Viscariello v Macks (No 5)

Supreme Court of South Australia
(Civil: Application)
VISCARIELLO v MACKS (No 5)
[2022] SASC 136
Judgment of Auxiliary Judge Norman a Master of the Supreme Court
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - GENERAL MATTERS
Applications for costs following an argument on 18 November 2021.
Held:
The costs of Viscariello's application FDN 342 and 371 and Mack's application FDN 385 are reserved and will be further considered at a later time in the taxations.
Law of Costs (5th Edition) 8.23, 14.25; Supreme Court Act 1935 (SA) s 40(1); Uniform Civil Rules 2020 (SA) ss 194.4, 194.4(5), 194.5(2), referred to.
Carey v Balfour (No 2) [2021] SASC 111; Mayfield Family Wines Pty Ltd v Growers Wine Group Pty Ltd (No 2) [2021] SASC 75; Murray v Lesicar [2014] SASCFC 43; Viscariello v Macks (No 4) [2022] SASC 30, discussed.

VISCARIELLO v MACKS (No 5)
[2022] SASC 136
JUDGMENT NAME
Supreme Court: Civil Application

NORMAN AJ: These are applications of the parties for costs relating to an argument before me on 18 November 2021, following which I published reasons on 31 March 2022 in Viscariello v Macks (No 4).[1] As there are multiple applications the applicant to the proceedings is referred to as “Viscariello” and the respondent to the proceedings as “Macks”.
[1] Viscariello v Macks (No 4) [2022] SASC 30.
Parties’ applications and rulings on same
Viscariello issued two applications. The first was dated 17 September 2020 seeking orders for the production by Macks of documents held by him evidencing his entitlements to costs for preparation, filing and service of an amended claim for costs, and for the filing and service of a response to Viscariello’s claims for costs served on 1 July 2020. The second was dated 19 May 2021 and sought as an alternative that in Macks’ claim for costs and in his further response, he was to comply with requests and complaints set out in letters dated 23 April 2021 and 29 April 2021, or alternatively to file and serve a separate document providing further and better details of his claim for costs, a response to Viscariello’s claim for costs, and orders for inspecting and copies of documents.
Macks issued an application dated 24 August 2021 seeking orders that the claim for costs of the parties be assessed on a lump sum basis and that these assessments be consolidated.
I heard argument on the parties’ respective applications as referred to above at a hearing on 18 November 2021, and on 31 March 2022 published reasons.
I found that Viscariello’s applications for further particulars of Macks’ claim and for associated orders were premature and I declined to make the orders ought, although I indicated that if following inspection, production and a pre-taxation conference, Viscariello continued to assert prejudice, he would be at liberty to apply for further submissions on those applications to be presented.
On Macks’ application for orders that his costs be taxed on a lump sum basis, I found that by reason of the large number of big ticket, controversial objections to that claim, and the intermingling of such items with other parts thereof, it was inappropriate to proceed with a lump sum assessment for the time being, but indicated that the Court would proceed to tax those items in the normal manner, by grouping if possible, and would then further consider a lump sum assessment of the balance of the claim thereafter. In relation to Macks’ application that Viscariello’s costs be taxed on a lump sum basis, I indicated that the Court would hear further from the parties on that application.
Present applications of the parties for costs
Following publication of those reasons, both Macks and Viscariello sought orders for their costs, and each also responded to each other’s submissions. By agreement, these submissions were in writing.
Viscariello referred to the Court’s findings that his own applications had been premature and the fact that it at it had declined to make the orders sought, although he noted that he had been given liberty to apply to renew these applications if appropriate after further inspection and the production of documents and the pre‑taxation conference between the parties. Accordingly, he submitted, the costs of those applications should be reserved until a later time for the Court to consider what might had transpired in the meantime. Because the applications had not been finally disposed of, if they were renewed later and were successful, then he would have reasonably arguable grounds for obtaining costs against Macks.
In relation to Macks’ application, Viscariello noted that the Court had decided not to make the orders sought, so in his submission that application had been finally disposed of. The Court had ordered that the next phase of Mack’s claim for costs should be considered on an item-by-item basis of big ticket and controversial items and the objections to these claims, rather than a lump sum taxation. In this regard, Viscariello sought orders that Macks pay his costs relating to this application, on a party-party basis, as there had been no reasonable basis for the application that the entire claims of Viscariello and Macks should proceed to a lump sum assessment at this stage.
In Macks’ submissions, the costs of Viscariello’s interlocutory applications should be reserved unless and until the Court made a final decision thereon, or in the alternative, an order that they be costs in the cause of the taxations of Macks’ further revised costs claim and Viscariello’s costs claim (apportioned as appropriate).
In relation to the costs of his own interlocutory application, Macks submitted that this had not been finally determined, as although the Court had declined to proceed with a lump sum taxation at this stage, it had found that it would further consider an assessment of the balance of the claim on a lump sum basis at a later stage. Viscariello’s submissions that the costs judgment had been determinative on the issue was baseless, it was submitted. Macks’ application would have great utility by saving time and costs and would be very carefully considered at a later stage. Had the Court formed the view that it was inappropriate or unreasonable, it would not have deferred consideration to a later stage, but rather it would have dismissed the application. No decision had been made on any of these interlocutory applications and the Court had postponed final determination of each until a later stage of the proceedings.
Legal principles relating to the presumption that costs of interlocutory applications were to be costs in the cause
The Uniform Civil Rules 2020 (SA) (UCR) establish a general rule that costs follow the event (see UCR 194.5(2)), subject to the Court’s overriding discretion as to costs and the presumptive costs rules in UCR 194.4.
The Court has an absolute and unfettered discretion as to costs which is to be exercised judicially on grounds connected with the underlying litigation.[2]
[2] Murray v Lesicar [2014] SASCFC 43 at [22] per Stanley J; Supreme Court Act 1935 (SA) s 40(1); Dal Pont Law of Costs (5^th Ed, 2021) at [8.23].
The “unifying factor” underlying the principles guiding the Court’s discretion as to costs is that it is endeavouring to ascertain which party caused or contributed to the incurring of the costs in question[3]
[3] Mayfield Family Wines Pty Ltd v Growers Wine Group Pty Ltd (No 2) [2021] SASC 75 at [6] per Blue J.
It is a presumptive costs rule that the costs of an interlocutory application are costs in the cause, subject to any order of the Court to the contrary, UCR 194.4(5), save for applications to amend and applications to extend time, in which case the costs are to be borne by the applicant.
In his Law of Costs,[4] the learned author, Professor Dal Pont, explains the rationale for the presumptive costs rule:
As the general rule that a successful party should have its costs as directed to a consideration of the litigation as a whole, or at least in respect of final orders, it is ordinarily going too far to say that this should apply to every interlocutory step in the proceedings … Aside from final orders, the primary aim to reflect the justice of the situation in any costs order dictates that a court is often unable at an interlocutory step of the proceedings to determine who in justice should bear the costs of that step. This explains why, on interlocutory questions, costs are frequently made “costs in the cause” or are reserved”. …
[4] Law of Costs (5^th Ed, 2021) at [14.25].
The Court’s discretion as to costs extends to displacing the presumptive costs rule in relation to interlocutory applications and to instead order that the costs of the application be reserved to be determined when the ultimate event of the action is known; the unsuccessful on the interlocutory application pays the costs of the application of the successful party regardless of the ultimate event of the action; or that there be no order as to costs i.e., that each party bear its own costs.[5]
[5] [2021] SASC 75 at [8] per Blue J, cited with approval in Carey v Balfour (No 2) [2021] SASC 111 at [8] per Hughes J.
In determining the appropriate order in relation to the costs of an interlocutory application, the Court will principally be informed by an analysis as the proximate cause of the incurring of those costs.[6] Blue J indicated that where a court was satisfied that the costs of an interlocutory application were merely part of the overall costs of the action, the appropriate costs order would generally be that such costs would be in the cause and would, by extension, follow the events of the substantive action. Further, the costs of an interlocutory application should only be ordered to follow the event of the interlocutory application where it could be confidently determined when the interlocutory application was decided, but the cause of the incurring of those costs was the making of the application by the unsuccessful party or resistance of the application by the unsuccessful party. Further, where there was a mixed result on an interlocutory application such that neither party was clearly successful in making or resisting the application, generally the Court would make no order in relation to the costs of the interlocutory application. Finally, where no final determination had been made on the interlocutory application, such that the analysis of causation would be unclear at that stage or may depend on contingencies in the proceeding yet to occur, the appropriate order would generally be to reserve such costs.
[6] [2021] SASC 75 at [9] per Blue J.
Consideration and findings
It is clear from the orders made that although the Court declined to make the orders sought by the parties, it did not dismiss any of those applications.
In relation to Viscariello’s applications, which were essentially seeking particulars, aspects were neither withdrawn nor determined, but remained adjourned for further consideration. Although the Court determined that the request was premature, it gave liberty to apply later, if Viscariello could then establish that he would be prejudiced if these were not supplied.
In relation to Macks’ application for lump sum taxations of both sets of costs, this had been issued in respect to the suggestion raised by the Court that the parties should consider the merits and feasibility of lump sum assessments, but it had been declined following argument because Viscariello had established that it would be inappropriate to undertake a lump sum taxation by random sampling because the big ticket and like items would not produce a reliable result, would not be logical, fair and reasonable, and might skew that random sampling. The Court did not find, however, that a lump sum taxation would be inappropriate after the big - ticket item taxation process had been completed.
I have formed the view in these circumstances that because the Court has made no final decision on any of the three applications and has left avenues open to the parties to re-enliven them at a later stage, it would be premature to award the costs of any of the applications at this stage. As it will not be possible to now make a final decision on any of the applications, it will likewise not be appropriate to complete the necessary analysis as to the proximate cause of the incurring of costs by both parties in relation thereto. Accordingly, the present situation falls within the scenario envisaged by Blue J in Mayfield, namely that where no final determination had been made on the interlocutory application, such that the analysis of causation would be unclear at this stage or may depend on contingencies in the proceeding yet to occur, the appropriate order will generally be to reserve such costs.
The three applications have all progressed the conduct of the proceedings: Macks’ application has at least partly resolved a question that the Court had expressly requested that the parties answer, but in the absence of a final decision on all applications which will depend on contingencies yet to occur, the appropriate orders in the present circumstances should be that the costs of all three applications should be reserved.
Orders
The costs of Viscariello’s applications FDN 342 and 371 and Mack’s application FDN 385 are reserved and will be further considered at a later time in the taxations.

[2022] SASC 136

21 November 2022