The State of South Australia and the State Bank of South Australia v Peat Marwick & Co and Ors No. Scgrg-94-983 Judgment No. 6243 Number of Pages 13 Procedure Costs

The case involves a dispute between the State of South Australia and the State Bank of South Australia, who are the plaintiffs, and Peat Marwick & Co and others, who are the defendants. The plaintiffs have filed a massive and complex amended statement of claim, which was approximately 2600 pages in length. The court took the view that this document was, in practical terms, an unworkable document. The court made an order dispensing with the requirements of the Supreme Court Rules as to the form and filing of pleadings, and directing the parties to file and deliver documents in the nature of pleadings only in accordance with directions given by the court. The plaintiffs then filed an Amended Formulation of Claim, which the defendants sought to have struck out. The plaintiffs also sought to have the directions order revoked and to permit an alternative pleading regime relying on computer technology. The court rejected these applications and struck out the Amended Formulation of Claim.

The court considered the issue of costs, including the basis on which the costs ordered should be awarded and whether the costs awarded should be paid forthwith. The defendants sought an order for indemnity costs, arguing that the plaintiffs stubbornly persisted in propounding the Amended Formulation of Claim in full knowledge of the defendants' criticisms of it, when they must have realised that they had no chance of success in doing so. The defendants also argued that the conduct of the plaintiffs in relation to the situation which has developed displays an "arrogance" which has precipitated the problems which have arisen, in a manner which ought to attract a special order as to costs. The plaintiffs argued that costs should be apportioned between the parties in relation to the issues decided, such costs ought to be on the normal party and party basis and that it is contrary to principle to direct that they be paid forthwith.

The court held that the defendants substantially carried the day, but the justice of the case demanded that there be a set off against them in respect of certain issues on which the plaintiffs succeeded. The court ordered that the plaintiffs must pay to the defendants 70 per cent of their costs of and incidental to the strike out application and also of the plaintiffs' application dated 21 May 1997 to vary the last-mentioned order. The court also held that the costs so ordered to be paid should be taxed as between party and party up to 13 February 1997 and, thereafter, on the basis of a taxation as between solicitor and client. The court declined to make an order for immediate taxation and payment, holding that the matter should be stayed until such time as final judgment is pronounced in the proceedings, or until further order.

The court made formal orders as envisaged in the reasons, including orders that the Amended Formulation of Claim be struck out, that the plaintiffs' application to rescind the directions order be dismissed, that the proceedings against the Fifth Defendant, Peat Marwick, be stayed until further order, and that the plaintiffs be at liberty to file and deliver a further Formulation of Claim in conformity with the requirements of the court's order with directions dated 29 March 1996. The court also made orders concerning the costs of and incidental to the strike out application, including the issues the subject of the present reasons.