Ausvest Holdings Pty Ltd v Russell Kennedy

8. On 4 February 2004 the plaintiffs issued a summons seeking orders that the defendant serve bills in taxable form by 13 February 2004. On 27 February 2004 the defendant served bills in taxable form in each of the matters. On 30 March 2004 Master Bruce listed taxation of the matters for 12 May and 23 June 2004.

11. On 30 April 2004, the defendant served a general notice to produce on the plaintiffs to which the plaintiffs objected. On 12 May 2004, the first day of the taxation before Master Bruce, the notice to produce issue was deferred to 25 May 2004. On 25 May 2004 a call-over occurred before Master Bruce in the course of which a direction was given for the Notice to Produce dispute to be dealt with on 23 June 2004. On 21 June 2004, however, the defendant withdrew the Notice to Produce and on 22 June 2004 issued a summons seeking discovery. The orders sought were the following:

"1. An order pursuant to Rule 29.07 (2) that the plaintiffs provide discovery in this proceeding. 2. Alternatively to 1 above, an order pursuant to R. 29.07 (2) that the plaintiffs provide discovery in this proceeding of any documents in the following categories: (a) any note or memorandum of a conversation with or attendance by Mr Michael Redfern of the defendants which is claimed in any of the defendant's bills of cost in this proceeding including but not limited to notes or memoranda of telephone conversations or attendances and (b) all computer and other records of the plaintiff Ausvest Holdings Pty Ltd which contain materials relating to the preparation of lease documentation for the premises at 217 - 231 Lonsdale Street Melbourne."

15. On 23 June 2004 Master Bruce dismissed the application for discovery and the balance of the day was taken up with the second day of taxation of the bills.

18. The defendant has appealed against the dismissal of the summons seeking discovery. It seeks the relief stated in paragraph 2 of its summons.

21. Counsel for the plaintiff has submitted that the breadth of the orders sought in the above summons is such that the defendant is in effect seeking general discovery in proceedings for the taxation of costs and such an order is not available in such proceedings. Counsel for the defendant has argued that such discovery is available. I accept the submission of the plaintiff on that point. In my view, however, the defendant is not seeking general discovery. It seeks specific discovery. For present purposes it is sufficient to note that the powers of the Taxing Master include those given by Rule 63.35 which appears to incorporate the power to order specific discovery contained in Rule 29.07. Accepting for present purposes that the Taxing Master had power to order specific discovery, the question to be determined is whether, on the evidence placed before me, the orders sought should be made in the exercise of such a power.

24. I am satisfied that it is necessary that special circumstances or a special case be made out before orders can be made for such specific discovery.[1]

27. The defendant's case is that Mr Redfern, the solicitor acting in the matters for the defendant, was suffering at all relevant times from a medical condition akin to Parkinson's Disease which made it difficult for him to write quickly. This had the consequence in particular, that his notes of attendances on representatives of the plaintiffs are brief or non-existent. It is submitted that this places the defendant at a disadvantage in the taxing of its costs which to be cured requires the making of the orders sought in para 2(a) above. It is also said that the speed and complexity of the matters involved made it difficult in any event to maintain detailed notes of attendances.

30. I accept that at the relevant times Mr Redfern was suffering from a condition which make difficult the writing by hand of notes of attendances. I am not persuaded, however, that the speed and complexity of the matters were such as to complicate and make difficult the maintaining of reasonably comprehensive notes of attendances. Nonetheless, it can be said on behalf of Russell Kennedy that, assuming that it is in fact disadvantaged by the brevity, or lack, of file notes this is a consequence of the ill-health of the solicitor concerned, Mr Redfern. I also accept that on the probabilities, the plaintiffs' servants or agents, particularly a Ms Kennedy, have notes of attendances. I am not satisfied, however, that the principal figure in the plaintiff companies, Mr Yu, kept any notes of such attendances.

33. Accepting that ill-health has led to the solicitor failing to maintain some notes and some detailed notes of attendances, it does not follow that the order should be made that is sought in para 2(a) of the summons. A party, particularly the solicitor party to a taxation of its costs, in seeking an order for specific discovery from the client should, in my view, demonstrate that such discovery will not only be relevant to a consideration of the particular challenge to particular items in the bill of costs but that there is a clear need for such discovery. While it would appear from the limited evidence about the taxation to date that some items may not have been allowed relating to attendances, more commonly what has not been allowed appears to be the rate charged for those attendances. A number of items pointed to in the course of the submissions of counsel were items where an attendance was allowed but at a lower rate which reflected the lack of application of legal skills.[2] But at no time has the defendant identified items where the amount sought for the item, or the item itself, was disallowed because of the inadequacy of a particular file note. Further, the application is not confined to specific instances that have arisen but seeks discovery in anticipation of problems arising in relation to claims for attendances which may in fact be adequately supported by file notes or other evidence. I leave to one side the issue whether the defendant would also need to be able to demonstrate that any deficiencies cannot be met by reference to the context in which the file notes appear or from evidence supplied by Mr Redfern himself to the Taxing Master.

36. Thus I am not persuaded that the defendant has made a case for the order for discovery sought, or of a more specific kind, because it has not demonstrated that the inadequacy of file notes has affected or could adversely affect the outcome in respect of particular attendances. I should also indicate that, on the evidence before me, I regard the order sought in para 2 (a) as oppressive in that it would extend to all attendances whether the file notes are adequate or not.

39. Practical difficulties also face the defendant in obtaining the order sought in para 2(b) concerning computer and other records of the plaintiff Ausvest Holding Pty Ltd containing materials relating to the preparation of lease documentation for the premises at 217 - 231 Lonsdale Street Melbourne. The evidentiary material relied upon in support of the application is the following passage contained in one of the several affidavits sworn by Mr Redfern - in this instance on 22 June 2004:[3]

"In respect of the file relating to the preparation of lease documentation for the premises of 217 - 231 Lonsdale Street Melbourne much of the work I carried out for the plaintiff Ausvest Holdings Pty Ltd was by way of drafting amendments to lease and other documentation contained on the computer system of the plaintiffs. On several occasions at the plaintiff's own premises and also at the premises of its real estate agents Fitzroys I dictated this work which was keyed into the plaintiff's computer records by the plaintiff's staff."

Again, the evidentiary material in support of the application is inadequate in my view. The material does not explain why the records are needed or identify which items challenged in the bill would benefit from reference to such records. Further, what appear to be sought are the documents prepared and, presumably, still retained on, the computers of the plaintiff Ausvest Holdings Pty Ltd concerning the lease mentioned. I have difficulty accepting that the defendant would not have retained copies of those documents seeing they were prepared by Mr Redfern and presumably used in the course of the transaction as drafts and like documents. It would be remarkable if Mr Redfern did not have copies of most if not all of those documents. He has not deposed in any of his affidavits to the fact that he does not. If it be assumed that the orders are sought out of an abundance of caution, that, in my view, is not a basis upon which an order for specific discovery can or should be made in a taxation of costs proceeding.

44. For the foregoing reasons, I have come to the conclusion that the orders sought should not be made and that the appeal should be dismissed. That, of course, is not necessarily an end of the matter so far as the parties are concerned. The Taxing Master has not only, in my view, the power to order specific discovery but he can also order production of documents under Rule 40.12. It would appear to me that those specific powers directed to specific documents provided adequate protection to the defendant. It must also be borne in mind that under the Rules, any party dissatisfied with decisions of the Taxing Master can seek a review by the Taxing Master. [4] I note that in conducting the review the Taxing Master may receive further evidence in respect of any objection to any item in the bill.[5]

47. Counsel for the plaintiff submitted that the appeal was a collateral attack on the decision of the Taxing Master. Counsel also submitted that the attempt to obtain access to all the plaintiffs' documents, initially through the notice to produce and then to the categories of documents listed in the summons, was a tactical move designed to delay the finalisation of the taxing of the bill in circumstances where the plaintiffs had paid the bulk of the bills and would be likely to receive a refund once the taxation was complete.

50. As to the first matter, I am not persuaded that the application involves a collateral attack on the taxing of the bills. As to the second matter, it is premature to conclude that there is such an ulterior motive on the part of the defendant. Further evidence would be required and much will depend on the way the defendant conducts itself during the remainder of the taxation.

[1] National Mutual Life Nominees v Co-Operative Farmers & Graziers Direct Meat Supply Ltd [1976] VicRp 65; [1976] VR 634; Creswick Resources N/L & Ors v Mining Warden of State of Victoria & Ors [2000] VSC 134.

[2] Notably the Whistler Lodge. Some of the Taxing Master's decisions seem to reflect the descriptions in the bill of costs, a description provided by Mr Redfern to and through the costing expert, Mr Ahern, engaged by the defendant.

[4] Review procedures - see Rules 63.63 and 63.56 and 63.56.1.