APC v Mr B (No 6)

Texts Cited: N/A

Category: Costs

Parties: APC (Plaintiff)
Mr B (Defendant)

Representation: Counsel:
M Robinson SC / J McEnaney (Plaintiff)
Solicitors:
Shine Lawyers (Plaintiff)
Self-represented (Defendant)

File Number(s): 2022/302110

Publication restriction: Nil

JUDGMENT

1. In October 2024 I gave judgment for APC*: APC v Mr B (No* 2*)* [2024] NSWSC 1608. Costs were later dealt with in APC v Mr B (No 3) [2025] NSWSC 142, with Mr B being ordered to pay APC’s costs, as agreed or assessed to 19 July 2024 and thereafter, on an indemnity basis.

2. APC later sought a gross costs order in the sum of $624,214.83. Her May 2025 motion was supported by an affidavit sworn by her solicitor Mr Ingleton. He explained the circumstances in which more time was required to put on evidence and submissions, with the result that further orders fixing a timetable for the filing and service of evidence and submissions were made.

3. On 27 May a further motion was filed, supported by another affidavit of Mr Ingleton, as well as that of the solicitor Ms Mossman, who was employed by DGT Costs Lawyers. It annexed her May 2025 report, which explained her role and experience in assessing costs, the instructions she had received, the material on which her report rested, the applicable statutory scheme, the issues she had considered and the conclusions she had reached. APC’s claim was concerned with professional fees, counsels’ fees and incurred disbursements.

4. APC had been directed to file and serve her submissions by no later than 16 June. She did not comply with this direction, providing her submissions only in July.

5. Mr B had become legally represented and approached on 30 June with a request that the timetable fixed be extended, it having required him to put on his evidence by no later than 2 June and his submissions by no later than 30 June. Later that day his solicitor advised that he no longer wished to put on evidence or submissions.

6. That position was revisited after APC’s submissions were received. But there was no response to my Associate’s enquiry about whether Mr B wished to respond to APC’s submissions.

7. The result was that the gross order APC sought was not opposed.

8. APC’s case was that the gross costs order which she pressed represented a fair and just amount of costs for the main proceedings’ litigation. This was a reference to an ongoing issue lying between the parties about whether Mr B had breached the freezing order earlier made in the proceedings and was in contempt of Court, which is listed for hearing in October 2025.

9. APC also pressed for costs of the motion of $1,626.10 plus GST and $3,000 plus GT for counsels’ fees. The latter reflecting a day for counsel to review evidence and prepare submissions.

10. It is s 98 of the Civil Procedure Act 2005 (NSW) which empowers the Court to make a gross costs order: s 98(4)(c). The exercise of the power to award gross costs must take into account the overriding purpose identified in s 56 of the Civil Procedure Act, the just, quick and cheap resolution of the real issues in the proceedings: Hamod v State of New South Wales [2011] NSWCA 375 at [816]. The principal purpose of a gross costs order being to avoid the expense, delay and aggravation likely to be involved in a contested costs assessment process*: Ahern v Aon Risk Services Australia Ltd (No 2)* [2022] NSWCA 39 at [15].

11. The discretion can be exercised to ensure that the issues between the parties are resolved in such a way that the cost to them is proportionate to the importance and complexity of the subject-matter in dispute: James v Australia and New Zealand Banking Group Ltd [2017] NSWCA 84 at [3]. Such orders providing an opportunity for ongoing litigation about “non-essential issues” to be resolved with as little technicality and expense as reasonably practicable.

12. That there is real utility in exercising the power in this case is apparent, given how it was conducted and that Mr B does not now oppose that course, which will help ensure further unnecessary expense is not incurred by the parties.

13. The power to make such an order is discretionary and so his attitude is pertinent. That helping to establish that it should be exercised, it being available whenever the circumstances warrant its exercise. That depends on the Court being satisfied that it can do so fairly between the parties and having sufficient confidence in arriving at an appropriate sum on the materials available. Typically, it applying a discount, without undertaking a detailed examination of the kind that would be appropriate on taxation or formal costs assessment: Gabrielle v Abood (No 4) [2023] NSWCA 100 at [6].

14. Account must also to be taken of the fact that if assessed on the ordinary basis, the usual outcome of a costs assessment is that the costs recovered represent a proportion in the range of 60% to 85% of the total costs incurred. On a gross costs assessment the result is that the Court should apply an “impressionistic” or “broad brush” approach in applying a discount to reflect that reality: Ahern at [42].

15. It is also appropriate to exercise the discretion to make a gross costs order when it appears that the party who has to pay the costs would not be able to meet the liability of a costs order following assessment: Harrison v Schipp (2002) 54 NSWLR 738; [2002] NSWCA 213 at [21], [28]-[30].

16. That this was such a case was not suggested. But that does not preclude the exercise of the discretion, Mr B not opposing its exercise.

17. What is also necessary is that the Court be satisfied of the appropriateness of the gross costs order that it makes. That depending on the evidence relied on, the Court making such orders even in complex cases, if satisfied that it can do so fairly between the parties. It taking a broad brush approach to the quantification of the costs: Harrison at [22].

18. APC ‘s case as to the appropriateness of the order she sought rested on the subject matter of the proceedings, in which Mr B had advanced his case by bare denials, having pursued his participation in a perfunctory, minimal and obstructive way, which had resulted in a longer, more complicated and costly process, than would otherwise have been necessary.

19. She also contended that his approach had necessitated the successful pursuit of freezing orders and the associated ongoing litigation in respect of their breach. That would support the conclusion that the Court could have no confidence that Mr B would engage appropriately in a costs assessment process. Refusal of the application would permit his engagement in satellite litigation which was to be discouraged: eInduct Systems Pty Ltd v 3D Safety Services Pty Ltd (No 2) [2015] NSWCA 422 at [4].

20. APC also contended that costs would be approached in the way adopted in Hancock v Rinehart (Lump sum costs) [2015] NSWSC 1640 at [56]-[58], where Brereton J explained that:

“56 The first defendant submits that there should be a further global percentage reduction of 15%, for two main reasons: first, because on assessment, even on the indemnity basis, a successful party invariably recovers something less than its actual costs, typically 15% where the assessment is on an indemnity basis; and secondly, the necessarily broad-brush approach of the court to assessment on a lump sum basis – involving some risk that the sum includes costs that would not be recovered on assessment – coupled with the savings to the costs creditor in time and costs through avoiding a detailed assessment, and the loss to the costs debtor of the opportunity to scrutinise and object to a detailed bill, has resulted in a practice of applying a discount on lump sum assessments.

57 While it is undoubtedly the usual practice of the court when making a lump sum costs order to apply a discount for the reasons mentioned, that does not mean that the Court must apply a percentage discount to the sum sought by the successful party, and the Court "must be astute not to cause an injustice to the successful party" by applying "an arbitrary 'fail safe' discount on the costs estimate submitted to the court". Thus if the court can be confident that there is little risk that the sum includes costs that might be disallowed on assessment, the case for a discount is seriously undermined.

58 Where a gross sum is assessed on an indemnity basis, and there is no evidence of unreasonableness, it may be inappropriate to apply any discount, although one may nevertheless be appropriate if there is evidence that the successful party "errs on the side of excessiveness [as in excessive use of legal services]".” (footnotes omitted)

21. In her report Ms Mossman explained that she had approached the assessment in light of the requirements of s 172 of the Legal Profession Uniform Law Application Act 2014 (NSW) which requires that charged legal costs be no more than was fair and reasonable in the circumstances and proportionate and reasonable in amount. As well as the criteria which she was obliged to have regard to: s 172(2) of Legal Profession Uniform Law 2014 (NSW). She also explained how she arrived at her conclusions, having regard to the work done and the reasons for performing it.

22. She also explained that, on an assessment, fees charged were typically reduced by between 5% and 15%, due to a combination of relevant factors. As well as how counsels’ fees are assessed, with her experience being that they are typically reduced at a lower rate of between 5% and 10%.

23. Ms Mossman also explained how she had separately considered the costs Mr B had been ordered to pay on the ordinary basis and those ordered to be borne on an indemnity basis and how the costs had been claimed in accordance with the parties’ 2021 agreement, which had provided for an uplift fee of 25%, which had not been claimed.

24. She explained the hourly rates charged as well as those which in her experience were typically charged in complex civil matters and the guidance to be found in the Guidelines issued by the New South Wales Costs Assessment Rules Committee in 2016, which were not updated until 2023. She noted that rates claimed were well above those fixed by the guidelines, with the result that she had applied a 15% reduction to account for hourly rate deductions she expected would be made in an assessment of ordinary costs.

25. That had not been applied to the indemnity costs which were generally allowed as incurred.

26. Ms Mossman also split the work undertaken into two periods. The majority of the work having been undertaken by the solicitors with carriage of the matter, assisted by paralegals and law clerks, as well as some assistance and supervision by more senior lawyers.

27. She concluded that the breakdown of the work appeared reasonable given the difficulties of conducting the proceedings against an unrepresented litigant, although there were potentially some aspects of the work which might have been considered unreasonable on assessment, or which artificially increased costs because of duplication or use of minimum six minute time units, as well as some excessive time travel costs, with the result that there had to be some reduction for incurred costs.

28. Overall however, she concluded that the costs were not disproportionate or unreasonable or out of the ordinary for this type of proceeding and that the work was undertaken by suitably qualified and experienced solicitors assisted by junior staff, guided by experienced counsel in highly contested proceedings. The proceedings raised some unusual difficulties, considerable interlocutory issues and were of significant importance to the parties.

29. Counsels’ fees were within the relevant range, but there was some work performed which might be considered duplicate and unnecessary. A 25% uplift charged by Mr Robinson SC would not be allowed on an assessment of ordinary or indemnity costs. On assessment it was likely that some reductions would be made.

30. Further, that some disbursements would not be allowed on assessment, with the result that there had to be a 50% deduction for them.

31. By tables, Ms Mossman explained the reductions which she would thus apply to professional fees, counsels’ fees and disbursements, both for ordinary and indemnity costs and her conclusion:

113. As such, I consider that the amount likely to be allowed on assessment of ordered costs and as such a reasonable amount for a gross sum costs order in this matter for the costs incurred of APC to be as follows:

Ordinary Costs Period

| Category | Amount Allowed $ | | Professional fees | $234,823.03 | | Counsels’ fees | $53,251.63 | | Other disbursements | $66,057.90 | | Total | $354,132.56 |

Indemnity Costs Period

| Category | Amount Allowed $ | | Professional fees | $124,890.38 | | Counsels’ fees | $123,158.00 | | Other disbursements | $22,033.89 | | Total | $270,082.27 |

32. Having considered all that I have explained, I have concluded that the orders APC pressed should be made, they not being opposed and the evidence establishing a fair basis for the amounts pressed. It being appropriate, given the regard had in Ms Mossman’s calculations to the applicable statutory requirements and principles, including the need to apply an appropriate discount in arriving at a gross sum.

33. I am satisfied that this accords with what justice requires in all of the circumstances. Any costs assessment likely not only to be costly, but also to involve further unnecessary expense, delay and aggravation, in circumstances where that is not warranted, Mr B having made a forensic decision while legally represented not to challenge the evidence APC relied on, or the orders she pursued.

34. As to the costs of the motions, I have concluded, adopting a similar approach to that of Ms Mossman, that a gross costs order in respect of them should be made, both solicitors’ and counsels’ fees also being discounted in the way that Ms Mossman concluded. That is 10% discount for solicitors’ fees and 5% for counsels’ fees.

35. The costs APC incurred on the motion were $1,626.10 plus GST for solicitors’ costs and $3,000 plus GT for counsels’ fees, that totalling $4,626.10 plus GST. After deductions, those costs are $1,463.49 for solicitors’ costs and $2,850 for counsels’ fees, totalling $4,744.84 after the addition of GST.

Orders

36. For these reasons I order that Mr B must pay APC gross costs totalling:

37. $624,214.83 for the substantive hearing; and

38. $4,744.84 inclusive of GST for the motion.

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