Question of Law Reserved No. 1 of 2022 (No 2)
[2023] SASCA 135
•20 December 2023
SUPREME COURT OF SOUTH AUSTRALIA
(Court of Appeal: Criminal)
QUESTION OF LAW RESERVED NO. 1 OF 2022 (No 2)
[2023] SASCA 135
Judgment of the Court of Appeal
(The Honourable President Livesey, the Honourable Justice Lovell and the Honourable Justice Doyle)
20 December 2023
CRIMINAL LAW - PROCEDURE - COSTS - POWER TO AWARD
On 12 October 2023, this Court answered three questions reserved by the Director of Public Prosecutions (SA) following the respondent’s acquittal pursuant to s 153(4) of the Criminal Procedure Act 1921 (SA) (the CPA).
The Court answered the first two questions and found that the third question, which was added at the request of the respondent and addressed whether the prosecution had acted in a manner consistent with prosecutorial duty, did not raise an issue appropriate for consideration.
The respondent sought orders that the Crown pay the respondent’s costs on a solicitor/client basis pursuant to s 156(1) of the CPA with costs to be taxed in accordance with Chapter 16 of the Uniform Civil Rules 2020 (SA).
The Court held (ordering that the Crown pay the respondent’s costs fixed as a lump sum in the amount of $25,000 inclusive of disbursements and GST):
1.Section 156(1) of the CPA permits an award of costs to be made on a lump sum basis.
2.This is an appropriate case in which to exercise the Court’s broad discretion to award costs on a lump sum basis.
3.It is unnecessary and undesirable to order a taxation of costs because the amounts in contention are not large and the claim is not complex. The Court can be confident that it has before it sufficient material to enable a lump sum assessment to be made without injustice to either party.
4.Where the Court determines to proceed by way of lump sum, the approach is one of estimation, not arithmetic.
5.In substance, if not also in form, the Director only included the third question at the request of former senior counsel for the respondent. Section 156(1) of the CPA does not allow a respondent to recoup costs incurred in connection with a question which has not been reserved by the Director.
Criminal Procedure Act 1921 (SA) ss 153, 156, 166, 169; Supreme Court Act 1935 (SA) s 40; Uniform Civil Rules 2020 (SA) rr 194, 195, 211.5, referred to.
Auspine Ltd v Australian Newsprint Mills Ltd (1999) 93 FCR 1; Bayley and Associates Ltd v DBR Australia Pty Ltd [2014] FCA 346; Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119; Channel Nine SA Pty Ltd v Police (No 2) (2014) 121 SASR 87; Channel Nine SA Pty Ltd v Police (No 2) (2014) 121 SASR 87; Charlick Trading Pty Ltd v Australian National Railways Commission [2001] FCA 629; Cornwall v Rowan (No 4) (2006) 244 LSJS 183; [2006] SASC 111; Cretazzo v Lombardi (1975) 13 SASR 4; Hadid v Lenfest Communications Inc [2000] FCA 628; Harrison v Schipp (2002) 54 NSWLR 738; Hislop v Paltar Petroleum Ltd [2017] FCA 1632; Indigo Financial Money Pty Ltd v Bolivar Road Pty Ltd [2012] SASC 228; Koonara Management Pty Ltd v Rockliff (No 3) [2020] FCA 523; McDonald v State of South Australia [2020] SASC 112; Question of Law Reserved (No 1 of 2018) (No 2) [2019] SASCFC 17; Question of Law Reserved No. 1 of 2022 [2023] SASCA 109; R v Thaller and Gee (Question of Law Reserved) (2001) 79 SASR 295; Russo v Buck (No 5) [2010] SASC 27; Seven Network Ltd v News Ltd [2007] FCA 2059; Smoothpool Nominees Pty Ltd v Pickering [2001] SASC 131; Sony Entertainment (Australia) Ltd v Smith (2005) 215 ALR 788; Viscariello v Legal Profession Conduct Commissioner (No 2) [2021] SASCFC 35; Viscariello v Macks (No 4) [2022] SASC 30, considered.
QUESTION OF LAW RESERVED NO. 1 OF 2022 (No 2)
[2023] SASCA 135Court of Appeal – Criminal: Livesey P, Lovell and Doyle JJA
THE COURT:
Introduction
On 12 October 2023, this Court answered three questions reserved by the Director of Public Prosecutions (SA) (the Director) following the respondent’s acquittal pursuant to s 153(4) of the Criminal Procedure Act 1921 (SA) (the CPA).[1]
[1] Question of Law Reserved No. 1 of 2022 [2023] SASCA 109 (Livesey P, Lovell and Doyle JJA).
The first two answers given by the Court were to the effect that the extended unanimity direction given by the primary judge was not required in connection with the jury’s deliberations on murder and manslaughter. The Court held that the third question, which addressed whether the prosecution had acted in a manner consistent with prosecutorial duty, did not raise an issue appropriate for consideration.
The respondent has now sought the following orders regarding costs:
1.An order pursuant to s 156(1) of the CPA that the Crown pay the adjudicated costs of the respondent in the proceedings for the reservation and determination of Question of Law Reserved No. 1 of 2022.
2.That the respondent’s costs be adjudicated according to Chapter 16 of the Uniform Civil Rules 2020 (SA) (the Rules).
3.That the Crown pay the respondent’s costs on a solicitor/client basis.
At the request of the Court, the respondent advised that “the total amount” of his costs claim was $29,919.19 (inclusive of GST), which comprised solicitor’s fees and disbursements of $5,169.19, together with fees for senior counsel of $16,500 and for junior counsel of $8,250.
The submissions of the parties
The respondent submits that the second and third orders may be made pursuant to s 166(f) of the CPA. Although the respondent seeks “the adjudication of costs” in accord with s 156 of the CPA, by r 195.1 (and following) the Rules have reverted to using the term “taxation of costs”.
For the Director, it is submitted that this Court should order that the Crown pay the respondent’s costs fixed in the amount of $17,600 inclusive of GST. This amount was offered before the hearing to cover the appearance of senior counsel together with an instructing solicitor. This amount has now been paid to the respondent’s solicitors.
The Director agrees that the taxation of costs should follow the procedure laid out in Chapter 16 of the Rules.[2] The Director disputes that there is any separate source of power available under s 166(f) of the CPA.
[2] The Director also submits that, consistently with r 195.1 of the Rules, a genuine written offer in respect of costs should be made by the respondent.
The respondent opposes an order that costs be paid on a lump sum basis, contending that this Court has no power to make that kind of order because by s 156(1) the Crown is liable to pay his “adjudicated costs”. Both parties rely on the decision of the Court of Criminal Appeal in Question of Law Reserved (No 1 of 2018) (No 2).[3]
[3] Question of Law Reserved (No 1 of 2018) (No 2) [2019] SASCFC 17 (Hinton J, with whom Vanstone and Lovell JJ agreed).
Disposition of the application
For the following reasons, there should be an order that the Crown pay the respondent’s costs fixed as a lump sum in the amount of $25,000 inclusive of disbursements and GST.
Relevant provisions and rules
As the questions were reserved on an application made by the Director pursuant to s 153(4) following an acquittal, s 156 of the CPA applies:
(1)If a question is reserved on application by the Attorney General or the Director of Public Prosecutions on an acquittal, the Crown is liable to pay the adjudicated costs of the defendant in proceedings for the reservation and determination of the question.
(2)If the defendant does not appear in the proceedings, the Crown must instruct counsel to present argument to the Court that might have been presented by counsel for the defendant.
Sub-section 166(f) of the CPA is one of a number of supplemental powers available to the Court of Appeal:
166—Supplemental powers of Court
For the purposes of this Act, the Court of Appeal may, if it thinks it necessary or expedient in the interests of justice—
(a)order the production of any document, exhibit or other thing connected with the proceedings, the production of which appears to it necessary for the determination of the case; and
(b)order any witnesses who would have been compellable witnesses at the trial to attend and be examined before the Court, whether they were or were not called at the trial, or order the examination of any such witnesses to be conducted in the manner provided by rules of court before any judge of the Supreme Court or before any officer of the Supreme Court or justice of the peace or other person appointed by the Court of Appeal for the purpose, and allow the admission of any statements so taken as evidence before the Court of Appeal; and
(c)receive the evidence, if tendered, of any witness (including the appellant) who is a competent but not compellable witness; and
(d)where any question arising on the appeal involves prolonged examination of documents or accounts or any scientific or local investigation which cannot, in the opinion of the Court of Appeal, conveniently be conducted before the Court, order the reference of the question in the manner provided by rules of court for inquiry and report to a special commissioner appointed by the Court and act on the report of any such commissioner so far as it thinks fit to adopt it; and
(e)appoint any person with special expert knowledge to act as assessor to the Court of Appeal in any case where it appears to the Court that such special knowledge is required for the proper determination of the case; and
(f)exercise in relation to the proceedings of the Court any other powers which may for the time being be exercised by the Supreme Court on appeals or applications in civil matters; and
(g)issue any warrants necessary for enforcing the orders or sentences of the Court,
but in no case will any sentence be increased by reason of, or in consideration of, any evidence that was not given at the trial.
That there is no power to award costs in connection with a criminal appeal, “or any proceedings preliminary or incidental thereto” under the CPA is put beyond doubt by s 169 of the CPA:
169—Costs of appeal
On the hearing and determination of an appeal or new trial or any proceedings preliminary or incidental thereto under this Act, no costs will be allowed on either side.
It is common ground that neither the CPA nor the Joint Criminal Rules 2022 (SA) stipulate any method by which a respondent’s costs may be adjudicated pursuant to s 156(1) of the CPA.
By r 211.5(2) of the Rules, Chapter 16 except Part 6, applies to an appellate proceeding as follows:
211.5—Judgment, costs and enforcement
(1)Chapter 15, except Part 3, with any necessary changes, applies to an appellate proceeding in the same manner as it applies to an action.
(2)Chapter 16, except Part 6, with any necessary changes, applies to an appellate proceeding in the same manner as it applies to an action.
(3)Chapter 17, with any necessary changes, applies to an appellate proceeding in the same manner as it applies to an action.
Chapter 16 comprises rules 191 to 195, inclusive. These rules address costs orders and the taxation and recovery of costs. Part 6 (which does not apply to an appellate proceeding) only comprises r 196.1 and concerns the right of appeal available against a judgment given on taxation.
By r 194 this Court may make any of the following orders concerning costs:
194.3—Costs orders
(1)The Court may order that costs be awarded—
(a) on the standard costs basis, solicitor/client basis, indemnity basis or another basis specified by the Court;
(b) in accordance with the Higher Courts costs scale, Magistrates Court costs scale, Minor Civil costs scale or Fast Track costs scale; or
(c) on a combination of different bases or scales for different components of costs.
(2)The Court may order that interest be payable on an award of costs in respect of a time before judgment is entered for the costs.
(3)The Court may order that costs (including any interest) be awarded on a lump sum or partial lump sum basis.
(4)The Court may order that costs awarded to a party be set-off against any liability of the party (including a liability for costs).
(5)The Court may refer any question about costs (including whether costs should be ordered, who should pay costs or the basis on which costs should be paid) for inquiry and report or determination by a taxing officer.
The Rules stipulate that the “presumptive costs rule” is that costs are to be taxed if not agreed, r 194.4(7). Proper reasons must be disclosed to displace this presumptive rule. By rr 195.1 and 195.2 the commencement of the taxation process is addressed in the following way:
195.1—Pre-taxation steps
(1)Before initiating a taxation process under rule 195.2, a claimant must make a genuine offer to the liable party to resolve the amount of costs payable that would otherwise be the subject of the taxation process.
(2)A genuine offer must—
(a) be in writing;
(b) state the amounts claimed for costs divided into costs scale periods;
(c) state the amounts claimed for counsel fees;
(d) state the amounts claimed for external disbursements; and
(e) make an offer of a fixed sum for the total amount of the costs, which remains open for acceptance within 28 days.
(3)A recipient of an offer made under subrule (2) must respond within 28 days by—
(a) accepting the offer;
(b) making a counter offer of a fixed sum for the total amount of the costs; or
(c) offering to meet within 14 days to negotiate an amount for costs.
195.2—Initiation of taxation process
(1)A claimant may apply for the taxation of costs under a costs order or by operation of these Rules by filing and serving on the liable party a claim for costs in the prescribed form.
Prescribed form—
Form 136 Claim for Costs
(2)A claim for costs must—
(a) unless the Registrar permits the schedule to be in some other form, provide the costs schedule in Microsoft Word format; and
(b) attach copies of all invoices for counsel fees and external disbursements.
(3)A claimant must, if the claim proceeds to taxation—
(a) at the request of the liable party, produce for inspection any documents on which the claimant proposes to rely; and
(b) if ordered by the Court, identify any documents relevant to the claim that are not produced because of a claim of privilege which is not waived.
(4)A claimant or liable party may apply for an order relating to the taxation of costs, notwithstanding that a claim for costs has not been filed under subrule (1), by filing an interlocutory application and supporting affidavit in accordance with rule 102.1.
Once a taxation has commenced, the taxing officer is conferred with “the same powers as the Court in relation to a proceeding in the Court”, r 195.8(1) and the taxing officer is “not bound by the rules of evidence and may decide questions by estimation or by any other expedient means”, r 195.8(2).
In the course of a taxation hearing the taxing officer may, under r 195.9(1)(a), adopt various methods of assessment, including “a lump sum assessment, or otherwise [determine] the amount of costs to be awarded in a wholesale manner, rather than undertaking an item-by-item assessment”.
The taxation process may result in an order determining some or all of the issues in contention, which is either a provisional or non-provisional order. Under r 195.13, when an order is or becomes “non-provisional under rule 195.10(2) or 195.12, it becomes a judgment of the Court”.
The power to award costs under s 156(1) of the CPA
The parties were agreed that s 156(1) of the CPA comprises a source of power permitting an order for costs to be made in favour of the respondent. They remain in dispute as to whether that source may be supplemented by s 166(f) of the CPA. As that issue is in part addressed by the ruling made in Question of Law Reserved (No 1 of 2018) (No 2) it is necessary to consider that ruling.[4]
[4] Question of Law Reserved (No 1 of 2018) (No 2) [2019] SASCFC 17 (Hinton J, with whom Vanstone and Lovell JJ agreed).
In Question of Law Reserved (No 1 of 2018) (No 2) a case was stated pursuant to s 350 of the Criminal Law Consolidation Act 1935 (SA) (the CLCA). The successor to that provision is s 153 of the CPA. The respondent succeeded in demonstrating that a statutory provision relevant to sentencing was invalid. He claimed costs. The Court of Criminal Appeal found that it had no power to award costs. Whilst the Court did not overlook the principle that it should not generally read down a grant of jurisdiction,[5] it was persuaded to do so by “the textual and contextual indicators” to which it referred.[6]
[5] Owners of Shin Kobe Maru v Empire Shipping Co Inc (1994) 181 CLR 404, 421 (The Court).
[6] Question of Law Reserved (No 1 of 2018) (No 2) [2019] SASCFC 17, [18] (Hinton J, with whom Vanstone and Lovell JJ agreed).
The Court’s decision rested on four essential propositions. First, accepting that the power to award costs must be sourced in statute,[7] the Court rejected the Director’s submission that the ordinary costs power conferred by s 40 of the Supreme Court Act 1935 (SA) applied to criminal proceedings.[8]
[7] There being no power at common law to award costs other than by way of damages, Channel Nine SA Pty Ltd v Police (No 2) (2014) 121 SASR 87, [25]-[29] (Kourakis CJ, Blue and Parker JJ).
[8] Channel Nine SA Pty Ltd v Police (No 2) (2014) 121 SASR 87, [23], [25] (Kourakis CJ, Blue and Parker JJ); Question of Law Reserved (No 1 of 2018) (No 2) [2019] SASCFC 17, [5] (Hinton J, with whom Vanstone and Lovell JJ agreed).
Secondly, the Court rejected the respondent’s submission that s 351A(1) conferred a power to award costs. That provision mirrors what is now s 155(1) of the CPA. It provided that the Full Court “may determine a question reserved under this Part and make consequential orders and directions”. The Court construed that power as confined to the making of orders which gave effect to the answer given to the question reserved.[9] This power was, contextually, adjunct to the criminal jurisdiction conferred on the Supreme and District Courts which included no power to award costs.[10] It was observed that if the matter proceeded to a verdict a question that might have been reserved may ground an appeal under s 352 (now s 158 of the CPA) and, even were the appellant to succeed, there was no power to award costs.[11]
[9] Question of Law Reserved (No 1 of 2018) (No 2) [2019] SASCFC 17, [8] (Hinton J, with whom Vanstone and Lovell JJ agreed).
[10] Question of Law Reserved (No 1 of 2018) (No 2) [2019] SASCFC 17, [9]-[10] (Hinton J, with whom Vanstone and Lovell JJ agreed).
[11] Question of Law Reserved (No 1 of 2018) (No 2) [2019] SASCFC 17, [10] (Hinton J, with whom Vanstone and Lovell JJ agreed).
Thirdly, although s 359(f) of the CLCA conferred a supplemental power in the appeal court to “exercise in relation to the proceeding of the Court any other powers which may for the time being be exercised by the Supreme Court on appeals or applications in civil matters”, this was constrained by the terms of s 363 of the CLCA. The successor to s 359(f) is s 166(f) of the CPA, on which the respondent relied in this case. Section 363 of the CLCA is now s 169 of the CPA. By s 169, “no costs will be allowed” for an appeal or new trial “or any proceedings preliminary or incidental thereto under this Act”. The Court effectively held that s 169 excluded from the grant of supplemental power in s 166(f) the power to award costs contained in s 40 of the Supreme Court Act 1935 (SA): “Put slightly differently, but for s [166(f), s 169] would not be required.”[12]
[12] Question of Law Reserved (No 1 of 2018) (No 2) [2019] SASCFC 17, [10] (Hinton J, with whom Vanstone and Lovell JJ agreed).
The Court took this approach even though a case stated or a question reserved are not referred to in the exclusion in the power to award costs effected by s 169 of the CPA. The Court explained that the power to state a case or reserve a question could not properly be described as an “appeal” for the purposes of s 169 even though that term had been used in some of the older authorities concerning the power to state a case or reserve a question. The power to state a case or reserve a question had, over time, been expanded well beyond cases that could be likened to an appeal:[13]
In R v Thaller and Gee (Question of Law Reserved) Doyle CJ noted that the procedure for reserving a question of law for consideration by the Full Court was originally only available after a trial and conviction.[14] In 1969 the power was expanded to include questions arising on sentencing, in 1980 to allow for the reservation of questions of law after an acquittal, and in 1995 to include questions as to how a judicial discretion should be exercised and decision on issues antecedent to trial.[15]
[13] Question of Law Reserved (No 1 of 2018) (No 2) [2019] SASCFC 17, [11]-[12] (Hinton J, with whom Vanstone and Lovell JJ agreed), citing R v Thaller and Gee (Question of Law Reserved) (2001) 79 SASR 295, [90] (Doyle CJ).
[14] R v Thaller and Gee (Question of Law Reserved) (2001) 79 SASR 295, [34]. See Act No 6 of 1859 (SA) and the Criminal Law Consolidation Act 1876 (SA).
[15] R v Thaller and Gee (Question of Law Reserved) (2001) 79 SASR 295, [34].
Finally, and in support of the conclusion that the general powers contained in the CLCA did not include a power to award costs, the Court pointed to the existence of the express power to award costs conferred by s 351B of the CLCA – now s 156 of the CPA – in the case of a question reserved on the application of the Crown following an acquittal. As the Court explained it, the acquitted defendant should not be burdened by having to meet the costs of “a proceeding that can have no direct consequence for him or her”:[16]
It might be said that s 351B merely removes the discretion from the Court that exists under s 351A(1) in the case of acquittals. However, the underlying policy appears to be that the acquitted defendant whose liberty is not in jeopardy (because the Court cannot set aside the acquittal irrespective of the answer to the question reserved)[17] should not be burdened by the costs of a proceeding that can have no direct consequence for him or her... The difference suggests that s 351B(1) aside, there is no power to award costs.
[16] Question of Law Reserved (No 1 of 2018) (No 2) [2019] SASCFC 17, [15] (Hinton J, with whom Vanstone and Lovell JJ agreed).
[17] Criminal Law Consolidation Act 1935 (SA), s 351A(2)(c).
This approach to the underlying policy of s 156 is reinforced by the terms of s 156(2) of the CPA which provides that, in the event the defendant does not appear, the Crown must instruct counsel as contradictor to present the argument that might have been presented by counsel for the defendant.
This review of Question of Law Reserved (No 1 of 2018) (No 2) demonstrates that s 166(f) cannot be relied on as a statutory source of power to award costs. It nonetheless has the effect of supplementing the procedural powers available to the Court of Appeal in a way that might have been inferred from the terms of s 156(1) of the CPA in any event. That is to say, s 156(1) refers to a liability in the Crown to pay “the adjudicated costs of the defendant”. Replacing the reference to “adjudication” with “taxation”, as the Rules now require, one would readily infer from the use of this phrase that the Court may adopt and apply the powers and processes which have for well over a century been available to the Supreme Court to award, tax and determine costs following appeals or applications in civil matters.
Whether as a matter of inference from the terms and subject matter of s 156(1), or by reference to the supplemental power conferred by s 166(f), this Court may have regard to the powers and processes recognised by Chapter 16 of the Rules in connection with, and so as to facilitate, the exercise of the power to award and tax costs under s 156(1) of the CPA.
The award of costs by way of a lump sum order
The parties remain at odds about whether this Court can make an award of costs by way of a lump sum in the respondent’s favour under s 156(1) of the CPA. The respondent contends that this would be inconsistent with an order that the Crown pay taxed costs, as s 156(1) requires. Alternatively, the parties are agreed that this Court may make an award of costs to be taxed. There appears to be no issue that the award should be made on a solicitor/client basis.[18]
[18] Though the respondent contends that he is probably entitled to costs on an indemnity basis, that contention was not pressed.
There is now a well-recognised line of authority permitting costs awards to be determined on the basis of a gross or lump sum, rather than by way of an item-by-item taxation.[19]
[19] The authorities are helpfully reviewed in “Lump sum or gross sum orders instead of assessment” in Thomson Reuters, Quick on Costs (online at 15 December 2023), [300.410] ff. The South Australian cases include Cornwall v Rowan (No 4) (2006) 244 LSJS 183; [2006] SASC 111 (Cornwall v Rowan (No 4)), [12] (Bleby, Besanko and Sulan JJ); Russo v Buck (No 5) [2010] SASC 27 (Judge Lunn); Indigo Financial Money Pty Ltd v Bolivar Road Pty Ltd [2012] SASC 228 (Judge Withers); McDonald v State of South Australia [2020] SASC 112 (Lovell J) (McDonald); and Viscariello v Macks (No 4) [2022] SASC 30 (Auxillary Judge Norman).
The source of the power to make awards by way of a lump sum in the Supreme Court is usually traced to s 40 of the Supreme Court Act 1935 (SA) and the rules of court, now the Uniform Civil Rules 2020 (SA). The court may make a lump sum assessment at any stage in the determination of a claim for costs.[20]
[20] See rr 195.8(1) and 195.9(1) of the Uniform Civil Rules 2020 (SA) and Indigo Financial Money Pty Ltd v Bolivar Road Pty Ltd [2012] SASC 228, [21] (Judge Withers).
The authorities in this jurisdiction often commence with the influential decision of von Doussa J in Beach Petroleum.[21]
[21] Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119 (Beach Petroleum) (von Doussa J).
After awarding the successful applicant $44.45 million in damages,[22] in Beach Petroleum it emerged that there was a need to quantify the costs liability of three respondents as there were other proceedings against them. Although orders for costs to be taxed had already been made, these were not thought to represent any impediment to the making of a supplementary order for an award of costs by way of a gross or lump sum. In that case, his Honour relied on a preliminary bill of costs which covered the first two months of the trial, evidence and submissions from the parties, as well as advice from a Deputy Registrar.
[22] Beach Petroleum NL v Johnson (1993) 43 FCR 1 (von Doussa J) and Fuller v Beach Petroleum NL (1993) 43 FCR 60 (von Doussa J).
The claims for gross sum costs orders lay in the range $8.78 to $9.5 million.[23] Von Doussa J ordered that the costs payable by two of the respondents on an indemnity basis be fixed as a gross sum of around $8.12 million, and by the third respondent on a party and party basis fixed as a gross sum of just under $5.7 million.[24]
[23] Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119, 122A-122C (von Doussa J).
[24] Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119, 125 (von Doussa J).
Justice von Doussa relied on the English case of Leary v Leary for the propositions that the power is appropriate to be exercised in complex cases, and whilst a process similar to taxation is not envisaged, the power must be “exercised judicially and after giving the parties an adequate opportunity to make submissions”.[25]
[25] Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119, 120F-120G (von Doussa J), applying Leary v Leary [1987] 1 WLR 72, 76D.
In Beach Petroleum the initial bill in taxable form covering the first two months of the trial took 15 weeks to draft, exceeded 4,400 pages and the costs of drawing it were claimed at around $286,000. To proceed to a full taxation was thought unduly expensive and time-consuming. Von Doussa J explained that, before exercising its discretion to award costs on a lump sum basis, the court should be confident that this approach would be “logical, fair and reasonable”:[26]
… before exercising the power to fix a gross fee, the Court should be confident that the approach taken to estimate costs is logical, fair and reasonable. On the one hand the Court must be astute to prevent prejudice to the respondents by overestimating the costs, and on the other hand must be astute not to cause an injustice to the successful party by an arbitrary “fail safe” discount on the cost estimates submitted to the Court: Leary v Leary at 76; 265…
[26] Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119, 123C-123D (von Doussa J).
Justice von Doussa also explained that gross sums can only be “fixed broadly” having regard to the information before the court.[27] After analysing the claims made in that case, he reduced them for various reasons which included his impression that the applicants had “erred on the side of excessiveness” in their conduct of the hearing:[28]
Even though there is no statutory obligation on a judge to discount figures provided by the successful party on a "fail safe" basis, it is acknowledged in Leary v Leary at 76; 265 that there may well be occasions on which a judge will make such a discount. In my opinion this is a case where there should be discount both on the indemnity costs and on the party and party costs. I was left with the impression at times during the trial that in an effort to ensure the very best presentation of their case, leaving no stone unturned in the investigation for evidence, the applicants had erred on the side of excessiveness. Whilst this is merely an impression, one not explored instance by instance with the applicants or their advisers, I think I should take it into account in fixing a gross sum. Where there is excessive use of legal services even on an indemnity costs order the excessive services should be excluded: EMI Records Ltd v fan Cameron Wallace Ltd [1983] Ch 59 at 72 per Megarry V-C.
[27] Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119, 124G (von Doussa J).
[28] Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119, 124C-124D (von Doussa J).
The purpose of a lump sum assessment is usually grounded in the need to avoid the expense, delay and aggravation associated with a protracted taxation of costs.[29] That may be important where the litigation has “already consumed excessive and disproportionate resources”.[30] This approach to an award of costs by way of a lump sum was summarised by the Full Court in Cornwall v Rowan (No 4) in the following way:[31]
A number of authorities indicate that it is appropriate to order a lump sum payment in one or more of the following circumstances:
(1)In long and complex cases where the question may more conveniently be dealt with by way of lump sum rather than taxation;[32]
(2)Where full recovery of taxed costs is not anticipated or is questionable;[33]
(3)In matters where the taxation process is likely to be costly and protracted. This may be because of the length and complexity of the case as in paragraph (1) above or because of the behaviour of one of the parties.[34]
[29] Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119, 120F-120G (von Doussa J), applying Leary v Leary [1987] 1 WLR 72, 76D. Beach Petroleum was followed in Paciocco v Australia and New Zealand Banking Group Ltd (No 2) (2017) 253 FCR 403 (Allsop CJ, Besanko and Middleton JJ); Seven Network Ltd v News Ltd [2007] FCA 2059 (Sackville J); and Koonara Management Pty Ltd v Rockliff (No 3) [2020] FCA 523, [60](1) (Gleeson J).
[30] Koonara Management Pty Ltd v Rockliff (No 3) [2020] FCA 523, [62] (Gleeson J). See also, Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119, 123C (von Doussa J).
[31] Cornwall v Rowan (No 4) (2006) 244 LSJS 183; [2006] SASC 111, [12] (Bleby, Besanko and Sulan JJ).
[32] Beach Petroleum NL v Johnson(No 2) (1995) 57 FCR 119, 121; Emanuele v Dau (1996) 133 FLR 312, 319; Smoothpool Nominees Pty Ltd v Pickering [2001] SASC 131, [9]; Sony Entertainment (Australia) Ltd v Smith (2005) 215 ALR 788, [189].
[33] Hadid v Lenfest Communications Inc [2000] FCA 628, [14]; Harrison v Schipp (2002) 54 NSWLR 738, [21] and [30]; Sony Entertainment (Australia) Ltd v Smith (2005) 215 ALR 788, [194]-[195].
[34] Leary v Leary [1987] 1 All ER 261, 265; Sony Entertainment (Australia) Ltd v Smith (2005) 215 ALR 788, [192]-[193]; Microsoft Corporation v Jiang [2003] FCA 101.
Equally, however, there are many cases where lump sum orders have been made because the time, trouble and cost of a taxation is not thought to be necessary. That may be because the amounts in contention are not large, or the claim is not complex and the court is confident that it has before it sufficient material to enable a lump sum assessment to be made without injustice to any party. For example, in McDonald Lovell J (as he was) gave as one reason for ordering a lump sum that it was “in the interests of efficiency that this matter is dealt with without a lengthy taxation process”, before awarding $15,000 against a claim of around $20,000 made on a party and party basis.[35]
[35] McDonald v State of South Australia [2020] SASC 112, [12] (Lovell J).
The burden of demonstrating that the court has before it sufficient information to enable a “logical, fair and reasonable” estimate on a gross or lump sum basis lies with the party seeking that kind of order.[36] Nonetheless, the information does not need to mirror the evidence that would be required on a formal taxation because that would be pointless, defeating the purpose of a lump sum assessment.[37]
[36] Seven Network Ltd v News Ltd [2007] FCA 2059, [29] (Sackville J); Viscariello v Legal Profession Conduct Commissioner (No 2) [2021] SASCFC 35, [25] (Tilmouth AJ, with whom Lovell and Hughes JJ agreed); Harrison v Schipp (2002) 54 NSWLR 738, [22] (Giles JA).
[37] Auspine Ltd v Australian Newsprint Mills Ltd (1999) 93 FCR 1, [16] (Loughlin J); Koonara Management Pty Ltd v Rockliff (No 3) [2020] FCA 523, [60] (Gleeson J).
The process of estimating a lump sum does not replicate a taxation because it involves estimation or assessment rather than arithmetic.[38] The award made by way of a lump sum will not necessarily match the award that might have been made following a taxation because one can only know the figure which would be arrived at on a taxation following a taxation.[39]
[38] Hislop v Paltar Petroleum Ltd [2017] FCA 1632, [7] (Gleeson J), citing Bayley and Associates Ltd v DBR Australia Pty Ltd [2014] FCA 346, [17](e) (Foster J). See also, Koonara Management Pty Ltd v Rockliff (No 3) [2020] FCA 523, [64] (Gleeson J).
[39] Smoothpool Nominees Pty Ltd v Pickering [2001] SASC 131, [11] (Lander J).
Indeed, it has been said that the approach taken when estimating a lump sum is very broad, involving a “much broader brush than would be used on a detailed taxation”.[40] Sometimes the assessment will be assisted by “random sample checks” of the invoicing produced.[41]
[40] Seven Network Ltd v News Ltd [2007] FCA 2059, [25](ii) (Sackville J); Harrison v Schipp (2002) 54 NSWLR 738, [22] (Giles JA); Charlick Trading Pty Ltd v Australian National Railways Commission [2001] FCA 629, [10] (Mansfield J). See also Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119, 124G (von Doussa J).
[41] Viscariello v Macks (No 4) [2022] SASC 30, [98] (Auxiliary Judge Norman).
The determination of the application for a lump sum award
In this case, the submission that there is no power to award costs on a lump sum basis must be rejected. The authorities demonstrate that the power to make an order usually emanates from the statutory conferral of power, but it may also be sourced in the applicable rules of court.
In this case the reference to taxed costs in s 156(1) must be supplemented, whether as a matter of implication or expressly under s 166(f) of the CPA, by the costs powers usually available to be exercised by the Supreme Court on appeals in civil matters. As has been shown, those powers are derived from both statute and the rules of court. Those sources of power permit orders to be made by way of lump sum, whether when making a costs award or as an adjunct to the taxation.
Indeed, as Beach Petroleum demonstrates, the existence of an order for costs to be taxed does not prevent the court awarding those costs on a lump sum basis. In most cases it will be of little moment whether that is done by way of a fresh order, by way of an order substituted for the initial order, or finally as part of the taxation process.
In this case the reference to a power to award taxed costs must therefore be understood as supplemented by the powers ordinarily available to the Court when exercising its broad, unfettered judicial costs discretion.[42] The costs power available to the Court includes the supplementary power to award costs on a gross or lump sum basis.
[42] Cretazzo v Lombardi (1975) 13 SASR 4, 11 (Bray CJ, with whom Zelling and Jacobs JJ agreed).
The award by way of lump sum
In most cases the question will not be one of power, but whether it is an appropriate case in which to exercise the power to award costs on a lump sum basis. Some of the considerations bearing on whether to make a lump sum award have already been mentioned. Remembering that the discretion is broad and essentially unfettered, though to be exercised judicially, a lump sum award may be appropriate in a wide range of circumstances.
In this case it is doubtful indeed whether the time, trouble and cost of a taxation is necessary. It is most certainly undesirable. The amounts in contention are not large, and the claim is not complex. It is difficult to see why the Court cannot be confident that it has before it sufficient material to enable a lump sum assessment to be made without injustice to either party. In short, an award by way of lump sum would in this case be “logical, fair and reasonable”.[43]
[43] Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119, 123C-123D (von Doussa J).
Under r 191.1 of the Uniform Civil Rules 2020 (SA), whether an award of costs is made on a party and party or “standard costs basis”, or on a “solicitor/client basis”, the costs claimed must be shown by the person entitled to payment to have been reasonably incurred. In the case of a “standard costs basis”, that is “determined by reference to the relevant costs scale in force when the costs were incurred”.
Having determined to proceed by way of lump sum, and wielding a very broad axe, it is appropriate evaluate the task required of the respondent in this case. The approach is one of estimation, not arithmetic. This is not a formal taxation.
The work would initially have required that the solicitors prepare the necessary papers. Some, but less work would have been required from the solicitors as the matter approached the hearing. The claim of $5,169.19 appears reasonable. As for counsel, the difficulty and complexity of the legal issues warranted the retention of senior counsel. In the circumstances of this case, it was not unreasonable to retain a junior as well, particularly where it might ordinarily have been expected that the junior could have drafted the initial outline, leaving it for the silk to settle the outline and prepare for the presentation of the argument in this Court. The retention of two counsel rather than one represents an important difference between the parties and should be resolved in favour of the respondent.
Senior counsel was required to settle the response to the Director’s application and submissions, as well as prepare and present oral argument in this Court. The hearing occupied just over half a day. An allowance of two days for counsel appears reasonable.
The Supreme and District Courts Indicator on Counsel Fees suggests a range for senior counsel of $4,800 to $7,200 for the first day of an appeal, including preparing the Summary of Argument.[44] Otherwise, the day fee is $3,200 to $4,800. That is, a maximum of $12,000 for two days. The mid-range is less. For junior counsel the range is $3,000 to $4,800, or otherwise $2,000 to $3,200. A maximum of $8,000. Again, the mid-range is less.
[44] South Australian Bar Association, Supreme and District Courts Indicator on Counsel Fees: Guide to counsel fees applicable from 1 June 2017 to date (available online as at 20 December 2023, >
Even if an allowance of two full days each in the mid-range were made for senior and junior counsel, and GST were added, the claims which have been made appear to exceed two full days. Nonetheless, the effect of a solicitor/client order might be said to allow higher rates than rates in the mid-range. Even if some allowance for that were made, it is difficult to see why the allowance should reach $20,000 for both counsel.
Overall, a reasonable allowance by way of a lump sum costs award in favour of the respondent is $25,000 inclusive of GST. In arriving at that award it has not been necessary to make any specific allowance by way of a reduction in fees claimed for the third question. In substance, if not also in form, the Director only included the third question at the explicit request of former senior counsel for the respondent. Section 156(1) of the CPA does not allow a respondent to recoup costs incurred in connection with a question which has not been reserved by the Director.
In so far as there is any attempt to justify more than two days’ work by counsel it is appropriate take that factor into account but, here again, only in a broad way.
Conclusion
There will be an order that the Crown pay the respondent’s costs fixed as a lump sum in the amount of $25,000 inclusive of disbursements and GST.
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