Viscariello v Macks - [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

This is an issue arising during an adjudication of costs.
The defendant/appellant has, by application dated 24 January 2020 (FDN 318), sought orders pursuant to rules 117, 271(1), 274(2) and 274(4) that the plaintiff serve on the defendant copies of further materials.
These comprise, first, any costs or fee agreements, retainer letters, letters of engagement or similar documentation between the plaintiff and any solicitors or counsel, or between any solicitors and counsel, acting on the plaintiff’s behalf in the trial of the proceedings, setting out the terms upon which any legal costs in relation to those proceedings would be incurred, invoiced or paid.
Secondly, production is sought of any solicitors’ or counsel’s fee invoices or bills or similar documentation (including in relation to any disbursements) recording the legal costs claimed by the plaintiff in relation to the trial of these proceedings.
Thirdly, the defendant seeks service of any receipts, records of payment or similar documentation evidencing the plaintiff having actually paid any of the legal costs claimed in relation to the trial of these proceedings.
The application is supported by the second affidavit of Ms Allie Umoff sworn on 9 December 2019 (FDN 317), the third affidavit of Ms Umoff sworn on 24 January 2020 (FDN 319), and the fourth affidavit of Ms Umoff sworn on 12 February 2020 (FDN 322).
The application is opposed by the plaintiff/respondent who has filed an affidavit sworn by himself on 10 February 2020 (FDN 320).
The plaintiff filed written submissions dated 10 February 2020 and the defendant filed reply submissions on 12 February 2020. The plaintiff filed responding submissions on 17 February 2020.
The defendant has filed proposed minutes of the orders which are sought.
The application was initially considered at a directions hearing on 10 December 2019 when the plaintiff appeared in person and Mr Cogan appeared for the defendant. I then made directions as to the filing of affidavits, submissions and a hearing date.
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; and
1.3    The appeal to this Court
shall 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; and
2.2    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 Court
Second 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).
The defendant’s solicitors responded on 5 December 2019 stating that the plaintiff’s letter did not meet the requirements of rule 271(1A) as it failed to provide any information whatsoever as to the likely quantum of or basis for the plaintiff’s claim for costs of the trial and it did not put forward any offer which the defendant was able to properly consider and respond to.
That letter also referred to my intimation that I wished to hear from the parties as to determining the plaintiff’s costs of trial on a lump sum basis. The defendant sought the provision of documents the subject of the costs claim. It foreshadowed an application if these were not provided.
The affidavit also referred to matters discussed during the hearing before me on 29 November 2019 and in particular to statements made by the plaintiff during that hearing relating to records concerning costing.
Third affidavit of Ms Umoff (FDN 319)
The third affidavit of Ms Umoff exhibits further communications between the parties and in particular a letter of 1 October 2019 from the defendant’s solicitors to the plaintiff and a letter of 2 October 2019 from the plaintiff to the defendant’s solicitors.
The plaintiff’s letter of 2 October 2019 refers to rule 271(1A) and stated that the plaintiff believed that the form of his offer fell within the scope and intent of the rule and had been made after deliberation, consideration and reflection, and to finalise all outstanding issues including the trial and appeal costs. The letter referred to Judge Roder’s order of 26 July 2019 and noted that the plaintiff had not received any offer from the defendant for the costs of the appeal.
Plaintiff’s affidavit of 10 February 2020 (FDN 320)
The plaintiff’s affidavit of 10 February 2020 (FDN 320) is filed inter alia in opposition to the orders sought by the defendant. He testified that notwithstanding the Full Court’s delivery of its judgment concerning costs on 17 October 2018, the defendant had taken no steps to try and resolve the question of costs or have that question adjudicated by the Court.
He referred to an attendance at the office of the defendant’s solicitors on 21 March 2019 and a meeting with Mr Lipman and Mr McFarlane to discuss costs. In paragraphs 5 and 6 he discussed matters referred to during that attendance, which are the subject of objection, but which Mr Cogan submits in any event are irrelevant to the application.
The plaintiff also referred to his representation during the matter. He testified that he had been represented by solicitors, McNamara Business & Property Law, Commercial & General Law, and Ujvari Lawyers and said that on his instructions his lawyers had engaged various counsel. He disputed any suggestion by the defendant that he had no liability to pay his lawyers’ costs and/or disbursements. He testified that there was no agreement between his lawyers or each of them and he providing to the effect that under no circumstances would he not be liable for payment of their professional costs, fees and disbursements in acting for him.
Fourth affidavit of Ms Umoff (FDN 322)
The fourth affidavit of Ms Umoff (FDN 322) is filed in response to the plaintiff’s affidavit of 10 February 2020. She refers to paragraph 6 of that affidavit and to paragraph 21(c) of the plaintiff’s written submissions. These relate to the contents of a meeting on 21 March 2019 between the plaintiff and Messrs McFarlane and Lipman, which she says was a without prejudice meeting, and understood that prior to its commencement Messrs McFarlane and Lipman had confirmed with the plaintiff that it was to be conducted on a without prejudice basis. She exhibited as “AAU-4” a copy of an earlier email chain between Mr McFarlane and the plaintiff making arrangements for the meeting in which it was agreed by both parties that the meeting was to take place on a without prejudice basis. She indicated that the defendant did not waive privilege in the contents of that meeting and he sought to maintain the meeting’s privileged and confidential status.
Further, she exhibited a search of the on-line ASIC company database in respect of Commercial & General Law (SA) Pty Ltd and this is exhibited as “AAU‑5”. This indicated that the company Commercial & General Law (SA) Pty Ltd is under external administration. That search also indicates that the plaintiff was a former shareholder/member of that company.
Defendant’s written submissions
In the defendant’s written outline there is reference to the documents being sought. It was contended that the primary purpose of the application for the production orders was to hopefully shortcut the process by which the plaintiff’s costs claim could be resolved and/or determined by the Court. It was noted that the plaintiff had made submissions which indicated that he might not be liable to pay for some or all of the various components of his claim for costs and in this regard there was reference to the second Umoff affidavit at paragraph 5. In the light of these submissions, it was contended, there might well be preliminary issues which arose with respect to the indemnity principle which had the potential to significantly reduce the scope of the plaintiff’s claim. In the circumstances, the requested records, to the extent that they existed, would shed some light on these preliminary issues, and were sought to be produced.
It was also submitted that there was an efficiency in the order sought. The defendant’s position was that the purported offer/letter sent by the plaintiff was not compliant with the requirements of rule 271(1A) and that it did not provide any information by which the defendant could meaningfully consider and respond to the offer made. The defendant referred to the second Umoff affidavit at “AAU-2”. This tended to suggest the absence of any information concerning the amounts claimed by the plaintiff, the applicable costs scale periods for those amounts and/or the amount of any external disbursements or counsel fees that were claimed, the provision of which was otherwise mandated by the rules.
Further, it was submitted, given the manner in which it was drafted, the letter provided no information as to the extent of the plaintiff’s own liability in respect of the trial or the proceedings.
It was put that in the period since sending the purported offer, the plaintiff had also made submissions regarding the significant time and resources that would be required for the preparation of his claim for costs and the onerous nature of this task. The defendant referred to the third Umoff affidavit at paragraph 6.
It was submitted that in circumstances where preparation of the claim for costs would be onerous, as the plaintiff had indicated, and would on his estimation take many months, it would be in the interests of the just and efficient progress of the matter for the defendant to first be provided with access to the requested records.
This would enable him to assess the likely scope of, and the extent to which he accepted any of the plaintiff’s claim for costs prior to the plaintiff undertaking such a substantial task of preparing his claim.
It was submitted that given the lack of any information regarding any of the matters prescribed by rule 271(1A), the parties were otherwise unable to attempt any resolution of the plaintiff’s claim on an agreed basis. It would be a waste to the parties’ time and resources – including noticeably the plaintiff’s own time and resources – to require him to undertake the expensive and protracted process of preparing his claim which he himself had foreshadowed, if there was some other way by which the parties could proceed which might otherwise enable the claim to be resolved consensually, or at least the scope of the claim and/or any disputation to be reduced at an early stage.
This was so in circumstances where, to the extent that his claim for costs was made, the plaintiff would be required to produce a large portion of the documents the subject of the production orders in any event pursuant to rule 271(2)(c), and the balance were of a similar nature, so their production would be uncontroversial. They would be likely to be included in any event in the materials made available for inspection by the defendant following service of the plaintiff’s claim.
In the circumstances, it was submitted, the making of the production orders would facilitate the timely and efficient resolution of the plaintiff’s claim for costs and would likely reduce the scope of any disputation and was consistent with the aims of the rules in this regard.
Plaintiff’s written submissions
On 10 February 2020 the plaintiff filed his submissions opposing the orders sought in the defendant’s application. He noted the defendant’s submissions that the primary purpose of the application for production orders was to shortcut the process by which the plaintiff’s costs claim could be resolved and/or determined by the Court, but noted that the defendant had not referred to or relied on any rule, principle or authority allowing a party to shorten or bypass the costs adjudication process. He referred to rule 291(1B) which provided that if costs could not be agreed, the claimant was to serve on the respondent a claim for costs prepared in an approved form.
He noted that the defendant had not agreed the plaintiff’s costs of the trial and submitted that there were only two pathways available to him to have his costs adjudicated. These were first the preparation of a claim under rule 271(1B) or secondly the preparation and filing of an application under rule 264(5) for an order that the costs be assessed on a lump sum basis pursuant to rule 264(5)(d).
He noted that he had informed the Court and the defendant that he did not wish to apply under rule 264(5)(d) and that he wished instead to have his entitlement to costs adjudicated pursuant to rule 271(1B).
He noted the defendant’s submission that he might not be liable to pay some or all of the various components of his claim for costs to his lawyers – referring to the second Umoff affidavit at paragraph 5. He submitted, however, citing Trevorrow v State of South Australia (No 7) [2008] SASC 5 per Gray J and in particular [9], [13], [14] and [17], that in the absence of any express agreement, the retainer of a professional person to act would normally give rise to an implied agreement for the payment of reasonable professional fees and disbursements, and that the onus was on the party seeking to avoid having to pay costs to establish that there was no liability on the part of the claimant to his or her solicitor for costs.
He submitted that the court record in the present proceedings confirmed and recorded that he had at all times been represented by solicitors, either McNamara Business & Property Law, Commercial & General Law and Uvjari Lawyers. In these circumstances, he submitted, it was to be implied that he was liable to meet the professional fees, costs, expenses and disbursements of his lawyers either pursuant to the terms of any retainer agreement or at common law.
He submitted that nothing in paragraph 5 of the second Umoff affidavit supported the defendant’s submission at paragraph 15 so it had no proper basis and should be rejected.
Further, he submitted, having the onus of proof, the defendant had adduced no admissible evidence that there was any agreement between he and his lawyers or each of them which included a term to the effect that he would not be liable under any circumstances to pay their legal costs and disbursements.

In fact, the evidence, including paragraph 5 of the second Umoff affidavit, was to the contrary. He referred to his affidavit of 10 February 2020. In consequence, he submitted, the defendant’s application should be dismissed.
The plaintiff then addressed the defendant’s submissions that he had not made a compliant offer concerning settlement of costs.
He maintained the position he had set out in his letter of 2 October 2019. He noted that the defendant had not sought a declaration or ruling that his offer to settle the question of costs of the trial and appeal was a non-compliant offer under rule 271(1A). He referred to the letter from the defendant’s solicitors to him of 1 October 2019 inviting him to put an offer or to proceed to preparing and serving a claim for costs.
As previously advised, the plaintiff submitted, he intended to exercise his legal right to proceed with option two.
He submitted that his claim for costs would be a large and onerous task which would take many months to prepare. However, he failed to see how this fact would support the orders and directions sought by the defendant.
He also referred to the order extending the time for the defendant to file and serve his own costs claim until 31 January 2020. In these circumstances, he submitted, any complaints that it would take he, the plaintiff, months to prepare his claim for costs was without merit and disingenuous.
In paragraph 21 the plaintiff referred to his affidavit in relation to the matters discussed at the conference for which a claim of privilege had been made. He submitted that there were no circumstances in which the parties’ respective claims for costs of the trial and the appeal would be resolved other than under full adjudications under rule 271(2).
Finally, he submitted, the documents sought to be produced under rule 271(2)(c) were limited to copies of all counsel fees and external disbursements and were not of a similar nature to the class or category of documents sought in paragraphs 1.1, 1.2 and 1.3 of the application. Further, he submitted, to the extent that he would be obliged to provide a copy of all counsel fees and external disbursements to the defendant as part of his claim for costs under rule 271(2)(c), this was not the basis for orders or directions sought by the defendant at this time and it would divert his, the plaintiff’s, limited resources away from preparing his claim for costs.
In summary, he submitted, the defendant’s application should be dismissed.
Defendant’s written reply submissions
These were tabled on 12 February 2020 but the plaintiff objected to their reception. The defendant submitted that the matters referred to in the plaintiff’s affidavit of 10 February 2020, paragraph 6, and repeated in paragraph 21(c) of his submissions were the subject of a without prejudice meeting and confidentiality was not waived by the defendant, so he objected to their admissibility. It was contended that these impermissibly sought to disclose the content of without prejudice discussions and should be excluded on the basis of s 67C of the Evidence Act 1929.
It was further submitted that both the plaintiff’s affidavit and his submissions failed to deal satisfactorily with his position as to liability on his part for costs of the proceedings. He had failed to provide any information whatsoever regarding whether there were any costs or fee agreements, retainer letters, letters of engagement, WRP records, solicitor or counsel fee invoices or bills, invoices in respect of other disbursements or receipt or other records of payment relating to the costs of the trial and whether these existed.
Further, it was submitted, the plaintiff had deposed at paragraph 8 of his affidavit that at all times he had been represented by various solicitors, including Commercial & General Law. However, it was contended, for a period of some years including the period of the trial at the first instance proceedings, he had been a director of that firm and was recorded as being a shareholder of the same – fourth Umoff affidavit at “AAU-5”. Whilst it was accepted that the onus was upon the responding party to establish that there was no liability – Trevorrow – it was submitted that there was already before the Court evidence giving rise to the need to clarify the plaintiff’s position and any liability on his part for any of the costs of the first instance proceedings. The defendant referred to the second Umoff affidavit at paragraph 5, the fourth Umoff affidavit at “AAU-4” and page 5 and “AAU-5” at pages 1-5 which recorded that Commercial & General Law SA Pty Ltd had been put into Court ordered liquidation on 9 November 2016. The defendant submitted that one of the purposes of the production sought by the application was to deal with this issue.
The defendant referred to the relevant Court Rules and authorities which supported the authority that the Court had the power to make the production order sought. There was further reference to rule 117. It was further noted that another important purpose of the application was to obtain sufficient information to enable the defendant to make some sense of the plaintiff’s letter of 4 September 2019 and to limit the need for a detailed adjudication. It submitted that the plaintiff had failed to provide any information which might arise in assessing the likely quantum of his claim or any limitation there might be on his part to claim any costs.
Defendant’s oral submissions
As a preliminary issue, Mr Cogan objected to aspects of the affidavit of the plaintiff sworn on 10 February 2020. He said that in paragraph 5 of that affidavit the plaintiff had referred to a meeting between himself and Messrs Lipman and McFarlane, solicitors for the defendant, to negotiate costs. Certain things concerning that meeting were referred to in the affidavit and Mr Cogan referred to paragraphs 5, 6 and 7. Mr Cogan said that the defendant objected to those paragraphs, first on the basis that the content was totally irrelevant as to what might have taken place at the meeting, but secondly because the meeting had been held without prejudice and s 67 of the Evidence Act prevented its admissibility. Mr Cogan referred to the fourth affidavit of Ms Umoff which exhibited an email proposing the meeting referred to in the plaintiff’s affidavit. This meeting was referred to as being a without prejudice meeting. Further, he said that no agreement had been reached at the meeting.
Mr Cogan also objected to the submissions of the plaintiff, 10 February 2020 paragraph 21(c) on page 8, which was a restatement of what had been put in the affidavit.
Addressing the substantive application, Mr Cogan submitted there were two main thrusts of the defendant’s application. The first was to obtain information regarding the contractual relationship between the plaintiff and the solicitors and barristers who had represented him.
The second was to obtain information as to the likely quantum of the plaintiff’s costs claim.
Mr Cogan referred to Ms Umoff’s second affidavit at page 5 of exhibit “AAU-2”. This was the rule 271(1A) letter which the plaintiff had forwarded to the defendant. He submitted that it contained none of the information that a rule 271(1A) letter should provide and which were clearly required by the rules. Such a letter should include details of the quantum of disbursements, the identification of the various parties to whom disbursements had been paid, and it had to state the amounts claimed for costs divided into cost scale periods.
None of this information was provided, he submitted. The purpose of the rule was to provide a costs payer, or respondent, with an opportunity to understand the quantum of a claim before the expense of Form 49 was commenced. The letter was a precursor to the filing of a claim for costs and the rules provided that a response had to be provided within 28 days, failing which there being no settlement as a result of the response, a claim for costs could be commenced. The benefit of this information had not been provided to the defendant and he had no way of understanding what amount was being claimed and accordingly no way of considering what offer might be made. The defendant was prejudiced as a result of this and he was trying to overcome this prejudice by seeking production of the material referred to in the interlocutory application.
Mr Cogan also submitted that under rule 271(3) his client had a right to require the inspection of documents. This application was permitted even before an adjudication commenced by virtue of rule 271(1). Mr Cogan submitted that it was an established procedure of the Court and it was practically useful and did result in quite a few settlements, either of costs claims in their entirety or at least a large or some portion of costs claimed.
He pointed out that the plaintiff in his previous submissions had informed the Court that he had some invoices from solicitors and some invoices from counsel. Furthermore, in his responding submissions he had not disputed this or told the Court that there were no such documents.
In relation to the second leg of the defendant’s application, Mr Cogan submitted that his client was seeking production of documents relating to any costs agreements, retainer letters and so forth between the plaintiff and any of his solicitors or counsel. The defendant did not know whether or not such existed. The purpose of this application was to enable the defendant to conduct due diligence to ascertain the true position in relation to the plaintiff’s contractual arrangements with any of his legal representatives. He submitted that this might or might not ultimately turn out to be an important issue but it could be.
In regard to this limb, he relied on rule 274(4). He submitted that costs agreements between a solicitor and a client were irrelevant because they concerned the question of indemnity which was the principle of costs recovery. He submitted that rule 274(1) provided that the rule applied to both proceedings in the nature of a preliminary assessment of costs and proceedings in the nature of a detailed adjudication. At the present, the Court was involved in the preliminary assessment stage and the indemnity issue was inevitably interwoven into this aspect. This was because if there was no indemnity, then there was no right to recover costs. The logic demanded that this issue be dealt with in a preliminary way because if the Court was to decide that there was no contractual obligation on the part of the plaintiff to pay costs, then there was no point in proceeding with an adjudication which was a long and expensive process.
In support of this argument Mr Cogan referred to Giannarelli v Wraith (No 2) [1991] HCA 2, which dealt with a situation where there was an application for the production of a costs agreement.
It also was noted that the Court has an inherent jurisdiction and reference has been made to [R 274.1] of Civil Procedure South Australia Volume 1.
The case of Steicke v Donaldson Walsh Lawyers [2010] SASC 188 was referred to but Mr Cogan submitted that this was a case concerning the issue of a subpoena rather than seeking production of documents from a party.
Mr Cogan also responded to the objections to affidavit and other material provided by the defendant. He submitted that a reply to the plaintiff’s submissions necessitated by reason of the admission of objectionable material by the plaintiff and the defendant was entitled to inform the Court of his objection.
In relation to the plaintiff’s complaint that evidence of Ms Umoff was hearsay, he pointed out that the adjudication process was an interlocutory application and the defendant was thereby entitled to submit hearsay evidence.
Plaintiff’s oral submissions
By way of preliminary submissions, the plaintiff objected to aspects of the fourth affidavit of Ms Umoff, together with the defendant’s reply submissions dated 12 February 2020.
First, he submitted, no leave had been sought or granted to the defendant to file reply submissions and the affidavit. Secondly, he said paragraph 5 of the fourth affidavit contained hearsay evidence which was inadmissible and should be struck out. Thirdly, the affidavit referred to an ASIC search undertaken by Ms Umoff of 11 February 2020 and he, the plaintiff, did not understand the purpose of this evidence and he submitted that it was irrelevant.
The plaintiff further submitted that if the meeting was in fact caught by s 67 of the Evidence Act, it nevertheless fell within the exceptions to that provision and was admissible.
The plaintiff also contended that the meeting comprised two portions, the first of which was not without prejudice, the latter which was. He submitted that he wished to file an affidavit to this effect.
In his substantive submissions, the plaintiff opposed the defendant’s application for production. He confirmed that in relation to the conference referred to in his affidavit, part of that conference was not without prejudice. He said that there had been a discussion beforehand and then the parties had moved to the without prejudice aspect of the meeting. He submitted that the portions of the conference which he had referred to in his affidavit and in his submissions had concerned statements made prior to the without prejudice meeting.
The plaintiff also addressed the defendant’s complaint that he had not made a compliant offer. First, he pointed out, no application had been brought for a declaration that the offer made by him was non-compliant. Secondly, whether or not the offer was non-compliant, this was not a basis for the Court to determine whether or not an order should be made for production. He referred to Trevorrow and submitted that clearly the legal position that the onus was on the defendant to produce evidence as to an agreement between he, the plaintiff, and his solicitors such that he would be disentitled from claiming costs on the basis that the indemnity principle did not arise.
The question was, he submitted, whether the defendant had or had not satisfied that burden or onus. The question of a compliant offer was not a fact in issue before the Court and was irrelevant to that question. He queried how a non‑compliant offer could support a position that an order should be made for the production of documents. He submitted that it could not for the reasons set out in Trevorrow. It was for the defendant to produce cogent evidence that there was an arrangement between he, the plaintiff, and his lawyers such as no entitlement to recover costs.
The plaintiff also complained that the application had not included any order for inspection, it was confined to production. He submitted that the appropriate forum for his provision of documentation in relation to his claim for costs was during that process. He submitted that he did not have to do this now and pointed out that there had been no directions sought for inspection or anything of that nature. He reiterated that the documents sought to be produced should properly be disclosed and produced during the adjudication process itself, notwithstanding that the Court might have a discretion or power to make an order for production at this stage.
He submitted that there was no doubt that Commercial & General Law and other lawyers had acted for him and that counsel had appeared for him in the proceedings. The legal inference was already there which was for the defendant to disturb.
The plaintiff noted the assertion in the second affidavit of Ms Umoff at paragraph 5 where she had referred to statements made in Court by him to the preparation of his bill. He confirmed that he had told the Court that it would take a lot of time to prepare his claim for costs, but this was unremarkable. He submitted that whether or not Commercial & General Law or other lawyers had rendered invoices at this point of time was completely irrelevant, because an invoice did not create a liability - it was a retainer agreement that created liability, and not an invoice.
The plaintiff further complained that the evidence that Commercial & General Law had been put into liquidation on 9 November 2016 was irrelevant. It was a fact known to the defendant personally and it should have been referred to in the defendant’s first affidavit. Further, he submitted, Mr Cogan had not articulated either in his written submissions or in his oral submissions what relevance the liquidation of Commercial & General Law had.
The plaintiff also submitted that far from there being an efficiency by way of production of documents at an early stage, the opposite was true. The defendant should not be permitted to disclose selected matters which he considered would assist his case, and then oppose and resist the plaintiff putting before the Court the full picture in his bill of costs. He submitted that the orders sought would have no utility and no influence on the matter settling on a commercial basis. He said that to deny the plaintiff the opportunity of putting the full picture before the Court would occasion him unfairness and deny him the opportunity to put material before the Court which would contradict inferences which the defendant would invite the Court to draw in its current application. He also submitted that the process of producing some documents concerning counsel fees and other disbursements, solicitors’ costs, would likely be substantial and would only cause further delay and wasted costs and expenses.
He submitted that the defendant’s application should be dismissed with costs. It was just delay tactics, he said.
Defendant’s oral submissions in reply
Mr Cogan made submissions in reply. He first referred to s 67C(1) of the Evidence Act. It was very clear in its wording, he submitted. None of the exceptions to the section were applicable in this case. The information had not been put before the Court or disclosed with the defendant’s consent, nor was it asserted that it was. It was clear that the negotiations and meeting were to facilitate a costs agreement. This was not disputed.
Even without s 67C, he submitted, it was a without prejudice discussion. He submitted that there was nothing to suggest that the matter came within subsections (2)(c) or (e) because there was no agreement alleged, or (2)(f) because it did not deal with the other evidence, or (2)(g) because it did not affect the rights of the parties. There was no agreement reached, no allegation of fraud and none of the exceptions applied.
He submitted that s 67C applied without further evidence.
Mr Cogan also referred to the rule 271(1A) letter. It was a procedural requirement, he submitted, not within the normal realms of settlement negotiations. He said that the problem the plaintiff faced, regardless of whether s 67C of the Evidence Act applied or not, and regardless that those discussions might have been a precursor to the rule 271(1A) letter, he had not taken the first step necessary to commence an adjudication. Mr Cogan submitted that what the defendant was suggesting was an alternative to this. If the defendant could obtain the information that it sought, any invalidity of the rule 271(1A) letter could be cured.
Mr Cogan reiterated that the defendant was trying to get to a position where the information was given to him, as was the purpose of rule 271, which would enable him to form as assessment of what the costs might be and then to make an offer. Having done this, there might be further negotiations. This could have ramifications in relation to the costs of the Form 49 ultimately, if one was prepared.
Mr Cogan refuted that the defendant was required to take steps – as the plaintiff might have suggested – to seek a declaration that the rule 271(1A) letter was invalid. That had not been done, he submitted, and this was clear on the face of the file. He noted that the plaintiff was not at the moment in the position to proceed to a formal claim and repeated that what the defendant was seeking was to take a reasonable, rational step in asking for the production of whatever invoices the plaintiff might have, whatever WHIP ledgers might exist and whatever records of payment might exist so the defendant could try to form a view, taking into account his own expenditure as to what reasonable costs might be.

He reiterated that in relation to the costs agreement, the defendant was simply trying to confirm what the position was. He submitted that there was authority to the effect that a costs agreement was not privileged unless it contained legal advice and it was unlikely that there would be any. He indicated that he would subsequently provide authorities in this regard.
Mr Cogan confirmed that he was not seeking a ruling at this time that the plaintiff was not entitled to go ahead with his Form 49 claim for costs, rather, he was asking the Court to use the fact of this non-compliance in order for the defendant to obtain documents in the production application.
Subsequently, Mr Cogan referred to authorities in relation to the fact that a costs agreement was not privileged. In this regard, he referred to CSR Ltd v Eddy [2008] NSWCA 83 at [62]; Cook v Pasminco Ltd (No 2) (2000) 107 FCR 44 Lindgren J at [47]; Brookfield Multiplex Ltd v International Litigation Funding Partners Pte Ltd (No 2) [2009] FCA 449 at [25]; and Anangu Pitjantjatjara Yankunytjatjara v Ombudsman & Anor [2019] SASC 162 at [189]-[190].
Principles
Pursuant to s 40 of the Supreme Court Act 1935 costs are in the discretion of the Court. The starting point to any award of costs is that they are meant to reimburse a party for professional costs actually incurred in the litigation: Cachia v Hanes (1994) 179 CLR 403 at 410; Trevorrow v State of South Australia (No 7) [2008] SASC 5 per Gray J. The key question is whether there is any liability on the part of the claimant to pay the legal costs at issue with the onus on the responding party to establish that there is no such liability – Trevorrow at [17].
The approach to adjudication of costs contained within the rules is designed to encourage and to facilitate negotiation between the parties and to enable the taxing officer to determine the most expeditious and cost efficient method of assessing costs without requiring the parties to first commence an adjudication process: see Legal Costs South Australia Summary at [1971]. Consistent with these rules, rule 271(1) permits a person liable for costs to apply for directions from the Court on issues relating to the adjudication of costs, notwithstanding that a formal claim has not been served or filed.
Rule 271 further empowers the Court to make such orders or directions as it considers appropriate in the circumstances.
Further, the Court retains a discretion to consider parties’ applications in respect of how the assessment of costs should proceed without a formal claim first needing to be served pursuant to rule 271 – Rasch Nominees Pty Ltd v Bartholomaeus (No 3) [2013] SASC 14; Rodda v Ian Rodda Pty Ltd [2016] SASC 90.
The first step by a party with an entitlement to costs is set out in rule 271(1A). This provides that before proceeding to an adjudication the claimant must make a genuine offer to the respondent and the offer is to be made in writing and may be in letter form stating the amounts claimed for costs divided into cost scale periods, external disbursements and counsel fees, and requiring a response within 28 days. This is a mandatory prerequisite before the adjudication of costs.
Rule 271(2)(c) provides that where a claim for costs is served, it must include copies of all counsel fees and external disbursements.
A respondent has a right to inspect all documents on which the claimant proposes to rely, if the claim proceeds to adjudication pursuant to rule 271(3): Players Pty Ltd (in liq) (recs apptd) v Clone Pty Ltd (2013) 115 SASR 547 at [90].
Pursuant to rule 274(2) the Court has the same powers in relation to an adjudication of costs as it does in relation to an action in the Court. This includes the power to require the production of documents. The Court may require a party to produce any material relevant to the assessment of costs – rule 274(4)(a); Giannarelli v Wraith (No 2) (1991) 171 CLR 592 at 597-600 per McHugh J.
Solicitor fee accounts and schedules of attendances are discoverable under the rules upon an application by the responding party – ACN 068 691 092 Pty Ltd & Anor v Plan 4 Insurance Services Pty Ltd & Ors [2014] SASC 39.
The Court may require a party to produce any material relevant to the assessment of costs – Seal & Seal v Malaugh Holdings (No 2) Pty Ltd [2008] SASC 223; Chadwick v Allen (No 3) (DCSA, Master Norman, DCCIV-10-324, Reasons published 29 July 2016, unreported).
In CSR Ltd & Anor v Eddy (2008) 70 NSWLR 725 at [62], Hodgson JA, McColl JA and Basten JA wrote:
The purpose of client legal privilege is to protect confidential communications between client and lawyer for the purpose of obtaining legal advice and the provision of that advice and communications in relation to the conduct of litigation. The existence of a retainer between client and lawyer is not the subject of the protection, but a precondition to its operation. Accordingly, and generally speaking, the retainer will not be privileged: see Cook v Pasminco Pty Ltd (No 2) (2000) 107 FCR 44; [2000] FCA 1819 at [47] (Lindgren J). If provisions of the costs agreement had served a different purpose, being one within the sphere of protection provided by the privilege, it would have been appropriate to consider a claim of privilege in relation to such provisions separately: ibid at [48]–[49]. That question did not arise in this case.
In Cook v Pasminco Ltd (No 2) [2000] FCA 1819, Lindgren J wrote at [47]:
In my opinion, generally, an agreement between solicitors and their prospective client as to the terms of retainer of the solicitors does not attract either kind of legal professional privilege mentioned: the agreement is not created for the dominant purpose of the giving or receiving of legal advice or of being used in existing or anticipated legal proceedings. A costs agreement is a bundle of mutual and reciprocal commitments between intending solicitor and client. It is entered into by parties whose interests are, at the time, generally opposed. Generally speaking, the solicitors are entitled to negotiate the terms of the agreement in their own interests. Once it is appreciated that a costs agreement is an agreement between persons who are about to enter into the relationship of solicitor and client, there is no obvious reason why such an agreement, as a class of document, should be the subject of legal professional privilege.
In Brookfield Multiplex Ltd v International Litigation Funding Partners Pte Ltd (No 2) [2009] FCA 449 Finkelstein J wrote at [25]:
The communications in issue are not confined to advice about litigation. Some communications concern the retainer agreements with MBC. No privilege attaches to most of those communications if for no other reason than the fact that copies of the agreements had been provided to Multiplex, by way of discovery, in other litigation. Even if copies had not been provided to Multiplex, it is unlikely that communications about their terms would be covered by privilege. MBC told registrants that it would not give them advice about the retainer agreement as it had a conflict of interest (I say nothing about the correctness of this statement). Having indicated it would not give registrants legal advice about the agreement, nothing it did say could be characterised as a confidential communication made in a professional context. Further, there are cases which hold that an executed retainer agreement is not in any event privileged: Cook v Pasminco Pty Ltd (No 2) (2000) 107 FCR 44 at 53 per Lindgren J (“In my opinion, generally, an agreement between solicitors and their prospective client as to the terms of retainer of the solicitors does not attract either kind of legal professional privilege mentioned”); Securities and Investments Commission v Mercorella (No 3) (2006) 58 ACSR 40 at 45 per Mansfield J (“[A]n engagement letter between a solicitor and a client is not privileged except to the extent that it records legal advice or material touching upon legal advice to be given”); CSR Ltd v Eddy (2008) 70 NSWLR 725 at 739 per Basten JA (“The purpose of client legal privilege is to protect confidential communications between client and lawyer for the purpose of obtaining legal advice and the provision of that advice and communications in relation to the conduct of litigation. The existence of a retainer between client and lawyer is not the subject of the protection, but a precondition to its operation. Accordingly, and generally speaking, the retainer will not be privileged”).
In Kuek v Devflan Pty Ltd [2011] VSCA 25 (Hansen J at [58] and following, Neave and Harper JJ agreeing) the Full Court of Victoria held that at least where there was some reason to believe that the indemnity principle might be infringed, then costs disclosure letters, the costs agreement, and, probably, solicitor client bills might be inspected by the party ordered to pay the costs, and used to argue the application of the indemnity principle.
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.
Consideration
Objections 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.
This issue was addressed in Mr Cogan’s submissions and I refer to the discussion above.
On 24 February 2020 the plaintiff filed an affidavit on this issue (FDN 323) and on 3 March 2020 the defendants filed the fifth affidavit of Mr Thomas McFarlane (FDN 324) in response.
The time for either party to request that the court be reconvened expired on 10 March 2020 at 5pm. No request has been made so it is appropriate to now rule on the issue.
The plaintiff’s evidence is that the discussion referred to in his 10 February 2020 affidavit had taken place before the commencement of the without prejudice negotiations. However, Mr McFarlane’s evidence is that the entirety of the discussions between the parties at that time were conducted on a without prejudice basis, and he says that his notes of the meeting confirmed this.
The parties are in direct conflict on this issue and there has been no request by either party to cross examine on the affidavit evidence.
I propose, therefore, to disregard the evidence and submissions on this issue. Further, if I am wrong on this, I would not regard any such discussion as falling within the exceptions of s 67.
Finally, the plaintiff objected to the ASIC search undertaken by Ms Umoff being put into evidence. That material might well be relevant as it suggests that the plaintiff had an involvement with the law firm the subject of the search. I do not need to decide this at this time.
I decline to strike out this exhibit.
The application for production
The plaintiff has complained that the defendant has not referred to or relied on any rule, principle or authority allowing a party to shorten or bypass the costs adjudication process.
He opposes any order for production at this time.
In considering these submissions I have regard to the fact that the recovery process of legal costs has in the past been notoriously expensive and time consuming, and, has very often been out of proportion to the amount in dispute.
Although, at times, there were genuine disputes and adjudication was necessary, earlier rules did not encourage speedy and cost-effective adjudication of costs disputes. Although they set out a process for making offers and acceptance of such offers, there were no provisions mandating the early service of a formulated claim for the total costs and disbursements sought, or, opportunities for early directions and rulings from the court.
In Smoothpool v Pickering [2001] SASC 131, the trial judge, Lander J, recognised that in some cases the preparation of a bill of costs was onerous and occasioned a party significant expense, which was often not recovered because the party was only entitled to party and party costs. He further observed:
I think it is clear enough … that the courts’ procedures for the assessment of costs in favour of successful parties, in long and complex matters, is no longer appropriate. They put successful parties to further expense in recovering that in which the courts have already awarded. It is time, I think, for the court to modify its procedures so as to allow the successful party to obtain the fruits of the victory of any cost order without being put to any further expense. Moreover the successful party should not be kept out of their money which is often a significant hardship, whilst a long and protracted taxation takes place.
The Full Court subsequently held in Pickering v Smoothpool (No 6) [2001] SASC 440 that, other than by dispensation with the rules, there was no provision for early determination of issues relating to assessments of costs, and, that a taxation of costs could not commence until a bill in taxable form was lodged.
In consequence of these observations and findings, new rules relating to the adjudication of costs in the Supreme and District Courts came into force on 1 September 2016. They required the provision of a formulated claim for costs, allowed the parties to seek an early directions hearing before the adjudication process commenced, replaced the former short and long form bills with a single claim which could be amended and updated where necessary, and, provided additional powers to the Court at the preliminary assessment stage.
These changes are consistent with the policies and objects of the current rules which are reflected in the following rules.
Rule 3 provides that the objects of the rules are to establish orderly procedures for the just resolution of civil disputes, to facilitate and encourage the resolution of civil disputes by agreement between the parties, to avoid all unnecessary delay in the resolution of civil disputes, to promote efficiency in dispute resolution so far as that object is consistent with the paramount claims of justice, and, to minimise the cost of civil litigation to the litigants and to the State.
Rule 113 sets out the general duties of the parties and provides that they, and their lawyers, have a duty to the Court to assist in the orderly progress of the proceeding from its commencement until it has been finally dealt with by the Court. Lawyers have a duty to ensure that the course chosen for proceedings is consistent with the timely resolution of the dispute and the most efficient utilisation of scarce Court resources: A Team Diamond Headquarters Pty Ltd v Main Road Property Group Pty Ltd (2009) 25 VR 189.
Rule 116 provides that the Court has the power to manage litigation to the extent necessary to ensure that it is conducted fairly, and as expeditiously and economically as is consistent with the proper administration of justice.
It is appropriate to have regard to all of these matters in determining the defendant’s application, and to expedite the adjudication process so it is as efficient and economical as possible, while, at the same time, preserving the paramount claims of justice.
The plaintiff’s position is that far from there being an efficiency by way of production of documents at an early stage, the opposite is true. He submits that the orders sought would have no utility and no influence on the matter settling on a commercial basis. He submits that he should not be denied the opportunity of putting the full picture before the Court in a formal bill of costs, and that the appropriate forum for his provision of documentation, in relation to his claim for costs, would be during the adjudication process.
However, in my view this course would not be appropriate. It would put in place the very mischief which the rule amendments of 2016 were introduced to overcome. It would inhibit the opportunities for the parties to properly negotiate, and for the Court to provide preliminary rulings at an early stage.
In my view, both limbs of the defendant’s application are good reason to make the orders sought.
The first is the early provision of information regarding the contractual relationship between the plaintiff and the solicitors and barristers who had represented him which will facilitate a proper evaluation of the plaintiff’s entitlement and hence the potential for resolution. The defendant has strongly refuted the suggestion that he had no liability to his solicitors and counsel for the legal costs expended. If that were the case, then he would have no rights of recovery from the defendant. The purpose of this application is to enable the defendant to conduct due diligence in a timely way so as to ascertain the true position in relation to the plaintiff’s contractual arrangements with any of his legal representatives. If it is the case that there is no indemnity, then there will be no right for the plaintiff to recover costs. The logic demands that this issue be dealt with in a preliminary way. That is because if the Court was to decide that there was no contractual obligation on the part of the plaintiff to pay costs, then there would be no point in commencing with a formal adjudication which will inevitably be a long and expensive process.

The plaintiff has submitted that it is for the defendant to first produce cogent evidence that there was an arrangement between him and his lawyers such that there would be no entitlement to recover costs. However, it is clear from the authorities that a claimant for costs can be required to produce the costs agreement with his or her lawyers. Giannarelli v Wraith (No 2) [1991] HCA 2 dealt with a situation where there was an application for the production of a costs agreement. There are numerous authorities that a costs agreement is not privileged: CSR Ltd v Eddy [2008] NSWCA 83 at [62]; Cook v Pasminco Ltd (No 2) (2000) 107 FCR 44 Lindgren J at [47]; Brookfield Multiplex Ltd v International Litigation Funding Partners Pte Ltd (No 2) [2009] FCA 449 at [25]; and Anangu Pitjantjatjara Yankunytjatjara v Ombudsman & Anor [2019] SASC 162 at [189]‑[190]. If the agreement contains privileged material, then this can be excised.
Kuek v Devflan Pty Ltd [2011] VSCA 25 suggested that such an order could be made at least where there was some reason to believe that the indemnity principle might be infringed.
In the present case, the ASIC search has revealed that the plaintiff was a former shareholder/member of the law company Commercial & General Law (SA) Pty Ltd. That fact provides some reason to believe that the indemnity principle might be infringed such as would warrant an order of the type sought by the defendant.
Further, if an opportunity to ascertain details of contractual arrangements between a lawyer and client was not available, then a paying party would never be able to rely on a “no‑indemnity” argument, as there would never be an evidentiary foundation for it. That would clearly be inappropriate.
It is clear that rule 274(4) enables the Court to order production of records of costs and disbursements and any other material that might be relevant to the assessment. The retainer agreement falls squarely within rule 274(4)(a).
It is also clear that rule 274(1) provides that the Court’s power in this regard applies to both proceedings in the nature of a preliminary assessment of costs and proceedings in the nature of a detailed adjudication. At the present, the Court is involved in the preliminary assessment stage and the indemnity issue is inevitably interwoven into this aspect. I also note that the Court has an inherent jurisdiction. I refer to the commentary at [R 274.1] of Civil Procedure South Australia Volume 1.
It is appropriate in the circumstances, in my view, for the documents sought to be produced on the basis set out in this limb.
The second limb relied on by the defendant is that if the order is made, he will obtain information as to the likely quantum of the plaintiff’s costs claim in a timely manner.
The plaintiff’s rule 271(1A) letter is before the Court and the amount sought has been redacted, but it is clear from its content that it contains no information whatsoever as to the quantum of disbursements, the identification of the various parties to whom disbursements have been paid, and the amounts claimed for legal costs divided into cost scale periods.
The purpose of the rule is to provide a costs respondent with the opportunity to understand the quantum of a claim before the expense of preparation of a full Form 49 is commenced. In the present case, a Form 49 claim is highly likely to be very large.
The benefit of having the information required by rule 271(1A) has not been provided to the defendant. He has no way of ascertaining details of the amount to be claimed, and, accordingly he has no way of considering what offer might be made. He will clearly be prejudiced as a result of this. Although he is not seeking any ruling at this time that the plaintiff is not entitled to proceed with his Form 49 claim for costs, he is asking the Court to facilitate an opportunity for him to assess the likely quantum of the plaintiff’s costs claim so that he can consider further options. Those options include making an offer, or, an application to the Court for a lump sum assessment. The power invested by rule 274 is an established procedure of the Court and it is practically useful. Its use might result in settlement either of the costs claim in its entirety, or, at least a portion of costs claimed.
For the above reasons, I propose to make the orders sought by the defendant.
Orders
1.On the defendant’s application (FDN 318) it is ordered that the plaintiff is to serve on the defendant on or before 14 April 2020 copies of any of the following materials which the plaintiff has in his possession, custody or control:
1.1 Any costs or fee agreements, retainer letters, letters of engagement or similar documentation between the plaintiff and any solicitors or counsel, or between any solicitors and counsel, acting on the plaintiff’s behalf in the trial of the proceedings, setting out the terms upon which any legal costs in relation to those proceedings would be incurred, invoiced or paid.
1.2 Any solicitors’ or counsel’s fee invoices or bills or similar documentation (including in relation to any disbursements) recording the legal costs claimed by the plaintiff in relation to the trial of these proceedings.
1.3 Any receipts, records of payment or similar documentation evidencing the plaintiff having actually paid any of the legal costs claimed in relation to the trial of these proceedings.
2.I fix a directions hearing on Tuesday 21 April 2020 at 9.30am to further consider this matter.