Viscariello v Macks (No 7)

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
VISCARIELLO v MACKS (No 7)
[2023] SASC 111
Judgment of Auxiliary Judge Norman a Master of the Supreme Court
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - GENERAL MATTERS
Ruling on application to set aside an order that neither party might obtain an order for payment of costs administratively.
Uniform Civil Rules 2020 (SA) r 3.1, 12.1, 13.2, 102.1, 103.1, 103.3, 132.4, 132.7, 132.8, 133.1, 195.3; Supreme Court Civil Rules 2006 (SA) r 271, referred to.

VISCARIELLO v MACKS (No 7)
[2023] SASC 111
Supreme Court: Civil Application

NORMAN AJ: This is a continuing taxation of the costs awarded to the respondent in the proceedings. In these reasons the applicant will be referred to as “Viscariello” and the respondent as “Macks”.
The applicant has also submitted his own claim for costs to be taxed but this taxation has not yet commenced.
An issue arisen as to an order I made on 8 May 2020, in Viscariello v Macks (No 2) 2020 SASC 78 (“Order 6”). Macks has applied on 25 May 2023, FDN 427, for that order to be revoked. The application was supported by an affidavit of his solicitor Ms Courtney Chow sworn on 25 May 2023, FDN 428, and was opposed by Viscariello.
At a hearing on 27 June 2023, I heard submissions on the application from Mr Heinrich of counsel for Viscariello and Mr Cogan with Ms Chow for Macks. I reserved my decision.
Background
On 14 April 2020, FDN 427, Viscariello had applied for various orders in relation to Macks’ claim for costs, supported by an affidavit sworn by him on 14 April 2020, FDN 328. The sixth order sought by Viscariello was that until further order, neither party might obtain an order for payment of an amount of costs administratively, pursuant to the then Supreme Court Rules 2006 (“SCR) Rule 271(5), or otherwise.
On 15 April 2020, Ms Umoff, solicitor for Macks, emailed the Court setting out in brief Macks’ submissions as to that application including opposition to many of the orders sought.
I subsequently allowed Viscariello time to file and serve responding submissions to those provided by Macks although no responding submissions were received. By agreement of the parties, I provided reasons based on the papers. These were published on 8 May 2020, in Viscariello v Macks (No 2) [2020] SASC 78.
In those reasons at paragraph [72], I indicated that in the normal course I would be hesitant to make the order sought by Viscariello, noting that there was a process in SCR 271(5) which should be respected. However, bearing in mind Viscariello’s then complaints as to the form and content of Macks’ claim for costs, which issue I had not then determined, I considered that it was appropriate for that order to be made. I indicated that as I was closely supervising the taxation of costs, if there were any interim costs orders to be made, these could be determined by me rather than by administrative order from the Registry.
I accordingly ordered that no party might obtain an order for payment of any amount of costs administratively pursuant to the then SCR 271(5) until further order, although I gave liberty to apply.
In Macks interlocutory application, FDN 427, dated 25 May 2023, seeking to vary Order 6, relying on UCR’s 12.1, 102.1, 103.1 and 103.3, he has sought a variation of that order so that it would read as follows:
1.Until further order, neither party may obtain an order for payment of any amount of costs in this matter administratively pursuant to UCR 195.3(5) or otherwise save and except for an order:
1.      made as part of a judgment in terms reflecting an accepted judgment offer under UCR 132.8(1); or
2.      made as part of appropriate orders pursuant to an accepted contract offer under UCR 132.8(2).
2.Costs of the application.
3.For such further or other orders as the Court deems fit.
That application was supported by Ms Chow’s affidavit of 25 May 2023, FDN 428.
Ms Chow testified that on 20 January 2023 Macks had filed a formal offer in respect of his claim for solicitor’s fees on an open basis, in FDN 421. On 30 January 2023 Viscariello had filed a response to that formal offer in FDN 422, not accepting it, and contending that it did not comply with the present Uniform Civil Rules (“UCR”) Rule 132.4 on 3 grounds. The third ground was that:
Further, the nature and effects of paragraphs [2] and/or [3] of the offer are incapable of acceptance because they are contrary to an inconsistent with an order which has already been made by the Court. See order [6] of Viscariello v Macks (No 2) [2020] SASC 78 published on 8 May 2020.
Ms Chow referred to the terms of Order 6.
She testified that on 3 May 2023 LK Law, solicitors for Macks, wrote to Viscariello attaching a proposed consent order to vary Order 6. She produced and exhibited this email and attachment.
She testified that on 3 May 2023, Viscariello in reply, wrote to LK Law to the effect that he would not presently consent to the proposed consent order.
She further testified that on 8 May 2023 her firm LK Law, in reply, wrote to Viscariello indicating that Macks would file an interlocutory application seeking a variation of Order 6 if Viscariello was not minded to reconsider his position.
She testified that on 8 May 2023 Ms Viscariello wrote a further response to LK Law. This is exhibited at pages 8 to 10 of the Exhibit CC1.
The email was in the following terms:
Dear Ms Chow,
Thank you for your email below. Respectfully your contention is misconceived.
As you correctly point out, the parties are not in agreement and are not likely to ever come to any agreement whatsoever on the question of costs in this taxation. That being so, the issue of the operation of order 6 of Viscariello v Macks (No 2) [2020] SASC 78 is moot as there is no actual or justiciable controversy for the Court to resolve at this time.
Whilst you have not referred to it in your email, I also draw your client’s attention to UCR 102.0(b).
Respectfully the Courts and parties’ resources are, in all the circumstances, best spent getting on with the taxation process without further unnecessary delay.
Kind regards
John Viscariello
It is important to place on record that although the parties have referred to correspondence and offers, the Court has not been informed of the terms of any offer, including, particularly, the quantum of any offer.
Submissions of the parties
Macks submissions
Mr Cogan addressed submissions in support of Macks’ application to vary Order 6, and to the terms of that order, and summarised that the reason it had been made was that there would not be any default order being obtained pending the resolution of the whole taxation. He explained that an issue had arisen in relation to obtaining an order administratively, observing that if a formal offer was filed and accepted then there were procedural methods available pursuant to the rules for obtaining a judgment administratively in the terms of the accepted offer such that there was no need for the Court to be involved.
However, he submitted, that administrative process was likely caught by the terms of Order 6 as it existed. What had occurred was that Macks had filed a formal offer and Viscariello had contended that it was incapable of acceptance inter alia because of the terms of that order. For this reason, Macks wanted to vary Order 6 so as to make it perfectly clear that the offer was capable of acceptance. In other words, Macks was seeking to remove the prohibition on the making of an administrative order embodied in Order 6 to permit an order to be made administratively whereby a formal offer which had been filed could be accepted. It was a straightforward matter, he said.
Mr Cogan noted that paragraph [2] of Ms Chow’s affidavit set out the history of the formal offer and had noted the objection taken to it by Viscariello’s response which had not accepted it and had contended that it did not comply. This was incorporated in his third ground alleging non-compliance, namely that the nature and effects of paragraphs [2] and or [3] of the offer were incapable of acceptance because they were contrary to, and inconsistent with, Order 6.
He submitted that Macks wanted to ensure that there was no obstacle to a formal offer being made, and an acceptance to that offer, and that was the reason for the present application.
Viscariello’s submissions
Mr Heinrich addressed submissions opposing the order sought by Macks. He submitted that the issue was purely hypothetical. If it was the case that Viscariello (and there was no evidence that this was the case) wanted to accept Macks’ offer, then the parties would come to Court and inform it of this, but a change would need to be made so that an order incorporating the offer and its acceptance could be made. However, he submitted, that was not the situation here, because there was no indication that Viscariello wanted to accept the offer.
Mr Heinrich also raised an issue concerning the rules. He noted that Order 6 was made under SCR, and now, three years later, the UCR applied. He noted in this regard that Viscariello would agree to an amendment to the order, so that it referred to the current rule, UCR 195.3(4), in lieu of the largely parallel SCR 271(5).
Mr Heinrich referred to the reasons for making the order in May 2020 and he acknowledged that it had been indicated that the order was not one which would easily be made. He submitted that if a party in the case made an offer to resolve all aspects of the whole case and the other party wanted to accept this, then a resolution could be out into effect. However, if the offer related to only one party’s claim, which was the position here, because it was the caser that Viscariello was not going to accept the offer, then the issue was hypothetical because it would not be referred to until the whole matter has concluded.
He submitted that if there was an offer, and it was accepted, then a formal court judgment would be entered, and it would stand unless set aside. Further, once accepted, enforcement could be carried into effect, and there would be consequences because presumably a party liable by reason of an acceptance would want to seek to stay the judgment because it would be appropriate for the whole matter to be resolved before any interim payments were made. At the end of the day, he said, one party would be owing monies to another party (it would be highly unlikely for both claims to be fixed at the same amount, with nobody owing anybody). At some stage, he said, someone was going to owe moneys to someone else. That was the time as which the order should be made, he submitted, and the situation would be unknown until a final washout was achieved. For this reason, the order should remain in place. In his submission, there were no impediments to a party filing and accepting a filed offer and under the relevant rules the position would be crystalised. He referred to UCR 132.7 which provided, inter alia, that provided an offer remained open for acceptance, the offeree may accept it or, if it contained alternatives, an alternative contained within it, by filing and serving on each other party to the proceeding an acceptance (a formal acceptance) in the prescribed form. He also referred to UCR 132.8 which in essence provided that where the judgment offer was accepted, the Registrar might enter a judgment reflecting the accepted offer. There were two steps involved, the first was filing a formal acceptance in Form 123 pursuant to UCR 132.7(1), and the second was the entry of judgment by the Registry pursuant to UCR 132.8(1). Accordingly, without both steps, an order that would not turn into a judgment, and enforcement would be a separate and distinct matter.
Viscariello’s opposition was based on the premise that the issue was hypothetical.
Mr Heinrich did qualify his position by acknowledging that it was appropriate to amend Order 6 by replacing the rule number in that order, namely, SCR 271(7), by the UCR rule number, namely UCR 195(3), because there was now no SCR 271(5) applying.
Macks submissions in reply
Mr Cogan made brief submissions in reply. He disputed that the issue was hypothetical, submitting that the whole concept of filing a formal offer was that there was something which was capable of acceptance, and this would promote the possibility of settlement. The reason why Macks wanted to change the order was for this, and not to enforce the judgment at this stage – which would be pointless because even if a judgment were entered then Viscariello could obtain a stay until the total situation became known. A stay was the remedy Viscariello could utilise, Mr Cogan submitted, and this had been recognized in paragraph [72] of my reasons. The reason the order had been made was because the Court wanted to make the decision itself, rather than the Registry, about whether default judgment could be entered, in circumstances where each party had claims against the other. If a judgment was obtained then there could be a stay, or alternatively if an offer was accepted then a simple solution would be to make a counter offer in the same terms but with a stay being sought.
He submitted that if Order 6 was amended, then Macks would have no objection to the terms of that amended order incorporating a provision that any orders which had been made administratively could be stayed or not enforced until such time as a further order was made.
Viscariello’s reply submissions
In response, Mr Heinrich contended that this was not the order which Macks had been seeking, although he acknowledged that in the light of what had been put by Mr Cogan, if the Court was inclined to make the order sought, then there should be an additional provision that any costs order or judgment be stayed until the final resolution of the taxation proceedings or by further of the Court.
Principles
The relevant rules provisions have been addressed by Counsel in their submissions, as discussed above.
It should be noted that the order made on 8 May 2020, now sought to be varied, was based on the SCR, which were then in force.
SCR 271 subrules (4) and (5) provided:
(4) Within 28 calendar days after service of the claim on the respondent, the respondent must respond to the claim by filing a notice in the Court—
(a) admitting the claim in full; or
(b) admitting the claim to an extent stated in the response; or
(c) rejecting the claim in its entirety,
(and if the respondent fails to respond as required by this subrule, the respondent will be taken to have admitted the claim in full).
Note—
this claim for costs as edited by the respondent will serve as the basis for a detailed adjudication pursuant to Rule 273.
(5) The Court will, on administrative request, make an order for payment of costs to the extent they are admitted or presumed to be admitted under subrule (4).
UCR Rule 195.3 subrules (4) and (5) provide:
(4) The claimant may request entry of an interim costs judgment for the total amount admitted or taken to be admitted by the liable party in a response to a claim for costs by filing an application to the Registrar in accordance with rule 13.2(5).
(5) The Registrar will enter an administrative costs judgment for the appropriate amount upon the filing of a request by the claimant under subrule (3) or (4). Prescribed form— Form 130 Record of Monetary Judgment
I note further UCR 132.8, which provides:
132.8—Implementation of resolution
(1) When a judgment offer is accepted, the Registrar may—
(a) enter judgment in terms reflecting the accepted judgment offer; or
(b) require the offeror to file a draft judgment in the prescribed form reflecting the terms of the accepted offer, and may enter judgment on the parties communicating their consent to the terms of the draft judgment under rule 133.1.
Prescribed form—
Form 127 Draft Judgment
(2) When a contract offer is accepted, the parties must apply to the Court for appropriate orders within 14 days of acceptance.
The parties have referred to a stay. This is enabled by the Court’s general powers set out in UCR 12.1, which provide in subrule (2)(o) that it may order the stay of a proceeding, of a step in or order made in a proceeding, or of enforcement of a judgment or order.
Consideration
In making Order 6, I had indicated that in the normal course I would be hesitant to make such order sought by Viscariello, noting the process then in force for making administrative orders based on formal offers which should be respected. However, bearing in mind Viscariello’s complaints as to the form and content of Macks’ claim for costs, I then considered that it was appropriate for that order to be made.
Since that time, however, circumstances have changed.
First, the Uniform Civil Rules are now in force, although the terms of UCR 195.3 closely replicate those of UCR 271, and the process under the rules continues to facilitate the making of costs orders following acceptances of offers administratively. I also note the provisions of UCR 132.8 (referred to above).
Secondly, although Viscariello had earlier complained as to the form and content of Macks’ claim for costs, those matters have largely resolved. As appears from para [7] of Ms Chow’s affidavit of 23 June 2023, FDN 432, Macks has now revised his claim on three occasions, namely on 15 March 2021, 31 May 2021, and on 9 June 2023, and in Viscariello’s affidavit of 14 June 2023, FDN 430, he has testified in paras [3] to [11] the matter has sufficiently progressed that the stage has been reached for the parties to attempt serious settlement negotiations, and he has now sought, and obtained, a consent order for a private mediation based on that revised claim by Macks.
Thirdly, there is evidence of an offer sought to be made by Macks, but an impediment has been raised by reason of Viscariello contending that the offer in its terms is non - compliant, in that it is incapable of acceptance by reason of its non- compliance with Order 6.
An impediment to the resolution of litigation is to be avoided. It is clear from the “overarching obligations” of the UCR that parties to proceedings are obliged to use reasonable endeavours to resolve, or alternatively narrow the scope of, a dispute in or the subject of the proceeding by agreement – UCR 3.1 (1)(g). As part of this process, there are numerous rules and provisions to facilitate the exchange of offers and acceptances of such offers, including pre action exchanges and offers - UCRs 61.7 to 61.11; settlement offers – UCRs 132.1 to 132.11; and offers in relation to the taxation of costs – UCRs 195.1 to 195.4 and 195.11. It is important that parties to litigation be given every opportunity by the Court to be actively involved in these processes, and these should include the filing and service of formal offers unimpeded by objection to the form of such offers. This remains the position even if the filing and service of an offer might not immediately result in its perfection by being accepted, or transformed into a judgment of the Court.
In the present instance, Macks has filed and served a formal offer but Viscariello has contended that it is by its terms non-compliant, because it is incapable of acceptance by reason of the fact of Order 6.
The point has been raised by both counsel that because both Viscariello and Macks have costs claims against each other, there will be difficulties if costs judgments obtained by virtue of acceptances of formal offers were sought to be enforced prior to the resolution of the whole matter (both sets of taxations). As Mr Heinrich has pointed out, it will be extremely unlikely that both parties obtain an identical costs judgment against the other, so the likely result here will be that in the final wash out of the taxations, one party will have to pay monies to the other party. In these circumstances, it would seem inappropriate to permit enforcement of a costs judgment in these proceedings until all of the taxation processes have competed. A stay of such pursuant to UCR 12.1(2)(o) would appear to be appropriate, and indeed the issue of a stay of any judgments obtained during the course of the taxation has been raised by both counsel, and it appears that neither would oppose such an order in that event.

In all the circumstances, I have concluded that it will be appropriate for the Court to set aside Order 6, but to stay until further order any judgment obtained in consequence of an administrative order pursuant to UCR 132.8.
This will enable Macks, if Viscariello were to accept the offer made to him (or any other offer), to obtain a costs order in his favour, even if it is immediately stayed. The same will apply if the roles were reversed. Such an order will be consistent with the overarching obligations principle that it is desirable that reasonable endeavours be made to resolve or narrow the scope of a dispute in or the subject of the proceeding by agreement. The narrowing of the dispute between the parties, even if for part only of the taxation processes, will ultimately be of benefit to them, and to the Court, and a stay of any judgment obtained thereby will protect both parties until the two taxations are finalised.
Orders
1.Order 6 made on 8 May 2020 is set aside.
2.Until further order, neither party may obtain an order for payment of any amount of costs in this matter administratively pursuant to UCR 195.3(5) or otherwise save and except for an order:
(a)    made as part of a judgment in terms reflecting an accepted judgment offer under UCR 132.8(1); or
(b)    made as part of appropriate orders pursuant to an accepted contract offer under UCR 132.8(2).
3.Any such order is to be stayed or not enforced until such time as a further order is made.
4.Liberty to apply.
5.      The Court will hear from the parties as to costs.

[2023] SASC 111

1 August 2023