Viscariello v Macks

Case [2020] SASC 44

SUPREME COURT OF SOUTH AUSTRALIA

(Civil)

VISCARIELLO v MACKS

[2020] SASC 44

Reasons for Decision of Auxiliary Judge Norman a Master of the Supreme Court

11 March 2020

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - TAXATION AND OTHER FORMS OF ASSESSMENT - PRINCIPLES OF TAXATION OR ASSESSMENT

Application made prior to lodgement of a costs claim for the production and inspection of documents on which the claiming party proposed to rely if claim proceeded to adjudication - rule 271 permits responding party to seek production of such documents without formal claim first having to be served - solicitor fee accounts, schedules of attendances and disbursement records discoverable under rules upon application by responding party to claim - onus on responding party to establish no liability of claiming party but generally costs agreements do not attract legal professional privilege and where reason to believe indemnity principle might be infringed, costs disclosure letters, agreements and solicitor client bills can be inspected by responding party prior to adjudication - orders made for production of costs or fee agreements, retainer letters, letters of engagement or similar documentation between plaintiff and solicitors or counsel setting out terms upon which legal costs would be incurred, invoiced or paid, solicitors’ or counsel’s fee invoices or bills including disbursements recording legal costs claimed and receipts, records of payment or similar documentation evidencing plaintiff having actually paid any legal costs claimed in relation to the proceedings.

Evidence Act 1929 ss 67 and 67C; Supreme Court Civil Rules 2006 rr 3, 113, 116, 117, 264, 271, 271(1A), 271(1B), 274 and 275, referred to.
Trevorrow v State of South Australia (No 7) [2008] SASC 5; Steicke v Donaldson Walsh Lawyers [2010] SASC 188; Cook v Pasminco Ltd (No 2) (2000) 107 FCR 44; Brookfield Multiplex Ltd v International Litigation Funding Partners Pte Ltd (No 2) [2009] FCA 449; Anangu Pitjantjatjara Yankunytjatjara v Ombudsman & Anor [2019] SASC 162; Rasch Nominees Pty Ltd v Bartholomaeus (No 3) [2013] SASC 14; Rodda v Ian Rodda Pty Ltd [2016] SASC 90; Players Pty Ltd (in liq) (recs apptd) v Clone Pty Ltd (2013) 115 SASR 547; Giannarelli v Wraith (No 2) (1991) 171 CLR 592; ACN 068 691 092 Pty Ltd & Anor v Plan 4 Insurance Services Pty Ltd & Ors [2014] SASC 39; Seal & Seal v Malaugh Holdings (No 2) Pty Ltd [2008] SASC 223; Chadwick v Allen (No 3) DCSA, Master Norman, DCCIV-10-324, (unreported); CSR Ltd & Anor v Eddy (2008) 70 NSWLR 725; Kuek v Devflan Pty Ltd [2011] VSCA 25; Smoothpool v Pickering [2001] SASC 131; Pickering v Smoothpool (No 6) [2001] SASC 440; A Team Diamond Headquarters Pty Ltd v Main Road Property Group Pty Ltd (2009) 25 VR 189, considered.

VISCARIELLO v MACKS
[2020] SASC 44

  1. This is an issue arising during an adjudication of costs.

  2. The defendant/appellant has, by application dated 24 January 2020…

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Viscariello v Macks [2020] SASC 44
Case
[2020] SASC 44
Decision Date

CaseChat Overview and Summary

In the matter of Viscariello v Macks, the South Australian Supreme Court addressed an application made prior to the lodgement of a costs claim, seeking the production and inspection of documents upon which the claiming party intended to rely. The dispute arose from a long-running case that had been finalised in 2017, with subsequent costs orders made in 2018. Each party had claims against the other for costs, and the matter was proceeding under the rules governing the adjudication of costs. The primary legal issue was whether the responding party could seek the production of documents relied upon in a costs claim before such a claim was formally served, and if so, what documents could be inspected under these circumstances.

The court held that under rule 271, the responding party could indeed seek the production of documents relied upon in a costs claim without the necessity of a formal claim being served first. The court found that documents such as solicitor fee accounts, schedules of attendances, and disbursement records were discoverable upon application by the responding party. The onus was on the responding party to establish that the claiming party had no liability. The court also noted that while costs agreements generally did not attract legal professional privilege, if there was reason to believe that the indemnity principle might be infringed, the responding party could inspect the relevant documents before adjudication. The court ordered the production of various documents including fee agreements, retainer letters, fee invoices, and records of payment to evidence the costs claimed. The orders were made to ensure transparency and fairness in the adjudication of costs, allowing the responding party to adequately prepare for the adjudication process.

Orders

Orders of the court

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Background

Background to the litigation

On 17 February 2020, when the plaintiff again appeared in person and Mr Cogan appeared for the defendant, I heard submissions and reserved my decision. However, I allowed the plaintiff a period of seven days to file any further affidavit/s and the defendant a further seven days to file any answering affidavit/s. I indicated that the parties were at liberty to contact the Court within a further seven days if a request was made to reconvene the Court. Background The proceedings were commenced by the plaintiff in 2006 and have had a long and complex history. They were finalised by a judgment of the Full Court published on 22 December 2017. In a further judgment dated 17 October 2018 [2018] SASCFC 106 the Full Court made costs orders as follows:1.The extant costs orders made by the Court on:1.1 All pre-trial and post-trial attendances;1.2 All interlocutory applications before and after the commencement of the trial of this action; and1.3 The appeal to this Courtshall be paid in accordance with those Orders of the Court, such costs to be adjudicated if not agreed.2.Subject to the extant costs orders that are dealt with in paragraph one of these Orders, Mr Macks shall pay to Mr Viscariello:2.1 Twenty five percent (25%) of the costs and disbursements of the trial before the Primary Judge; and2.2 Twenty five percent (25%) of the costs of the applications before the Court for which the costs order of the Court was, or is by virtue of these reasons, costs in the cause, such costs to be adjudicated if not agreed.3.Subject to the extant costs orders that are dealt with in Paragraph 1 of these Orders, Mr Viscariello shall pay to Mr Macks seventy percent (70%) of the costs of the appeal, which shall include the costs of all chamber attendances preparatory to the hearing of the appeal for which the costs order of the Court was or is by virtue of these reasons, costs in the cause, such costs to be adjudicated if not agreed. As a result, each party has a claim against the other for costs. At a hearing on 26 July 2019, Judge Roder directed that each claimant was to make a genuine offer for costs to the respondent pursuant to rule 271(1A) and that thereafter the subsequent provisions of rule 271 applied to the process of adjudication. The matter was adjourned to a directions hearing on 29 November 2019. At that hearing I directed that the defendant was to file and serve his claim for costs pursuant to rule 271(1B) by 20 December 2019. I directed that the plaintiff was to respond pursuant to rule 271(4) by filing and serving a response by 27 March 2020. I gave the defendant liberty to apply pursuant to rule 275 if so advised. I indicated that I wished to hear from the parties as to whether the plaintiff’s costs should be dealt with on a lump sum basis. The plaintiff had not, as at that stage, commenced recovery of costs. Affidavits before the CourtSecond affidavit of Ms Umoff (FDN 317) Ms Umoff exhibits correspondence between the parties following the hearing before Judge Roder on 26 July 2019. On 4 September 2019, the plaintiff wrote to the defendant’s solicitors making an offer pursuant to rule 271(1A) to settle and finalise all outstanding issues on the following terms (amount redacted).

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

In Anangu Pitjantjatjara Yankunytjatjara v Ombudsman & Anor [2019] SASC 162, Hinton J at [189]-[190] wrote:[189] In relation to application 2017/00117 APY contends that the Ombudsman erred in his consideration of the application of Sch 1 cl 10 in that he applied the wrong test. It is to be recalled that application 2017/00117 sought copies of costs agreements and invoices issued by Mr Stirk and Ms Morley in the period of 18 months prior to the date of the application. The Ombudsman determined:50. Costs agreements do not generally attract legal professional privilege unless the document itself refers to legal advice. In CSR v Eddy, Hodgson JA said: Costs agreements that do no more than specify rates for work to be done by specific classes of persons, and/or give a global figure for carrying out a specified task, and/or give estimates for carrying out a specified task, are not the subject of client legal privilege at general law. However, if an agreement contains material which expressly or impliedly conveys legal advice or views about tactics or strategy, that material may be privileged. 51. I do not accept that any documents that might be held by the agency would be exempt pursuant to clause 10(1) of Schedule 1. Ms Morley has not submitted that any costs agreements that might be held by the agency convey legal advice or views about tactics or strategy that might attract legal professional privilege. Any invoices held by the agency would not have been issued for the dominant purpose of obtaining or giving legal advice.[footnotes omitted][190] Under Sch 1 cl 10 of the FOI Act a document is an exempt document if it contains matter that would be privileged from production in legal proceedings on the ground of legal professional privilege. It might be said that the Ombudsman would have reasoned more correctly had he said that he was not satisfied that any invoice within the ambit of the application was prepared for the dominant purpose of giving legal advice. However, in my view that is what he meant. I am not persuaded that the Ombudsman applied the wrong test in his application of Sch 1 cl 10 to application 2017/00117.ConsiderationObjections to filed material The plaintiff objected to the filing and service of Ms Umoff’s fourth affidavit and the defendant’s reply. However, the fact is that these were responsive to matters he had raised in his own affidavit and submissions, so I propose to have regard to them. He also objected to the evidence of Ms Umoff as being hearsay. However, as an adjudication process is an interlocutory application, a party is entitled to submit matters that the deponent honestly believes to be true if the deponent states the grounds of his or her belief: rule 162(2). The plaintiff submitted that if the meeting referred to in his affidavit (FDN 320) was caught by s 67 of the Evidence Act, it nevertheless fell within the exceptions to that provision and was admissible. He further contended that the meeting comprised two portions: the first of which was not without prejudice, and the latter which was. He said that he wished to file an affidavit to this effect. I subsequently gave him leave to do so, and the defendant an opportunity to file an answering affidavit. I directed that if either party requested that the court was to be reconvened, they were to contact the court within a further seven days.