[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
[2]
JUDGMENT
THE COURT: On 25 May 2023, the Court delivered judgment in an application for judicial review of a judgment and orders of the District Court. The Court dismissed the proceedings and ordered that the applicant pay the respondents' costs in this Court. [1] On 7 June 2023, the respondents filed a notice of motion seeking a gross sum costs order in an amount of $55,716.45. The motion was supported by an affidavit of the respondents' solicitor, Sharon Levy, of Bartier Perry.
On 26 June 2023, the respondents filed an amended notice of motion noting that a single fee memorandum for junior counsel had been omitted and seeking payment of an increased amount of $57,320.25. A further affidavit was supplied in support of the amended notice of motion. As the amount of the amendment was $1,620 (plus GST) it may be doubted whether the cost of pursuing the amendment was justifiable.
There is no doubt that the Court has power to specify a gross sum instead of costs to be assessed, pursuant to s 98(4)(c) of the Civil Procedure Act 2005 (NSW). The power to make such an order is not subject to specific constraints. [2] A court may be reluctant to make such an order where, for any of a number of reasons, there may be doubt as to the fairness to one or other party of a summary determination of the quantum of costs. However, where it is practicable and fair to do so and the party entitled to costs requests it, the court should usually do so. There is likely to be a saving of the additional costs of a taxation, and a more expeditious outcome. [3] There are two factors which favour the making of an order in the present case.
First, the Court is required to implement steps to eliminate unnecessary delay: Civil Procedure Act, s 59. The subject matter of the present case is a decision of the District Court on appeal from a review panel, on appeal from a decision of a costs assessor in relation to the costs of earlier proceedings. The applicant, who is liable to pay the respondents' costs in this Court, had thus commenced three proceedings by way of appeal or review in respect of an earlier costs order, where the amount in dispute was less than $13,000. A history of disputatious conduct is a basis for making a gross sum costs order.
Secondly, it is apparent that the costs incurred by the parties in this Court will exceed by many times the amount in dispute. The requirement to maintain costs within a range which is "proportionate to the importance and complexity of the subject matter in dispute", as required by s 60 of the Civil Procedure Act, also militates in favour of a gross sum costs order.
The only factor militating against such an order is the inadequacy of the material provided to the Court on which to base such an order. However, as will be noted shortly, the inadequacy of the evidence is the fault of the applicant for the order (the respondents) and can be addressed so as to minimise any unfairness to the applicant.
In the circumstances, a gross sum costs order should be made.
[3]
A temporal issue
The respondents referred in their application to the power to vary an order once entered, pursuant to the Uniform Civil Procedure Rules 2005 (NSW) (UCPR), r 36.16(3). They noted that the application had been made within 14 days of entry of the orders, as required by r 36.16(3A).
The applicant asserted that the notice of motion was incompetent and should be dismissed with costs because it did not conform to the requirements of r 36.16(3A). That was not because the notice of motion had not been filed within 14 days, but because it did not comply with r 36.16(3) which, it was submitted, did not empower the Court to vary an order or judgment. The reasoning is both factually and legally misconceived. First, the notice of motion was filed within the relevant time and therefore complied with subr (3A). Legally, if it were correct that the application was made to vary the earlier order 2 pursuant to subr (1), rather than subr (3), the failure to refer to the correct subrule would not render the notice of motion "incompetent" nor mean that it should be dismissed. In fact, there is authority that such an order can be varied under subr (3). [4]
Indeed, a doubt has been raised as to whether an application for a gross sum costs order involves a variation of an existing order. It might do so if the Court's order was that one party pay costs "as agreed or assessed", but the order in the present case was not in that form. However, even that possibility has been doubted. In Short v Crawley (No 45) White J, sitting in the Equity Division, and following an expansive review of the case law, stated:
"29 … These differences of expression do not connote any difference in substance. Each of the expressions is correct. The gross sum is paid pursuant to the previous costs order and in respect of the previous costs order and is payable instead of assessed costs. Whilst the original costs order is thereby varied, it is not varied in respect of the matter that was the subject of determination when the order was made. Rule 36.16(3) confers power to vary the previous costs orders by substituting an order for payment of a gross sum instead of a sum determined by an assessment."
White J also relied on the fact that s 98(4)(c) confers an express and separate power to make a gross sum costs order "at any time before costs are referred for assessment". He noted, however, that the rule did not address the timing of an application for such an order. [5]
Again, nothing turns on this issue in circumstances where the notice of motion was filed within 14 days of the entry of the orders. It may however be noted that delay in seeking such an order can weigh against the exercise of the discretionary power. Usually, if a gross sum costs order is sought, that should be made clear either in written submissions or in oral argument, or, if not so done, within the 14-day period allowed by r 36.16(3A). After the expiration of that period, the Court will no longer have ready access to the file and the judges will have assumed that no further application will be made.
[4]
Adequacy of evidence
The Court has a broad understanding of the costs involved in proceedings before it. [6] It is frequently called upon to make orders by way of security for costs. However, it is usual for a party seeking a gross sum costs order to provide evidence of the costs in fact incurred and paid. That evidence may include:
1. a copy of the costs agreement with the clients, or at least a solicitor's affidavit stating that the costs agreement is unconditional or, if conditional, identifying the conditions to which it is subject;
2. copies of the bills and memoranda of fees rendered in the matter; and
3. an indication as to whether the costs have been paid or not.
Sometimes expert evidence from a costs assessor is tendered.
There was no evidence tendered by the respondents as to (a) or (c). All that was tendered in respect of (b) was a set of fee memoranda sent to the client, and fee notes received from counsel, but with the substance of the items and the dates on which the work was done redacted. The difficulty was raised by the applicant in his written submissions, so that the respondents were on notice as to the issue, but did not seek to tender further evidence.
In any event to provide the respondents with an opportunity to tender further information would have opened up an opportunity for further disputation and increased costs for both parties. Given the procedural history, and the fact that only $13,000 was involved in the original dispute, the appropriate course is to determine the matter on the basis of the material presented by the respondents, whose application it is. The Court should determine the amount of the costs to be awarded, erring on the conservative side to avoid unfairness to the applicant.
[5]
Quantification of gross sum
As the applicant observed, two counsel had been briefed to defend the proceedings in this Court, but it was not possible to determine whether there had been duplication of work undertaken. Even more troubling is the fact that a respondent to an application for judicial review, listed with a three-hour estimate (which proved correct) incurred fees in excess of $66,000. The claim was for payment of 90% of counsel's fees (of some $40,000) and 75% of solicitor's fees (of some $26,000).
This was a proceeding initially limited to four grounds, all of which were abandoned by an amended summons filed on 13 February 2023, long before the respondent was required to file written submissions, and replaced with one ground. The evidence was all documentary and was quite limited in scope. There was one directions hearing on the return of the summons on 22 February 2023, at which stage a hearing date was fixed for 15 May 2023.
The more senior of the counsel charged a daily hearing fee of $5,500; second counsel charged at a daily rate of $2,500. For one counsel to spend four days on the case might be hard to justify, but to have two counsel spend a total of some 10 days was patently unjustifiable and was not sought to be justified. The recoverable fees will be limited to those involved in preparing written submissions and appearing at the hearing. The Court can allow an amount of $25,000 for counsel.
So far as the solicitor's fees are concerned, Ms Levy stated that she was the solicitor on the record in the proceedings, and appears to have had the carriage of the matter throughout the brief history of the proceedings. She indicated in her affidavit the charge rates for professional time for six categories of admitted practitioners, but did not say into which she fell. Her years of experience suggest that she was at least a senior lawyer and her time might have been charged at an hourly rate of approximately $400. Without further information, and assessing costs on a party-and-party basis, an allowance of 20 hours (or $8,000) would seem reasonable.
Accordingly, an appropriate gross sum costs order is for an amount of $33,000 (inclusive of GST). There was no amount sought for the costs of the motion.
[6]
Orders
The Court makes the following additional orders:
(3) Order that the applicant pay the respondents a sum of $33,000 for the costs of the proceedings in this Court, in satisfaction of order (2) made on 25 May 2023.
(4) Otherwise dismiss the amended notice of motion filed by the respondents and dated 26 June 2023.
[7]
Endnotes
Amirbeaggi v EB [2023] NSWCA 108.
Hamod v State of New South Wales [2011] NSWCA 375 at [813].
Ahern v Aon Risk Services Australia Ltd (No 2) [2022] NSWCA 39 at [15].
Short v Crawley (No 45) [2013] NSWSC 1541 at [29].
Short v Crawley (No 45) at [12] (noting a submission), [31].
Bobb v Wombat Securities Pty Ltd & Ors (No 2) [2013] NSWSC 863 at [6] (Beech-Jones J).
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Decision last updated: 10 August 2023