Wieland v Texxcon Pty Ltd (No 3)

[2016] VSC 837

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE
COSTS COURT

S APCI 2013 0093

BETWEEN:

DAVID CHARLES WIELAND and DAVID GOLDBERGER	Appellants
v
TEXXCON PTY LTD (ACN 120 272 880)	Respondent
S APCI 2013 0110
AND BETWEEN:
NOMINEXX PTY LTD (ACN 121 396 503)	First Appellant
TEXXCON PTY LTD (ACN 120 272 880)	Second Appellant
v
DAVID CHARLES WIELAND	First Respondent
DAVID GOLDBERGER	Second Respondent

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JUDGE:	Wood AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	On written submissions
DATE OF JUDGMENT:	19 July 2016
CASE MAY BE CITED AS:	Wieland & Anor v Texxcon Pty Ltd & Ors (No 3)
MEDIUM NEUTRAL CITATION:	[2016] VSC 837

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COSTS – Application for gross costs.

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HIS HONOUR:

1. On 18 March 2016 I published my reasons[1] in relation to two applications for gross costs by Messrs Wieland and Goldberger (‘the applicants’), filed in both these matters on 30 July 2015. The applications covered the applicants’ entitlement to costs of both the appeals and the trial below.[2] Texxcon Pty Ltd and Nominexx Pty Ltd (‘the respondents’) are the parties liable. 

   [1]Wieland v Texxcon Pty Ltd; Nomminexx v Wieland (No 2) [2016] VSC 109.

   [2]S CI 2010 6430.

1. The decision was that a gross sum be fixed for disbursements only. The order covers the trial and both these appeals. Messrs Gray and Henderson (‘the interveners’) had previously been granted leave to intervene in the applications. It was the interveners (as opposed to the respondents) who filed material in opposition to the application for a gross sum. However, both the respondents and the interveners appeared and were separately represented when they collectively opposed the applicants’ applications for gross costs at the hearing on 10 March 2016.

1. Procedural orders were made by consent in both these applications on 31 March 2016 by Judicial Registrar Gourlay to advance the gross sum quantification of disbursements. The orders submitted by the applicants, respondents and interveners provided for the respondents to file relevant material in opposition (as opposed to the interveners).

1. The matter was scheduled for hearing on 14 July 2016 but two days prior to the scheduled hearing the applicants and respondents agreed between themselves that the matter could be determined on the papers without the necessity for a hearing in open court. I now publish the decision and reasons.

1. The applicants rely on affidavits of an expert, Debra Michelle Paver, sworn 20 April 2016 and 17 June 2016 and Robert John Heathcote, sworn 29 April 2016, together with written submissions dated 29 April 2016.

1. The respondents rely on an affidavits of an expert, Ariel Weingart, sworn 9 June 2016 and written submissions dated 10 June 2016.

1. In reality the opinions of the experts are not far apart. Ms Paver advocates for a 60% recovery of actual disbursements and Mr Weingart for 54%. The overall dollar difference between the opinions is around $90,000.

1. In relation to the trial the applicants’ total actual disbursements were $690,326.69 (comprising $619,387.51 for counsel fees and $70,939.38 for other disbursements). This was modified by Ms Paver to a claim for $539,065.04 (comprising $496,803.30 for counsel fees and $42,261.74 for other disbursements).

1. In relation to both appeals the applicants’ total actual disbursements were claimed at $591,304.03 (comprising $564,323.18 for counsel fees and $26,980.85 for other disbursements). This was initially modified by Ms Paver to a claim for $219,592.42 for counsel fees and $16,659.18 for other disbursements (total of $236,251.16). In her affidavit sworn 17 June 2016 the ‘other disbursement’ figure was corrected and adjusted upwards to $16,970.43, making an amended total claim of $236,562.85.

1. A total of $775,627.89 is therefore claimed by the applicants for both the trial and the appeals (comprising $236,562.85 for the appeals and $539,065.04 for the trial). The respondents would allow a total of $686,141.97 (comprising $202,640.41 for the appeals - that is, $33,922.44 less than the applicants’ figure and $483,501.66 for the trial, being $55,563.38 less than the applicants’ figure).

1. The applicants utilised two senior counsel and one junior counsel in the appeals. These fees have been refashioned by Ms Paver in part to allow two senior counsel for preparation and hearing and exclude junior counsel.

1. Mr Weingart proposes a reduction of rates of counsel in the trial and in the allowable fees claimed for pre-trial work. In relation to the appeals he excludes the second senior counsel and proposes allowance for senior and junior counsel.

1. The concessions and allowances made in reduction to the actual disbursements of the trial and appeals by Ms Paver are reasonable and appropriate. The only exception is the inclusion of photocopying performed in-house at the internal charge rate of 30 cents per page to the client. Although the lawyers for the applicants account to the applicants on this basis this is not a disbursement.

1. Rule 63.42[3] makes it clear a disbursement is a sum paid to an outside provider. Practice Note 1 of 2013 makes it clear that where copying is printed outside the solicitors office the amount charged should be included as a disbursement.[4] Internal copying is work performed by the solicitor and is part of costs, not disbursements. The monetary sum referable to this aspect is identified by Mr Weingart for the respondents as $1,836.56 for the trial and $1,791.95 for the appeals. These figures represent a total of $3,628.51 which should be excluded.

   [3]Supreme Court(General Civil Procedure) Rules 2005.

   [4]Paragraph 11 of the Practice Note.

1. In my view the concessions and reductions of Mr Paver to reach the recovery figure claimed have been very fair to the respondents having regard to the complexity and importance of the litigation and I essentially adopt her rationale. The only reduction I would make is to photocopying. 

1. The applicants are entitled to a gross sum pursuant to Rule 63.07(2)(c) in relation to claimable disbursements in both the trial proceedings and the appeals in the following sums.

1. The figure for the trial is $496,803.30 for counsel and $40,425.18 for other disbursements. A total of $537,228.48.

1. The figure for the appeals is $219,592.42 for counsel fees and $15,178.48 for other disbursements. A total of $234,770.90. 

1. The grand total for both appeals and the trial is $771,999.38. This could be rounded to $772,000.

1. The issue of the cost of these gross costs applications remains to be dealt with. This issue could be dealt with by way of written submissions if the parties are unable to resolve the issue.

1. The parties are invited to formulate orders by consent to give effect to these reasons. In the event that costs are not resolved the orders could set a timetable for written submissions without the necessity for a further hearing in relation to costs. Liberty to apply is granted in the event that a further oral hearing is required.