Viscariello v MACKS (No 2)
[2020] SASC 78
•8 May 2020
SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
VISCARIELLO v MACKS (No 2)
[2020] SASC 78
Reasons for Decision of Auxiliary Judge Norman a Master of the Supreme Court
8 May 2020
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - GENERAL MATTERS
Claim for costs pursuant to r271 - appropriate procedure - inappropriate for costs respondent to apply to set aside or strike out or declare a costs claim to be of no legal force prior to the filing and service of a response pursuant to r271(4) – extension of time given for filing and service of response – in the circumstances of the case order made waiving the effect of r271(5) – application dealt with on the papers.
Supreme Court (Civil) Rules 2006 ss 113(1), 217(1A), 271(1B), 271(4), 217(5), 271(6) referred to., referred to.
MACKS v VISCARIELLO (No 2) [2018] SASFC 106, discussed.
VISCARIELLO v MACKS (No 2)
[2020] SASC 78
This is an application of the plaintiff, dated 14 April 2020 (FDN 327), seeking various orders in relation to the defendant’s claim for costs. It is supported by an affidavit of the plaintiff sworn on 14 April 2020 (FDN 328).
On the same date, the defendant filed the fifth affidavit of his solicitor, Ms Umoff, dated 14 April 2020 (FDN 326), together with proposed minutes of order.
On 15 April 2020, Ms Umoff emailed the court, setting out in brief, the defendant’s submissions as to the application, including opposition to many of the orders sought.
The defendant’s entitlement to costs had arisen by virtue of orders of the Full Court made on 17 October 2018 when its reasons were published.[1] The plaintiff also has costs entitlements pursuant to those reasons.
[1] [2018] SASFC 106
At a directions hearing on 29 November 2019, I aad inter alia ordered that the defendant was to file and serve his claim for costs pursuant to r271(1B) by 20 December 2019 and that the plaintiff was to respond pursuant to r271(4) by filing and serving such response by 27 March 2020. I directed that I would later fix a hearing to consider that claim, in a general sense, rather than on an item by item basis.
In a subsequent order made on 17 February 2020, I had inter alia extended the time for a response by the plaintiff to the defendant’s bill of costs to 15 April 2020.
In conformity with the court’s policy concerning hearings during the COVID-19 pandemic, I indicated in an email, sent to the parties on 23 March 2020, that the matters in dispute on the application would be determined on the papers.
On 17 April 2020, the plaintiff sought time to file and serve responding submissions to those provided by the defendant.
On the same date, I allowed him until 24 April 2020 to file and serve any such responding submissions.
I later refused two further email applications by him seeking extra time.
No responding submissions were received during the time fixed, so it is now appropriate to provide these reasons.
The plaintiff has sought seven discreet orders.
Order One
Order one seeks that the plaintiff is to pay the defendant’s costs of the defendant’s application of 24 January 2020 on a party/party basis to be taxed if not agreed. That order is not opposed and will be made.
Orders Two and Three
Orders two and three are linked. Order two seeks that the defendant’s claim for costs, served on the plaintiff on 5 February 2020, be set aside, struck out and/or declared to be of no legal force or effect such that the plaintiff is not required to file and serve a response to that claim.
Order three seeks that the defendant is to prepare, file and serve, on the plaintiff, an amended claim for costs, complying with the rules and any directions/orders of the court concerning the form and content of that document within 4 weeks from the date of the order.
In his affidavit, the plaintiff exhibited two letters he had sent to the solicitors for the defendant on 18 March 2020 concerning the latter’s claim for costs of the principal proceedings, the defendant’s appeal, and their adjudication. He asserted that the defendant’s claim for costs was not in proper form and did not comply with the relevant rules.
He further exhibited an email received on 19 March 2020 from the defendant’s solicitors enclosing a copy of a spreadsheet of the defendant’s claim for costs served on him on 5 February 2020 in electronic form, together with a notation that the defendant would respond to the rest of the matters raised in the plaintiff’s letters shortly.
He testified that, by letter of 24 March 2020, the defendant’s solicitors had written to him and informed him to the effect that the defendant disagreed with the contentions set out in his letters of 18 March 2020. The defendant had further indicated that he would not agree with other proposals contained in the plaintiff’s two letters of 18 March 2020.
The plaintiff’s first letter of 18 March 2020 to the defendant’s lawyers set out the basis for his assertion that the claim was invalid.
First, he said there had not without good (any) reason been provision of the defendant’s claim for costs in Microsoft Excel or similar computer spreadsheet format such as was required by r271(2A).
Secondly, he said that the schedule was in a font size font less than size 12 which contravened r46. He said that it was practically unreadable.
Thirdly, he said that numerous items in the schedule contained the word “attending” but they appeared not to refer to any of the types of attendances described to in items 7-10 inclusive of schedule 2 of the rules. He said that these items should either have been omitted or amended to contain a description consistent with the items appearing in schedule 2.
Fourthly, he said item 4 in the notes to form 49, the claim for costs provided that the nature of attendances should be described. However, many of the items in the schedule to the defendant’s claim that contained the word “attending” did not contain any description of the nature of the attendance, which meant that there was no explanation given why the items were party/party costs.
Fifthly, he said that there were numerous items in the schedule where the description commenced with the word “research”. He pointed out there was no item in schedule 2 for research, and further that it was well established that any amount charged by a legal practitioner for research was solicitor/client and not party/party. Accordingly, all such items should be omitted or, alternatively, amended to contain a description consistent with the items appearing in schedule 2 - if any of those items were to be claimed.
Sixthly, he said the last page of the schedule to the claim had one entry for counsel fees claiming a total amount of $432,603.05. He said that he had been provided with copies of numerous tax invoices from counsel - in which some of the items had been redacted - which indicated that the redacted items were not part of the claim. However, no list has been provided along with the schedule that explained how the amount claimed for counsel fees was calculated.
Seventhly, he submitted that he should be provided with a list showing each separate invoice from counsel with the amount from each such invoice that the defendant claimed. Without this minimum information, he said he had no notice how the claim for party/party counsel fees had been calculated and he was therefore unable to formulate a proper response.
Ninthly, he said the last page of the schedule had one entry for other disbursements, with a total amount claimed of $8,198.40. As with counsel fees, no other listing or calculation had been provided. He contended that he should be provided with a list showing each separate disbursement that was claimed.
Tenthly, he said item one in the notes to the form 49 provided that a claim for costs should include “only charges claimable under the costs order”. He said that the claim for costs was replete with items which were solicitor/client in nature, which were therefore outside the scope of the costs order. For example, he said, each of the items commencing with the word “research” were not party/party items, and many of the items containing the word “attending” described an activity that was not a party/party item.
Eleventhly, he submitted the claim served was not a genuine attempt to set out a claim for costs according to the terms of the costs order made by the full court, which was that he was to pay the defendant 70% of his costs of and incidental to the appeal on a party/party basis.
Finally, he submitted it would be oppressive and onerous to require him to prepare a properly detailed response to each item in the schedule to the claim in light of the matters referred to above.
He submitted that the defendant should serve an amended claim for costs which complied with the rules in form and in substance, and was free of the defects set out above, and at the same time provide to him a copy of the amended claim in Microsoft Excel or a similar computerised spreadsheet in digital form as required by the rules.
He also said that, in the event that the defendant required more time than referred to above within which to serve and provide the amended claim, then the defendant was to write to him confirming that it was agreed that the claim was deficient, that he would serve an amended claim in proper form, and he that he would indicate a date by which he would serve and provide the further documents requested.
He gave the defendant notice that if he did not agree with such requests, he reserved his rights. He also stated that the letter was an open one and he reserved his rights to produce it to the court.
In his second letter sent to the defendant’s solicitors on18 March 2020, the plaintiff noted the defendant’s letter of 5 February 2020 attaching the purported claim for costs in relation to the appeal to the Full Court. He suggested that the defendant agree to a timetable to the further steps in relation to the claims for costs of the parties and submitted that the claim should not proceed to adjudication until at least 60 days after both parties had served their claims on each other together with Microsoft Excel or similar computerised spreadsheets in digital form.
Next, he suggested that once both parties had served their claims, there should be a period of at least 30 days allowed to provide them with an opportunity to try and resolve their respective claims on a commercial basis without the need for a costly and time-consuming adjudication.
He submitted that the time deadline for each party to serve their responses on each other should be 60 days from the time when the last claim for costs and copy in digital form was served and not 28 days from the time of service of the first claim for costs.
He reiterated the matters set out his earlier letter in which he had considered that the defendant had not yet served a claim for costs together with a copy in digital form in accordance with the rules and that there was no claim for costs from the defendant for him to respond to. In those circumstances, he sought an agreement that the time for a response allowed in the order made on 17 February 2020 be discharged. He made the letter openly and reserved the right to produce it.
Ms Umoff’s affidavit responded inter alia to these matters and, particularly at paragraphs 5 to 18. She testified that, on 19 March 2020, she had sent an email to the plaintiff attaching a copy of the defendant’s costs claim in Microsoft Excel format. She further referred to the court’s email of 23 March 2020, fixing a timetable, and to a letter sent by her to the defendant’s solicitors of 24 March 2020 responding to the matters raised in his two letters of 18 March 2020.
That 24 March 2020 letter, she said, had rejected the various allegations made by the plaintiff concerning the contents of the defendant’s costs claim and had invited him to raise these matters in his response to the claim or in submissions to the court.
Secondly, she said, the proposals set out by the plaintiff in his second letter of 18 March 2020 were rejected.
In tab 4 to her affidavit, Ms Umoff exhibited that letter from the defendant’s solicitors to the plaintiff responding to his two letters of 18 March 2020.
The defendant confirmed that, after receiving his request, the plaintiff had been provided with an electronic copy in Microsoft Excel format of the costs claim.
Ms Umoff testified that the defendant disagreed with the various assertions made in his first letter of 18 March 2020 concerning the claim and its deficiencies. She asserted that the costs claim was in the form required by r271(2), to which the plaintiff was able to respond in accordance with r271(4). She submitted that the issues raised in the plaintiff’s letters concerning the contents of the claim were matters of a nature that might be addressed in the response or submissions to the court and they did not provide any basis for the claim to be struck out or stayed, or for the defendant to be required to issue an amended claim.
In the email to the court and the plaintiff from Ms Umoff dated 15 April 2020, the defendant has provided written submissions in response to the plaintiff’s application.
It was submitted that none of the matters set out in the plaintiff’s affidavit provided any legitimate basis for the orders sought by him. It was put that the plaintiff’s assertions concerning the alleged deficiencies in the defendant’s claim for costs, as set out in his letters of 18 March 2020, were rejected, although the defendant said that he would be content to provide further, more detailed submissions on those matters if they would assist the court. In any event, it was submitted that none of the matters raised by the plaintiff would stand in the way of his providing a response to the claim and he should be required to do so, absent which the presumption in r271(4) would apply.
It was also indicated to the court that the defendant’s solicitors would arrange for a hard copy of the claim to be lodged with the Registry by 16 April 2020. (Notwithstanding the provisions of r271(1B) that the claim would only be served on the respondent and not filed with the court).
I have had regard to the matters raised in the parties’ affidavits and submissions and, in particular, their communications regarding the costs claim served on the plaintiff by the defendant on 5 February 2020.
In my view, it is inappropriate to make the orders sought by the plaintiff in paragraphs 2 and 3.
The rules set out a clear process for claims and responses. Because there is a process for the filing of a response to a claim, it is inappropriate for the court to set-aside or strike out or declare that a costs claim is of no legal force or effect prior to that point. Prior to the filing and service of a response to a r271(1A) claim pursuant to r271(4), or a failure to respond within the appropriate time, the court is not privy to the process. There is no provision in the rules for service of a costs claim on the court.
Once served with a claim, the respondent is entitled to admit the claim in full, or admit it to an extent stated in the response, or to reject it in its entirety. If it asserts deficiencies or irregularities in the claim, the appropriate step is to incorporate these into its response, objecting if it wishes to a particular item or items or to the claim in its entirety, and giving the reasons to do so.
These can then be considered at the hearing of a preliminary assessment pursuant to sub-rule 271(6).
Accordingly, if the plaintiff contends that the costs claim of the defendant is deficient or irregular, or does not comply with the rules, then his appropriate response is to serve his formal response in accordance with r271(4) addressing any defects in the claim, responding if he is able or, in the event that he is unable to respond by reason of the matters raised in his letter, stating this and explaining why he cannot respond.
However, he is reminded of his procedural obligations pursuant to r113(1) to assist in the orderly progress of the proceedings, and he should provide a genuine response in accordance with these obligations. Any overly technical objections will not be viewed sympathetically.
Any objection or objections to the claim incorporated in the response will be considered, after it has been filed and served, on the hearing of any application pursuant to r271(6) for a preliminary assessment to be undertaken.
At that time, each party can provide its submissions based on the matters raised in the response.
I accordingly decline to make the orders sought in paragraphs 2 and 3 of the plaintiff’s application.
Orders Four to Seven
Order 4 seeks that if the court declines to make the orders sought in 2 and 3 (which is now the case here) then a time for the plaintiff to respond should be extended for a further 8 weeks.
Order 5 seeks an extension of time until 30 June 2020 to comply with paragraph 1 of the orders made on 11 March 2020.
Order 6 seeks that until further order, neither party may obtain an order for payment of an amount of costs administratively pursuant to r271(5) or otherwise.
Order 7 seeks that the directions hearing of 21 April 2020 be vacated. This has already occurred.
Order 8 seeks liberty to apply.
Order 9 seeks costs.
Order 10 seeks further directions.
The defendant has opposed any further extensions of time being granted to the plaintiff. I refer in this regard to the defendant’s email of 15 April 2020, paragraphs 5 and 6.
In his affidavit of 14 April 2020, and in emails the plaintiff has sent to the court, he has explained why he has sought an extension of time to respond to the defendant’s costs claim. At paragraphs 7 and 8 he has raised matters relating to the COVID-19 pandemic and the effect that this has had on his ability to undertake legal proceedings. He has testified that between March 2020 and the date of his affidavit, he had to attend at, amongst other locations, the court registry to file documents and review transcripts, to attend various directions hearings and arguments, and to attend at his solicitors concerning proceedings. By reason of the imposed government restrictions, he said, each of these activities has taken much longer than otherwise might have been the case.
He has also referred at paragraphs 9-20 of his commitments with respect to other proceedings which are or remain on foot and in which he is a party represented and/or a self-represented litigant. I will not repeat these details, as they are contained in the affidavit, but they relate to hearings before the Full Court in Viscariello v LPDT & Anor,[2] Viscariello v LPCC,[3] and Viscariello v Tamasuaks.[4]
[2] (SCCIV-18-891)
[3] (SCCIV-13-1654) – a Full Court appeal
[4] (DCCIV-16-1387) – a permission to appeal matter
As has been indicated by the court, and as the defendant has complained, there have already been significant delays in this matter. Costs were awarded as long ago as 2018 and it important that the defendant’s costs claim be resolved as soon as possible. Clearly the plaintiff has distractions arising from other matters in which he is involved, by reason of court-imposed deadlines, including orders made by the Full Court. Ordinarily these should not interfere with a litigant’s responsibilities in other cases in which he is involved.
However, the reality is that in the time of the COVID-19 pandemic, legal processes are more difficult, and take longer to process. Allowances should be made for this.
In these circumstances, I have decided that it is appropriate to make the orders sought by the plaintiff extending the time for him to comply with his procedural obligations in this matter.
He should be on notice however, that notwithstanding the difficulties he is experiencing, this matter must proceed as expeditiously as possible. He cannot assume that any further extensions will be granted. He may later face a claim for interest on costs occasioned by any delay.
I will extend the time for the plaintiff to respond to the defendant’s claim for costs and to comply with paragraph 1 of the orders made on 11 March 2020 to 30 June 2020.
The plaintiff has also sought that neither party may obtain an order for payment of any amount of costs administratively pursuant to r271(5) or otherwise. In the normal course, I would be hesitant to make such an order. There is a process in the rules which should be respected. However, bearing in mind the plaintiff’s complaints as to the form of the defendant’s claim for costs, which issue I have not yet determined, I consider that it is appropriate for that order to be made. As I am closely supervising this adjudication of costs, if there are any interim orders for costs, these can be made by myself rather than by order from the registry. I will accordingly order that no party may obtain an order for payment of any amount of costs administratively pursuant to r271(5) until further order. I will give liberty to apply.
Once the plaintiff has responded to the defendant’s claim, if he chooses to do so, it will be necessary for the court to further consider the matters Notwithstanding the general court directions given by reason of the COVID-19 pandemic as to contested matters being dealt with on the papers, I propose to fix a further directions hearing, subject to any submissions of the parties I will accordingly tentatively fix a hearing on Tuesday 14 July 2020 at 2.30pm but I give liberty to apply.
Summary of orders
1The plaintiff is to pay the defendant’s costs of the defendant’s application of 24 January 2020 on a party/party basis to be taxed if not agreed.
2I decline to strike out the defendant’s claim for costs, served on the plaintiff on 5th February 2020.
3I decline to order that the defendant prepare, file and serve on the plaintiff an amended claim for costs.
4I extend the time for the plaintiff to respond to the defendant’s claim for costs of 5 February 2020 to 30 June 2020.
5I extend the time for the plaintiff to comply with paragraph 1 of the orders made on 11 March 2020 to 30 June 2020.
6Until further order, neither party may obtain an order for payment of any amount of costs in this matter administratively pursuant to r271(5) or otherwise.
7I fix a hearing on Tuesday 14 July 2020 at 2.30pm subject to liberty to apply.
8Liberty to apply generally.
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