First Plaintiff v Second Plaintiff

First Plaintiff v Second Plaintiff - [2013] VSC 669 - VSC 2013 case summary — Zoe

[17]

(i) The purpose of the subrule is to avoid the expense, delay and aggravation involved in protracted litigation arising out of taxation: Beach Petroleum v Johnson (No 2), at 120, per von Doussa J, applying Leary v Leary [1987] 1 All ER 261; Harrison v Schipp [2002] NSWCA 213; (2002) 54 NSWLR 738, at 742 [21] per Giles JA.

(ii) An order that costs be assessed as a gross sum does not envisage that any process similar to that involved in taxation should take place. On the contrary, the Court applies a much broader brush than would be used on a taxation of costs pursuant to O 62: Beach Petroleum v Johnson (No 2), at 120, 124, per von Doussa J; Harrison v Schipp, at 743 [22], per Giles JA.

(iii) The Court should be confident that the approach taken to the estimate of costs is logical, fair and reasonable. The Court should be astute to avoid both overestimating the recoverable costs and underestimating the appropriate amount, for example by applying an arbitrary discount to the amounts claimed: Beach Petroleum v Johnson (No 2), at 123, per von Doussa J.

(iv) Although the power to assess a gross sum for costs involves the exercise of a discretion, it is necessary to bear in mind fundamental principles applicable to an assessment of costs on a party and party basis. These include the principles contained in O 62 r 19 (embodying the 'necessary or proper' test) and those stated in Stanley v Phillips [1966] HCA 24; ) [1966] HCA 24; (1966) 115 CLR 470, at 478, per Barwick CJ (on a party and party taxation the emphasis is upon obtaining adequate representation to enable justice to be done, not upon the propriety of steps taken to ensure maximum success in the cause): Auspine Ltd v Australian Newsprint Mills Ltd [1999] FCA 673; (1999) 93 FCR 1, at 4-5 [12]-[15], per O'Loughlin J; Charlick Trading Pty Ltd v Australian National Railways Commission [2001] FCA 629, at [6]-[8], per Mansfield J.

(v) Although the methodology permitted by O 62 r 4(2)(c) initially involves a broader approach than on a normal taxation, the provisions of O 62 and Sch 2 provide assistance in fixing an appropriate gross sum: Charlick Trading Pty Ltd v ANRC, at [10], per Mansfield J."

[122]

But with respect, again it remains important in relation to this issue, to remove ourselves from the subtle and to address ourselves to the facts which are evidence before the court and the fact which is in evidence before the court from the affidavit of Bronwyn Lisa Lincoln of 16 May 2012 is, and I refer to the fifth paragraph of that affidavit, by reference to the Herbert Smith, Freehills retainer by reference to Paragraph 2.4 of the brief to Ms Harris. She says and I read from the last sentence, "Prior to that date", that is prior to the commencement of the proceedings by the plaintiffs in the Federal Court of Australia, "Time was recorded on a general Dubai file. The reason for the new file also stated in the Herbert Smith, Freehills brief was to maintain a costs centre file for the litigation and from that time onwards only time related to the Australian litigation was recorded on the litigation file". You've seen that evidence?---I have. That is - - -

You've had regard - one moment, please?---Yeah.

You've had regard to that evidence?---I do now. I did not have that evidence when I wrote my report.

I understand you did not before, hence the necessity, or so it was thought, of putting that beyond doubt though it was thought to be clear from Paragraph 2.4 of the brief, at least in the terms that Ms Harris understood her brief, that it having been put beyond doubt by the filing of the affidavit do you say you've had regard to it?---The filing of an affidavit, with respect, Mr Carmichael, is not the end of the story and as my report makes clear, my experience is that recording time is a very difficult thing for all people involved in litigation and the likelihood is that these distinctions of ten minutes, quarter of an hour with counsel getting advice about one aspect, or a telephone call, it's in the day to day running of legal practice which taxing officers and His Honour and the people in this room should be aware.

But the likelihood to which you refer, the likelihood I assume that must be premised on a proved fact, is what fact in answer to the clear assertion of fact by Ms Lincoln, last sentence of the last paragraph of her affidavit and I read the last line, "Only time related to the Australian litigation was recorded on the litigation file". What fact can you point to beyond possibility, beyond subtle speculations, answers that fact?---The material that is before us all is not such that I'm able to point to any fact which disproves what Ms Lincoln has filed. Her affidavit which is filed and has not been forensically tested and, for example, a forensic test would be producing the detailed file note of a conference and we're not necessarily speaking of 1530. I think that was - we'd like to move past that. Generally and if we have a conference, a particular one, the file note may elucidate that other matters were dealt with and this is not something that His Honour is even able to contemplate.

HIS HONOUR: So as I understand what you've said prior to Mr Carmichael's last question was that the likelihood based on your experience is that Ms Lincoln's affidavit is inaccurate?---Sadly, yes, Your Honour.

[126]

Is it an item that you took into account when you were coming up with your discount?---It is an item which appears in my filtered sheet and it appears because I filtered for the word counterclaim and I did that because it was a proposed counterclaim. There is no cross claim or counterclaim in these proceedings and if there had been that would have needed to be the subject of a separate costs order if the costs of the counterclaim were to be part of the costs of the proceedings. That's my understanding of the - - -

So a proposed - sorry, discussion about a proposed counterclaim, your position is that that's not caught by an indemnity costs order?---I believe it would be, that was why I conducted this and I've referred to counterclaim - -

Sorry, it would be within the ambit of an indemnity costs order or it wouldn't be?---No, Your Honour it wouldn't.

It wouldn't be?---No, not as costs of the proceedings unless there was a - - -

So somebody contemplating whether they will or won't bring a counterclaim you say is not contemplated or within the ambit of an indemnity costs order?---Again this is rather like the question of when you call a witness or you bring someone from overseas and you don't call them. It's the very grey area. So that would be a forensic task that taxation may tease out. But as I said all these filters previously were indicative only of the sorts of things which may affect my percentage.

So you think it would be unreasonable for them to be allowed any money at all in respect to contemplating a counterclaim within the confines of indemnity costs order?---It would be arguably the case that would occur before a taxing officer and again there could be a discretion exercised that the taxing officer in the circumstances might consider it was recoverable.

I guess what I'm asking (sic) what your opinion is. Do you think it's reasonable or unreasonable?---It's more likely to be unreasonable.

Unreasonable, all right?---More likely. And that item probably would have been part of the filtering that I did for the word strategy, which is again an important one and - - -

MR CARMICHAEL: Before we come that?---Yes, before we come to that I probably should not go to that extent at this point, yes.

Is your answer to His Honour's question about a counterclaim and whether it is reasonable or not reasonable for a party subject to a claim to have regard to a counterclaim as an indemnifiable entitlement. Is that answer qualified in any respect by the relevance of the facts

- by the facts of the possible counterclaim?---Well as the counterclaim has not been filed and is not part of the documents in my brief I can't say that.

But if the facts of the counterclaim it becomes clear arose from subject matter that was already pleaded in the litigation, would that fact be relevant to the answer to the question asked by His Honour which is whether it would be relevant?---It could have relevance, yes.

And it would have relevance because the subject matter of the counterclaim being subject matter already in the litigation would be a fact lending substance to the reasonableness of the claim for indemnity - for attendances, even in relation to a possible counterclaim?---Yes, but could I go further saying these are part of the subtleties that inform my 68 per cent. I have endeavoured to not go too far south and to - - -

Where is south, forgive me?---South is 65, 50, 40 whatever...."

At a glance

Court

Decision date

Before

Source

Judgment (286 paragraphs)

Parties

Legislation Cited (6)

Cases Cited (5)