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  • Unreported Judgment

Iezzi Constructions Pty Ltd (in liq) v C & E Pty Ltd

 

[2005] QSC 158

 

SUPREME COURT OF QUEENSLAND

 

PARTIES:

FILE NO:

Trial Division

PROCEEDING:

Application

DELIVERED ON:

10 June 2005

DELIVERED AT:

Brisbane

HEARING DATE:

10 June 2005

JUDGE:

Wilson J

ORDERS:

Security ordered up to and including the first day of trial in the sum of $85 000.

CATCHWORDS:

PROCEDURE – COSTS – SECURITY FOR COSTS – PRACTICE MATTERS – where the defendant seeks security for costs against the plaintiff – where the plaintiff is a company in liquidation – where the liquidators concede that this is an appropriate case for security

EVIDENCE – ADMISSIBILITY AND RELEVANCY – OPINION EVIDENCE – IN GENERAL – joint appointment of expert – Practice Direction No 2 of 2005 – whether security should be ordered before consideration of joint appointment of expert – quantum of security

Uniform Civil Procedure Rules 1999 (Qld), Chapter 11 Part 5

COUNSEL:

G J Robinson for the plaintiff

T Matthews for the defendant

SOLICITORS:

Dibbs Barker Gosling for the plaintiff

MacDonnells Solicitors for the defendant

[1] Wilson J:  This is an application by the defendant for security for costs pursuant to r. 670 of the UCPR.  The plaintiff is a company in liquidation, and the liquidators concede that this is an appropriate case for security.

[2] The defendant seeks security to the first day of the trial in the sum of approximately $180,000.00.  The defendant offers security in the form of a joint and several guarantee of the liquidators in the sum of $60,000.00. 

[3] The proceeding was commenced in 2002.  It arises out of a contract for the construction of 65 residential apartments.  The contract price is alleged to have been $9.35 million.  The claim of the plaintiff at its highest is for approximately $800,000.00 being the cost of work performed plus net profit less amounts paid.  There are alternative claims for lesser amounts.  There is a counter claim for approximately $100,000.00. 

[4] There have been several interlocutory applications since the proceeding was commenced.  On 5 May 2005 Justice PD McMurdo ordered that the proceeding be placed on the supervised case list.  His Honour gave directions with respect to particulars and disclosure, and directed the defendant to file any application for security for costs or for leave to make the counterclaim on or before 13 May 2005.  It is pursuant to that direction that the present application was filed and comes before the Court. 

[5] The applicant relied upon a draft bill of costs prepared by its solicitor Mr Marshall.  A broad outline of that draft bill is as follows:-

Preparation for trial

 

Professional fees $91,370.60

Disbursements $120,860.00

 

Total$212,230.60

 

Preparation for trial

 

First day of trial professional fees$2,204.00

Disbursements___$22.00

Total$2,226.00

Thus the total of the estimated fees and disbursements was $214,456.60, and after an adjustment for GST the sum of $190,866.38 was arrived at. 

[6] The respondent relied upon the opinion of Mr Ryan, a costs assessor, as to what would be allowed if such a bill were taxed.  In Mr Ryan’s opinion the following would be allowed:

Preparation for trial

 

Professional fees and disbursements $78,102.60

 

First day of trial

 

Professional fees and disbursements$2,226.00

Total$80,328.60

Less GST$7,302.60

$73,026.00

The most substantial attacks on the estimates of Mr Marshall were in three areas - allowance for 2 counsel, allowance for inspection of documents, and expert witness fees.  I shall deal with each in turn. 

[7] Mr Marshall allowed for senior and junior counsel.  In Mr Ryan’s view junior counsel only would be allowed on taxation.  For the purposes of this application counsel for the applicant was prepared to concede that fees for only one counsel would be allowed, but in his submission it would be senior counsel.  The effect of allowing senior counsel only would be to reduce the applicant’s estimate of costs and disbursements to approximately $180,000.00.

[8] Items 6, 7 and 8 of Mr Marshall’s draft bill were as follows:

 

OutlaysProfessional

(inc GST)Fees

(inc GST)

 

6.  Attending upon mutual inspection

of documents (estimated 5 hours)

and various attendances to arrange

inspection and exchange of copy

documents (estimated 2 ordinary

letters and 2 telephone calls)1,244.00

 

7.  Attending to copy documents

 obtained on disclosure (estimated

1,200 pages)240.00

 

8.Attending to peruse disclosed

documents (estimated 2,000 folios)8,000.00”

[9] The inspection of documents has not yet been attended to, and it is not included in item 1 of the bill (being costs to date).  Accordingly, a fair and reasonable allowance for it should be taken into account in the estimate of the likely costs of preparation for trial.  During argument I expressed some concern at the way item 6 had been formulated.  A new schedule of costs came into effect on 22 April 2005.  Items 8 and 9 in that schedule are as follows:

 

“PERUSING DOCUMENTS

 

Perusing a document – for each 100 words3.00

 

EXAMINING OR COMPARING DOCUMENT

 

Examining a document or comparing documents, if

perusal is unnecessary – 

 

(a)  by a solicitor – for each quarter hour49.00

 

(b)  by an employee – for each quarter hour15.00”

 

The concept of a folio (72 words) no longer has a place in the schedule of costs.  Further, what is likely to be allowed is a fee for examining the documents under rule 9 calculated on a time basis.  The draft bill has been prepared without an appreciation of the distinction between perusing and examining documents which is to be found in rules 8 and 9.  (I mention also that the new schedule of costs contains no reference to “scanning” documents: refer to item 23 in the draft bill of costs.) 

[10] The applicant proposes engaging a quantity surveyor as an expert witness.  His fees are estimated at $72,000.00 (excluding GST).  In the draft bill of costs prepared by Mr Marshall the sum of $68,000.00 plus a conference fee of $220.00 have been claimed.  After the deduction of the GST allowance, the amount estimated for the expert’s fee is $62,018.18.  Mr Ryan is of the view that only 10% of that amount would be allowed. 

[11] Each side has expressed the intention of engaging a quantity surveyor.  Until I raised the question during argument, consideration had apparently not been given to joint appointment of an expert.  When I raised this question, the respective instructing solicitors left the Court room to confer briefly with their principals, and upon their return I formed the impression from what both counsel told me that the solicitors would not be unfavourably disposed to the joint appointment of an expert, but that they would have to discuss the matter with their clients and with counsel having the conduct of the proceeding. (I note that counsel who appeared on this application are not the counsel who drew the pleadings and who apparently have the conduct of the proceeding.)

[12] The expert evidence rules contained in chapter 11 part 5 of the Uniform Civil Procedure Rules have the following purposes:-

 

(a)to declare the duty of an expert witness in relation to the court and the parties; and

 

(b)to ensure that, if practicable and without compromising the interests of justice, expert evidence is given on an issue in a proceeding by a single expert agreed to by the parties or appointed by the court; and

 

(c)to avoid unnecessary costs associated with the parties retaining different experts; and

 

(d)to allow, if necessary to ensure a fair trial of a proceeding, for more than 1 expert to give evidence on an issue in the proceeding.

 

(Rule 423)

[13] By Practice Direction No 2 of 2005 issued on 12 April 2005 the Chief Justice drew the attention of litigants and intending litigants to part 5 of chapter 11.  Paragraphs 2-5 of the Practice Direction provide:-

 

“2.In any proceeding, or intended proceeding, where expert evidence will or may be called, early consideration must be given to the requirements of the Rules, particularly as to the appointment of an expert to be the only expert witness on a particular substantial issue in the proceeding. 

 

3.Costs sanctions may follow where multiple experts are needlessly retained in relation to an issue (r 429D).

 

4.Either before commencement of any such proceeding, or soon afterwards, a party intending to call expert evidence on a substantial issue should raise with all other parties the prospect of their jointly appointing an expert, who would become the only expert to give evidence on that issue (unless the court otherwise ordered) (rr 429G(1), 429H(6)).

 

5.As soon as it is apparent to a party that expert evidence on a substantial issue in a proceeding will be called at the trial or hearing, that party must file an application for directions.  On the hearing of that application, that party must inform the court of steps taken or to be taken to conform with these Rules.”

[14] In my view consideration of the joint appointment of a quantity surveyor should have preceded this application for security for costs.  But for the concession that this is a proper case for security, and but for the direction given by Justice PD McMurdo that an application for security be filed on or before 13 May 2005, I would have seriously considered not making an order for security until the question of expert evidence had been dealt with on a directions hearing or on a review by His Honour.  However, in the circumstances I will order security. 

[15] The question then is in what amount security should be ordered – a matter in relation to which the Court’s discretion is unfettered.  The potential costs saving in the joint appointment of an expert is a relevant factor in considering the amount of the security. 

[16] In all of the circumstances I am going to order security up to and including the first day of trial in the sum of $85,000.00.  I will ask the counsel to try to agree on the precise terms of the order, and will receive submissions on the costs of the application. 

Close

Editorial Notes

  • Published Case Name:

    Iezzi Constructions Pty Ltd (in liq) v C & E Pty Ltd

  • Shortened Case Name:

    Iezzi Constructions Pty Ltd (in liq) v C & E Pty Ltd

  • MNC:

    [2005] QSC 158

  • Court:

    QSC

  • Judge(s):

    Wilson J

  • Date:

    10 Jun 2005

Litigation History

No Litigation History

Appeal Status

No Status