Rodda v Ian Rodda Pty Ltd

[2016] SASC 90

SUPREME COURT OF SOUTH AUSTRALIA

(Civil)

RODDA & ANOR v IAN RODDA PTY LTD & ANOR

[2016] SASC 90

Reasons of Judge Roder a Master of the Supreme Court

20 June 2016

PROCEDURE - COSTS

Application for the issue of an interim allocatur.

Rasch Nominees Pty Ltd & Anor v Bartholomaeus & Ors (No 3) [2013] SASC 14, applied.
Pickering v Smoothpool (No 6) (2001) 217 LSJS 178; [2001] SASC 440; Russo v Buck & Ors (No 5) [2010] SASC 27, considered.

RODDA & ANOR v IAN RODDA PTY LTD & ANOR
[2016] SASC 90

1. JUDGE RODER.  In this action a Judge has ordered that the defendants pay the plaintiffs’ costs of and incidental to the action, certified fit for senior counsel, to be adjudicated on a party/party basis if not agreed.

2. The parties entered into a deed on 21 October 2015 for the discontinuance of an appeal against the orders of the Judge which provided that:

   If the costs payable under those orders are not agreed, the Respondents will proceed to have their costs under the Costs Orders and Further Costs orders adjudicated and, upon such adjudication, the Appellants will pay the costs in the sum adjudicated.

3. There is no dispute as to the liability to pay costs.  Nor is it disputed that there will be a very substantial sum due by the defendants to the plaintiffs as between party and party for costs. 

4. By FDN 91 filed on 29 March 2016, the plaintiffs sought the following orders:

   1.   The plaintiffs are excused from preparation of a Short Form Claim for Costs in accordance with Rule 271 and instead are to proceed to prepare an abbreviated itemised claim listing attendances and other charges in chronological order to be served on the defendants in the form annexed hereto within 8 weeks.

   2.   The plaintiffs are to make available for inspection to the defendants all documents on which the plaintiffs propose to rely if the claim proceeds to adjudication in accordance with Rule 271(3) within one week after service of the abbreviated itemised claim.

   3.   The defendants are to inspect the said documents within 4 weeks after service of the abbreviated itemised claim.

   4.   Having inspected the said documents the defendants are to respond to the itemised claim by inserting on the same document in the columns provided:

   (a)whether or not they agree with each item; and

   (b)the amount (if any) offered for any items which are not agreed;

   and filing and serving the itemised claim with the said responses.

   5.   Both parties are to provide their documents to each other electronically in Excel or Word format.

   6.   An interim allocatur is to be issued for the sum of $650,000.00 payable by the defendants to the plaintiffs.

   7.   The plaintiff and defendant are at liberty to apply for further orders on the adjudication.

   8.   Adjourned for mention to a date to be fixed by the Court.

   9.   Costs in the adjudication.

5. On 29 April 2016 Judge Bochner made orders in terms of paragraphs 1-5 and 7-9 of FDN 91, and listed the order sought in paragraph 6 of FDN 91 for argument.  That argument came on before me on 15 June 2016.

6. The plaintiffs assert that solicitors’ fees exceed $795,000.00 (plus GST) and that counsel fees exceed $460,000.00.  Further, the plaintiffs claim daily trial fees of $41,814.00 and transcript fees of $15,425.20.  It is said that the total costs in fact incurred by the plaintiffs exceed $1.3 million plus GST.  The plaintiffs seek an interim allocatur in the sum of $650,000.00. 

7. Ms Bonesmo, for the defendants, submits that I have no power to make the orders sought.  She says that the Court has not embarked upon an adjudication of the costs and so the power in Rule 274 cannot be used.

8. It is clear that under the 1987 Rules that proposition was correct.  Then, the power to make an interim order could only be exercised “on a taxation of costs” (Rule 101.13).  That meant a taxation of a detailed bill of costs (Pickering v Smoothpool (No 6) (2001) 217 LSJS 178; [2001] SASC 440 at [36], and Russo v Buck & Ors (No 5) [2010] SASC 27 at [19]).

9. As Ms Bonesmo submits, the 2006 Rules have changed that position. 

10. The relevant rule now is Rule 274 which provides that:

    274    (1)     This rule applies both to proceedings in the nature of a preliminary assessment of costs and proceedings in the nature of a detailed adjudication upon costs.

    (2)     The Court has—

    (a)the same powers as it has in relation to an action in the Court;

    (b)the following special powers—

    (i)   the Court is not bound by the rules of evidence but may decide questions by estimation or in any other way that may be expedient in the circumstances;

    (ii)     the Court may make interim orders.

    …

11. There is a definition of “proceeding” in Rule 4.  It is:

    proceeding includes—

    (a)    an action, interlocutory proceeding or appellate proceeding; and

    (b)     any step in an action, interlocutory proceeding or appellate proceeding.

12. The usual course of an adjudication is set out in Rule 271.  The person claiming costs is to file a claim in the approved form.  Production of documents is required.  The respondent to the claim must file a notice admitting the claim in full or to an extent or rejecting it entirely.  There is power for the court to make an order for costs to the extent that they are admitted (or presumed to be admitted).

13. If the claim is not admitted in full, a party may apply for a preliminary assessment and on such an application the court has several powers as set out in sub-rule 271(6). 

14. One of those powers is to order that the matter proceed to a preliminary and/or detailed adjudication.  In that case Rules 272 and 273 apply.

15. In this case the parties have, for good reasons, consented to an order that changes that usual course.  That is the order made by Judge Bochner on 29 April 2016. 

16. It appears to me that that order sets up a “proceeding” “in the nature of” an adjudication.  It is a step in an action – or at least a proceeding – and the nature of the step is an adjudication.

17. It further appears to me that my characterisation of the “proceeding” is consistent with the decision of the Chief Justice in Rasch Nominees Pty Ltd & Anor v Bartholomaeus & Ors (No 3) [2013] SASC 14. In that case the plaintiff contended that an application for a lump sum assessment of costs should not be considered before a short form bill had been delivered. The Chief Justice was satisfied that the adjudication of costs would not be facilitated by the provision of such a short form bill and therefore dispensed with compliance with the rule. That is exactly what her Honour has done in this case. In Rasch, the Chief Justice made an order for an interim allocatur. 

18. For those reasons, I consider that I have power to make an interim order.

19. I turn to the questions of:

    ·whether the power should be exercised at this stage; and

    ·if so, what the quantum of any order should be?

20. I accept Ms Bonesmo’s submissions that a party ordered to pay costs should have an opportunity to see and consider the claim.  In this case Judge Bochner has made an order.  The time for compliance has not yet expired.  It cannot be the case that her Honour required compliance before a decision on this point. 

21. However, it is appropriate that I be very cautious. 

22. 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. 

23. 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.

24. 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.

25. Further, the Judge has certified that the plaintiffs are entitled to fees for the trial of senior counsel.  The trial exceeded three weeks. 

26. 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.

27. 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.

28. I order that an interim allocatur issue in the amount of $210,000.00.

29. The plaintiffs have permission to make further applications for interim orders.

30. Otherwise, Judge Bochner’s orders set up the future progress of the matter.

31. The plaintiffs have substantially succeeded on the argument.  I order that, subject to any application to the contrary by the defendants, the plaintiffs have their costs of the argument.  Any application for an order to the contrary is to be made by interlocutory application within seven days of the delivery of these reasons.