FEDERAL COURT OF AUSTRALIA

Charlick Trading Pty Ltd v Australian National Railways Commission

[2001] FCA 629

COSTS - Federal Court Rules O 62 r 4(2)(c) - costs assessed as a gross sum.

COSTS - gross sum ordered - whether appropriate to make allowance for three counsel - whether appropriate to make allowance for expenses incurred because interstate counsel retained.

COSTS - gross sum ordered - whether costs incurred during unsuccessful negotiations towards agreement on appropriate gross sum should be allowed as part gross sum - whether costs of negotiations for settlement of issues should be allowed as part of gross sum.

Trade Practices Act 1974 (Cth) s 46

Beach Petroleum NL v Johnson (1995) 57 FCR 119 Applied

Brookfield v Davey Products Pty Ltd [1997] FCA 1462 Applied

Australasian Performing Rights Association Ltd v Marlin [1999] FCA 1006 Applied

Auspine Ltd v Australian Newsprint Mills Ltd [1999] FCA 673 Applied

Stanley v Phillips (1966) 115 CLR 470 Applied

Sparnon v Apand Pty Ltd [1998] FCA 164 Applied

Donohoe v Britz (No 2) (1904) 1 CLR 662 Applied

W & A. Gilbey Ltd v Continental Liqueurs Pty Ltd (1963) 81 (Pt 1) WN (NSW) 1 Referred to

Grant v Australian Knitting Mills [1937] SASR 113 Applied

Bartlett v Higgins [1901] 2 KB 230 Applied

Alexander Stewart & Sons Ltd v Robinson (No 2) (1921) 29 CLR 325 Considered

The Federal Commissioner of Land Tax v Jowett (1930) 45 CLR 115 Considered

Dalgety Australia Operations Ltd v FF Seeley Nominees Pty Ltd (No 2) (1988) 49 SASR 75 Considered

Henderson v Amadio (22 March 1996, unreported) Considered

Peel v London & North Western Railway Co (No 2) [1907] 1 Ch 607 Referred to

Cachia v Hanes (1994) 179 CLR 403 Applied

Mackay v Hamilton [1905] VLR 457 Not followed

Higgins v Nicol (No 2) (1972) 21 FLR 34 Applied

CHARLICK TRADING PTY LTD v AUSTRALIAN NATIONAL RAILWAYS COMMISSION AND NATIONAL RAIL CORPORATION LIMITED

SG78 OF 1996

MANSFIELD J

ADELAIDE

30 MAY 2001

THE COURT ORDERS THAT:

1.         Pursuant to O 62 r 4(2)(c) of the Federal Court rules the costs ordered to be paid by Charlick Trading Pty Ltd to National Rail Corporation Limited on 6 September 1999 be a gross sum in the amount of $1,214,826.

2.         Costs of the notice of motion of National Rail Corporation Limited of 18 April 2001 for an order under O 62 r 4(2)(c) of the Federal Court rules be reserved.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

1                     This is an application under O 62 r 4(2)(c) of the Federal Court Rules (“the Rules”) for an order that the costs ordered to be paid by the applicant Charlick Trading Pty Ltd (“Charlick”) to the second respondent National Rail Corporation Ltd (“NRC”) on 6 September 1999 be a gross sum in the amount of $1,485,745.00.  Charlick does not now contest that it is appropriate to make an order under O 62 r 4(2)(c), but it contends that the gross sum should be specified in the amount of $1,024,260.50.

2                     I am satisfied that it is appropriate to make a gross sum costs order, as I am of the view that such an order will “avoid the expense, delay and aggravation involved in protracted litigation arising out of taxation”:  see per von Doussa J in Beach Petroleum NL v Johnson (1995) 57 FCR 119 at 120 (“Beach”).

3                     On 6 September 1999, I made the following order for costs:

“1.       In respect of reserved costs, the applicant is to pay the costs of the second respondent of and incidental to:

1.                  the hearing on 9 October 1996;

2.                  the hearing on 5 March 1997, insofar as it related to the applicant’s application to adjourn the trial date;

3.                  the hearing on 25 – 27 March 1997, insofar as it related to the applicant’s motion to amend its Statement of Claim;

4.                  the hearing on 8 May 1997;

5.                  the hearing on 4 September 1997, insofar as it related to the applicant’s motion for further and better discovery from the second respondent.

2.                  There be no variation to the orders for costs made by the court on 4 July 1997.

3.                  The applicant is to otherwise pay the party/party costs of the second respondent in relation to the applicant’s proceedings against the second respondent as taxed or agreed.”

4                     Although the motion of NRC refers to a costs order made on 14 April 1999 when judgment on the principal claim was delivered, that reference is in error.  No costs order was made on that date.  The matter has been argued on the basis that it is the costs order made on 6 September 1999 which is the subject of the motion.  The parties have accepted that the fact of that order presents no bar to an order now being made under O 62 r 4(2)(c) in respect of those costs:  Beach;  Brookfield v Davey Products Pty Ltd [1997] FCA 1462 (“Brookfield”);  Australasian Performing Rights Association Ltd v Marlin [1999] FCA 1006.

5                     It is not necessary to refer to the principal proceedings in any detail.  On 29 June 1993, Charlick entered into an agreement with the first respondent Australian National Railways Commission (“AN”) concerning the carriage of international shipping containers between Adelaide and Melbourne.  It commenced proceedings against both AN and NRC on 27 September 1996.  The claim against AN was settled during the course of the hearing.  Charlick alleged against NRC, inter alia, that its conduct in relation to the terms upon which and the circumstances in which NRC was prepared to carry international shipping containers between Adelaide and Melbourne wrongfully interfered with the contractual relations between Charlick and AN, and contravened s 46 of the Trade Practices Act 1974 (Cth) (“the Act”).  Ultimately, the issue was confined to whether NRC contravened s 46 of the Act by reducing, from 1 May 1996, the rates it charged for the carriage of international shipping containers between Adelaide and Melbourne.  The hearing was a lengthy one and involved complex and contentious issues of fact and law.  Ultimately, the claim by Charlick against NRC was dismissed.  It was found that NRC, in relation to the conduct about which Charlick complained, did not have a purpose proscribed by s 46(1) of the Act, so that its conduct could not amount to a contravention of that section.  There was no real issue that NRC had engaged in the conduct complained of.  Issues as to the nature of the market, whether NRC had a substantial degree of power in the market, whether its conduct amounted to NRC taking advantage of its power in the market, and the losses suffered by Charlick as a result of the conduct complained of, did not have to be resolved.

6                     In Auspine Ltd v Australian Newsprint Mills Ltd [1999] FCA 673 (“Auspine”) O’Loughlin J at [12] pointed out that, in the exercise of the discretionary power to determine a gross sum under 0 62 r 4(2)(c), the discretion must be exercised judicially.  The principles reflected in 0 62 r 19 must be borne in mind.  It provides :

“On every taxation the taxing officer shall allow all such costs charges and expenses as appear to him to have been necessary or proper for the attainment of justice or for maintaining or defending the rights of a party, but, except as against the party who incurred them, costs shall not be allowed which appear to the taxing officer to have been incurred or increased –

(a)               through over-caution, negligence or misconduct;

(b)               by payment of special fees to counsel or special charges or expenses to witnesses or other persons;  or

(c)               by other unusual expenses.”

His Honour also drew attention to the observation of Barwick CJ in Stanley v Phillips (1966) 115 CLR 470 at 478 in relation to O LXV r 27 of the then Rules of the Supreme Court of Victoria (which also identified allowable costs as being those which appeared to the taxing officer “to have been necessary or proper”) to the following effect :

“The emphasis throughout is upon obtaining an adequate presentation to enable justice to be done:  it is not upon the propriety of the steps taken by a litigant to ensure the maximum of success in his own cause.  That of course he may do but not, in my opinion, at his opponent’s expense.”

7                     O’Loughlin J in Auspine, and von Doussa J in Sparnon v Apand Pty Ltd (1998) FCA 164, each referred to the succinct statement by Barton J in Donohoe v Britz (No 2) (1904) 1 CLR 662 at 666 as indicating the line drawn by rules such as 0 69 r 19 as to what costs are recoverable, on a party and party basis, as being “necessary and proper”.  Barton J said :

“It is a general rule that, as between party and party, the luxuries of litigation must be paid for by those who indulge in them, the necessities only are to be paid for by the losing side.”

Counsel for NRC cautioned about approaching this matter by adopting that dichotomy between necessities and luxuries, in particular because that dichotomy was not warranted by use of the “necessary and proper” formula in O 62 r 19.  Donohoe v Britz (No 2) concerned the costs allowed on an unsuccessful appeal from the Supreme Court of New South Wales: Donohoe v Britz (No 2).  The expression “necessary or proper” as the test for determining party and party costs appeared at least as early as 1845 in r CXX of the General Orders and Rules of the High Court of Chancery (1845) 14 LJ (NS) Eq 296: see the discussion in the judgment of Asprey J in W & A. Gilbey Ltd v Continental Liqueurs Pty Ltd (1963) 81 (Pt 1) WN (NSW) 1 at 8-9.

8                     In New South Wales at the time that Donohue v Britz (No 2) was decided, the General Rules of the Supreme Court of New South Wales did not restrict recoverable party and party costs only to those which were “necessary” for the conduct of the proceeding (see rules 408 and 409 of the Rules) nor did the scales of costs made under the Common Law Procedure Act 1899 (NSW) do so.  Rule 420 provided that, where the rules did not otherwise provide, the like fees should be allowed on taxation as would have been allowed in respect of business of the like kind in the Owen’s Bench before the passing of the Supreme Court of Judicature Act 1873 (UK).  The relevant provision applicable to the Owen’s Bench appears to be contained in 6 & 7 Vict, c 73, s 37 which also does not limit the recoverable costs only to those which were “necessary”.  I am therefore not confident that the point made by counsel for NRC is correct.  In any event, I propose to apply the “necessary or proper” test contained within O 62 r 19 of the Rules, as enlightened by authorities to the extent that they are relevant.

9                     The Court, in exercising the power to fix a gross sum for costs, should be satisfied that the approach taken to estimate costs is logical fair and reasonable: per von Doussa J in Beach at 123.  His Honour said:

“On the one hand the Court must be astute to prevent prejudice to the respondents by overestimating the costs, and on the other hand must be astute not to cause an injustice to the successful party by an arbitrary ‘fail safe’ discount on the cost estimates submitted to the Court.”

10                  To reflect that view, both parties have approached this matter on the basis that the Court should endeavour to fix a gross sum for costs which would reflect the costs which would be allowed on a normal taxation as between party and party.  They accept that the Court should, where appropriate, make use of the scale set out in the Second Schedule to the Rules (see 0 62 r 12), and should apply the approach expressed in 0 62 r 19 of the Rules.  Although the methodology to fix the costs under O 62 r 4(2)(c) will inevitably involve a broader approach to determining the appropriate amount for costs than would be adopted in a normal taxation, I agree that those Rules and the Second Schedule will in certain respects provide assistance in the fixing of an appropriate gross sum.

11                  In determining what costs are “necessary or proper”, it is of course appropriate to look to the circumstances which obtained at the time the work was done, rather than to look to a later set of circumstances:  Grant v Australian Knitting Mills [1937] SASR 113 at 115, Bartlett v Higgins [1901] 2 KB 230 at 237.

12                  In this matter, I have been greatly assisted by the views of the two legal costs consultants who provided reports to the solicitors for NRC (Mr Travers) and to Charlick (Mr Cogan).  They each adopted their reports by affidavit.  They each adopted a common categorisation of costs items to be separately addressed.  To illustrate the general areas of dispute, I note the respective positions adopted by the parties:

                                                                        NRC                            CHARLICK

Professional fees                                               590,000                       499,824

Counsel fees                                                     545,600                       324,992

Disbursements                                                  352,145                       199,444

                                                                     1,487,745                    1,024,260

Within those three broad categories, there were many areas where there was agreement.  The issue concerning professional fees essentially concerned two issues.  The first was the determination of an appropriate hourly rate.  The second was the extent to which, in broad terms, the professional fees should be reduced to allow for work done which would not be allowed on a party and party taxation.  The dispute concerning counsel fees was largely, but not wholly, confined to whether NRC should recover the fees of three counsel or of two counsel and whether the costs incurred by reason of its counsel being located principally interstate should be recoverable.  The rates at which counsel fees should be allowed was also in issue.  The dispute about the appropriate level of disbursements concerned only some of the 34 claimed disbursement items.  It is necessary to consider each of the contested issues separately.

professional fees

13                  The claim for professional fees by NRC relates to the fees of its solicitors quantified on a time cost basis.  Hourly rates have been applied and charged for each hour of work, according to an internal billing guide of the solicitors for NRC.  That work was performed by solicitors with varying degrees of experience, and by paralegal and clerical staff.

14                  Mr Travers prepared four schedules of costs for four randomly selected periods, to give some indication whether amounts charged on that basis would be recoverable if a bill of costs in taxable form in accordance with the Second Schedule were prepared and taxed.  That was not done on a strict party and party taxation basis.  Those comparative schedules led Mr Travers to the conclusion that, for the four randomly selected periods, the costs which would be allowed on taxation (assuming they were incurred in those amounts, as costs of course provide no more than an indemnity against actual costs incurred) would exceed the professional costs actually billed to NRC by its solicitors on a time cost basis.  That conclusion assumes that all the work itemised for those periods would be reasonable on a party and party taxation.  It also assumes that it is appropriate to apply the scale to the items of work as described in the cost sheets, rather than converting that work as described to items as they would be described in a party and party taxation.  For example, an allowance for reading and consideration was allowed by Mr Travers at the hourly rate, rather than being converted to the perusal fees prescribed in Items 17 and 18 of the Second Schedule.  The “blended hourly rate” for all fee-earning solicitors for NRC who worked on this matter is $180.66.  The charge out rate ranged from $305 per hour to $85 per hour, with temporary legal clerks being charged out at $40 per hour.  The “blended hourly rate” is simply the fees divided by the hours.  Mr Travers says that, in his experience, commonly a range of factors result in costs recoverable on a party and party taxation in the normal manner resulting in an hourly rate allowed in effect at considerably more than $180 per hour.  In reaching that conclusion, Mr Travers applied an uplift of 20 per cent for general care and conduct (Item 41) on the hourly rate of $156 (Item 31) specified in the Second Schedule applicable to a solicitor.  The “blended hourly rate” of $180.66, he points out, is less than the scale hourly rate increased by 20 per cent, which calculates at $187.20.

15                  Mr Travers then reduced the claimed professional fees to reflect costs not recoverable from Charlick under the costs order.  They were costs relating to the cross claim by AN against NRC and costs of interlocutory proceedings for which NRC did not recover costs from Charlick.  Mr Cogan did not dispute that the percentage reductions so made were appropriate.

16                  Mr Travers also deducted from the professional costs then arrived at 15 per cent to reflect the costs which were likely to be of a solicitor and client nature only.  He made no separate assessment of whether any of the work done and claimed for under the category of professional fees was in fact necessary or proper.

17                  Mr Cogan does not dispute that the use of a form of time costing is appropriate, or that the work itemised in the time costing records was carried out, or was charged out at the rates specified.  He does, however, dispute that the four random samples have been properly costed according to the scale in this Second Schedule and has provided illustrations of where that has occurred.  There is a rejoinder to those comments.  Mr Travers says, as part of his response, that he did not set out to exactly replicate a party and party costing process.  Mr Cogan assessed the recoverable costs on a party and party basis against the amounts charged, according to the solicitor’s billing guide, for those four random periods.  He arrived at the conclusion that the recoverable costs were between about 40 and 62 per cent of the charged amounts.  Again there is a response and a rejoinder.  Each of the costs consultants has, in effect, undertaken a different exercise.  I do not consider that it follows from Mr Travers’ analysis of those four sample periods that a bill of costs prepared for a normal party and party taxation would equate to the actual professional costs billed (he says that it would almost certainly exceed those costs, but of course as costs are an indemnity to the person in whose favour the costs order has been made, that is no doubt simply hyperbolic).  In particular, the assumption that all costs claimed on a time basis would be allowed on that basis, because the taxation officer has a discretion to do so, is one which I do not think should necessarily be adopted for the purposes of determining a gross sum for costs under O 62 r 4(2)(c).  That assumption may be appropriate in some circumstances, but when analysis of the costs claim on a party and party basis for a sample period or periods (as done by Mr Cogan) indicates a significant overclaiming of costs on a party and party basis, I do not consider that the adoption of such an assumption is warranted.

18                  In my view, the differences in approach in part reflect the fact that a taxing officer has certain discretions available in taxation.  Judging from their respective observations, each of the costs consultants has had different experiences (although both are clearly very experienced) in taxations of party and party costs.

19                  There seems to be accord that a reduction in a bill of costs upon taxation on a party and party basis is often in the region of 15 per cent, as there will be included in the bill lodged for taxation some items more properly regarded as solicitor and client costs.  That percentage reduction is consistent with the reduction on that basis in both Sparnon and Auspine.  Mr Cogan points out, however, that that commonly shared experience reflects the fact that a properly drawn bill of costs for party and party taxation will routinely exclude items which are clearly not recoverable on a party and party basis, that is that the claimed costs have already been through one sifting process by the person preparing the bill of costs to eliminate items which clearly are solicitor and client costs only, whereas the claim for costs in this matter has not been so sifted, except by the exclusion of work not covered by the costs order.  It is a claim based upon all work carried out by solicitors for NRC.  That consideration, which to my mind is a sensible one, was not the subject of specific comment in either Sparnon or Auspine.

20                  In Sparnon, von Doussa J did reduce the claim for professional services by 15 per cent to reflect the fact that certain time spent on costed items might include, in a complex case, work done through over caution, excessive investigation, and detailed reporting to the client beyond that which party and party costing might allow.  The hours charged had been converted from the billing rate of the solicitors to the rate allowed by the Second Schedule.  His Honour, in determining the appropriate discount, also made allowance for general care and conduct (Item 41 of the Second Schedule).  His conclusion was that the “conversion calculation”, that is hours worked charged at the Second Schedule rate, rather than the charged out rate, should be reduced by 15 per cent and that no separate additional allowance should be made for care and conduct.  A slightly different approach was taken by O’Loughlin J in Auspine at [28] and [50].  His Honour reduced the amount claimed for solicitors fees by about 15 per cent  to allow for work carried out which was not properly the subject of a claim for party and party costs, and then added back an allowance of 15 per cent  for care and conduct.  In the course of his reasons, his Honour at [30] - [50] discussed in a helpful way the nature of the allowance for care and conduct in complex cases such as the present.  In Brookfield, Branson J reduced the claim for professional fees by 40 per cent  in the particular circumstances.  These were features of the claimed costs which indicated to her Honour that they included a significant number of attendances which would not be recoverable on a party and party basis.  Her Honour then allowed an “addback” of 7 per cent for general care and conduct.

21                  In this matter, the costs consultants are in agreement that a care and conduct allowance of 20 per cent should be granted in the exercise of the Court’s discretion.  I agree that that is an appropriate adjustment to make.  In this instance, I consider that allowance should be made to reflect the complexity of the matter, the specialised skill and knowledge called for on the part of solicitors for the parties having regard to the issues, and for the research and consideration necessary which would not otherwise be recoverable as part of the party and party costs.

22                  In my view, the appropriate starting point for fixing the allowance for professional fees is the hourly rate of $156 prescribed by the Second Schedule for solicitors’ work.  I accept that it is not uncommon that party and party costs on an itemised basis on taxation often equate to, or exceed by a significant margin, costs if they had been calculated and charged at an hour rate.  For that reason, I do not propose to reduce the applicable hourly rate to be applied overall, or to reduce the percentage allowance for non party and party costs on that score, even though certain work was carried out by solicitors or paralegal staff at rates lower than the schedule rate and even though, strictly speaking, those costs could only be recoverable at the rates charged.

23                  The next step is to adjust the amount arrived at on that basis for the fact that it is likely that not all the costs so chargeable would be recoverable on a party and party taxation.  I think that the reduction of 15 per cent suggested by Mr Travers is too low as it reflects the common experience of costs consultants in relation to a bill of costs which has been properly prepared, including sifting to exclude costs which are not recoverable on a party and party basis.  I am also of the view that the suggested reduction of 40 per cent proposed by Mr Cogan, based upon his detailed consideration of Mr Travers’ four random samples is too high.  The exclusion of all “unsubstantiated” work, that is work which is demonstrably recoverable on a party and party basis is likely to have resulted in too severe a cutback.  It is probable that a significant part of that work would be capable of being accurately described and being recoverable on a party and party taxation basis if a bill in normal taxable form were to be prepared.  In the light of Mr Weber’s evidence, I think the time spent on preparing a database should not be excluded.  I think that there is also scope for some of the work which Mr Cogan has excluded, such as “research”, to be work clearly identified as time spent in circumstances which would make it recoverable on a party and party basis.  There are also likely to be some recoverable costs on an item based bill of costs which are not specifically recorded or otherwise allowed for, such as clerical attendances or clerical telephone calls.

24                  Finally, but importantly, I note that the 40 per cent reduction made by Mr Cogan also incorporates the adjustment necessary to convert the hourly rate to that provided for in the scale.  I am mindful that I should not double count the adjustment necessary on that score.

25                  There are, however, some specific matters which leads me to the conclusion that the 15 per cent reduction commonly experienced should be increased.  I have referred to the fact that there has been no sifting process to eliminate work clearly  not recoverable on a party and party basis.  There are clearly items of work some of which would not be recoverable on a party and party basis, such as “research and consideration of questions of law and fact” or like items.  In my view, allowance for those matters to some extent is properly reflected in the “care and conduct” allowance under Item 41 of the Second Schedule.  I am also not satisfied that the time spent on preparation of a documents database is work for which Charlick ought to be responsible, having regard to the terms of O 62 r 19.  I have also had regard to the assessment of costs made on a party and party basis by Mr Travers, in response to that made by Mr Cogan, for the work carried out on a particular day.  The comparison, and the comments of each of the costs consultants, indicates to my mind that Mr Travers has adopted a more liberal approach to items which would be allowed on taxation on a party and party basis than I consider is warranted under the “necessary or proper” test, as explained in the authorities.  I am not of the view, for example, that on the day in respect of which he made his party and party costs assessment a third solicitor’s attendance in court on a party and party basis would be recoverable.  I also doubt that the claimed cost for photocopying on that day should be allowed when the item for photocopying fees has been separately included as a disbursement.

26                  The costs consultants are agreed that, after allowing for the costs not recoverable by NRC from Charlick because those costs are attributable to the cross-claim by AN or because they are the subject of discrete costs orders, the professional fees of NRC’s solicitors are $694,200.  Mr Travers has simply reduced that figure by 15 per cent to allow for costs not recoverable on a party and party basis, as he considers that, after allowing for general care and conduct, the starting point of $694,200 is a reasonable one.

27                  For the reasons I have given above, in my view it is necessary to reduce that figure by a more significant percentage to reflect the costs which are not recoverable on a party and party basis.  I have made that calculation in two alternative ways to achieve some check on the process.  In the first instance, I have reduced that figure to $599,442 by applying an hourly rate specified in Item 31 of the Second Schedule of $156 instead of the “blended hourly” or average hourly rate actually charged of $180.66.  I have then reduced that figure by 25 per cent to allow for work done but not recoverable on a party and party basis, having regard to the considerations referred to above, and then increased the result by 20 per cent to allow for the general care and conduct uplift upon which the costs consultants are agreed.  The result is $539,498 which I round to $540,000.  As a cross check, having regard to Mr Cogan’s approach of simply reducing the starting figure by 40 per cent and increasing it by 20 per cent for general care and conduct, and having regard to the fact that his party and party costing for the four randomly selected periods of Mr Travers reduced the professional fees by 48 per cent, 49 per cent, 40 per cent and 61 per cent respectively, I have reduced the starting figure by 35 per cent and increased it by 20 per cent for general care and conduct.  The result is the sum of $541,476.  It confirms my view that the appropriate gross sum allowance under this head should be $540,000.  I have used the figure of 35 per cent rather than the figure nominated by Mr Cogan of 40 per cent in the light of the considerations discussed above.

28                  In the result, in my judgment, the allowance in the gross sum for costs for professional fees should be $540,000.

counsel fees

29                  There were four senior counsel retained by the solicitors for NRC from time to time in connection with this matter, and two junior counsel.  Two of the senior counsel were retained for specific interlocutory issues, and no part of their fees is claimed on this application.  The first senior counsel retained was Mr Sulan QC, apparently to advise and to act generally in the matter.  He returned the brief in May 1997 upon his appointment as a Judge of the District Court of South Australia.  Mr Conti QC was retained some time prior to the commencement of the hearing to appear at the hearing and to advise generally in the matter.  He was practising principally at the Sydney bar, and was located there.  Mr Gray of junior counsel was retained to act and advise generally from October 1996, and to appear at the hearing.  Mr Comans then of junior counsel was retained in August 1997 to advise in relation to the issues concerning s 46 of the Act, and to appear in relation to those issues at the hearing.

30                  NRC seeks to recover the fees paid to Mr Sulan QC, to Mr Conti QC and to Mr Gray and Mr Comans as part of its party and party costs.  There is no issue that those fees of Mr Sulan QC and of Mr Conti QC and of Mr Gray which represent proper party and party costs should be allowed.  There is an issue as to the rates at which those fees should be allowed on a party and party basis.  There is also an issue as to whether the travelling and accommodation expenses incurred for Mr Conti QC and Mr Gray should be allowed at all, as Charlick contends that it was not necessary or proper to have incurred the particular expenses associated with retaining counsel located interstate.  Charlick disputes that the fees of Mr Comans, as the third counsel appearing at the trial, should be allowed at all.

31                  The fees of Mr Sulan QC which Mr Travers said would be recoverable on a party and party basis amounted to $25,000, on what he described as a somewhat “arbitrary” approach as the fee notes contained no detailed breakdown of the work performed.  Mr Cogan has identified particular attendances, and work associated with those attendances, which relate to occasions when NRC is not entitled to costs against Charlick.  After deducting the fees relating to those occasions, he has reached the figure of $23,492 as fees of Mr Sulan QC recoverable on taxation.  He has set out in detail how he arrived at that figure.  I see no reason not to accept his analysis.  The approach of Mr Travers to this item is a general one and without the apparently detailed analysis undertaken by Mr Cogan.  I accordingly allow the fees for Mr Sulan QC at  $23,492.

32                  The determination of the fees to be allowed in respect of the engagement of Mr Conti QC is somewhat more difficult.  Mr Travers has allowed a fee on brief at $4,500 and twenty-seven daily refreshers at $3,000.  He also allowed a daily rate of $3,600 at $450 per hour (for an eight hour day) for the equivalent of seven days pre-hearing preparation, four days preparation during the hearing and fifteen days for preparation of submissions, (a total of twenty-six days) plus fifty hours for conferences.  The fees thereby reached are $201,600.  Mr Cogan’s approach is to allow nine days pre-hearing preparation, four days preparation during the hearing and eleven days for preparation of submissions and including conferences, and thirty-two trial days at $3,000 per day, making a total of $168,000.  He regards time spent above those periods as time for which Charlick should not be responsible on a party and party basis.

33                  There is a difficulty in drawing the line between proper party and party costs on the one hand and solicitor and client costs on the other where there is limited information about the detailed nature of the work undertaken by counsel over lengthy periods of time.  There is no issue about the periods of time allowed by Mr Conti QC during the trial, including preparation during the trial.  For other preparatory work and conferences, the dispute ranges between in effect an allowance for a little over twenty-one days and an allowance of fourteen days.  (I have taken into account the extra time Mr Cogan has allowed before and during the hearing).  Neither costs consultant has extended his explanation for his views in a way which helps me resolve that issue.  Bearing in mind the length of the hearing and the shedding of issues, until ultimately only one issue needed to be resolved by the end of the trial (although a complex issue), I have come to the view that, on a party and party basis, the time allowed by Mr Cogan is the more reliable one.  I have also borne in mind in reaching that view that much of the work in considering the evidence and drafting submissions, at least on the basis of what is appropriate for a party and party taxation, was carried out by junior counsel, or by solicitors.  An allowance for that work by junior counsel will be allowed.  I add that, in my view, expressions of the percentage by which the fees charged may have been reduced when assessed on a party and party basis do not really assist in determining the appropriate level of fees.

34                  The appropriate rate for Mr Conti QC is to some degree contentious.  In South Australia, the Master of the Supreme Court publishes a Guide to Counsel Fees to provide an indication of the range of counsel fees which taxing officers are likely to allow on a party and party taxation.  At present, and at material times, that rate is up to $2,500 per day for senior counsel, and up to $1,350 per day for junior counsel.  As the Guide points out, the range does not determine the maximum or minimum which will be allowed, as the determination must be made as to what fees are fair and reasonable having regard to the time occupied, the complexity of the matter and the standing and experience of counsel.  Mr Cogan has suggested a daily fee of $3,000.  I agree that, in South Australia, by application of that Guide, that is a fee which would in this matter be allowed if the senior counsel concerned were of more or less equivalent standing and experience to Mr Conti QC.  Mr Travers has allowed a higher rate because :

“... it was appropriate to take into account fees that Mr Conti might be expected to recover in the Sydney market for Counsel’s fees on a party/party basis.”

However, he also has allowed refresher fees at $3,000 per day.  I accept that the daily fees during trial which Mr Conti QC might be allowed on a party and party taxation in the New South Wales Supreme Court would be $3,000, as I understand the reference to the “Sydney market” to be a shorthand reference to that jurisdiction.  It is the same as the daily trial figure allowed by Mr Cogan.  I propose to adopt that daily rate.  In both Auspine (O’Loughlin J) and Sparnon (von Doussa J), the Court indicated that the South Australian Supreme Court Guide to Counsel Fees is, and should generally be, used for taxations in the South Australian District Registry of this Court.  I do not allow an additional sum for fee on brief as that Guide now contemplates a daily fee, and because substantial preparation time has also been allowed.  I do not consider that the daily out-of-court rate should exceed the daily court rate, at least on a party and party basis.

35                  I propose therefore to allow the fees of Mr Conti QC at $168,000 for the purposes of the gross sum for costs.

36                  It is convenient at this point to deal generally with the claims for costs and disbursements which arise from each of the three counsel engaged on behalf of NRC being based interstate.  That has resulted in significant disbursements in respect of travelling and accommodation, and to some degree to the claim that higher daily rates might be allowed than otherwise would be the case. 

37                  In Alexander Stewart & Sons Ltd v Robinson (No 2) (1921) 29 CLR 325 at 327, Starke J said :

“The expenses of sending legal advisers to another State may, no doubt, be allowed as costs if a litigant of ordinary prudence would reasonably have incurred them to secure a proper presentation of his case to the Court.”

In the “very special circumstances” of that case, the expenses of sending counsel interstate were allowed.  These were also special circumstances which applied in The Federal Commissioner of Land Tax v Jowett (1930) 45 CLR 115 per Rich J at 118.  Generally speaking, such costs will not be allowed if suitable counsel are available in the State in which the proceedings are being conducted:  Dalgety Australia Operations Ltd v FF Seeley Nominees Pty Ltd (No 2) (1988) 49 SASR 75.

38                  In this matter, Mr Weber has deposed to the fact that, upon Mr Sulan QC returning the brief, inquiries were made both of Mr Sulan QC and another senior counsel in Adelaide who was a member of the Board of Directors of NRC to determine whether other suitable senior counsel were available in Adelaide to be retained.  Those inquiries led to the conclusion that there were no other suitably qualified and experienced senior counsel in Adelaide available to take the brief.  He explains the factors contributing to that conclusion.  He was not cross-examined upon it.  In that circumstance, in my view, it was necessary or proper for NRC to have retained Mr Conti QC and I consider the proper expenses of him travelling to and from Adelaide and his accommodation expenses should be included in the gross sum for costs.  I have not overlooked the information provided by Mr Cogan as to other senior counsel in South Australia at the time who practised in the relevant areas of law and who could have been retained by NRC.  Whilst Mr Weber has not said why each of them individually was not available to be retained, his general statement as to the unavailability in South Australia of senior counsel with relevant specialist experience to accept a retainer from NRC was not challenged.  I do not consider it appropriate to go behind that unchallenged statement on the basis that Mr Cogan suggests.

39                  Mr Travers accepts that it was also appropriate to allow, on a party and party basis, the additional costs associated with briefing interstate junior counsel.  I deal with his six stated reasons for that view seriatim.  In my view, it does not follow from the acceptance by Charlick that it was appropriate to retain solicitors based in Canberra that it was also appropriate to engage interstate counsel based elsewhere than in Canberra.  The initial retainer to Mr Sulan QC evidenced the fallacy of the proposition.  The fact that the Court exercises federal jurisdiction, and that litigants may retain counsel from anywhere in Australia is plain.  It does not follow that the decision of a litigant to do so carries with it the assumption that, for the purposes of party and party taxation, it was necessary or proper to do so.  To include the assertion that “in proper circumstances” that additional cost may be recoverable on a party and party taxation does no more than arguably state the relevant proposition of law;  it does not address the particular circumstances.  Thirdly, he refers to the opinion of Mr Weber that suitable counsel could not be retained in Adelaide.  I have referred to Mr Weber’s evidence as it was referred to me in submissions.  It does not deal with the availability of junior counsel.  The assumption underlying that reason of Mr Travers is not made out.  Fourthly, Mr Travers refers to the efficiency which would follow from the closer proximity of Sydney to Canberra, and to the location of NRC’s head office and a number of its witnesses in Sydney.  I do not consider that that general claim, without detailed explanation, is sufficient to determine that the engagement of interstate junior counsel was necessary or proper for the purposes of party and party taxation.  It would require detailed evidence of the claimed efficiency, having regarding to the role of junior counsel, before such a proposition would be persuasive.  There is no analysis of the relative cost efficiency of junior counsel based in Adelaide travelling interstate to the extent that that was necessary or proper.  Mr Travers next refers to the fact that NRC through its solicitors had briefed senior counsel based in Adelaide, and had therefore demonstrated a willingness to engage local counsel.  It does not follow that it had been unable to retain suitably experienced local junior counsel.  As I have noted, Mr Weber does not assert any such inability in the material to which I was referred.  Finally, Mr Travers refers to the fact that senior counsel retained by NRC was based interstate.  Again, I do not consider that that fact alone, or without further explanation, warrants the conclusion that it was necessary or proper for the purposes of party and party taxation to retain junior counsel not located in the State where the proceedings were conducted.

40                  I am therefore of the view that, for the purposes of party and party taxation, the additional fees, costs and expenses associated with the retention of junior counsel based interstate should not be allowed.

41                  An additional area of dispute arose from the engagement by NRC of two junior counsel.  There is no doubt that, on taxation, the fees of senior counsel and one junior counsel would be allowed. There is also no issue that, to the extent that a second junior counsel did necessary work in preparation for the hearing, the proper fees incurred for performing that work should be allowed;  the work would have been required to have been performed in any event.  In view of my conclusion that the additional fees costs and expenses associated with the engagement of junior counsel based interstate should not be allowed, the remaining significant consequence in practical terms is the fees of the second junior counsel during the hearing.

42                  Mr Travers has expressed the view that it was appropriate to retain Mr Comans as a second junior counsel in view of the specialist nature of his services in “litigation at the more difficult end of the spectrum”.  He refers to the fact that Mr Sulan QC returned his brief at an early stage of the matter, to its “substantial size” as indicated partly by the length of the hearing and by the voluminous material in counsels’ brief, the enormity of the relevant documentation, the nature and extent of the claim under s 46 of the Act including the size of the potential award of damages, and the extent of the expert evidence to be presented and rebutted.  In addition, he says that in his view there was a need for different counsel to concentrate their efforts on different aspects of Charlick’s claim.

43                  I accept that most of those matters are relevant to whether the costs liability of Charlick on a party and party basis should extend to the three counsel ultimately retained by NRC for the hearing.  They reflect the considerations adverted to by Barwick CJ in Stanley v Phillips (1966) 115 CLR 470 at 479 - 480.  I do not consider that the return of the brief by Mr Sulan QC is of any real moment in relation to that question.  Whether or not allowance for three counsel will be made on a party and party taxation must be decided in all the circumstances of the case:  Donohoe v Britz (No 2) at 667.  Such an allowance was made by Heerey J in Henderson v Amadio (22 March 1996, unreported).  In this matter the hearing was long and the extent of the documentation required to be mastered by solicitors and counsel was clearly very extensive.  These matters are not uncommon in litigation.  It is also the case that the issues ventilated during the hearing involved difficult questions of law and fact, but I do not think that the range of issues was unduly extensive.  As against NRC, Charlick alleged interference with its contractual relations with AN in respect of a particular contract made on 29 June 1993 by its conduct in relation to its operations concerning the carriage of international shipping containers between Adelaide and Melbourne during a period of months in 1996 (a claim that ultimately was not pursued), and that such conduct contravened s 46 of the Act.  It is clear that those allegations required NRC to extend its investigations over a much wider period, and ultimately to adduce evidence to indicate the background to the conduct on its part about which Charlick complained and why that conduct was engaged in.  It is also clear that those allegations entitled NRC, as it did, to investigate the relationship between Charlick and AN and to investigate and dispute (including through expert evidence) Charlick’s claims as to the nature of the relevant market, the extent of NRC’s power in the market or the range of possible markets of which the allegations invited consideration, and whether NRC’s conduct amounted to it taking advantage of any power in the market or the possible markets.  It was also necessary for NRC to investigate and confront the evidence of Charlick as to its claimed damages, including exploring other factors which may have caused or contributed to the financial disadvantages which Charlick claimed to have suffered.

44                  Mr Weber has explained that Mr Comans was engaged after the application by NRC to hear separately the issues relating to s 46 of the Act from other issues was determined.  He was retained because he was regarded as a junior counsel highly experienced in litigation under the Act.  He attended conferences to brief experts and to assist in the preparation of witness statements for use at the hearing.  He asserts that the complexity of this matter and the timeframe within which the case was to be brought on for hearing necessitated the use of two junior counsel.  The comment about the timeframe was not developed in his affidavit or in the reports of Mr Travers, and I am not persuaded in the circumstances that the period of time allowed for preparation prior to the hearing was itself, in the circumstances a reason why it was necessary or proper to engage two junior counsel.  I deal further with that aspect below.

45                  In this matter, I do not consider that the engagement of a second junior counsel in the circumstances should be a matter for which Charlick should be liable for costs taxed on a party and party basis.  As I have observed, the two causes of action alleged were directed to particular conduct of NRC which occurred over a period of months during 1996.  Although I accept that those causes of action prompted very extensive factual investigations over a much longer period of time, and required identification and consideration of extensive documentation, the ultimate focus of those inquiries was not itself dispersed very broadly.  Charlick adduced evidence from only one expert economist;  and NRC adduced evidence from only two expert economists.  The trial itself occupied many days of hearing, but again the number of witnesses was not extensive;  several witnesses took more than one day to complete their evidence.  I have taken into account the legal and factual complexity of the issues which were ventilated, and the significance of the case to the parties.  I do not think that the proceedings had a particular significance beyond the parties, although many cases which concern s 46 of the Act attract substantial interest amongst those concerned with Part IV of the Act and I accept that this proceeding would have fallen into that category had it been necessary to decide issues concerning the market and the existence and exercise of market powers.  I have also had regard to the amount at stake, not simply by reference to the damages claim of Charlick but also by reference to the implications to NRC’s operations had the application been successful and had it resulted in some form of mandatory order.  I have no doubt that NRC regarded the claims of Charlick, and their potential impact upon NRC if the claims were successful, very seriously.

46                  In this matter, I regard the question whether the case required a subdivision of labour to the extent of two junior counsel as an important consideration:  Donohoe v Britz (No 2) at 606;  Peel v London & North Western Railway Co (No 2) [1907] 1 Ch 607 at 612.  As Barwick CJ pointed out in Stanley v Phillips at 479 - 480, the question is whether the case by reason of its features made it necessary or proper that the services of all the counsel whose fees are sought to be recovered on taxation were engaged in order that the Court may do justice between the parties.  That feature is one which, in the present circumstances, warrants particular attention.  The information now presented only touches upon that question.  Whilst Mr Comans may have been selected for his particular expertise, the question is whether the engagement of a second junior counsel was necessary or proper.  I do not consider that, on the material, the case required a subdivision of labour.  As noted earlier, I am not persuaded that the time for preparation prior to the hearing reasonably required a subdivision of labour so that two junior counsel reasonably should have been engaged.  The proceedings were commenced on 27 September 1996.  There was substantial contention about the quality of the pleadings which culminated in an amended application and statement of claim being filed on about 17 April 1997.  The hearing commenced on 13 October 1997.  There is but brief mention of that aspect in the affidavit of Mr Weber and it is not developed in the views of Mr Travers.  In the light of my consideration of the issues, and of the nature and complexity of the case referred to above, I do not consider that those matter themselves, or in conjunction with the time for preparation for trial, led to the view that the case reasonably required a subdivision of labour.

47                  For these reasons, I do not consider that a party and party basis the sum for costs should include allowance for two junior counsel.  I will allow for the work done by Mr Comans in preparation for the trial in the fees generally allowed for junior counsel.

48                  The fees for Mr Gray, in the view of Mr Travers, should be allowed at $181,000.  Mr Travers has excluded from his fees those items which are not recoverable under the costs order either in their entirety or in part.  He has used an hourly rate of $200 to 20 July 1997 and $220 thereafter.  Where a daily rate is appropriate, he has allowed it as $1,750 prior to 20 July 1997 and $1,850 thereafter.

49                  Mr Cogan considers that the appropriate rates for junior counsel should be $200 per hour and, given the significance of the matter and its complexity, $1,500 per day.  That is slightly in excess of the range referred to in the Supreme Court of South Australia Guide to Counsel Fees.  As noted earlier, and as the Guide itself states, it does not prescribe an inflexible range.  Mr Cogan has then allowed Mr Gray fifty days for preparation (including conferences) and forty-five days for the hearing at $1,500 per day totalling $142,500.  The preparation time includes fifteen days’ allowance for work performed by Mr Comans.

50                  For reasons previously given, I consider that the Guide does provide an indication of the rate of fees for counsel which would be allowed on taxation on a party and party basis.  It is to be adjusted by the taxing officer to a fair and reasonable rate, having regard to the time occupied, the complexity of the matter and the standing and experience of counsel.  In the case of Mr Conti QC, the figure of $3,000 per day represented an uplift of 20 per cent on the upper figure specified in the range.  I see no reason why a similar uplift is not appropriate in the case of junior counsel, and given the extent to which junior counsel was involved in preparation of the matter before Mr Conti QC was briefed, in my view a taxing officer would allow a daily rate of $1,700 representing an uplift of about 25 per cent on the upper figure specified in the range.  I think that daily rate is the appropriate one whether the work was performed by Mr Gray or by Mr Comans.

51                  It is unclear from Mr Travers’ reports precisely how he arrived at the figure of $181,000 for Mr Gray’s fees.  Mr Travers has sought to delete items charged which were not the subject of a costs order, and to reduce his fees where not all of particular work was likely to be allowed on taxation.  Mr Gray’s memoranda of fees are exhibited to Mr Weber’s principal affidavit on the motion.  It is not possible to discern the precise purpose of his various attendances, except of course for the hearing, and for preparation of submissions.  On my calculations, the overall time spent on conferences and preparation in the interlocutory stages equates roughly to twenty-six full days, with eleven days for attendance in Court on motions and directions hearings.  In the period leading up to the trial, the conferences and preparation occupied about thirty-eight days, and he has charged for thirty-seven hearing days and about fourteen days for preparation of submission.  Those figures are appropriate only, as it has been necessary to ascribe time spent for certain purposes in part on a rough basis only.  I note Mr Gray’s preparation for trial included lengthy conferences with witnesses, including Professor Officer;  Mr Comans also has charged for lengthy conferences with witnesses.  On my rough calculations, that means that Mr Travers has allowed about two-thirds of the time spent by Mr Gray on preparation for this matter as recoverable on a party and party basis. 

52                  In the case of Mr Comans’ fees, he allowed a fee on brief of $3,000 and eighteen daily refreshers of $2,000.  He also allowed a daily rate for preparation of $2,000, or $250 per hour.  He assessed the preparation time for Mr Comans at twenty-five days, and allowed the equivalent of just over six days for conferences and seventeen days for preparation of submissions.  He also allowed $2,500 for Mr Comans’ expenses which he apparently paid direct.  The total he would allow is $138,000.  I discern from Mr Comans’ memoranda of fees they relate to travelling and accommodation.  I do not consider that it was, in the relevant sense, necessary or proper for interstate junior counsel to be retained, I would not include those disbursements at that amount, but some relate to travelling to confer with Professor Officer.  In addition, counsel retained in Adelaide would have incurred expenses travelling interstate to confer with NRC, its solicitors and wittinesses.  Allowance should be made for those expenses.  I do so when dealing with the disbursements.

53                  In effect, the combined allowance by Mr Travers for preparatory work leading up to the trial (as distinct from the earlier interlocutory work) for junior counsel is the equivalent of about fifty-six days work (including the allowance for Mr Comans’ conferences), and the combined allowance for junior counsel for preparation of submissions is the equivalent of about twenty-six days work (assuming, in the case of Mr Gray’s attendances, that the time he spent has been reduced by about one-third - in fact I think it more likely that the greater proportion of the reduction of Mr Gray’s time spent is in respect of the work done at the interlocutory stages, as Mr Travers looked at the specific attendances to see whether they were covered by the costs order).  Mr Travers has also allowed for Mr Conti QC the equivalent of eleven days for preparation of submissions and conferences in relation to them.

54                  In my view, those allowances on their face appear to reflect the understandable commitment on the part of NRC to secure the best presentation of its case, and do not reflect the extent of commitment necessary and proper for the purposes of party and party costs.  That view is reached by comparison of the periods allowed by Mr Travers against the number of days the trial occupied (thirty-six days), and having regard to the number of witnesses called to give evidence (fourteen) of whom eight were called by NRC.

55                  Mr Cogan has not explained how he selected the periods he allowed for junior counsel of fifty days preparation (including fifteen days for Mr Comans’ work) and forty-five days hearing (presumably including time to prepare submissions, as the hearing occupied only thirty-six days).

56                  In those circumstances, I am left largely to an intuitive judgment about the extent of time which should be allowed on a party and party taxation basis for the work of junior counsel.  In respect of the interlocutory stages, I adopt the reduction which seems to reflect Mr Travers’ assessment of the work done by Mr Gray which was not covered by the costs order, or which is not recoverable on a party and party basis, namely about one-third.  Accordingly, I consider that the equivalent of twenty-four days at $1,700 should be allowed for that work including attendances in Court.  In respect of the preparatory work prior to and during the trial, I consider that the thirty-eight days charged by Mr Gray should be allowed at thirty days, to which I add ten days for work performed by Mr Comans.  I allow one junior counsel’s fees for the thirty-six days of the hearing.  In my view, the allowance which should be made on a party and party basis for junior counsel for the preparation of submissions should be the equivalent of sixteen days, including five days for Mr Comans’ work.  As I have indicated, there is no firm basis upon which those periods have been chosen, in the sense that a process of calculation leading to that conclusion is transparent.  It reflects an intuitive judgment.  I have borne in mind the words of von Doussa J in Beach to which I have referred in [8] above.  The result is that, in my view, the appropriate allowance for junior counsel is the sum of $195,500 representing 115 days allowed at $1,700 per day.  I will deal separately with disbursements for counsel when considering the disbursements in issue.

disbursements

57                  It is necessary to consider these disputed items separately.

(1)        Solicitor’s Airfares

58                  Charlick does not dispute that it was necessary or proper to have engaged solicitors based in Canberra in the circumstances of this matter. 

59                  Mr Travers allows $38,000 for this disbursement.  Mr Travers has not explained how the figure of $38,000 is arrived at, although it approximates the full amount of the claim less $621 for an airfare apparently included in error, and reduced by 15 per cent.  He regards the claim for solicitor’s airfares as concerning mainly travelling between Canberra and Sydney to confer with counsel or with the client, and between Canberra and Adelaide for the hearing.  The disbursement has been claimed at economy class travel rates.  It also includes airfares to interview expert and other potential witnesses, and to inspect documents in Brisbane and Melbourne.  He also expresses the view that the approach of Mr Cogan “grossly under-estimates” the number of flights required for the preparation of the matter and for attending conferences with counsel and for attending the hearing.

60                  Mr Cogan takes issue with the extent of the travel.  He would allow the claim at $16,330.  He has allowed the equivalent of 23 return flights between Adelaide and Canberra, on the basis of conferences between counsel and solicitors taking place in Adelaide or Canberra, and has allowed for one solicitor only to travel to Adelaide to attend directions hearings and two solicitors to travel to Adelaide for the trial.  He has also allowed three return flights to Sydney to interview witnesses, and one to Melbourne to interview a witness.  Adelaide based witnesses could have been interviewed whilst in Adelaide for related purposes.

61                  In the light of my conclusion that, in the particular circumstances referred to, the engagement of counsel based interstate was only necessary or proper in respect of Mr Conti, I consider that some only of the disbursements for solicitors’ airfares should include airfares to travel to Sydney to confer with counsel as necessary or proper.  However, it was necessary or proper for the conferences which are recoverable on a party and party basis to occur somewhere.  If they took place in Mr Conti’s chambers in Sydney, junior counsel from Adelaide would have attended with consequential expenses.  I therefore think that Mr Cogan has somewhat underestimated the airfares to confer with counsel.  I also note that there were a number of witnesses based in Sydney and one in Melbourne, who were required to be interviewed.  Given the complexity of the issues in this matter, in my view it was necessary or proper for those persons to have been interviewed at their location, or where their principal documentary resources were. 

62                  Mr Weber, in his affidavit of 20 February 2001, says that airfares were undertaken in order to undertake conferences with counsel and experts, and at no stage was an airfare incurred exclusively in order to brief NRC or to obtain its instructions.  He does not refer to airfares to attend to interview witnesses, other than expert witnesses, or to inspect documents.  He refers to the inspection of Charlick and AN documents taking place in Adelaide, and to the discovery process by NRC conducted principally in Sydney and Canberra.  He does not refer to any visit to Brisbane to identify discoverable documents.  He also does not give details of the persons required to be interviewed as potential witnesses, although Mr Travers refers to that category of interviewees.  Mr Weber refers to nine named witnesses or potential witnesses. 

63                  I am left with the impression that the amount claimed for this item, based upon Mr Travers’ view, is too high.  One consideration, in addition to the matters I have mentioned, is the need to disallow that travel related to the cross-claim against AN, and that travel related to those interlocutory attendances for which NRC was not entitled to costs.  On the other hand, as I have noted, I consider that Mr Cogan’s allowances do not adequately allow for the complexity of the matter, the fact that it was necessary or proper to have briefed senior counsel based interstate and the need to interview witnesses and experts on more than one occasion.  In my view, the appropriate allowance for this item of disbursement is $35,000.  I have arrived at that figure by reducing the disbursements incurred of $45,751 by about 10 per cent to allow for travel associated with costs not recoverable against Charlick and then by a further percentage in the order of 15 per cent to allow for travel expenses incurred which were not necessary or proper in the sense explained in O 62 r 19 of the Rules, that is for expenses which would not be allowed on a party and party taxation basis.

(2)        agent’s fees

64                  This expense was billed at $41,857.  Mr Travers fixed the allowable sum at $31,000 and Mr Cogan at $24,800.

65                  As noted, it is accepted that a taxing officer would consider it appropriate that NRC engaged its Canberra based solicitors to act in this matter.  Consequently, as the matter was conducted from the South Australian District Registry of the Court, it was necessary or proper to engage solicitors in Adelaide to act as their agents.  Mr Travers has also allowed for interstate agents’ fees for solicitors acting as agents in Brisbane, Sydney and Melbourne.  As he considers that there would be some duplication in work, which would not be recoverable on a party and party taxation basis, he has arrived at the estimate of $31,000 as an appropriate allowance.

66                  Mr Cogan has allowed the fees and disbursements of interstate agents at percentages or figures which, when re-converted to their full amounts, indicate the make-up of the claimed disbursement.  Principally, it is for professional fees and disbursements of Adelaide agents.  He refers to an additional disbursement for Melbourne agents.  Mr Travers refers also to the need to have engaged the same solicitors also as agents in Brisbane and Sydney, and Mr Weber refers to their engagement.  It appears therefore that those agents are included in the claim of $2,500 (other than the Adelaide agents) is for interstate agency work.

67                  Mr Weber describes that work, other than that of the Adelaide agents, as being to finalise affidavit material in Brisbane, Sydney and Melbourne or to attend at the offices of NRC to gather documents for discovery.  He says the engagement of those solicitors was to minimise costs incurred for NRC.  In the light of that explanation, I do not think that there is reason to reduce that disbursement to allow for the fact that the costs would be allowed on a party and party basis only, except to allow for the prospect of the charged rates exceeding the scale.  I accordingly propose to reduce that figure by 15 per cent only, rounded to $2,100.

68                  The major part of this claimed disbursement is for solicitors’ fees for Adelaide agents. Mr Travers has reduced this disbursement by about 25 per cent.  Mr Cogan has separately treated professional fees and disbursements.  He has reduced the professional fees by 40 per cent as the amount charged is based upon a solicitor and own client taxing basis, and increased it by 5 per cent for care and conduct, having regard  to the fact that much of the work was done at the direction of NRC’s principal solicitors.  I agree with the view that, given the nature of the work carried out by solicitor agents, there is not likely to be a great deal of work of a nature that is not recoverable on a party and party basis.  I also have regard to the likelihood that the agent’s hourly charge-out rates would exceed the scale rate specified in the Second Schedule.  In my view, in the circumstances, the 40 per cent reduction proposed by Mr Cogan is too high.  I think a care and conduct factor, as proposed by Mr Cogan, is a reasonable one.  On this part of the claim, that is for professional fees, I fix the allowable disbursement at $18,400.  It is calculated by reducing the professional fees component of the disbursement by 25 per cent and then adding back 5 per cent for care and conduct.  I have rounded out the result.

69                  The disbursements incurred by those solicitors includes $6,342 not apparently in dispute, plus photocopying fees at $6,996 and fax fees of $2,583.  Mr Travers has not separately dealt with those items, but has included them in the fees for which Charlick ought to be liable except to the extent of unnecessary duplication.  Mr Cogan regards the extent of photocopying as likely to include bulk copying which should be charged at a commercial rate.  He indicates that an appropriate allowance is $2,000.  I am not satisfied that an allowance above that sum is necessary or proper in the circumstances.  The charge of $2,583 for facsimile transmission would only be allowed on a party and party basis to the extent that use of facsimile transmission was necessary or proper.  That may not be confined to circumstances of urgency.  There may be occasions when efficiency dictates the use of facsimile transmissions.  I think his cutback of that disbursement is too severe.  On the other hand, the use of facsimile transmissions to the extent claimed has not been shown to have been necessary and proper in the sense used in O 62 r 19.  I must apply a broad axe, in the absence of further information.  I propose to allow that aspect of the agent’s disbursements at $1,500.  The total of those three amounts is $9,842.

70                  The result of those considerations is to arrive at a figure of $30,342.  I propose to allow as part of the gross sum for costs the rounded out sum of $30,400 for agent’s fees.

(3)        accommodation

71                  The costs incurred by NRC for accommodation in Adelaide for solicitors and counsel are $39,924.  Mr Travers considers that the likely amount allowed for that disbursement on a party and party basis is $35,000 and Mr Cogan has allowed $20,000.

72                  Mr Travers believes that the charges incurred are reasonable, and his “arbitrary” reduction is to allow for periods when NRC was not entitled to costs from Charlick and for the possibility that some unnecessary extras may have been included in the charges.  Mr Cogan’s fundamental point of difference derives from his view that no allowance should be made for the fact that interstate counsel were engaged.  As I have reached the view that, in this matter, it was necessary or proper to have engaged senior counsel who resided interstate, but not junior counsel, follows that I should reduce this item.  The reduction should reflect the disallowance of accommodation for two junior counsel, of whom one attended only for about half the trial, but allow for senior counsel and solicitors’ accommodation.  It should also make some allowance for accommodation of junior counsel from Adelaide when attending interstate.  I propose in the circumstances to reduce that disbursement by about one-fifth to $28,000.

(4)        counsel’s airfares

73                  The disbursement incurred is for $34,173.  Mr Travers suggests an appropriate allowance is $29,000, for similar reasons to those relating to the allowance for accommodation.  Mr Cogan suggests the appropriate allowance should be $6,000.  Again, the fundamental point of difference is whether it was necessary or proper to have engaged counsel located interstate.  For the reasons already given, I consider that the allowance in the gross sum for costs in respect of this disbursement should be significantly reduced.  These should be substituted for the airfares of junior counsel an allowance for airfares of an Adelaide based junior counsel as for conferences interstate necessary or proper.  In my view, the appropriate allowance is $18,000.

(5)        expert witness’ fees

74                  Two of the five claims are in issue.  The first is a claim for $4,205 paid to McMillan Binch, a firm of Canadian lawyers, and the second is a claim for $42,400 (which Mr Travers would allow at $36,640) paid to Paul Wait (“Mr Wait”), a transport economist.  In each instance, Mr Cogan’s view is that no allowance should be made for those expenses.

75                  McMillan Binch were retained by NRC’s solicitors to extract transcripts, judgments and other publicly available information relevant to competition law opinions expressed by Professor Bonsor, the expert economist called by Charlick, in competition law cases.  The information was used in preparation for the cross-examination of Professor Bonsor.  As it happened, Professor Bonsor was temporarily resident in Adelaide when he was retained and when his evidence was given.  He lives in Canada.  Mr Cogan suggests that that level of preparation for Professor Bonsor’s cross-examination was not necessary or proper in terms of O 69 r 19.  In my view, research into opinions expressed by proposed expert witnesses in other litigation is not, in the absence of particular circumstances warranting such research, work which falls within the aegis of O 69 r 19.  No particular circumstances have been identified in the material on this application to take the case out of the ordinary.  I do not therefore allow that disbursement as part of the gross sum for costs.

76                  Mr Wait’s fees were charged at $200 per hour to the total of $38,400 plus expenses of $4,000.  Mr Travers has reduced his fees by an arbitrary 15 per cent to reflect what might be allowed on a party and party taxation, having regard to the totality of his fees, the lack of detail in his accounts, to the full allowance made for other expert witness’ fees, and to the vagaries of taxation.

77                  Mr Cogan’s view is that, as Mr Wait is an economist, NRC should not be entitled to recover his fees as well as the fees of the other expert economist called by NRC, namely Professor Officer.  He points out that Charlick called only one expert economist.  He also expresses the view that, if Mr Wait’s fees are to be allowed, the fees should be greatly reduced as they are not shown to be warranted to the amount claimed and are much greater than those of Professor Officer (appearing as Roboff in the costs material).  His fees represent 190 hours of work.

78                  In this matter, I think that the perspectives of Professor Officer and Mr Wait were different.  Professor Officer gave evidence as an expert economist relating to the market.  Mr Wait’s evidence was as to the economics of the transport industry, including the rail industry, an area in which he appeared to have particular expertise.  He gave evidence, and was cross-examined.  I am satisfied that, in the circumstances, his engagement was necessary or proper.  However, I do not think that the extent of his work is shown to have been necessary or proper.  His accounts contain no detail apart from hours charged.  As Mr Cogan points out, his fees are much greater than those of Professor Officer.  One might expect, given Mr Wait’s particular expertise, that the necessary or proper extent of his contribution would have been delivered in considerably less hours.  There may be good reasons why that is not the case, but those reasons do not appear in the materials before me.  I propose therefore to allow his fees at $15,000 and his expenses at $4,000, a total of $19,000.  In reaching that sum, I have endeavoured to reflect his necessary and proper fees having regard to the fees charged by Professor Officer.

(6)        travel expenses dr ferrier

79                  These expenses are claimed at $2,390.  Mr Cogan points out that his accounts how only two airfares, apparently totalling $1,675.  There is no further information before me on the topic.  I consider that the verified expenses of $1,675 only should be allowed

(7)        courier expenses

80                  The expenses incurred of $9,006 have been reduced by Mr Travers to $8,500 simply to reflect that some of the expenses may not be recoverable on a party and party basis.  Mr Cogan has reduced the allowance to $2,000.  Mr Weber has explained that the majority of the courier expenses were incurred to transport briefs to counsel and to experts, and on one occasion to transport material from Canberra to Adelaide for the hearing.  His affidavit does not explain the basis of Mr Travers’ assertion that courier services were also required to transport documents produced under discovery in Brisbane, Sydney, Melbourne, Canberra and Adelaide.  Indeed, Mr Weber’s affidavit describing how courier services incurred by Deacons Graham & James were allocated between its clients on a monthly basis does not suggest that the detail available to Mr Travers would provide that information.  I am left with considerable uncertainty about the extent to which courier expenses incurred would be recoverable on a party and party taxation.  I do not think that the amount claimed is shown to have been necessary or proper on that basis.  In the absence of other information, I propose to include in the gross sum for costs an allowance of $2,000.

(8)        photocopying expenses

81                  The claim for photocopying expenses, as allowed in Mr Travers’ report at $22,464 is not in issue except for the item “Communication Station” at a cost of $7,091.  This service is explained by Mr Weber to replicate sets of documents and to prepare three sets of briefs for counsel.  Its rate for copying was reasonable.  Mr Cogan’s view is simply that some photocopying expenses would not be recoverable on a party and party basis, and that the disallowance of this item is an appropriate reflection of that fact.  I do not think that the particular expenditure incurred to Communication Station should be disallowed, but in  my view Mr Cogan’s comment is correct in principle.  It is unlikely that all photocopying would be recoverable on a party and party basis.  It is also appropriate, in my view, to have regard to the probability that some photocopying was for aspects of the matter in respect of which costs are not payable by Charlick to NRC.  I accordingly propose to reduce the overall photocopying expenses to $18,000, representing roughly a 20 per cent reduction in the expenses incurred.

(9)        std telephone charges and miscellaneous charges

82                  The claimed STD telephone expenses of $3,434 have been reduced by Mr Travers to $3,000 to reflect the prospect that some of these expenses are not recoverable on a party and party basis.  Mr Cogan would allow these charges at $2,000.  He has also reduced the claimed miscellaneous expenses of $6,407 for taxis, petrol, parking, incidental travel and car hire to $5,000 on the same basis.  Mr Cogan would allow $2,000 for the miscellaneous expenses.  In each instance, he says he is making a judgment as to what is reasonable in a party and party basis and takes a broad axe approach to the claims, as such claims often contain items which on taxation are disallowed.  Mr Travers has separately considered each of the claimed items, and has reduced them by about 20 per cent to allow for items which would not be recoverable on a party and party basis.  I consider that that approach is reasonable, and I do not see any reason to think that these particular disbursements should be the subject of a different and much greater reduction than I have, broadly speaking, adopted in these reasons.  I allow $8,000 for these two items in the gross sum to be allowed under O 62 r4(c).

(10)      estimated expenses incurred by nrc

83                  NRC has estimated that its employees incurred airfares and taxi fares of $16,870 to attend conferences with counsel or solicitors at the hearing.  Mr Travers thinks that that claim should be allowed in full, but Mr Cogan would reduce it to $10,000.  NRC’s estimate of the accommodation and sustenance charges it incurred for the same reasons is $8,060.  Again, Mr Travers would allow that claim in full, but Mr Cogan thinks it should be reduced to $5,000.  Both Mr Travers and Mr Cogan are agreed that the loss of benefit of salary and wages paid by NRC to its employees relating to those attendances should be $11,658.

84                  There were no records of NRC provided to either Mr Travers or Mr Cogan to support the claims, although the fact of certain expenses having been incurred is not in issue.  Nor is there an issue that, in principle, such expenses are recoverable as part of NRC’s costs.  It is only the quantification of the claims which requires consideration.

85                  Mr Travers has identified the dates upon which NRC employees attended the hearing to give evidence, and has been provided with the number of days each was engaged in proofing and in conferences.  Mr Travers accepts that the latter periods are not periods in respect of which the time spent by officers of NRC itself represents a recoverable cost:  Cachia v Hanes (1994) 179 CLR 403.  Hence, the figure of $11,658 represents salaries paid only whilst officers of NCA were in attendance to give evidence.

86                  Both Mr Travers and Mr Cogan have estimated the number of airfares required to be undertaken by NRC employees.  Mr Travers has allowed $700 per return trip, plus $120 per day accommodation and sustenance, and $70 per travel day for taxi fares.  Mr Cogan’s proposed allowances are $650, $140 and $70 respectively.  They differ as to the number of trips required and the periods of time required of each relevant NRC employee.  I think that one attendance for proofing is reasonable on a party and party basis for each of the interstate witnesses, and the information as to dates of their attendances at the hearing indicates that seven return flights were warranted.  That represents $7,700 for airfares.  I also allow for 22 days travel taxi fares totalling $1,540.  The total is a little less than the figure suggested by mr Cogan, so I adopt his proposed figure of $10,000.  The figure I roughly calculate for accommodation and sustenance for the interstate witnesses for giving evidence and being proofed (allowing slight reductions on the periods identified by Mr Travers to allow for some proofing which would not be recoverable as a party and party costs) also results in a figure slightly less than the figure suggested by Mr Cogan, so I adopt his figure of $5,000 for that item also.

87                  Accordingly, I allow the sum of $10,000 for travel and $5,000 for accommodation and sustenance for NRC employees to attend for proofing and for giving evidence, together with the agreed claimable expense of their salaries of $11,658, making a total of $26,658.

stationery

88                  This is a minor item.  Mr Travers would allow $300 for brief and exhibit folders and dividers, boxes for transit, and the like.  Given the voluminous material, and the size of the brief, in my view that claim should be allowed

Legal cost

89                  The claim for a gross sum for costs includes $15,450 for advice given by Mr Travers’ firm about the most efficient manner to have determined the question of the costs to which NRC is entitled from Charlick, to advise with respect to the quantum of those costs, and to attempt to negotiate a settlement of those costs.  Those fees to 31 October 2000 totalled $29,801 and the claim has been significantly reduced to avoid any element of solicitor and client costs.  Mr Travers’ later report explains that these costs preceded the current application and were incurred independently of it.  He says, and I accept, that the costs were incurred in a genuine attempt to settle the costs issue and to bring the proceedings to finality.  Charlick has requested that the question of the allowance of this item should await the determination of the gross sum for costs generally.

90                  I accept Mr Travers’ description for the purpose of this work.  Accordingly, I see no reason to defer ruling upon the claim.  If those costs are recoverable as a matter of principle, I am satisfied that the amount claimed is a proper one.

91                  In the particular circumstances of this matter, I consider that that expense was necessary or proper for the attainment of justice.  Barwick CJ, in Stanley v Phillips at 478 stressed, in the context of the disputed claim for the costs of two counsel but of general import that the question presented to taxing officers :

“… is fundamentally concerned with the attainment of justice, which expanded into its elements, means that it is concerned with the presentation of a case to a court of law in such manner and to such extent that a just result is able to be achieved.”

92                  I do not accept the proposition for which counsel for Charlick contended that cots of negotiations to explore compromise of a claim should never be allowed on a party and party taxation.  There is a substantial public interest, as well as private interest, in the resolution of disputes by negotiation or by mediation.  It is not a common feature of litigious claims that the parties are required to consider, and often to participate in, pre-trial mediation.  The Rules prescribe powers and procedures to that effect.  Negotiation and mediation may resolve a dispute entirely.  Apart from the benefit to the parties of such resolution, such an outcome saves the costs associated with the trial and releases judicial and court resources to deal with other matters.  Negotiation and mediation often also partly resolve a dispute so as to enable the focus of the parties in litigation to be more confined, again with consequential savings of time and expense to the parties and to the benefit of the public.  In my view, steps taken by the parties to confine the areas of their dispute will often be able to be categorised as necessary or proper for the attainment of justice.  They will often facilitate the presentation of the case so as to enable a just result to be achieved in an expeditious and economic manner.  Even if those processes do not in fact result in any consensual outcome, either totally or in relation to certain issues or matters which then do not require proof, it does not follow that the processes themselves were not necessary or proper for the purpose of O 62 r 19 of the Rules.  Those observations are not intended to lay down any precept that the costs of private negotiation or mediation should as a general rule be allowed on a party and party taxation.  Whether they are allowed will depend upon the particular circumstances.  Often, the parties agree upon the basis upon which the costs of mediation will be borne, or the agreement made at mediation will include terms as to costs.

93                  In this matter, bearing in mind the nature of the issues which were being addressed, I think it is likely that the private negotiations to endeavour to agree costs and actions taken in relation to those negotiations resulted in refinement of the areas of dispute and provided part of the process of refining the issues required to be addressed by the  Court.  Furthermore, the nature of the issues being addressed in such negotiations in the light of the costs order of 6 September 1999 was such as to be likely to lead to refinement of disputed issues.  NRC was endeavouring to give effect to an order of the Court by addressing the detailed components of costs to which that order related.  I do not consider that the line drawn by Holroyd J in Mackay v Hamilton [1905] VLR 457 at 460 - 461 between costs :

“…incurred by a party for the simple purpose of making a settlement ... [and] costs incurred in fighting or prosecuting the action until from one cause or another it has to stop”

is one which should continue to be rigidly given effect to.  Indeed, his Honour recognised that costs incurred in seeking to procure a settlement may overlap with costs which would have been necessary for the prosecution of the action,  and made allowance for that.  But, in my view, in the light of the more modern approach to litigation discussed above, that sharply drawn line no longer exists.  In Higgins v Nicol (No 2) (1972) 21 FLR 34 at 57 - 58, Joske J recognised that negotiations to settlement are part of the ordinary course of the conduct of litigation.  His Honour reached a conclusion similar to that I have reached.  In that case the costs of counsel incurred in a bona fide attempt to settle the action were allowed as party and party costs, where that attempt had been unsuccessful.

94                  I therefore propose to allow as a proper disbursement the expense of Legalcost of $15,450.

conclusion

95                  In my judgment, the appropriate order for gross sum costs in this matter is that Charlick should pay to NRC the sum of $1,214,826.  That sum is made up of the following amounts:

Professional fees                                                                                       $540,000

Fees for senior counsel                                                                                191,492

Fees for junior counsel                                                                                195,500

Disbursements :

Solicitors’ airfares                                                        35,000

Agents’ fees                                                                 30,400

Accommodation                                                          28,000

Counsels’ airfares                                                        18,000

Expert witness Wait                                                     19,000

Travel expenses Dr Ferrier                                             1,675

Courier expenses                                                           2,000

Photocopying                                                               18,000

STD and miscellaneous                                                  8,000

Stationery                                                                         300

NRC out of pocket expenses for witnesses                   26,658

Legalcost                                                                     15,450

Other disbursements (not in dispute)                             85,351

                                                                               $287,834         $287,834

                                                                                                    $1,214,826

96                  I have not dealt with the costs of the motion for the order for a gross sum for costs.  Counsel for NRC sought those costs, but counsel for Charlick requested that they be the subject of separate written submissions in the light of these reasons.  I accede to that request.

97                  Accordingly, I order that the costs ordered to be paid by Charlick to NRC on 6 September 1999 be a gross sum in the amount of $1,214,826.  I give leave to the parties to file and serve written submissions on the costs of the motion for that order in the  following sequence, upon the basis that NRC seeks those costs as it has secured a gross sum costs order in excess of the amount which Charlick was prepared to agree :

1.         Charlick should file and serve its written submissions within fourteen days of the date of these reasons.

2.         NRC should file and serve its written submissions in reply within fourteen days of service of the written submissions of Charlick.

98                  I will then decide on that matter, and will issue brief reasons for that decision without the need for further attendance of the parties.

Associate:

Dated:              30 May 2001