Verdell Pty Ltd v F & G Nominees Pty Ltd
[2002] WASC 58 (S2)
VERDELL PTY LTD -v- F & G NOMINEES PTY LTD & ANOR [2002] WASC 58 (S2)
| Link to Appeal : |
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| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2002] WASC 58 (S2) | |
| Case No: | CIV:2726/1991 | 14-16, 19-23 NOVEMBER 2001, 11-12 FEBRUARY, 28 MARCH, 19 APRIL, 28 JUNE, 25 JULY & 20 SEPTEMBER 2002 | |
| Coram: | WHEELER J | 28/03/02 | |
| 4/12/02 | |||
| 22 | Judgment Part: | 1 of 1 | |
| Result: | Orders made | ||
| A | |||
| PDF Version |
| Parties: | VERDELL PTY LTD F & G NOMINEES PTY LTD MALLESONS STEPHEN JAQUES CORSER AND CORSER |
Catchwords: | Costs Special costs orders Evidence required for application |
Legislation: | Nil |
Case References: | Collins v Westralian Sands Ltd (1993) 9 WAR 56 Cruickshank v Producers Markets Co-operative Ltd [1960] WAR 184 Esther Investments Pty Ltd v Markalinga Pty Ltd (1992) 8 WAR 400 Geraldton Fisheries Co-operative Ltd v Minister for Fisheries, unreported; SCt of WA; Library No 9187; 12 December 1991 Jewel Walk Pty Ltd v Kondinin Group Inc [2001] WASC 197 McConnell v Nationwide News Pty Ltd, unreported; SCt of WA (Owen J); Library No 920670; 10 December 1992 McLean v Kerville, unreported; SCt of WA; Library No 6455; 1 October 1986 Robinson v Corrs, unreported; SCt of WA (Anderson J); Library No 970183; 23 April 1997 Schmidt v Gilmore [1988] WAR 219 Tenbohmer v Eden (1992) 6 WAR 366 Bishop v R (1982) 58 FLR 233 Bruce Angelo Gatti as trustee of the Bruce Gatti Family Trust v Brett Davies [2000] WASC 190 City of Rockingham v Curley & Anor [2000] WASCA 202 Coshott v Learoyd [1999] FCA 276 Dent v Moore (1919) 26 CLR 316 Eaton Developments Pty Ltd v NTC Pty Ltd (1998) 19 WAR 552 Fountain Selected Meat (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 Geraldton Building Co Pty Ltd v Christmas Island Resort Pty Ltd (1994) 13 WAR 242 Hawker De Havilland Limited v Fernandes, unreported; SCt of WA; Library No 960285; 1 March 1996 Lewandowski v Lovell, unreported; FCt SCt of WA; Library No 960310; 14 June 1996 Lewkowski v Bergalin Pty Ltd, unreported; FCt SCt of WA; Library No 7675; 26 May 1989 Mikuljanac v Wigmores Tractors Pty Ltd (1992) 9 SR(WA) 137 Multicon Engineering Pty Ltd v Federal Airports Corporations (1996) 138 ALR 425 Radonich v Radonich [2000] WASC 163 Ratnam v Cumarasamy [1965] 1 WLR 8 Re J L Young Manufacturing Company Limited [1900] 2 Ch 753 Revici v Prentice Hall Incorporated [1969] 1 WLR 157 Vickers v Mayne, unreported; FCt SCt of WA; Library No 980391; 17 July 1998 Wenzel v Australian Stock Exchange Ltd [2002] FCA 353 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
DECISION (2) : 4 DECEMBER 2002 FILE NO/S : CIV 2726 of 1991 BETWEEN : VERDELL PTY LTD
- Plaintiff
AND
F & G NOMINEES PTY LTD
Defendant
MALLESONS STEPHEN JAQUES
Third Party
- Plaintiff
AND
CORSER AND CORSER
Defendant
(Page 2)
Catchwords:
Costs - Special costs orders - Evidence required for application
Legislation:
Nil
Result:
Orders made
Category: A
Representation:
CIV 2726 of 1991
Counsel:
Plaintiff : Mr J Gilmour QC & Mr C D Belyea
Defendant : Mr D H Solomon
Third Party : Mr J A Chaney SC
Solicitors:
Plaintiff : Clayton Utz
Defendant : Solomon Brothers
Third Party : Blake Dawson Waldron
CIV 2294 of 1992
Counsel:
Plaintiff : Mr D H Solomon
Defendant : Mr K J Martin QC & Ms F C E Davis
Solicitors:
Plaintiff : Solomon Brothers
Defendant : Phillips Fox
(Page 3)
Case(s) referred to in judgment(s):
Collins v Westralian Sands Ltd (1993) 9 WAR 56
Cruickshank v Producers Markets Co-operative Ltd [1960] WAR 184
Esther Investments Pty Ltd v Markalinga Pty Ltd (1992) 8 WAR 400
Geraldton Fisheries Co-operative Ltd v Minister for Fisheries, unreported; SCt of WA; Library No 9187; 12 December 1991
Jewel Walk Pty Ltd v Kondinin Group Inc [2001] WASC 197
McConnell v Nationwide News Pty Ltd, unreported; SCt of WA (Owen J); Library No 920670; 10 December 1992
McLean v Kerville, unreported; SCt of WA; Library No 6455; 1 October 1986
Robinson v Corrs, unreported; SCt of WA (Anderson J); Library No 970183; 23 April 1997
Schmidt v Gilmore [1988] WAR 219
Tenbohmer v Eden (1992) 6 WAR 366
Case(s) also cited:
Bishop v R (1982) 58 FLR 233
Bruce Angelo Gatti as trustee of the Bruce Gatti Family Trust v Brett Davies [2000] WASC 190
City of Rockingham v Curley & Anor [2000] WASCA 202
Coshott v Learoyd [1999] FCA 276
Dent v Moore (1919) 26 CLR 316
Eaton Developments Pty Ltd v NTC Pty Ltd (1998) 19 WAR 552
Fountain Selected Meat (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397
Geraldton Building Co Pty Ltd v Christmas Island Resort Pty Ltd (1994) 13 WAR 242
Hawker De Havilland Limited v Fernandes, unreported; SCt of WA; Library No 960285; 1 March 1996
Lewandowski v Lovell, unreported; FCt SCt of WA; Library No 960310; 14 June 1996
Lewkowski v Bergalin Pty Ltd, unreported; FCt SCt of WA; Library No 7675; 26 May 1989
Mikuljanac v Wigmores Tractors Pty Ltd (1992) 9 SR(WA) 137
Multicon Engineering Pty Ltd v Federal Airports Corporations (1996) 138 ALR 425
(Page 4)
Radonich v Radonich [2000] WASC 163
Ratnam v Cumarasamy [1965] 1 WLR 8
Re J L Young Manufacturing Company Limited [1900] 2 Ch 753
Revici v Prentice Hall Incorporated [1969] 1 WLR 157
Vickers v Mayne, unreported; FCt SCt of WA; Library No 980391; 17 July 1998
Wenzel v Australian Stock Exchange Ltd [2002] FCA 353
(Page 5)
- WHEELER J:
The applications
1 I have before me numerous applications revolving around the question of costs. They arise from a 10 day trial which took place over late 2001 and early 2002, in which I was the trial Judge. I will come to the detail of the numerous applications shortly. I have also received written submissions in relation to the question of costs, and have heard argument, which runs to over 100 pages of transcript, touching that issue. There have been filed, allegedly for the purpose of assisting me in determining these questions, a pile of affidavits which measures some 5 cms in thickness. It is desirable for me to describe in general terms the contents of each of these affidavits.
The affidavits
2 In chronological order, the affidavits are as follows. In the action between F & G Nominees and Corser and Corser I have:
• 18 April 2002 - Affidavit of Ms Crawford, a solicitor employed by the defendant Corser and Corser.
This affidavit gives in some detail the dates of a variety of matters which can be ascertained from the Court file, eg issue of the writ. It states the deponent's belief that the issues considered in the action were of unusual complexity, and sets out in some detail the issues dealt with in the written submissions which were made to me and the factual issues which arose in the trial. In similar vein, it advises me of the length of the trial and the representation of the defendants at the trial. It sets out in very broad terms the sort of work encompassed in getting the trial up (eg "reviewing all witness statements ... "). It also lists the various discovery lists, and sets out the number of documents discovered on each occasion, so that I could conveniently ascertain from the affidavit that there were approximately 850 documents discovered in both actions between all parties. This last feature appears to me to be the only useful feature of the affidavit.
• Supplementary affidavit of 21 May 2002 of Ms Crawford.
It annexes certain material which had already been tendered as an exhibit at the trial. This material forms the bulk of the affidavit. It also annexes some brief correspondence between the parties relating
(Page 6)
- to the question of whether a special order as to costs should be made and in relation to an O 24A offer of compromise.
- • 24 May 2002 - Supplementary affidavit of Ms Crawford.
This annexes a brief draft bill of costs comparing the amounts available under the scale with the amounts which would be claimed by the defendants if a special order for costs were made. It is drafted by reference to the scale, so that for example in relation to counsel fee, there is an item entitled "counsel fee on brief", the item number from the scale, and the two amounts (ie the scale amount in one column and the amount which would be claimed in the next). The affidavit also contains certain matters of submission which do not significantly increase its length.
• 20 June 2002 - Affidavit of Mr Blundell on behalf of the plaintiff.
It annexes a variety of trial directions, which are of course available on the Court file. It annexes a witness statement prepared by the defendant but not relied on by the defendant at trial, in order to demonstrate that costs were wasted on behalf of the plaintiff in preparing for cross-examination of the witness who was not called. It also refers to a variety of other communications between the parties in the lead up to the trial. The submission is made in relation to those communications that at various points the defendants either engaged in unnecessary work or caused the plaintiffs to engage in unnecessary work prior to the trial.
• 19 September 2002 - Further supplementary affidavit of Ms Crawford.
This brief affidavit refers to the earlier affidavits and states the basis of Ms Crawford's knowledge and belief about the matters deposed to therein.
• 22 May 2002 - Affidavit of Mr Garnsworthy prepared on behalf of the plaintiff.
It consists almost entirely of a partially complete draft bill of costs. It follows the form of the later draft bill to which I will refer shortly.
(Page 7)
- • 6 June 2002 - Affidavit of Ms Pickett, a receptionist employed by the defendant.
It annexes a quantity of correspondence between the parties relating to proposed special orders as to costs, some of which raises issues of relevance to the application before me and some of which does not.
• 20 June 2002 - Affidavit of Mr Blundell, solicitor for the defendant.
This affidavit notes the number of changes of solicitor and counsel on the part of the plaintiff, and deposes to Mr Blundell's belief that costs have been wasted as a result.
• 21 June 2002 - affidavit of Mr Belyea.
This sets out in detail issues which were raised during the trial, the length of trial, the length of transcript and of written submissions, the length of cross-examination and a variety of other matters which were, of course, quite obvious to me as the trial Judge. The affidavit also sets out in broad terms, what was done by the plaintiff in relation to discovery, including non-party discovery, and the course of correspondence between the parties concerning special orders as to costs.
• 21 June 2002 - Further affidavit of Mr Garnsworthy on behalf of the plaintiff.
The greater part of this affidavit is an annexure which consists of a draft bill of costs. The body of the affidavit itself sets out the material which Mr Garnsworthy examined and the steps which he took in order to prepare that draft bill. It includes the statement that "the level of and attention to detail has been particularly time consuming as I had no prior knowledge of the proceedings before instructions were given to me". The bill consists of two parts. As a whole, it is some 99 pages long. Pages 2 to 7 contain what I might describe as a short form or conventional form bill setting out the relevant item of scale (for example "subsequent days of trial - junior counsel item 14c"), the amount which could be claimed under the scale, and the amount which would be claimed if special orders as to costs were made removing the scale limit. It appears that before disbursements, the maximum which could be claimed under the scale would in total be a sum of $180,065.75, while the amount which the plaintiffs would seek to claim would be $337,534.57. The rest of the bill consists of a glossary or legend setting out the initials of the various counsel, solicitors, and employees employed by the plaintiff, and numerous schedules setting out, as I understand
(Page 8)
- it, in relation to many of the scale items, every single action performed by any person on behalf of the plaintiffs which is recorded in the files of the plaintiffs' solicitors. By way of example, I set out the first seven items on p 16, which forms part of the discovery schedule and the last nine items on p 77 from the schedule which refers to the plaintiff's chamber summons for further and better discovery.
- "No Date Detail DISCOVERY F/E Time $
72 19.12.97 Telephone call: Clive Raymond - NR 0.20 $20.63
missing files
73 23.12.97 Telephone call: M Blundell - NR 0.20 $20.63
privileged documents
74 23.12.97 Telephone call: C Raymond NR 0.10 $6.88
75 23.12.97 Telephone call: M Blundell - NR 0.10 $6.88
- extending time for further affidavit
76 23.12.97 Drafting affidavit of discovery NR 1.00 $103.14
77 24.12.97 Preparing annexures to affidavit NR 0.50 $48.13
- of discovery
78 24.12.97 Telephone call: Phillips Fox SPC 0.20 $20.63"
and:
"No Date Detail CHAMB SUMMS F/E Time $
32 29.5.98 Conferring with J Carter: discovery SPC 0.40 $48.13
33 2.6.98 Editing letters JC 1.00 $96.27
34 4.6.98 Letter to Solomon Bros serving DK 0.20 $6.88
order
35 9.6.98 Letter to Solomon Bros: ANZ JC 0.20 $13.75
application and hearing time
36 9.6.98 Letter to Supreme Court JC 0.70 $68.76
37 9.6.98 Sorting out file JC 0.20 $13.75
38 11.6.98 Letter to Solomon Bros: time for JC 0.70 $68.76
special appointment
39 11.6.98 Reviewing file JC 0.50 $48.13
40 11.6.98 Swearing affidavit JC 0.10 $6.88"
(Page 9)
4 As will perhaps be apparent from my summary of the affidavit material, it is my view that almost all of the material before me in the affidavits (in terms of volume) is of no assistance in relation to the questions which I have to determine on the special costs applications. It is also my view, which I will develop a little later, that in some areas the material is, despite its volume, deficient. In order to explain those views, I think it is desirable to consider in some little detail the cases concerning the making of special orders as to costs and the light which those cases can shed on the materials which it is necessary for the Judge to have before him or her, and the way in which the Judge approaches the task of determining whether such an order should be made.
Special Costs Orders - Principles and Evidence
5 The prior regime in relation to costs and special orders as to costs is discussed in some detail in Cruickshank v Producers Markets Co-operative Ltd [1960] WAR 184. At that time, the amount which could be recovered by way of costs was related to the value of the subject matter. It was considered that the principle underlying the scale was a "swings and roundabouts" one, so that solicitors might on occasion be inadequately rewarded for work actually done where the subject matter of the action was of little value, and might on occasions receive more than adequate remuneration where the value was greater. Over time these discrepancies would average out, so that the solicitors received fair remuneration for work done over a range of matters. There was, further, a lump sum which the total costs of an action exclusive of disbursements could not exceed unless the court certified for the whole of the costs.
6 It was held in Cruickshank that the maximum sum should not be increased "save in most exceptional circumstances" and upon the "clearest evidence" that an increase was justified. I should note that, although the underlying principle of the costs scales has changed, certain observations in relation to costs made in that case are still applicable today. Virtue J at 194 referred to the expensive and "virtually unproductive" nature of the taxation process. That comment is certainly applicable to the way in which these applications for special orders have proceeded, and it is my view that while the court has an important role in supervising levels of remuneration, it should not encourage unnecessary work in this area.
7 The significant alterations in the costs scales and the principles relating to the making of special orders as to costs in 1967 gave rise to a departure from the extremely cautious approach enunciated in Cruickshank. Certain observations were made in McLean v Kerville
(Page 10)
- (unreported; SCt of WA; Library No 6455; 1 October 1986) which were relied upon by the parties in this matter as justifying the volume of material put before me. Burt CJ said at p 2 of his Honour's reasons that, so far as the getting up case for trial item was concerned:
"If the trial Judge is of the opinion that for reasons falling within O 66 r 12(1) the allowance in that scale should be increased then before making any order it would be a good rule of practice if he were to require the person seeking such an order to bring in a draft bill so enabling the trial Judge to tailor his order to the then known facts".
It is to be noted that his Honour apparently thought it was open to the trial Judge to form an opinion that the allowance should be increased before seeing any draft bill; it should also be noted that nothing in that observation requires a bill of the detail set out in Mr Garnsworthy's affidavits. Indeed, when one considers the materials which the Full Court actually had before it in that case, it was able to review the exercise of the trial Judge's discretion without reference to any such bill. Rather, it appears that the court was "told" that the number of hours involved in preparation was 224, and it was apparent from the court file how many witnesses had been called, what the heads of damage claimed were and how long the case had taken at trial. In view of those considerations, the Full Court did not consider 224 hours to be an excessive number of hours preparation.
8 In Schmidt v Gilmore [1988] WAR 219 it was established that the amount of work done could of itself constitute a good and sufficient reason for making an order increasing the scale allowance. It was held that the discretion to order a departure from scale was not one to be exercised upon a finding of inadequacy of any degree, but would be exercisable where the inadequacy was "such as to constitute a good and sufficient reason" (per Burt CJ at 220). In Geraldton Fisheries Co-operative Ltd v Minister for Fisheries (unreported; SCt of WA; Library No 9187; 12 December 1991) Anderson J at 7, in considering the way in which the court should fix the value of the subject matter so as to arrive at a fair remuneration for the solicitors (where the value of the subject matter could not be readily ascertained) commented that that was an "awkward task" for Judges, who are not experts in the cost of running legal practices. However, his Honour referred to an estimate of the time which might have been reasonably taken in getting the case up for trial, but without seeking to apply any mathematical formula or undertaking any precise computation. In Tenbohmer v Eden (1992) 6 WAR 366, a
(Page 11)
- precise computation was undertaken, in one sense. However that was a very unusual case in which the matter of costs had already been before the taxing officer who had inadvertently taxed them at a sum in excess of the scale, so that the court had before it, at the time of the application for a special costs order, the taxing officer's opinion as to precisely what would be reasonable remuneration for work reasonably undertaken.
9 A discussion of the way in which the Judge should approach the task of considering a special order as to costs was undertaken by Malcolm CJ in Esther Investments Pty Ltd v Markalinga Pty Ltd (1992) 8 WAR 400. At 404, his Honour said:
"It is a matter for the trial Judge to determine as a matter of judgment whether, on the face of it, the amount of work done appears to have been reasonably done so as to constitute good and sufficient reason for making the order.
That is a judgment which is essentially preliminary and provisional in nature for the purpose of the exercise of the discretion granted by the Rules. A Judge will no doubt draw on his own experience, the impression gained during the course of the litigation, and his appreciation of the issues which have been involved, in making that judgment."
- That view was confirmed by the Full Court in Collins v Westralian Sands Ltd (1993) 9 WAR 56. So far as I can ascertain, the view there expressed has been followed in all subsequent cases.
10 My researches suggest that the only case in which it has been suggested that the sort of detail which is to be found in the affidavits of Mr Garnsworthy, and which it might be appropriate to furnish to a taxing officer, should be made available to a Judge on a special costs application is McConnell v Nationwide News Pty Ltd, unreported; SCt of WA (Owen J); Library No 920670; 10 December 1992. In that case, Owen J had been the trial Judge. He referred to his own knowledge of the issues in the action, and expressly adopted the approach described by Malcolm CJ in Esther Investments, which I have quoted above. It appears that his Honour had before him a schedule of some kind which contained some details of the time engaged in by solicitors acting for the party seeking the order. At 7 of his Honour's reasons, he observed that:
"It would not be appropriate, nor is it necessary, to review the schedule of work item by item and to assess its worth. That is the job of the taxing officer. The Judge's task is to look at the
(Page 12)
- schedule in the context of the proceedings as they were conducted and to ascertain whether it would be fair and reasonable to make a special order."
- I would respectfully agree with those observations. However, his Honour also said at 9:
"There are deficiencies in the materials presented by the plaintiffs in support of this application. It would have been preferable had the plaintiff filed a draft bid of costs for taxation, accompanied by the appropriate schedules."
- His Honour noted that it appeared that the schedule contained items which were of a solicitor/client nature and which were not properly claimable. His Honour went on however to observe that " ... that is a matter for the taxing officer". With respect to his Honour, I have some difficulty in following those observations. If it is not the task of the Judge to go through the schedule line by line, and if questions of whether certain items may not be properly claimable is really a matter for the taxing officer, it is not entirely clear how a draft bill, accompanied by appropriate schedules, would have been of assistance.
12 So far as one can ascertain from the reasons for decision, it appears that in subsequent cases the approach of the parties seeking a special order as to costs has been to err on the side of caution and to provide the Master or Judge with voluminous materials relating to the work done. Notwithstanding that amount of detail, there have nevertheless been held to be deficiencies in the materials presented. It appears that while parties have provided detailed schedules setting out the activities in which solicitors have engaged - so far as I can tell, schedules which may be very similar to the schedules from the affidavit of Mr Garnsworthy portions of which I have extracted in this case - the materials have not explained why the work was done.
13 For example, in Robinson v Corrs, unreported; SCt of WA (Anderson J); Library No 970183; 23 April 1997, Anderson J was provided with a "very extensive" schedule of work. His Honour commented that he did not know whether it was all reasonably necessary
(Page 13)
- but that he was able to draw on his general experience and knowledge of the particular case to make a special costs order. Similarly, in Jewel Walk Pty Ltd v Kondinin Group Inc [2001] WASC 197, Roberts-Smith J was dealing with a matter in which his Honour had not been the trial Judge. His Honour had before him a bill and detailed schedules which appear to have been in a form very similar to the schedules in Mr Garnsworthy's affidavit in this action. It was argued before his Honour that as a result of the late filing of a large affidavit it became necessary for the party seeking the special order to seek the assistance of an accountant and to analyse the material annexed to the late filed affidavit. The work actually done in relation to the affidavit appears to be that set out at [41] of his Honour's reasons for decision, and it is not necessary to reproduce it here. His Honour commented that "None of this affords any useful clarification nor assistance for the purposes of this application." and went on to explain at [43] that the difficulty for his Honour was that none of the material produced to him explained the content of the voluminous affidavit, the extent to which it related to matters pertaining to the action, what work was done in responding to it or why that particular work had to be done in response to it.
14 Leaving aside the observations of Owen J in McDonnell at p 9 which may have been prompted by the circumstances of that case, and which I would respectfully suggest should not be seen as stating a general rule, it would appear that the following general propositions emerge in relation to the task of the Judge who determines whether or not a special costs order should be made. If the Judge has been the trial Judge, he or she will be able to draw on experience of the trial, which will be of great assistance in understanding the issues involved, and in appreciating the extent to which, for example, detailed preparation for cross-examination appears to have been necessary, or work appears to have been necessary beyond normal court sitting times to respond to matters arising suddenly during the course of the trial. Whether or not the Judge has been the trial Judge, a perusal of the pleadings, the transcript, and the submissions, together with the materials which may relate to interlocutory applications, will be of great assistance in understanding whether it was necessary for additional work to be done.
15 Whether or not the Judge has been the trial Judge, there may be work done of which the Judge is not aware. For example, there may have been unusually voluminous discovery, which is not reflected in the actual number of documents tendered at trial, or there may have been consultation with potential expert witnesses or research of issues of law which were not in the end reflected in the trial. Such work may not have
(Page 14)
- been unnecessary in the light of what was known at the time, but may have resulted in agreement between the parties or a decision by one or another party to abandon an issue which at first appeared to arise. In those cases, it will be necessary for affidavit material to be placed before the Judge explaining in general terms what work was done and why it was done, and giving some indication of the time occupied by such work. It will, of course, be necessary to establish that, prima facie, costs appear to have been incurred which exceed those allowable under the scale. Whether this material is produced in the form of a computer printout, or a draft bill, or a summary prepared by the practitioner having carriage of the file, does not appear to me to matter. If the step is taken of producing a detailed schedule or a computer printout or the like, the Judge will not examine the material line by line, looking for possible duplication or overlap, or enquiring about the way in which every 10 minutes was spent.
Evidence in this application - Evaluation
16 In the light of those general propositions, there are I think two principal criticisms which can be levelled at the majority of the affidavit material placed before me. The first is that a good deal of it consists of deponents placing on oath things which I already know or can ascertain readily from the Court file, such as the nature of the issues involved in the trial, or the pre-trial orders which were made. The second is that the very detailed schedules in Mr Garnsworthy's affidavits, to which I have referred, do not themselves explain, or even hint at, why it was necessary that any particular item of work be done. For example, turning to item 72 on p 16, what were the "missing files" which necessitated the telephone call to Mr Raymond? What was it about the affidavit of discovery at item 76 that called for an hour's drafting? Similarly, on p 77 at item 32, why did "SPC" (Mr Crabb) need to confer with Ms Carter, and what about? What letters at item 33 required an hour's editing, and for what purpose was the review of the file referred to at item 39 undertaken? None of these schedules can be cross-referenced with the very general explanations in the affidavit of Mr Belyea of the additional work which had to be done in relation to discovery. Indeed, to the extent that Mr Belyea's affidavit relies upon issues of third party discovery as adding to the complexity of the discovery process, it is to be noted that there is nothing in the schedules, so far as I can discover, which anywhere conveniently sets out how many of the many hours spent on this matter related to particular issues of third party discovery.
(Page 15)
17 The course I propose to adopt in relation to the merits of the application for special orders as to costs is as follows. I rely upon my own experience of the trial, and knowledge of the issues involved, together with my observations of the roles played by each of counsel and the various solicitors in court. I have already observed in reasons earlier published that although I found that the matter was not ultimately a complex one, it was presented by F & G Nominees in a way which involved considerable complexity. Many issues of some novelty were raised. In addition, many issues, such as questions of whether admissions could be withdrawn, arose during the course of the trial unexpectedly and required immediate attention. Aspects of F & G's pleadings were not entirely easy to understand, and on their face required attention to somewhat complex questions of fact.
18 In addition, I have regard to the volume of interlocutory material and to the fact that numerous contested interlocutory applications were made. I accept the evidence of Mr Belyea, so far as it goes, that questions of third party discovery did appear to be potentially relevant, that discovery was relatively complex, and that there was extensive amendment to the pleadings which required attention throughout the trial. I also accept Mr Belyea's evidence in his affidavit that a potential strike out application which was raised by counsel for F & G during the course of the trial required additional attention and that the matter, because of the rather unusual way in which it was presented, warranted the attendance of a practitioner of some seniority at mediation.
Verdell action - orders
19 With those observations in mind, I turn to the plaintiff's amended minute of special orders, directions and certificates.
20 I propose to use the numbering in Verdell's amended minute for convenience.
21 1. Interrogatories were delivered prior to trial and there is nothing to suggest that they were other than properly delivered and justifiably administered. I see no reason not to grant a certificate for interrogatories.
22 2. I have already ordered that Verdell be paid any reserved costs and there is not need to make any further order in those terms.
(Page 16)
23 3. As I understand it there is only one order outstanding which the plaintiff overlooked extracting, and I granted leave to extract that order which is required for taxation of its costs.
24 4. As I have observed, I accept that there were complexities in relation to discovery and there appears to have been a reasonable volume of documents. It appears to me appropriate therefore to permit the lifting of the limits in relation to discovery and inspection. Similarly, because of the complexity of the issues, and because of the way in which matters arose at short notice during the course of the trial which required attention outside ordinary sitting hours, it appears to me appropriate to increase the items for getting up and fee on brief to junior and senior counsel and for subsequent days of trial.
25 However, so far as interrogatories are concerned, the only explanation for the increase sought is that it relates to counsel's fee, and there is nothing to indicate whether the work done by counsel was reasonably or necessarily done, or indeed what it consisted of. Similarly, in relation to the hearings referred to in par 4(k), although I accept that overall additional work was reasonably and necessarily done in relation to this trial, it is not clear to me what there was about those hearings which required work which would not be adequately remunerated by the scale amounts. So far as the defence to counterclaim is concerned, the items for reply and defence to counterclaim in the draft bill do not, as I understand it, suggest that additional work was done or that the limits need be lifted. So far as the mediation conference is concerned, it appears to me that the complexity of the issues and the desirability of settling what was at bottom a relatively simple claim, was such that it would be appropriate to lift the limits in relation to the mediation conference item, subject to the comment that I make in relation to par 5 of the amended minute.
26 In summary, so far as par 4 is concerned, I would be prepared to order that the plaintiff's costs be taxed without regard to the limits applying to discovery, inspection, getting up for trial, fee on brief for junior and senior counsel, subsequent days of trial for senior and junior counsel, and for the mediation conference. I would not otherwise make the order sought.
27 I should observe at this point that the defendant F & G particularly drew my attention to the numerous changes of solicitor on the part of the plaintiff, and to changes of counsel, and to the apparently very large number of practitioners who at one stage or another had had something to do with this action on behalf of the plaintiff. It was submitted that this
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- necessarily resulted in considerable duplication and that it would not be appropriate for the defendant to bear the costs of work arising out of those changes. It may be that costs have been incurred which could have been saved had fewer practitioners had the continuous carriage of the matter on behalf of the plaintiff. However, it is my view that, having formed the opinion that the matter was of unusual complexity and that it would appear that the amount of work would justify some remuneration above the scale, the questions of whether there has been work unnecessarily done by reason of changes of solicitor or counsel or for any other reason is a question which is appropriately left to the taxing officer.
28 5. So far as the preparation and attendance of senior counsel at the mediation conference is concerned, I accept that it was desirable for a practitioner of some seniority to attend that conference. However, it appears to me from the material which has been provided to me that Mr Belyea was the practitioner who attended the conference with senior counsel. Having regard to the fact that Mr Belyea appears to have had the carriage of the matter for some considerable time, as his affidavit discloses, and having regard to his seniority, it appears to me that it was not necessary for both he and senior counsel to attend. Having regard to the order which I propose to make in relation to the hourly rates of Mr Belyea, it would not in my view be appropriate to make an order in respect of the preparation and attendance of senior counsel as well.
29 So far as the hourly rates of senior counsel, junior counsel, Mr Belyea and Mr Crabb are concerned, I note that the rates for a "senior practitioner" in the determination relate to any practitioner admitted for more than five years. Mr Belyea has been admitted for significantly longer than that time, and appears to have had the carriage of the action in interlocutory matters and the like where one otherwise might have expected counsel to have been briefed. It appears to me that it is appropriate that the rates of Mr Belyea not be limited to the rates prescribed by the Legal Costs Committee. Mr Crabb's role does not immediately appear. Nor am I able to ascertain from any of the materials before me why it is considered necessary that senior counsel be remunerated at a rate in excess of that prescribed by the scale, which is by definition one appropriate to senior counsel.
30 So far as item 5 is concerned, I would only direct that the hourly rates for Mr Belyea, whether acting as counsel or a solicitor, not be limited to the rates prescribed by the Legal Costs Committee.
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31 6. So far as par 6 is concerned, I have already referred to what appears to me to have been the unusual complexity of the issues. It appears to me that that complexity justifies the application of item 13A to the preparation of the plaintiff's statement of issues for mediation, and to the preparation of closing submissions at trial. Further, because of the relationship between the two actions, it appears to me that it is appropriate that there be an application of item 13A to the mutual discovery in action 2294 of 1992 (the Corser's action). However, subpars (a), (b), (g) and (h) appear to be primarily concerned with matters arising after the trial and largely after the publication of my reasons for decision. They are matters which could and should in my view have been considered and dealt with during the course of the trial. Their consideration after the trial necessarily involved a degree of double handling, and in my view also appears to have resulted in more detailed attention than such matters would reasonably have attracted during the course of a trial. I do not propose to make orders in respect of those matters. So far as the attendance of senior counsel at the mediation conference is concerned, I have already dealt with it under par 5. I would therefore make orders in terms of par 6(c), (e) and (f) but would not otherwise make the orders sought.
32 7. So far as this paragraph is concerned, I accept Mr Belyea's evidence in his affidavit concerning the non-party discovery application, and I can see no reason not to make the order sought. I therefore order that the plaintiff's costs of the non-party discovery application be its costs in the cause.
33 So far as the costs of the application are concerned, I have made a number of special costs orders. The plaintiffs have been largely successful, and in particular, I have not accepted the defendant's submission that I should concern myself with questions of duplication arising out of changes of solicitor and the like. For reasons which I will come to later, I have also not accepted the defendant's submissions in relation to questions of extension of time. It therefore seems to me appropriate that the defendant pay the plaintiff's costs of this application to be taxed.
Corser and Corser - orders
34 So far as Corser and Corser are concerned, their application dated 17 May 2002 seeks either a special order lifting the upper limits of the scale in respect of certain items or, in the alternative, an indemnity costs order. I do not think it is now open to Corser and Corser to seek an order
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- for indemnity costs. Earlier this year, shortly after the delivery of my reasons for decision, Corser and Corser foreshadowed that they may well be making application for special orders as to costs. Certain of the costs issues were dealt with by me in my reasons for decision in the supplementary decision of 24 April 2002. At that time, having regard to the orders which had then been sought, I made an order that in the Corser and Corser action the plaintiff F & G should pay the defendant's costs of the action to be taxed. An order of that kind is necessarily an order that the costs be taxed on a party and party basis. What is in effect sought by the alternative order is a variation of an order which I have already made and which has been extracted. No reason is advanced in any of the materials placed before me by Corser and Corser for the failure to seek indemnity costs at an earlier time, or explaining why the application comes to be made at this stage. It may be that the matter was simply overlooked. However, it appears to me there is no material which would justify the exercise of the power to recall the orders already made so as to vary them in that way.
35 The special costs order sought is in relation to the lifting of the upper limit set by the Court scale in relation to discovery, inspection, getting up and fee on brief for counsel. So far as discovery and inspection are concerned, I note that the draft bill annexed to Ms Crawford's affidavit of 24 May 2002 does not suggest that the scale would be inadequate remuneration in relation to those two items.
36 So far as the other issues are concerned, I noted in my supplementary reasons of 24 April that there is some difficulty facing Corser and Corser in establishing that the limits set by the scale are not adequate, given the necessarily secondary nature of its role in the trial [par 7]. However, it is my view that there are two matters which would justify an order removing the upper limits set by the Scale in relation to getting up and fee on brief for counsel. The first is that, as I have noted, a number of issues arose during the course of the trial which called for work beyond that which would normally be expected of counsel on each day of the hearing. Some of those issues - in particular those relating to potential lost opportunity questions - concerned Corser and Corser. Further, there were, I think, some ambiguities and difficulties in the pleading, again particularly relating to potential lost opportunity issues, the result of which may have been that additional work was called for before Corser and Corser could be clear about the nature of the case which had to be met. The correspondence which was tendered to me during the course of the trial in relation to this question tends to bear out that view.
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37 For those reasons, I think it is appropriate to order that costs be taxed without regard to the scale limits in relation to items 13 (getting up for trial) and 14 (counsel fees). Of course, it does not follow from that view that all of the very considerable costs referred to in the draft bill have been necessarily and reasonably incurred. In particular, I would reiterate the comments which I made in my supplementary reasons of 24 April 2002 to the effect that Corser's role in the trial was of a secondary nature; it follows from that, that it would not have been appropriate for Corser and Corser to prepare, in relation to the issues arising in the Verdell action, as if Corser and Corser were a party to that action, notwithstanding the relationship between the two actions.
Notices to produce
38 There are two further issues with which I have to deal. The first is that which relates to a number of notices to produce documents pursuant to O 26 r 8(2) filed by F & G in both proceedings. The notices follow similar formats in each case. In essence, they call on Verdell and on Corser and Corser to produce all of the records to which reference is made in the affidavits to which I have referred earlier. For example, in relation to the affidavit of Mr Garnsworthy sworn 22 May 2002, Verdell is called upon to produce the "correspondence files for the plaintiff's present solicitors [which] occupy 14 volumes plus Court documents files".
39 A number of issues revolving around the proper interpretation of O 26 r 8 were argued before me. In my view, it is not necessary to determine any of them. O 26 r 11 is to the effect that no order for production of documents for inspection shall be made unless the Court is of opinion that the order is necessary, either for disposing fairly of the matter or for saving costs. In my view, an order of the kind sought by F & G is not only unnecessary, but is likely significantly to increase costs.
40 The misconception underlying the notices to produce is, I think, the same misconception which underlies a great deal of the affidavit material which I have earlier described. If it is not my task to go through the relevant schedules line by line, still less is it necessary for me to consider the materials upon which those drafting the schedules have relied in order to determine whether their characterisation of the work is accurate or whether matters which appear in one line may duplicate matters to be found in another, and so on. What F & G propose, it appears from the argument addressed to me, is essentially an examination of all of the files of Verdell and Corser and Corser in order to ascertain with precision whether each individual attendance recorded in those files was reasonably
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- necessary for the purpose of the litigation. I would decline to make any orders in relation to the notices to produce.
41 However, I would also make no order as to costs in relation to the costs of the argument concerning those notices, since it appears to me that the giving of the notices stemmed from a misconception which was shared by all parties and which was fed in part by the nature of the material filed by Verdell and by Corser and Corser in support of their costs applications.
Extension of time
42 It is submitted in the Verdell action by F & G that Verdell's application for special orders as to costs is out of time, and that it was necessary for Verdell to bring a motion or chamber summons within 30 days of the supplementary reasons and orders which I published on 24 April 2002. Verdell filed a document entitled "Minute" of special orders on 22 May 2002 and served it on 24 May, and then brought an application by chamber summons dated 28 May 2002.
43 It is not clear to me that a motion or chamber summons was in fact necessary. An application for special costs orders is commonly made orally immediately upon delivery of judgment in an action. Indeed, except in the most complex cases, it is, as has often been said, counsel's responsibility to consider the orders which ought to be made in an action and, when taking judgment, to be prepared to seek any orders which may be necessary. The Court recognises that in some matters it is undesirable for counsel taking judgment to attempt to formulate proper orders on the spot, and for that reason the practice of delivering an advance copy of judgment in some cases has been provided for.
44 However, without finding it necessary to determine that issue, I would to the extent necessary extend time for the making of Verdell's application for special orders as to costs. The likelihood of such an application, although not any detail of its terms, was foreshadowed when I published my reasons in this matter much earlier in the year. Verdell at that time foreshadowed that it might be seeking an extension of time within which to make application for such orders, indicating a view that the application was one which would require some consideration by the parties. Since that foreshadowed application, the parties have had some correspondence in relation to the orders which would be sought, and have of course considered whether any orders were able to be agreed. I am unable to see any prejudice to F & G from such delay as there may have been. I would therefore extend time to the extent necessary and I would
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also grant leave to make the minor amendments to the minute of proposed orders which were sought by Verdell at the hearing of the application before me.
Conclusion
45 The orders which I would make would therefore be as follows:
In each action:
1. Dismiss F & G's Notice to Produce Documents.
In action CIV 2726 of 1991:
2. To the extent necessary, extend the time for making application for special costs orders to 13 September 2002.
3. Orders in terms of the following paragraphs of the Plaintiff's Further Amended Minute of Special Orders, Directions and Certificates dated 13 September 2002:-
1, 3, 4(b)(d)(e)(f)(g)(h)(i) and (j), 5(b) as to Cameron Belyea only, 6(c)(e) and (f), 7 and 8.
4. Orders in terms of the following paragraphs of the Defendant's Minute of Proposed Special and Indemnity Costs Orders dated 16 September 2002:-
1.3, 1.4, 3, 5.
0
14
0