypothetical interim allocatur solely directed to reducing Clone’s interim allocatur.
·Secondly, Players had no liability to its lawyers pursuant to the engagement letter of 30 April 2015. This engagement was on a “no win, no fee” basis and following the decision of the High Court, Players did not relevantly win, and having regard to the indemnity principle, it could not now recover costs for which no liability was borne to their lawyers.
·Thirdly, and alternatively, the amount invoiced by Griffins did not correspond with the amount claimed. Only counsel fees had been invoiced with no amount invoiced for solicitor’s fees. Having regard to the indemnity principle, Players could not now recover costs for which they had not been invoiced by their lawyers, so this would reduce the maximum claim to $149,187 referable to counsel fees and $8,422 for other disbursements.
·Clone noted that issue was different from that considered by Judge Roder and that was at a time when Players were holding the decision of the Full Court, subsequently overturned by the High Court.
·Fourthly, Players’ costs orders were confined to the costs of the interlocutory application before Kourakis J, as he then was, and the appeal in respect of the interlocutory application, whereas both the amount invoiced and the amount claimed incorporated not only the period during which those arguments proceeded but they also covered a far broader period and were not limited to costs of the application and appeal.
In all of these circumstances, Clone contended, it could not be said that there was an amount that was “undeniably owed” to Players so it was not a case where the discretion should be exercised in favour of the issue of an interim allocatur.
Clone noted that ultimately Players were accepting that there would need to be a set-off of any costs payable to Players if, contrary to Clone’s contentions regarding the effect of the retainer, there was any amount payable at all.
It will be an appropriate exercise of the Court’s discretion for this to occur as part of the ultimate adjudication rather than as part of an assessment of an application for the issue of an interim allocatur.
However, Clone submitted that Players’ application was both substantively and procedurally flawed. It put that the rationale for the issue of an interim allocatur was to ensure that a party was not kept out of its money during the course of an extended adjudication if, and to the extent that it could be determined with some confidence, that an amount would ultimately be payable to that party. Here, Clone submitted, this was not the position and that was conceded by Players. They had acknowledged that no amount would be payable to them and instead a material net sum would be payable to Clone. Accordingly, the principles that underlined the issuance of an interim allocatur had no application.
Clone submitted that this was especially so in this case where there were material arguments based on the indemnity principle, to the effect that no amount would be payable to Players which would give rise to complex questions of law and fact. It submitted that it would be highly undesirable that those questions would ultimately be addressed by way of an appeal arising out of an interim allocatur which was of itself a mechanism for a payment of an account of that which was beyond dispute.
Clone said that a further reason why the vehicle of an interim allocatur was not the appropriate mechanism for contested questions of law to be resolved was that the review process contemplated by rule 278 was not suited to the resolution of any review of decisions relating to dispute issues of principle arising in connection with a retainer. Clone referred to Catto v Hampton Australia Ltd (in liq) [2008] SASC 231 at [27].
Quantification issues were an inherent part of a review involving correction of mistakes, errors or oversights which had occurred in the detailed adjudication process.
Instead, the Court should adopt a procedure providing for a regular means of the determination of the contested issues, and thereby facilitating an appeal from any such decision.
Clone submitted that rule 271(6) conferred broad powers on the Court for the resolution of the issues of principle arising on the adjudication that might then be the subject of a regularly constituted appeal. Rule 271(6)(a) provided for the determination of the basis upon which costs were to be awarded and for the Court to give directions to facilitate this. Rule 271(6)(b) permitted the Court to resolve any issues in dispute on an adjudication. In an alternative, section 49(1) of the Supreme Court Act permitted a Master to refer a question of law to the Full Court.
Clone noted that Players sought to rely on the decision of Judge Roder of 30 August 2017. That decision had been the subject of a grant of leave to appeal by Justice Blue on 5 October 2017 but it was not prosecuted in light of the stay order made by his Honour. It would be contrary to the efficient administration of the various adjudications for such an appeal to be prosecuted at this stage.
Clone submitted that no amount was payable in conformity with the indemnity principle. It said that this was because on the proper construction of the Griffins’ retainer, which was a no win, no fee retainer, an entitlement to charge did not arise given that the Players parties had failed in the proceedings. Presently all that needed to be determined was that the Clone arguments in this regard were arguable such that it could not be said that the Players parties had established that there was any amount beyond any reasonable dispute.
It submitted that on a proper construction of the Griffins’ retainer, Players was not liable to their solicitors in circumstances where they had lost the proceedings – and were liable to pay Clone’s costs – but where they won an interlocutory dispute in the proceedings that saw them receive a costs order for an amount ultimately well less than the amount that they would owe to Clone.
It was noted that this was an entirely separate issue from that previously considered by Judge Roder which was at a time when the outcome of the appeal to the High Court was unknown. Clone submitted that on the proper construction of the retainer agreement, Players was not liable to pay costs unless they “win in the proceedings”. Clause 2 made explicit that Griffins were acting on a no win, no fee basis for the entire dispute including the original 2004 proceedings.
Clone submitted that the construction given to a no win, no fee engagement in the published decisions was consistent with a proper construction of the retainer in this case and specifically clause 2 which made it explicit that Griffins were acting on a no win, no fee basis for the entire dispute including the original 2004 proceedings.
It submitted that here the solicitors would recover no sum. Any costs orders referrable to the interlocutory dispute would be set-off. There was no net recovery and hence no win for relevant purposes.
Clone submitted that this meaning was amplified by clause 3 which made it explicit that Players would not be invoiced “until a result is achieved in the proceedings”, such result being either an order or orders which required Clone to make payment to Players or one of them or where a negotiated settlement was reached pursuant to which Clone was required to pay Players or one of them. Read as a whole, it was submitted, the clause was addressing an overall result in Players’ favour: a net payment to it, not merely an interlocutory order in the context of losing litigation (“which require Clone to make payment to the Players parties”).
Clone submitted that the no win, no fee basis of that engagement reflected a net payment to Players as a precondition to any liability to pay costs. It was also evident from clause 4. This clause provided, in amplification of clauses 2 and 3:
The way this will occur is that once the relevant order is made or settlement reached, we will invoice you for all our fees and disbursements, including for our fees and disbursements in the original 2004 proceedings and the 2010 proceedings and any associated proceedings, but we will recover payment from you via Clone, by way of payment from Clone into our trust account, which we will then transfer to our office account in payment of our fees and disbursements.
Clone submitted that this demonstrated that Players would not be called upon to pay any amount other than a net payment receipted into their trust account. Once it was evident that (1) Players had lost the proceedings, (2) that countervailing costs orders had been made in favour of Clone which would exceed the quantum of the interlocutory orders, and (3) that there would never be “payment from Clone into [the Griffins] trust account” it was clear that Players was under no liability to make any payment to its own lawyers.
Clone also referred to clause 5. This provided:
Your liability for payment of our invoice(s) will be joint and several, but as we have stated above, payment of our fees will be sourced via payment from Clone into our trust account.
It was further reinforced by clause 7:
We also confirm that your liability to us for payment of our invoices, will be capped at the amount we can and do recover from Clone. That is, if there is a shortfall between the amount of our invoices to you and the amount Clone pays, we will not claim any such shortfall from you. The maximum we will be able to recover will be what is received from Clone.
Clone submitted that on the proper construction of the retainer, there was a no win and thus no liability for costs of Players and in accordance with the indemnity principle no amount would be recoverable from Clone.
It was submitted that the application by Players for an interim allocatur should be dismissed but with liberty to renew the application once the retainer questions had been determined. Alternatively, if the Court was to entertain the contested questions, no amount should be ordered by way of interim allocatur on the basis that no amount was presently payable from Players to their own lawyers.
Clone also referred to what it described as a disconformity between the invoice and the claim. By reason of the indemnity principle, the amount invoiced was the cap for any claim for recovery. It noted that Players’ claimed $724,067.22 in their claim for costs inclusive of interest of $210,247.84. That claim comprised $149,187.50 in counsel fees, $8,422.40 in other disbursements and $356,209.48 in solicitors’ fees. However, the amount invoiced was limited to $500,000 for disbursements with no amount being invoiced for solicitors’ fees.
Clone again referred to the retainer and in particular paragraphs 3, 4, 5, 7 and 8. Under that retained Players would only be liable to pay any account to their lawyers once invoiced. This invoicing represented a condition precedent to their liability for their own lawyers.
Clone referred to paragraph 7 of the retainer which included a notification by Griffins to their clients of their rights under the Legal Practitioners Act 1981. This included the right of the client to receive a bill. In particular, sections 31 and 32, when read in context, required a bill to be rendered before there was any liability on the part of the client to pay.
In Clone’s submission, the consequence of the invoicing for only disbursements was that Players had no liability for solicitors’ fees, the claim for costs was to be confined to disbursements, before any allowance for interest the claim could be for no more than the amount of approximately $158,000 and the entitlement to an interim allocatur must on any scenario be substantially less than this amount.
Clone addressed the quantum of Players’ claim for costs and it submitted the following matters should be considered in relation to the appropriate quantum of an interim allocatur.
It submitted that the amount sought was grossly inflated. There had been no substantive submission addressing the reasonableness of the quantum. It was only in paragraphs 32-38 that the quantum had been addressed. This broke down the Players’ claim of $724,067.22, noted a concession as to interest, and stated that there could be no dispute that Players were entitled to an interim allocatur in respect of the costs of and incidental to a significant Full Court appeal hearing.
Players had conceded in its submissions that interest was not an amount which was “unquestionably owing” in circumstances where no amount had ever been paid by Players, nor would any amount ever be paid by Players, so that concession was properly made. Accordingly, it submitted, following the deduction of the claim for interest, Players was left with a claim of only $724,067.22 - $210,247.84, or $513,819.38. Even this ignored the fact that only $149,187.50 in counsel fees had been invoiced.
Players were effectively seeking the issue of an interim allocatur which amounted to 97.31% of the total claimed, noting the concession as to interest. A decision to grant an interim allocatur involved the exercise of a discretion warranted in only those cases where it could fairly be said that there was an amount on account of costs which appeared to be beyond dispute. Clone submitted that that clearly was not the case here.
Clone addressed the scope of the 2013 Full Court’s costs orders. It had undertaken an analysis of this claim and had identified a number of items which did not appear to be referrable to the Full Court orders. These were set out in paragraph 13 of the third affidavit of Mr Rydon.
In summary, it appeared that Players had claimed all of the costs from the initiation of the 2010 action, namely work commencing 11 December 2009 up to the conclusion of the 2012 Full Court appeal. That claim was plainly incorrect. Work relevant to the set aside action as opposed to interlocutory proceedings had been included. That fell outside the scope of the 2013 Full Court costs order.
Clone said that this supported a finding that at least $188,165.51 (including GST) in respect of solicitors’ fees pre-dated the consideration of the interlocutory application and related instead to the broader costs of the action where Players had been ordered to pay Clone’s costs and not the other way around.
Material sums referable to counsel fees had also been included. They were not referable to the interlocutory application and related instead to the broader costs of the action. The Court could have no confidence as to what component of the claim was actually within the scope of the costs orders given these errors.
Clone submitted that the fact that Players had sought to include numerous claims for work done which did not fall within the scope of the 2013 costs orders cast a doubt on the likelihood that the claim for costs adhered to the 2013 Full Court costs orders.
Given that a number of items had been identified in both solicitor fees and disbursements claimed which clearly related to the set aside action, it was likely that these types of items would infect the remainder of the claim for costs.
Clone finally submitted that there were a number of observations contained in the third Rydon affidavit as to general deductions which would need to be taken off the total of Players’ claim for costs. These were set out in the schedules exhibited to the third Rydon affidavit at MAR-13 and MAR-14 and the items totalled $98,880.76.

In the circumstances, Clone submitted that the Players’ application for an interim allocatur should be wholly refused.
Principles
The power to issue an interim allocatur is derived from rules 271(1) and 274(2)(b)(ii).
A decision to grant an interim allocatur involves the exercise of the discretion warranted in those cases where it can fairly be said that there is an amount on account of costs which appeared to be beyond any reasonable dispute: Russo v Buck & Ors (No 5) [2010] SASC 27 Judge Lunn at [14]. The authorities mandate that a conservative approach is to be taken when assessing an amount of costs which was beyond any reasonable dispute.
Judge Roder made similar observations in his decision on the interim allocatur.
Of its nature, an interim allocatur is a payment on account and it requires a consideration of the final result upon an adjudication and an assessment that something exceeding the interim allocatur would ultimately be recoverable after full argument was heard.
In Johnson Winter and Slattery v MP Investments Nominees Pty Ltd [2013] SASC 157 at [10], Judge Dart spoke of monies “undeniably owed” to the plaintiff.
In Rodda v Ian Rodda Pty Ltd [2016] SASC 90 at [21] and following, Judge Roder made the following observations:
However, it is appropriate that I be very cautious.
The general principle is that a party entitled to costs pursuant to an order of the court should not be kept out of what it is indisputably entitled to.
I do not mean to say that Ms Bonesmo has conceded. She did not. It is my conclusion that there are sums that plainly must be paid by the defendants to the plaintiffs. I accept that there are some costs orders that may be set off and that there are genuine issues as to the quantum of counsel fees and solicitors’ costs as between party and party.
Nevertheless, I do not think that there is any basis on which it could be disputed that the plaintiffs are entitled to be reimbursed for transcript and daily trial fees. Those amounts come to a little less than $60,000.00.
Further, the Judge has certified that the plaintiffs are entitled to fees for the trial of senior counsel. The trial exceeded three weeks.
I have had regard to the indicator on counsel fees. It is inconceivable that senior counsel’s fees for the trial would be allowed at less than $75,000.00. I disregard, for present purposes, the attendance of junior counsel – as Ms Bonesmo points out, the certificate is not for two counsel.
I also do not think that it could possibly be said that the other costs of the plaintiffs in getting up and conducting the trial could be allowed at less than $75,000.00.
I order that an interim allocator issue in the amount of $210,000.00.
In Edwards v Legalese Pty Ltd DC(SA), reasons delivered 14 February 2014, Decision 5 of 2014 (unreported), Master Blumberg awarded an interim allocatur in the sum of $100,000 based on a costs claim just short of $300,000.
The expression “impressionistic terms” is not an appropriate test – that relates to the consideration of a lump sum assessment, not to the quantum of an interim allocatur.
The concept of costs that appear to be beyond any reasonable dispute requires a fair degree of rigour, and if there is any doubt the court is required to err on the side of conservatism.
The vehicle of an interim allocatur is not the appropriate mechanism for contested questions of law to be resolved.
Interim allocatur appropriate when taxation is to be complex
Where there is a multitude of issues sought to be raised on an adjudication, there will inevitably be a substantial delay in adjudicating the costs, and this makes an appropriate case in which to make an order for the immediate payment of an amount on account of costs – Russo v Buck; Johnson Winter and Slattery v MP Investments.
Solicitors’ charges
On any taxation, care must be taken where a claim for party/party costs has the appearances of a claim on an indemnity basis, or where charges are claimed for work which would not even be allowable as between solicitor and client. Such charges will include claims made for communications between counsel and instructing solicitors on a piecemeal basis; excessive communications in respect of drafting, repeated drafting of outlines and other documents; claims for research of the law, including procedural rules; the provision of research memos to counsel; excessive perusal claims, claims made for briefs which are nothing more than copies of documents and/or authorities; and claims made for numerous internal conferences with in-house counsel. Claims made for perusing judgments, transcripts and other documents on a perusal basis (ie a page rate, especially if on a medium or high rate) need to be carefully scrutinised. It is clear from the schedule of Supreme Court costs that when perusing bulk documents these are to be reduced to whatever reasonable time was spent. This should be spelled out in the claim.
Although normally on a party/party basis counsel fees are allowed for preparing submissions, it is not a solicitor’s role to work progressively over a period of months in order to develop submissions as is sometimes claimed. Further, counsel do not unless in very special circumstances need to draw submissions in conference with solicitors.
Care should always be taken, to avoid duplication, when a team of solicitors is involved in litigation.
Particular care needs to be involved in considering claims for research. A solicitor is not generally permitted to claim charges for looking up or researching law, or for inquiries from other practitioners or officials about the law or procedures. An adjudicating officer has discretion to allow a solicitor's charge for looking up authorities in a case in which counsel is employed: Perpetual Executors and Trustees v Colonial Mutual Fire Insurance Co Ltd (1903) 29 VLR 427 at 432, or to research authorities in order to draft a defence: In Re James McEwan Ltd (1903) 29 VLR 114. However, such claims are invariably controversial, and such claims would not in my view be permitted to be taken into account on an interim allocatur.
Counsel fees
It is generally inappropriate on an interim assessment for the court to make any enquiry about whether or not counsel fees should be allowed on a higher rate than that set out in the indicator. Such an exercise would equate to the commencement of an adjudication process: it would be necessary to see what work had been done, how the matter had unfolded, what correspondence had been exchanged and so on. This exercise would amount to considering fine detail which would be inappropriate. In assessing counsel fees generally, a good rule of thumb when quickly assessing costs of preparation for trial is that the preparation might take about the same number of days as the trial, although this may or may not be right in each instance. It is an issue that must be determined in the adjudication process itself. In relation to the use of interstate counsel, Dalgety Australia Operations Ltd v FF Seeley Nominees Pty Ltd (No 2) (1988) 49 SASR 75 is a leading authority. The general position is that interstate counsel will not be allowed on a party/party basis unless it could be affirmatively proven that there are no South Australian barristers capable of handling the matter, and the fact that interstate counsel come from a jurisdiction where fees are higher is not a good ground for allowing higher fees for an argument in a South Australian court: see also Walker v Law Society of Tasmania [1991] Tas R 121. The Court should be alert to the orders made as to certification for counsel, eg for interstate counsel, or for two senior counsel or not. An interim allocatur hearing is not the appropriate occasion on which to determine contentious matters such as these.
Costs of the adjudication process
It is obvious from the claims that the adjudications are going to take time. At the end of the day there are likely to be very significant costs of adjudication including a Court 5% taxing fee. These costs will fall potentially on one side or the other, depending on the nature of any offers. Accordingly, in fixing the amount for an interim allocatur the Court should take into account the potential for the claiming party to have to refund monies by way of costs of the adjudication process. These costs may be significant, especially if they include the court taxing fee. This is an argument for being extremely cautious in the interim allocatur award.
Interest claims
The Court should be very cautious to pay much regard to interest on costs claimed by a party when considering interim allocatur amounts, because interest can only be determined once the underlying principal costs entitlement has been conclusively ascertained and determined following a taxation.
Regard to other taxations in the same matter
In my view it is of very little assistance on an application for an interim allocatur to refer to the recovery rate in percentage terms of another adjudication and to use this by way of an analogy or as a relevant comparison or yardstick so as to fix the quantum of the proposed interim allocatur. Claims made case by case can significantly differ.
Set-off
If an allocatur is to be granted in favour of one party and another in favour of the other party, a set-off can be considered and only the net amount, being the difference between the two, should be ordered to be paid.
Costs agreement issues
The indemnity principle is such that as between party and party, a party ordered to pay the other party’s costs is obliged to pay only those costs which the other party was legally obliged to pay his or her solicitor: Mainieri v Cirillo (2014) 47 VR 127 at [43].
If there is presently no obligation to pay, there cannot be any amount awarded pursuant to an interim allocatur: Mourik v Marburg [2016] VSC 601 at [29]-[30].
In Wentworth v Rogers (2006) 66 NSWLR 474 Basten JA distilled the essence of the indemnity principle as follows:
… it is beyond dispute that the purpose of an adverse costs order is to compensate or partly indemnify one party to litigation (usually the successful party) for the legal costs incurred in the course of the proceedings. The [indemnity] principle does not require that the costs have been paid, but it does require that there be a legal liability to pay costs.
Baker Johnson v Jorgensen [2002] QDC 205, McGill DCJ, concerned a no win, no fee style retainer agreement. The court made the following observations as to the concept of a “win”:
[17] I am unaware of any authority on the correct interpretation of this expression, and neither advocate was able to assist me with any. In Adamson v Williams [2001] QCA 38 the Court of Appeal found it "unnecessary to decide whether "win" includes the reaching of a settlement in which the client might obtain some damages over and above his obligation for fees.". The terms used by the Court suggest that their Honours would not have regarded a less favourable settlement as a win. In my opinion it is a matter of determining objectively the meaning of the expression, by reference to what ordinary people in the position of the parties would have understood it to mean.
[18] In my opinion the construction placed on the expression by the magistrate was correct. I do not consider that an outcome can properly be characterised as a win from the point of view of the respondent unless the respondent actually recovers something herself. In my opinion, properly understood, the expression "no win no fee" is a succinct way of saying "the client will not have to pay the solicitor other than from the proceeds of the claim". It is not necessary, for present purposes, for me to consider whether the expression implies that there will be no liability on the part of the client for any costs to any other party to the proceeding. I am only concerned with the position as between the solicitor and the client. In my opinion the ordinary meaning and true construction of a retainer on a "no win no fee" basis is that the solicitor is saying in effect: "you will not have to pay me any fees except out of whatever I can recover for you." The effect is that the client will not have to pay anything out of the client's own pocket. On the basis of the retainer found by the magistrate therefore his decision was correct.
Jorgensen was cited with approval in “Law of Costs”, LexisNexis Butterworths 2003, written by G E Dal Pont, Associate Professor, Faculty of Law at the University of Tasmania, and by R J Walker, Deputy Registrar and Taxing Officer of the Supreme Court of Tasmania. Under the heading “Speculative Fee Agreements”, the authors state:
[2.50]Where a lawyer considers that the client has a reasonable cause of action (or defence) and does not bargain for an interest in the subject matter of the litigation, there is in Australia no impediment at general law for the lawyer to charge the clients on a speculative fee basis. The leading judicial statement of this is that of the Full High Court in Clyne v The New South Wales Bar Association (1960) 104 CLR 186 at 203:
“…it seems to be established that a solicitor may with perfect propriety act for a client who has no means, and expend his own money in payment of counsel's fees and other outgoings, although he has no prospect of being paid either fees or outgoings except by virtue of a judgment or order against the other party to the proceedings. This, however, is subject to two conditions. One is that he has considered the case and believes that his client has a reasonable cause of action or defence as the case may be. And the other is that he must not in any case bargain with his client for an interest in the subject-matter of litigation, or (what is in substance the same thing) for remuneration proportionate to the amount which may be recovered by his client in a proceeding…”
In fact, it has been said that ‘[j]ustice would very often not be done if there were no professional man to take up the cases and take the chance of ultimate payment’. The taking of such a chance is not champerty and has been described as conduct ‘consistent with the highest professional honour’. To this end, judges have queried ‘a widespread reluctance in the legal community to recognise, if not to commend, a speculative action’.
[2.51]Speculative fee agreements are often described as ‘no win no fee’. Aside from an express definition in the retainer, such a phrase is open to be interpreted as the solicitor saying, in effect: ‘You will not have to pay me any fees except out of whatever I recover for you’ (Baker Johnson Lawyers v Jorgensen, McGill DCJ). The solicitors have taken the case on a ‘no win, no fee’ basis, and had not defined in the retainer what was meant by ‘win’. McGill DCJ rejected the solicitors’ claim to recover the shortfall from the plaintiff on the ground that an outcome cannot properly be characterised as a ‘win’ from a plaintiff’s point of view unless he or she actually recovers something. Implicit in this logic is that if solicitors wish to protect their entitlement to costs, it is within their power to state expressly what constitutes a ‘win’ via the terms of the retainer, which may then be assessed as to fairness and reasonableness. In the absence of a specific provision, a retainer is interpreted by reference to ‘what ordinary people in the position of the parties would have understood it to mean’.
[2.52]There is no relaxation of professional standards required from lawyers who act on a speculative basis. In this regard, the extent to which the lawyer’s own interest in a speculative claim may interfere with the duties to the client and the lawyer’s professional duties must be considered. Re Robb (1996) 134 FLR 294 highlights some of the dangers of speculative fee agreements. The solicitors ran a personal injury practice where they acted for plaintiffs on a ‘no win no fee’ basis. As the solicitors in effect financed the litigation disbursements, they were necessarily out of pocket until the final and successful resolution of the plaintiff’s claim, and ‘had a substantial personal interest in the successful outcome of their clients’ cases and the monies that thereby became payable to the clients’. This created a conflict between their interests and those of the clients in being properly advised in relation to settlements and the profit costs and disbursements. This conflict obscured the solicitors’ perceptions of their fiduciary duties, leading them to treat settlement monies as their own rather than on trust for their clients.
A like approach was taken by Neilson DCJ in Brady v Bale Boshev Solicitors [2009] NSWDC 387. His Honour, following Jorgensen, limited the solicitor’s recoverable costs to $100,000 on the basis that the client was to bear no liability to the solicitor other than what the solicitor could actually recover. In Baker v Legal Services Commissioner [2006] QCA 145, McPherson and Jerrard JJA and Douglas J, the effect of the Queensland Court of Appeal ruling was if there was not a win, there would be no liability to pay. Clients patently were not liable to lawyers on a sensible construction of “no win, no fee”.
In Trevorrow v State of South Australia (No 7) [2008] SASC 5, however, Gray J held that an express or formal retainer agreement was not a necessary pre‑requisite to establishing that a litigant had a legal liability to his solicitor for the payment of the costs and disbursements of the solicitor incurred as a result of the solicitor acting for the litigant in Court proceedings. Gray J reviewed the authorities dealing with the “indemnity principle” in the context of consideration of the recovery of party/party costs by the plaintiff in that case, in circumstances where he had entered into a legal costs funding agreement with the Aboriginal Legal Rights Movement Inc and its successor entities and not a separate costs agreement with his solicitor, Mr Richardson, from the Aboriginal Legal Rights Movement Inc. That funding agreement was conditional in the sense that it provided that if, and only if, the plaintiff’s claim was successful he would be obliged to repay the fund or funds advanced subject to certain considerations. In essence, that funding agreement was a no win, no fee agreement. The defendant had opposed the making of any costs orders in favour of the plaintiff, contending that he was under no liability to his solicitor for costs so accordingly he was not entitled to any indemnity from the defendant for the costs of the action. In paragraph [12] of his Reasons, Gray J quoted from French J’s decision (as his Honour then was) in Angor Pty Ltd v Ilich Motor Co Pty Ltd (1992) 37 FCR 65 at 72.
French J had concluded that:
… the decision in Adams is clear authority for the proposition that the indemnity principle will permit recovery of costs by a successful party who is under a legal liability to his solicitors to pay them even though the likelihood of being called upon to do so is remote.
Gray J set out, at [17], various principles, discerned from authorities reviewed by him at [9] to [16] that the indemnity principle was the guiding principle concerning the recovery of costs. It allowed for an indemnity if there was a liability of the claimant to his or her solicitor; in the absence of any express agreement, the retainer of a professional person to act would normally give rise to an implied agreement for the payment of reasonable professional fees and disbursements; the onus was on the party seeking to avoid an order to establish that there was no liability on the part of the claimant to his or her solicitor for costs; and the indemnity principle was a flexible principle designed to allow for a just and fair result. Accordingly, he found, even though there was no express agreement for the payment of the lawyer’s professional services, in the circumstances:
… it was to be implied that the plaintiff would be liable to meet Ms Richardson’s reasonable professional charges as well as disbursements incurred. This implication arose from the plaintiff instructing Ms Richardson to act for him in the proceedings.

He concluded at [20] and [21] that:
In the present proceedings, the application of the indemnity principle allows the plaintiff to recover costs. It has not been established that the plaintiff had no liability to his solicitor to pay costs. To the contrary, the evidence establishes an implied agreement on the part of the plaintiff to pay Ms Richardson’s reasonable costs. This liability for costs arises from the plaintiff’s retainer of Ms Richardson to act as his solicitor. Assistance with immediate funding was provided by the Commonwealth Attorney General’s Department. However, this funding did not release the plaintiff from his obligations to Ms Richardson. The arrangements for funding allowed for assistance but required repayment.
The plaintiff has succeeded in his claim. There is no evidence in the present proceedings that there was an agreement between the plaintiff and his solicitor that he would not be liable, under any circumstances, to pay costs. The plaintiff remained liable for costs.
The indemnity principle was also considered during the course of these proceedings by Judge Roder in a decision dated 28 June 2017. Following the decision of Hargrave JA and the Full Court appeal from that decision, Players had filed a claim for costs, a response followed, and Players applied for an interim allocatur, which Clone opposed, arguing that based on a construction of the retainer agreement between Players and its solicitors and the interaction of this with the indemnity principle, it meant that Players was not liable for costs so it could not recover them. Submissions were put as to the construction of the retainer and Clone contended that because it was a condition precedent to liability that an invoice be issued, no “result” had been achieved.
Judge Roder considered the arguments which related to the indemnity principle and rejected the construction contended for by Clone that the issue of an invoice was a condition precedent. Nor did he accept that recovery from Clone would be a condition preventing the solicitors for Players claiming costs. He observed that:
[17] … The circularity involved is quite clearly uncommercial. The proposition requires an acceptance that because there is no liability before there is a liability there can be no liability. That is clearly uncommercial. The principle that Mr Roberts SC invokes establishes that the proposition is not sustainable. It could not possibly have been the intention of the Players parties and their solicitors that there could not ever be any liability for costs. There would have been no point in the costs agreement.
[18] I think that the submission of Mr Roberts SC is to be preferred. The requirement for an invoice is a condition subsequent to liability to pay, but precedent to the actual payment. It does not appear to me to be useful to attempt to resolve what is said to be the difference between Santow and Basten JJA in Wentworth v Rogers. I would prefer the views of Basten JA – it seems to me that the other approach involves an insoluble circularity.
He found that the correct construction of the retainer agreement was that there was in the event of a “win” a present liability to pay subject to a condition subsequent being the ability to recover from Clone. He was satisfied that there had been a relevant “win, indeed there were more than one, there might not be an ultimate win” because the High Court might make a decision that changed the present outcomes but that did not mean that the Players parties had not “won”. He awarded an interim allocatur in favour of Players in the sum of $500,000.
However, of course, the situation has now changed, as the High Court overturned the rulings below.
As shown above, the issue is a complex one and the detailed argument to determine the position needs to be considered. In my view, it is not appropriate that such arguments be addressed at the interim allocatur stage.
Consideration and findings
Overview
Clone’s two costs claims comprise those in relation to the trial before Hargrave AJ where $1,345,253.57 is sought, and the other for the Full Court appeal, where $903,584.21 is sought.
Players’ responses allow $196,906.63 for the trial and $57,805.48 for the appeal. Players also claims a set-off of $38,034.04 for the hearing before Kourakis J and of $724,067.22 for the Full Court appeal from that decision. Clone offers nil dollars for those set-off claims.
Clone seeks interim allocaturs in the amounts of $600,000, $37,080.86, $600,000, and $20,969.41.
Players seek an interim allocatur in the sum of $500,000.
An interim allocatur is appropriate
On any view, the trial before Hargrave JA was a matter of significant complexity - this is evident from the decision of the High Court. So was the appeal to the Full Court.
It appears obvious that Players intend to embark on a protracted adjudication. Mr Whitington has identified 12 issues which Players seek to have determined as preliminary points.
There will inevitably be a substantial delay in adjudicating the costs. Even if all of the claims are set down for taxation, the Court would not have the facilities to tax these concurrently. The taxation of Clone’s costs for the Vanstone J trial has been proceeding for several months already. This makes it an appropriate case in which to make an order for the immediate payment of an amount on account of costs.
General observations
The amount sought by Clone for an interim allocatur for the trial, namely $600,000, represents 44.6% of its claim for costs, not including interest, which is calculated as $366,203.82. Interest has been calculated only from the judgment date and not from the date of payment of the relevant expenses. Taking interest into account, Clone’s claim exceeds $1.7 million.
In relation to counsel fees, Clone submits that a slavish adherence to the indicator to counsel fees is unwarranted and fails to reflect the accepted principle that complex cases warrant special consideration.
It argues that that the use of interstate counsel was necessary, as explained in its submissions. It refers to the illness of Mr Karkar and his replacement by Mr Sullivan. It submits that where it is reasonable or proper to brief interstate counsel, regard is then to be had to the level of fees usually charged by such counsel.
It submits that while some conservatism might be warranted given the need for resolution of the issues upon an adjudication, a claim for an interim allocatur in the order of a 35% allowance once interest was brought into account was appropriate, and that the figure of $600,000 was conservative.
In relation to the costs of the appeal, Clone refers to the complexity of that hearing, the representation of both sets of parties by two senior counsel, and its representation by one interstate senior counsel. Once interest on costs was brought into account, the claim for costs was approaching $1.1 million, so the amount of $600,000 was appropriate.
Against these claims I have formed the following views.
On their face value Clone’s claims for costs might be very substantially reduced, as many components are arguably solicitor/client based and some items might not even be awarded as between solicitor and client. (I discuss these matters below).
An interim allocatur hearing is not the appropriate occasion on which to determine contentious matters such as Clone’s claims for interstate counsel fees or for counsel fee rates to be considered.
Indeed, when I ruled that the interim allocatur issue should be determined before any detailed adjudication or determination of preliminary issues, I made this order subject to the rider that in the circumstances the price for this would be to take a very conservative approach.
In these circumstances, it is not open for Clone to, in effect, have the Court now determine some of the preliminary issues raised by Players as part of the interim allocatur hearings.
Notwithstanding that the Court has not certified the matter as fit for two senior counsel, the quantum of the claims for counsel fees appear to be made on this basis.
Nor has any certification been made for the use of interstate counsel, so this will have to be argued in detail later.
These matters can only be resolved on a full taxation.
The same applies in relation to travel and accommodation costs claimed.
There are other matters which need to be addressed at the interim allocatur stage. These have been raised in Mr Dart’s affidavits and in Mr Cogan’s submissions.
Caution should be taken in assessing solicitor’s charges.
There is a once and for all perusal rule, so perusals by different solicitors and at different times by the same solicitor will need to be carefully examined.
There are said to be various occasions on which two solicitors have attended in court together, or at a conference where only one solicitor’s attendance should be permitted.
There are claims for solicitor’s personal attendances to effect service when it is to be argued that this should be paid at a clerk’s rate.
There are claims for drawing file notes of Court attendances but these might be objectionable as it is normally expected for a solicitor to make a contemporaneous note of an attendance while in Court.
Various claims for amending documents will be objected to on the principle that normally the amending party had to bear such costs.
There are a number of charges for “consideration” of matters which are potentially objectionable. They will either constitute a re-perusal of previously perused documents or constitute a charge for sitting and thinking, which is not chargeable under the Court scale.
There are also occasions when both solicitors and counsel have charged for the same work, such as drafting the closing submissions at trial. These claims will be closely scrutinised.
There are said to be claims for both solicitor and counsel charging for the same work.
Trial costs
In respect to the trial before Hargrave AJ the total claim is for $1,345,253 for a nine day trial, including $763,803 in respect of counsel fees.
It appears that a considerable amount of work will be argued to be not claimable on a party/party basis, including communications between counsel and instructing solicitors on a piecemeal basis; multiple communications in respect of drafting, repeated drafting of outlines and other documents; substantial claims for research of the law, including procedural rules; the provision of research memos to counsel; large numbers of perusal claims; and claims made for briefs which may be nothing more than copies of documents and/or authorities.
All of these will need to be carefully scrutinised and depending on submissions, may be disallowed on adjudication.
In respect of counsel, no attempt had been made by Clone to apply an appropriate rate by reference to the indicator.
Claims have been made for numerous internal conferences with Mr Bill Ericson, in-house counsel, which might be disallowed on adjudication, noting that two counsel are already engaged.
A team of solicitors had been involved and great caution should be made in such respect, noting the potential for duplication.
If interstate counsel are found not to be appropriate, then claims for travel and accommodation will be disallowed.
Mr Dart’s affidavit evidence is of importance. He has extracted what he submits are objectionable amounts and has prepared schedules.
Analysing the schedules of counsel fees, and then applying the daily rate pursuant to the indicator, namely, $4,500, and then relating it to the Karkar, Sullivan and Roberts trial schedules, he has calculated a reduction from the face value of the claims amounting to $209,300 for Mr Karkar, $142,860 for Mr Sullivan and $57,925 for Mr Roberts. These total reductions amount to $423,926.
Mr Dart has also prepared a schedule alleging excessive solicitors’ fees claimed for the trial, relating to research and perusing.
The total amount for research is $24,254, and a significant portion, if not all of this work, might not be allowed on a taxation, so a discounting from the face value in the sum of $24,254 is indicated.
A schedule has also been prepared with respect to perusal of judgments and transcripts by up to five solicitors. This is annexure “D” and the total amount is $48,699. It might be that a significant portion of this work would not be allowed on a taxation. A discount is sought in the amount of $48,699.
The trial lasted for nine days but Mr Karkar’s time spent on preparation – he did not prosecute the trial – was the equivalent of a little more than 18, 10-hour days. His invoices which are attached to the claim for costs simply say reading various parts of the brief, reviewing written submissions for the appellant, reading respondent’s and Commissioner’s written submissions, consultations with senior counsel, instructing solicitors, advice and research. He then listed a number of hours and then provided a bill of $80,960 for the appeal.
There was a second bill for the appeal in the sum of $128,480 and this had an even more limited description of the work undertaken. It allowed for reading, research, consultations, reviewing written submissions and preparation for the appeal. It was followed by a number of hours and dates with no further description and the bill totalled $128,480. The same was applied to the trial which was five days long.
It has been contended that a rule of thumb when quickly assessing the costs of a trial is that preparation might take about the same number of days. That is of course an issue for a detailed taxation. It might or may not be right in each instance, but it is an issue that had to be determined in the adjudication process itself.
If nine days are assigned for preparation of the trial, and assessed at a rate of $5,200 per day – which is above the rate set by the indicator – then $46,800 should be taken off the face value reduction of those counsel fees which had been prepared by Mr Dart.
Players has argued that there should be a reduction of some $408,500 for counsel fees alone without taking into account other disbursements.
A further issue will involve Mr Sullivan stepping in to handle the trial. His preparation had been about five and a half days. There might well be duplication between Mr Sullivan’s work and Mr Karkar’s work. If such duplication meant that Mr Sullivan’s preparation time was probably even less, say in the order of three days, this will arguably indicate excessive time spent by Mr Karkar in preparing for trial.
Players contend that if Mr Sullivan could have got himself up to speed in five and a half days, then nine days might not be an unreasonable estimate of what the trial preparation should be for senior counsel.
Players submits that overall it is essential for the Court to adopt an extremely cautious approach in fixing an interim allocatur.
Conclusion as to trial costs
I have formed the view that for the purposes of an interim allocatur, a sizeable reduction should be made to the face value of Clone’s claims for the costs for trial. Especially having regard to the matters raised in the Dart affidavit, and in Mr Cogan’s submissions, which will be argued on taxation, my view is that an interim allocator in the sum of $225,000 is appropriate.
Appeal costs
Similar issues also arise in respect of the Full Court appeal. The costs claim is $903,584 which on face value looks high for only a two day appeal, notwithstanding the complex issues. The counsel fee component alone is $546,897.
If there are found to be excessive communications claimed in respect of the drafting, and the repeated redrafting of outlines and other documents, these might not be allowed.
There appear to be substantial claims for research of the law including procedural rules by solicitors – these likewise might not be allowed.
Any excessive perusal claims may be disallowed.
If there are claims for briefs which are in effect nothing more than copies of documents and/or authorities – these may not be allowed.
The same will apply in respect to any excessive claims made for interactions between solicitors and their client. It must be borne in mind that this aspect of the claim relates to an appeal, and solicitor/client communications are likely to be less necessary than for the trial.
Claims appear to have been made for numerous amendments to Clone’s notice of appeal but these might not be recoverable on a party/party basis.
As with the trial, no attempt had been made by Clone to apply an appropriate rate for counsel fees by reference to the indicator.
Claims have also been made for numerous internal conferences with Mr Bill Ericson, an in-house counsel, and these will have to be justified on adjudication bearing in mind there are external counsel as well.
A substantial matter requiring attention on taxation will be any claims for costs by Clone after the delivery of the Full Court’s decision on 8 December 2016. There appear to be a considerable number of such claims. They might not be covered by the Full Court’s order. Clone have not been awarded costs in respect of the applications or hearings before Blue J and Judge Roder.
Mr Dart’s affidavit evidence is of importance. As with the trial, he has extracted from Clone’s Full Court claim for costs all of the fees incurred for senior counsel, namely Mr Sullivan, Mr Karkar and Mr Roberts. He had also extracted disbursements for flights and accommodation arising from the briefing of interstate counsel.
He has also prepared a schedule of counsel fees and solicitors’ charges claimed by Clone after 8 December 2016. The amount claimed for this work was $71,181.
After extracting all the counsel fee items claimed in the Full Court claim, the daily rate of $4,500 provided in the indicator was applied to each counsel fee, resulting in a sizeable reduction in the face value of the claim for counsel fees, namely a reduction of $400,030.
Further, the analysis made by Mr Dart only involved a discounting of the rate claimed by Clone but did not involve any analysis of the actual individual items of work, and whether these were properly claimable.
Mr Karkar had spent approximately 22, 10-hour days in preparation for the appeal which had lasted for only two days. The preparation might be found to be greatly excessive for the time spent on the appeal itself.
It is likely to be argued that something in the order of five days of preparation would be sufficient. This would mean a reduction of 17 days in preparation time, which may or may not end up being the ultimate allowance on the taxation.
The claim for costs relating to drafting submissions by solicitors is very high. Details are provided in annexure “A” of Players’ written submissions. These total $40,940. These might be disallowed on a taxation and a very conservative approach should be taken and the Court should immediately discount a significant portion of this aspect of the claim.
Players have also prepared a schedule extracted directly from the claim for costs, extracting all solicitors’ fees categorised as research of the law. This is annexure “B” and it totals $48,499. A significant portion, if not all of the work for research, might be disallowed on a taxation, so a discount should be applied to the referable figure of $48,499.
Conclusion as to appeal costs
I have likewise formed the view that for the purposes of an interim allocatur a sizeable reduction should be made to the face value of Clone’s claims for the appeal. A claim for in excess of $620,000 for a two day appeal appears to be high. Especially having regard to the matters raised in the Dart affidavit, and in Mr Cogan’s submissions, which will be argued on taxation, my view is that an interim allocatur in the sum of $150,000 is appropriate.
Allowance for interest
At the interim allocatur level the Court should be extremely hesitant to allow any component for interest on costs because this can only be properly determined once the underlying principal costs entitlement has been conclusively ascertained and determined following a taxation.

In the present case I have not found it appropriate to make any other than a very conservative provision for interest on costs in the context of the interim allocaturs awarded.
The Players’ set-off claim
As indicated above, Players is seeking its own interim allocatur pursuant to the Full Court order in [2013] SASCFC 104, covering the hearing before Kourakis J and then the Full Court.
It is common ground that the Court should only order that one net monetary amount on account of any interim allocaturs should be paid.
In other words, an allocatur granted in favour of Clone and an allocatur in favour of Players should be set-off against each another and only the net amount, being the difference between the two, should be ordered to be paid.
It is accepted that this approach will result in a net amount being payable to Clone for an interim allocatur.
Players’ own claim for costs remains unimpeached, notwithstanding Clone’s successful appeal to the High Court. The claim and a response have been filed. Clone denies liability for every item claimed, on the basis that the Players clients were not liable to Griffins Lawyers to pay any of the costs claimed and therefore had no basis on which to seek a costs indemnity from Clone. This is a threshold issue.
I noted that this was the subject of prior judicial consideration by Judge Roder on 28 June 2017 and in reasons for decision of 30 August 2017 he awarded the Players parties an interim allocatur notwithstanding the retainer agreement issue. Players submit that the Griffins Lawyers’ costs agreements are binding and enforceable and establish the requisite legal liability on the part of the Players parties to pay the costs to their lawyers and thus to enable Players to recover those costs from Clone. They refer to the “commercial absurdity” proposition.
They also rely on Trevorrow v State of South Australia (No 7) [2008] SASC 5, Gray J, analysed above.
Players have addressed the quantum of their claim for costs which included items for work performed during the period 11 December 2009 to 15 October 2013 but excluded items claimed for the preparation of the claim for costs document itself. The total amount claimed is $724,067 (including GST). The solicitors’ fees total $356,209 (including GST) and counsel fees total $149,187 (including GST). Supreme Court fees, transcript fees and printing fees total $8,422 (including GST).
A claim is also made in an amount of $210,247 for interest on costs.
Clone oppose any amount for an interim allocatur by Players. I have summarised its arguments above and will not repeat them here.
In order to award an interim allocatur in favour of Players, to be used by them in set-off to any interim amounts owed to Clone, the Court will have to find that there is an amount that is “undeniably owed” to Players.
Each side has arguments in favour of its contention, supported by authority. However, the interim allocatur process is not an appropriate vehicle for considering such issues. Either side might ultimately be successful in its contentions. If Clone is successful, nothing will be payable.
It cannot be said on Players’ claim that any amount will be “undeniably owing”.
I have accordingly come to the view that it is not a case where a discretion should be exercised in favour of the issue of an interim allocatur for Players.
I decline, therefore, to award an interim allocatur in favour of Players such that it might otherwise set-off against Clone’s claims.
Orders
On Clone’s claim for interim allocaturs in respect of the trial before Hargrave JA, I award to it an interim allocatur in the sum of $225,000.
On Clone’s claim for interim allocaturs in respect of the appeal to the Full Court from Hargrave JA’ s judgment, I award to it an interim allocatur in the sum of $150,000.
I order that Clone’s claims in respect of the trial before Hargrave JA and the appeal to the Full Court from Hargrave JA’s judgment each proceed to a detailed adjudication.
I decline to award an interim allocatur to Players with respect to its entitlements to costs pursuant to the Full Court order in [2013] SASCFC 104 and covering the hearing before Kourakis J, the subject of that appeal.
I fix a directions hearing on Tuesday 12 November 2019 at 11.00am to hear from the parties as to the process of adjudication, to fix a program for the determination of any preliminary issues, and for any other orders the parties may seek.