Viscariello v Macks (No 4)

Case [2022] SASC 30

Supreme Court of South Australia

(Civil: Application)

VISCARIELLO v MACKS (NO 4)

[2022] SASC 30

Judgment of Auxiliary Judge Norman a Master of the Supreme Court  

31 March 2022

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - GENERAL MATTERS

Applications by both parties to proceedings against the other for costs awarded in their favour.  Application by the party in one claim seeking before the commencement of the taxation particulars of the costs claimed by the other party.  Application by the party in the other claim for the costs of both parties to be taxed on a lump sum basis and for the assessment to be consolidated.  Generally inappropriate for an order for particulars of a costs claim to be made before inspection and production and the pre-taxation conference between the parties.  Application deferred until after those events have occurred.  Lump sum costs assessment declined where there are large numbers of "big ticket" and controversial objections to the claim and such items intermingled with other parts of the claim, but deferred until after those items had been taxed.  Application that party be required to elect prior to taxation as to proceeding with an application relating to the costs indemnity rule refused.  The concept of proportionality pursuant to UCRs 1.3, 3.1(1)(h), 12.2(c) and (e) and 61(b) and (d) is relevant on a taxation of costs.  Observations on the requirements as to the form of interlocutory applications pursuant to UCR 102.1 and Form 77.

Paciocco & Anor v Australia and New Zealand Banking Group Ltd (No 2) [2017] FCAFC 146; (2017) 253 FCR 403, applied.
Hall v City of Burnside (No 10) [2013] SASC 140, discussed.

Macks v Viscariello (2007) 130 SASR 1; Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119; Leary v Leary [1987] 1 WLR 72; Seven Network Ltd v News Ltd [2007] FCA 2059; Koonara Management Pty Ltd v Rockliff (No 3) [2020] FCA 523; McDonald v State of South Australia [2020] SASC 112; Viscariello v Legal Profession Conduct Commissioner (No 2) [2021] SASCFC 35; Harrison v Schipp (2002) 54 NSWLR 738; Auspine Ltd v Australian Newsprint Mills Ltd (1999) 93 FCR 1; Smoothpool Nominees Pty Ltd v Pickering & Ors [2001] SASC 131; Charlick Trading Pty Ltd v Australian National Railways Commission [2001] FCA 629; Seven Network Ltd v News Ltd [2007] FCA 2059; Hudson v Sigalla (No 2) [2017] FCA 339; Piciocco & Anor v Australia and New Zealand Banking Group Ltd (No 2) [2017] FCAFC 146; (2017) 253 FCR 403; Cornwall & Ors v Rowan (No 4) (2006) 244 LSJS 183; [2006] SASC 111; Moyes & Anor v J & L Developments & Anor [2004] SASC 319; Harris Scarfe (in liq) v Harris Scarfe Wholesale Pty Ltd (in liq) [2006] SASC 277; Ricciardi v Philmac Pty Ltd [1987] 45 SASR 290; Indigo Financial Money Pty Ltd & Anor…

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AGLC
Viscariello v Macks (No 4) [[2022]] SASC 30
Case
[2022] SASC 30
Decision Date

CaseChat Overview and Summary

Viscariello and Macks are parties to a legal dispute that has spanned over a decade, and both have filed applications related to the taxation of costs awarded in their favour. Viscariello sought further particulars of Macks’ costs claim, while Macks sought a lump sum assessment of both parties’ costs. The legal issues the court needed to resolve included the appropriateness of ordering particulars of a costs claim before inspection and production and the pre-taxation conference, the circumstances in which a lump sum assessment of costs is appropriate, and the application of the concept of proportionality in the taxation of costs. The court found that it was generally inappropriate to order particulars of a costs claim before inspection and production and the pre-taxation conference. The court also declined to assess Macks’ costs on a lump sum basis due to the large number of "big ticket" and controversial objections to the claim and the intermingling of such items with other parts of the claim. However, the court agreed to tax those items in the normal manner and will consider a lump sum assessment of the balance of the claim thereafter. The court further declined to require Macks to elect on whether to pursue his withdrawn application or to issue a fresh application at that time.

The court's reasoning was based on the concept of proportionality, which is relevant in the taxation of costs. The court noted that the concept of proportionality is relevant in various parts of the Uniform Civil Rules and that it must be considered in the taxation of costs. The court also noted that the form of interlocutory applications must comply with the relevant rules and forms. The court found that it was not appropriate to order particulars of a costs claim before inspection and production and the pre-taxation conference because it would not be proportionate to do so. The court also found that it was not appropriate to assess Macks’ costs on a lump sum basis due to the large number of "big ticket" and controversial objections to the claim and the intermingling of such items with other parts of the claim. The court further declined to require Macks to elect on whether to pursue his withdrawn application or to issue a fresh application at that time.

The final orders of the court were that the applications of Viscariello for further particulars of Macks’ claim and associated orders were premature and were declined at the present time. The court further declined to require Macks to now elect as to further pursuing his withdrawn application or to require him to issue a fresh application at that time. A further directions hearing was fixed for 5 April 2022 at 2:30pm but the parties have liberty to apply as to that date.

Orders

Orders of the court

1.The applications of Viscariello for further particulars of Macks’ claim and associated orders are premature and are declined at the present time. If following inspection and production and the pre taxation conference between the parties Viscariello continues to assert prejudice, he is at liberty to apply for further submissions on those applications to be presented by the parties.

2. In relation to Macks’ application for his costs to be taxed on a lump sum basis, by reason of the large number of “big ticket’ and controversial objections to that claim, and the intermingling of such items with other parts of the claim, the Court declines to proceed with a lump sum assessment of that claim at this time, but will proceed to tax those items in the normal manner (by grouping if possible) and will then further consider a lump sum assessment of the balance of the claim thereafter.

3. In relation to Macks’ application for Viscariello’s costs to be taxed on a lump sum basis, the Court will hear further from the parties at the next directions hearing on that application, including as to whether a Response by Macks should now be filed.

4. The Court declines to require Macks to now elect as to further pursuing his withdrawn application FDN 336 or to require him to issue a fresh application at this time.

5. A further directions hearing is fixed for 5 April 2022 at 2:30pm but the parties have liberty to apply as to that date.

Background

Background to the litigation

Macks filed an application dated 24 August 2021 (FDN 385) seeking orders that the claims for costs of the parties be assessed on a lump sum basis and that the assessments be consolidated. This application was supported by a second affidavit of Macks sworn on 24 August 2021 (FDN 388) and minutes of order were filed. Macks filed written submissions in support of that application dated 21 September 2021 (FDN 389) and Viscariello filed responding submissions dated 29 October 2021 (FDN 393). Macks filed responding written submissions to these dated 11 November 2021 (FDN 395).Background to the proceedings The proceedings were commenced by Viscariello in 2006 and have had a long and complex history. He had sued Macks in his capacity as an administrator and liquidator of certain companies, seeking declarations and damages, and alleging, inter alia, that he had been in breach of various statutory duties in these roles. It was alleged that Macks had been motivated by personal motives, wishes and intentions that had caused him not to act in the best interest of the creditors, members and contributories of the companies, and to act unprofessionally, and that he had acted with an improper purpose. Kourakis CJ at first instance found that in conducting the liquidation Macks had breached provisions of the CorporationsAct 2001 (Cth) and he issued declarations to that affect. An appeal and cross-appeal followed and in Macks v Viscariello (2017) 130 SASR 1 (Lovell J, Corboy and Slattery AJJ) dated 22 December 2017 the Full Court held that that the trial Judge had the power to make declarations pursuant to s 31 of the Supreme Court Act 1935 (SA), but varied a declaration made concerning a breach of s 180 of the Corporations Act, and set aside findings first that Macks had acted with four substantial and actuating collateral purposes from June 2005, secondly that he had breached ss 181 and 182 of the Corporations Act from June 2005; and thirdly that what were described as the Bernsteen proceedings and the George proceedings were an abuse of process. The Full Court further found that that the trial judge had not erred in allowing the amendments to the pleadings after the delivery of reasons; and finally that issues of allegations of a breach of ss 181 and 182 on the exercise of the Court’s discretion should not be remitted for trial. Viscariello’s cross-appeal was dismissed.Costs orders in the proceedings In a further judgment of the Full Court dated 17 October 2018, extant costs orders made in the proceedings on all pre-trial and post-trial attendances, all interlocutory applications before and after the commencement of the trial of the action, and the appeal were confirmed. Further, subject to those orders, it ordered that Macks was to pay to Viscariello 25 per cent of the costs and disbursements of the trial, and 25 per cent of the costs of applications before the Court for which the costs order of the Court was or is by virtue of the Full Court’s reasons costs in the cause. Further, subject to the extant costs orders dealt with in Paragraph 1 of the orders, Viscariello was to pay to Macks 70 per cent of the costs of the appeal, which would 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 the reasons, costs in the cause, such costs to be adjudicated if not agreed.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

Viscariello submitted that there were several items for attendances upon people who had no relevance to the proceedings. Items 9 and 325 related to communication with Macks’ former solicitors, presumably in order to obtain information about something that had happened during the course of proceedings, and these were clearly solicitor/client. Item 543 related to an attendance upon Mr Iles, the solicitor acting in proceedings in the District Court between Viscariello and the estate of his counsel who had died in March 2016, this could have nothing to do with any issues in the appeal. Viscariello exhibited as (JV4) to his affidavit (FDN 343) copies of tax invoices produced to him of counsel fees included in Macks’ claim, however he asserted that large portions of these tax invoices had been redacted without explanation. While the total amount for such items was relatively small ($228) the inclusion of these claims highlighted that there had been no proper attempt to limit Macks’ claim to party/party items. Viscariello also noted that item 368 of Macks’ claim sought the sum of $883.20 for “considering K Macks’ Will and Testamentary Trust Deed”, which was clearly irrelevant to the appeal.“Considering” and “consideration” claims Viscariello referred to numerous items in the claim using the words “considering” or “consideration” in the descriptions – these include Items 10, 11, 12, 22, 27 and 31 and 17 and 20. Numerous of these had involved one solicitor considering a document prepared by another. It was contended that the prima facie position on a taxation was that such items were not allowable on a party/party basis. Item 308 was described as “considering correspondence”, under item 7 in Schedule 2, one hour of solicitor’s time was claimed. However, the “consideration” of correspondence was not an attendance coming within item 7, nor had the specific correspondence referred to been identified. There were no facts, circumstances, grounds or reasons in the claim justifying the items or explaining why they were properly claimable. The items were listed in Schedule A and the total amount was $33,382, representing approximately 9 per cent of the claim for solicitor fees. These items should be determined on an item-by-item basis as there were reasonable grounds for establishing that each ought to be disallowed. Since the items were dispersed randomly throughout the claim for costs, this was another reason why it would be difficult, if not totally impracticable, to attempt some form of lump sum assessment process on any part of Macks’ claim for costs. “Considering” irrelevant matters Viscariello likewise submitted that numerous items in the claim were for solicitors considering or reviewing irrelevant matters, which did not relate to the issues in the appeal. Item 312 claimed $528 for considering a District Court decision in relation to a disciplinary matter involving Viscariello, this had no relevance, and it was not referred to in the appeal. Item 568 claimed $432 for considering a statement of claim in the District Court action referred to above. Further items in this category related to attendances to search court registries in relation to other proceedings not directly relevant to the appeal and not raised or dealt with at any stage during the appeal. It was submitted that these matters should be dealt with on an item-by-item basis, and they should all be taxed off. The total was $5,504.Claims for “attending on” or “attending to”