Batterham v Goldberg

Supreme Court of NSW|2023-07-31|Before: Lonergan J

JUDGMENT

On 22 June 2023, I ordered judgment in favour of the defendants, dismissing the plaintiff's proceedings under r 13.4 of the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") on the basis that the proceedings were frivolous and vexatious, disclose no reasonable cause of action, and were an abuse of process: Batterham v Goldberg [2023] NSWSC 721 (Principal Judgment).
A summary of the background facts and my rationale for the dismissal are set out at [3] to [10] of the Principal Judgment: "[3] The plaintiff is an aggrieved litigant, apparently unable to move past the unfavourable outcomes he has sustained in proceedings in the Industrial Relations Commission of NSW, this Court, the Federal Court, the High Court of Australia and the Federal Circuit Court. [4] The plaintiff, in his Statement of Claim filed 19 January 2023 (and Amended Statement of Claim filed 22 February 2023) alleges that he was wrongly made bankrupt some years ago because of a judgment wrongly entered in the Local Court of NSW for unpaid legal costs claimed by Turner Freeman, to which, the plaintiff has asserted on numerous occasions, they were not entitled. [5] The plaintiff pleads a kind of "flow on" effect, that because he was wrongly made bankrupt, he was not able to pursue his rightful entitlement to a significant sum of money in excess of $2 million being: "the value of the net loss from a joint venture between Mr Nauer and the plaintiff incurred by the plaintiff in November 2017 when the wrongful bankruptcy of the plaintiff by the defendants caused proceedings against Mr Nauer to be dismissed for want of due dispatch." [6] The plaintiff also claims "exemplary damages" for "distress", a claim which I interpolate has the dual problem of "distress" not forming a valid basis for a claim for exemplary damages, and the complete absence of the necessary particulars of such a claim. [7] Apart from the fact that the proceedings disclose no valid cause of action, they duplicate the claims made by him in proceedings he commenced in the Federal Court, complaining of the same matters and seeking the same damages from Turner Freeman, as well as Clayton Utz and a separately named solicitor, Mr Rush. [8] The defendants in the Federal Court proceedings filed summary dismissal applications in September 2021. On 7 April 2022 Halley J heard and determined those applications: Batterham v Clayton Utz Partnership [2022] FCA 360 (the "Halley Judgment"). In a comprehensive and cogently reasoned judgment, his Honour dismissed the proceedings, concluding that: "[10] I am satisfied that the claims pleaded by Mr Batterham in the AOA and the ASOC disclose no reasonable cause of action, fail to articulate any coherent basis on which the loss and damage alleged can be attributed to the respondents, can fairly be characterised as an abuse of process, are time barred, precluded by the doctrines of res judicata and issue estoppel and in the case of Clayton Utz are also precluded, at least in part, by a deed of release. Further, I am satisfied that to the extent that any cause of action might have been available to Mr Batterham in respect of the alleged loss of future income as a promoter of private equity opportunities it would have vested in his trustee in bankruptcy on the making of the sequestration order against him." [9] An application for leave to appeal Halley J's decision was refused by Stewart J on 20 November 2022: Batterham v Clayton Utz Partnership [2022] FCA 1435. [10] As explained in the written and oral submissions by counsel for the defendants in this Court, the proceedings in this Court are nothing more than an attempt to relitigate the same matters already raised and determined in the proceedings commenced in the Federal Court and disposed of by Halley J."

Orders sought and evidence

In addition to dismissal of the proceedings, the defendants sought indemnity costs, a gross sum costs order as well as an order in the following form: (5) An order pursuant to the inherent jurisdiction of the Court restraining the plaintiff from commencing or continuing any proceedings in any court or tribunal (other than by a claim in the nature of a defence, cross-claim or cross-summons) against any or all of: a. the defendants; b. the current partners, formers partners from time to time of the partnership with the business name Turner Freeman and trading as Turner Freeman Solicitors, which arise from the same or similar facts as alleged in the ASOC without leave of a Judge of the Supreme Court of New South Wales unless and until the plaintiff has paid in full the costs order in Prayer 4 above.
That part of the notice of motion was adjourned to 31 July 2023 to provide time for the parties to file and serve affidavit evidence and written submissions addressing these additional orders.
The defendants read and relied upon an affidavit of Baron David Alder, solicitor, sworn 6 July 2023. Succinct written submissions were also provided by counsel for the defendants. This material was served by email upon Mr Batterham who replied on 7 July 2023 as follows: "I am finalising my leave to appeal application shortly and will not be filing any submissions in response to your costs submissions. Cheers. Peter."
The plaintiff was required to file and serve an outline of submissions and evidence in response by 20 July 2023. The plaintiff did not file any evidence, nor did he serve an outline of submissions. Instead, on Saturday 29 July 2023 at 2:17pm the plaintiff forwarded an email to my Associate stating: "I have filed an appeal and accordingly will not be attending the hearing on Monday concerning costs", and attached a "Summary of Argument" document (presumably for "the appeal") that largely repeated the same arguments made in June 2023 in this Court and in 2022 in the Federal Court before Halley J and Stewart J.
To ensure there was no misunderstanding that the balance of the notice of motion would proceed on 31 July 2023, an email was forwarded by my Associate on 29 July 2023 at 4:28pm stating: "Dear Mr Batterham, Her Honour has asked me to write to you to confirm that any appeal you have filed in respect of her Honour's judgment in June 2023 does not operate as a stay or vacation of the hearing date listed on 31 July to deal with the balance of the orders sought in the notice of motion. Subject to submissions by the defendant, her Honour may proceed to deal with the balance of the orders sought in the notice of motion and will do so in your absence if you do not attend. If you wish to raise any argument as to why her Honour should not proceed to hear the remaining parts of the notice of motion, you will need to attend court at 10:00am on Monday and articulate any such argument on the record. Please acknowledge receipt of this email."
At 6:15pm this email response was provided by Mr Batterham: "Thank you Dianne It is up to her Honour to deal with cost orders on Monday as she thinks fit to deny me justice. It would be a waste of my time to appear as nothing I say will have any impact of her Honour's determination. The same as at the hearing on the motion to dismiss. We have an appeal in the Supreme Court and if unsuccessful will seek to appeal in the High Court. We are seeking that the judiciary clarify that legal practitioners are not immune from the law when claiming that they are owed monies from a client when there is no contractual basis for such a claim. Best regards Peter Batterham."
The defendants' solicitor forwarded an email to the plaintiff on 30 July 2023 at 1:34pm stating: "Dear Mr Batterham Our clients will be pressing their application. We strongly suggest that you appear. Regards Baron Alder"
It was clear from the correspondence set out at [7], [8] and [9] that the plaintiff made a deliberate decision not to attend nor cooperate with the Court's orders regarding submissions and evidence and so the remaining issues were heard (and determined) in his absence.

Costs orders

There are three aspects to consider for the defendants' application for costs: whether the Court should award indemnity costs, whether the Court should make a gross sum costs order, and if so, in what sum.

(i) General power to award costs

Section 98 of the Civil Procedure Act 2005 (NSW) provides the Court's power to award costs: Courts power as to costs (1) Subject to rules of court and to this or any other Act - (a) costs are in the discretion of the court, and (b) the court has full power to determine by whom, to whom and to what extent costs are to be paid, and (c) the court may order that costs are to be awarded on the ordinary basis or on an indemnity basis. (2) Subject to rules of court and to this or any other Act, a party to proceedings may not recover costs from any other party otherwise than pursuant to an order of the court. (3) An order as to costs may be made by the court at any stage of the proceedings or after the conclusion of the proceedings. (4) In particular, at any time before costs are referred for assessment, the court may make an order to the effect that the party to whom costs are to be paid is to be entitled to - (a) costs up to, or from, a specified stage of the proceedings, or (b) a specified proportion of the assessed costs, or (c) a specified gross sum instead of assessed costs, or (d) such proportion of the assessed costs as does not exceed a specified amount. ….
The court has full power to determine by whom, to whom and to what extent costs are to be paid. This discretion is subject to the qualification that it must be exercised judicially in accordance with established principle and factors directly connected with the litigation: Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11 at [65] per McHugh J. Among the fetters on the discretion to award costs are the rules of the court contained in Part 42 of the UCPR. The usual rule is that costs follow the event, unless it appears to the court that some other order should be made: UCPR, r 42.1.
The defendants' application for dismissal was wholly successful and so costs should follow the event. I have already ordered that the plaintiff must pay the defendants' costs. The question now for consideration is what form the costs order should take.

(ii) Indemnity Costs

Indemnity costs can be ordered where a party has maintained proceedings that they should have known had no real prospects of success: Fountain Selected Meat (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 at 401; [1988] FCA 364. Mr Batterham should have known these proceedings had no prospects of success and were an abuse of process. Halley J's judgment was clear and comprehensive, as was the judgment of Stewart J refusing to allow an appeal from Halley J's decision.
Attempting to relitigate the same issues in this Court, with a slight adjustment as to the names of the defendant(s), shows deliberate disregard for the judgments given in the Federal Court. On 15 February 2023 Mr Adler wrote to the plaintiff accurately explaining why the matters pleaded in the statement of claim could not proceed, yet the plaintiff persisted
I accept the submissions of counsel for the defendants that the costs should be assessed on an indemnity basis.

(iii) Gross sum costs

The Court of Appeal in Bechara (t/as Bechara and Co) v Bates [2016] NSWCA 294 summarised the relevant principles applicable to the making of a gross sum costs order: "[12] The power to award a lump-sum should only be exercised when the Court considers that it can do so fairly between the parties and where an appropriate sum can be determined from the available materials: Harrison v Schipp (2002) 54 NSWLR 738; [2002] NSWCA 213 at 742-723 [21]-[22]; Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119 at 123. [13] The power may also be exercised where a party's conduct has unnecessarily contributed to the costs of the proceedings, especially where the costs incurred have been disproportionate to the result of the proceedings: Hamod v New South Wales [2011] NSWCA 375 at [818] per Beazley JA (Giles and Whealy JJA agreeing). [14] A 'broad brush' approach is appropriate. To require the same or similar level of detail as in a formal costs assessment would defeat the purpose of the lump sum order: Auspine Ltd v Australian Newsprint Mills Ltd (1999) 93 FCR 1; [1999] FCA 673 at 5 [16]; Penson v Titan National Pty Ltd (No 3) [2015] NSWCA 121 at [7] [15] The courts have typically applied a discount in assessing costs on a gross sum basis: Hamod v New South Wales at [814]. …. [18] The Court is satisfied that the total costs of this litigation will become even more disproportionate if the costs are referred for assessment and a lump-sum costs order is not made. The reasoning in Hamod v New South Wales at [816]-[817] is apposite."
Also relevant given the relatively confined nature of the dismissal application are the observations by Beech-Jones J in Bobb v Wombat Securities Pty Ltd & Ors (No 2) [2013] NSWSC 863: "[6] Thus, in addition to complex cases, another common category in which lump costs will be awarded is the very short and relatively straightforward case. In such cases it can be expected that costs will be modest so that the pursuit of the costs assessment process might lead to unnecessary expense. This is particularly so where there is doubt about the payer's financial capacity. Further, in such cases the court will often be in a good position to make a reasonably well-informed assessment as to how much of the costs were reasonably incurred, because in a straightforward case it may often be apparent what out of court work was necessary for the case as presented."
The affidavit of Mr Baron sworn 6 July 2023 provides evidence of the costs and disbursements incurred and billed in the sum of $31,997.03 excluding GST. Filing the notice of motion for dismissal was appropriate and timely. The relevant issues were prepared and run economically. Counsel's fees were modest. The matter was principally prepared by Mr Crockett, an appropriately experienced solicitor, with some supervision and input by the partner, Mr Alder. The charge-out rate of those experienced solicitors was appropriate, and frankly very moderate.
The affidavit material clearly demonstrates the work done and allows me to fairly conclude what was appropriate work and costs associated with each step. I have taken a broad brush approach and have applied an appropriately small discount of 10%. To require the defendants to have their bill assessed would be to add unwarranted and disproportionate further expense. I consider the prospect of a successful negotiation of costs with Mr Batterham to be nil. This was a short and straightforward case, conducted with expertise and competence by the solicitors and counsel for the defendants in a way that avoided undue expense and delay. It is apparent from the affidavit of Mr Alder what was necessary to be done, and that was done; no more and no less.
I accept the submission of counsel for the defendants that given my conclusion regarding indemnity costs, 90% of the costs claimed and billed should be assessed as a gross sum, which I have rounded down to $29,000.00.

Restraint order pending payment of costs

The defendants seek an order that the plaintiff be restrained from commencing further proceedings concerning the same subject matter without leave of the Court, or unless and until full payment of the costs ordered.
Counsel for the defendants referred to decisions of this Court in which orders have been made restraining a litigant from commencing or continuing proceedings in respect of the same or similar facts without paying outstanding costs orders such as: K Sheridan v Colin Biggers & Paisley [2019] NSWSC 621, ("Sheridan") in which Black J referred to Webster v Super Smart Strategies Pty Ltd [2017] NSWSC 531 at [61], Kostov v Nationwide News Pty Ltd (No 1) [2018] NSWSC 1822 per Davies J, Davy v Van Gorp [2022] NSWSC 466 per Peden J and Golden v Anderson (No 2) [2023] NSWSC 339 per Cavanagh J.
In Sheridan at [31], Black J was satisfied that there was a "substantial risk" that the litigant would commence further proceedings against the applicants in that case in respect of the same or similar facts without first paying outstanding costs orders. That conclusion was reached in part because the litigant "does not necessarily recognise that he is bound by Australian law or by orders of this Court".
Counsel for the defendants submitted that the Court's power to order such a restraint is in this case informed by the following matters: 1. The underlying subject-matter of the plaintiff's complaint involves conduct occurring many years ago, which has already been the subject of consideration and determination and the plaintiff has now been found to have commenced two recent sets of proceedings against the defendants with no prospects of success. 2. The plaintiff has previously been found to have been a vexatious litigant by this Court: see Nauer v Batterham [2020] NSWSC 240 at [34] per Hammerschlag J, although not in respect of this particular proceeding against the present defendants. 3. The plaintiff's approach to these proceedings was to file and serve voluminous materials which were not directed to any issue for determination but which instead sought to re-ventilate his underlying dispute against the defendants. 4. After orders were proposed on 22 June 2023, prior to receiving reasons for judgment, the plaintiff asserted orally on the Court record that he would appeal to the High Court. 5. The plaintiff asserted in his correspondence that "there are two legal issues in the proceedings that may be needed to be settled by the High Court".
Counsel for the defendants submitted that the Court should infer that the plaintiff is likely to commence further proceedings against the defendants in respect of the same subject matter in the future.
This is an inference I can and do draw. The plaintiff seems intent on continuing to bring proceedings to agitate the same subject matter. He should be restrained from doing so unless and until he has paid the costs he has unreasonably caused the defendants to incur in this case.

Orders

I make the following orders: 1. The costs order made on 22 June 2023 is varied as follows: 2. The plaintiff is to pay the defendants' costs of the proceedings on an indemnity basis fixed in the specified gross sum of $29,000.00. 3. The plaintiff is restrained from commencing in any court or tribunal, any proceedings against any of the defendants, or the current partners, former partners from time to time of the partnership with the business name "Turner Freeman" and trading as Turner Freeman Solicitors, (other than by a claim in the nature of a defence, cross-claim, or cross-summons), which arise from the same or similar facts as those alleged in these proceedings, without the leave of a Justice of the Supreme Court of New South Wales, and unless and until the plaintiff has paid the costs ordered in Order 1 above.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 21 November 2023

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