plaintiff. Order pursuant to s 98(4)(c) Civil Procedure Act 2005 (NSW) that the plaintiff is to be entitled to a specified gross sum of $103,280 including GST in respect of his costs of these proceedings.
Key principles
A court may, under s 98(4)(c) of the Civil Procedure Act 2005 (NSW), order that a party be entitled to a specified gross sum instead of assessed costs where the circumstances...
When fixing a gross sum the court must act judicially, be satisfied that the approach to estimate costs is logical, fair and reasonable, and have a sufficient evidentiary basis...
In fixing a gross sum the court may make an impressionistic discount of actual costs to reflect contingencies and to approximate what would be recoverable on a party-and-party...
Where a prior costs order was not on an indemnity basis, it is appropriate to discount the actual solicitor and counsel fees when estimating recoverable party-and-party costs,...
Issues before the court
Whether the Court should exercise its discretion under s 98(4)(c) Civil Procedure Act 2005 (NSW) to award a specified gross sum instead of assessed...
Plain English Summary
The plaintiff applied for a lump-sum costs order under s 98(4)(c) because the defendants failed to comply with and have not engaged with enforcement of an earlier judgment. The plaintiff provided invoices totalling about $120,000. The Court accepted the costs were reasonable but, because the earlier costs order was not indemnity, discounted solicitors' fees by 25% and counsel's fees by 10% to approximate what would be recoverable on a party-and-party assessment, then ordered a specified gross sum of $103,280 inclusive of GST.
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Deep Dive
1,699 words · generated 06/09/2026
What happened
This judgment is an interlocutory costs decision by Rees J in the Supreme Court of New South Wales concerning a plaintiff's application for a specified gross sum costs order under s 98(4)(c) of the Civil Procedure Act 2005 (NSW). The background is that, on 5 September 2019, the Court found oppressive conduct by the second defendant and ordered him to buy the plaintiff's shares and for the defendants to pay the plaintiff's director's loan (see In the matter of Mosman & Co Pty Limited [2019] NSWSC 1155, referred to at [2] of the present judgment). The defendants did not comply with those orders; judgments were entered and the plaintiff sought to enforce the judgment, including by garnishee orders ([2]).
If a gross sum is appropriate, what amount should be fixed?
Cited legislation
1 cited instrument linked from this judgment.
The plaintiff produced sworn affidavit material and exhibits of invoices from solicitors ($70,814.70), counsel ($42,900.00), half of a valuer’s fee ($1,435.50), court listing fee ($2,241.00) and other disbursements ($2,512.60), totalling $119,903.80 (including GST). The plaintiff also incurred further enforcement costs of $6,802.69 ([3] and following). The plaintiff applied for a lump-sum costs order to avoid the time and expense of taxation and because the defendants had not engaged with compliance or enforcement.
Rees J accepted that the solicitors' invoices, counsel rates and expert fee were reasonable. However, because the prior costs order (from September 2019) was not an indemnity costs order, the Court discounted the solicitors' fees by 25% and counsel's fees by 10% to approximate the amount recoverable on a party-and-party assessment, keeping disbursements in full. That produced a specified gross sum of $103,280 inclusive of GST, which the Court ordered under s 98(4)(c).
Why the court decided this way
The decision follows established principles about the use of s 98(4)(c) to award gross sum (lump-sum) costs. Rees J summarised and relied on authorities explaining (i) that the power is not confined and may be exercised whenever circumstances warrant; (ii) it is suitable where assessment would be protracted and expensive or where the party liable to pay is unlikely to meet a taxed assessment; and (iii) when fixing a gross sum the Court must be confident the approach is logical, fair and reasonable given the available materials.
Key judicial guideposts cited in the judgment include:
Giles JA in Harrison v Schipp (2002) (quoted at [Whether appropriate...]) for the proposition that s 98(4) is not confined and may be used where assessment would be protracted and expensive.
Dunstan v HREOC and other Federal Court authorities for the relevance of the paying party's financial capacity to meet a taxed assessment ([Whether appropriate...]).
Idoport v NAB [2007] NSWSC 23, where Einstein J summarised the principles for fixing a gross sum, including the touchstone that the approach be logical, fair and reasonable and that the gross sum be fixed broadly on the materials before the Court ([Fixing a sum] citing Idoport [9]).
Beach Petroleum (Von Doussa J) and Leary v Leary for the requirement of judicial exercise and adequate opportunity to make submissions.
Baychek v Baychek [2010] NSWSC 987 (Ball J) for the point that a gross sum must bear a reasonable relationship to actual costs and recoverable costs.
Applying those principles to the facts before it, Rees J emphasised two factual features supporting a lump-sum order: the defendants' non-response and non-compliance with existing orders (making assessment likely pointless and wasteful), and uncertainty about the defendants' ability to pay if a taxed assessment were obtained. The evidentiary basis (invoices and bills) showed fees incurred and their reasonableness; but because the earlier costs order was not indemnity, the Court judged it appropriate to discount to approximate party-and-party recoverable amounts. The method and numerical discounts used (25% solicitors, 10% counsel) were applied to reflect that distinction.
Before and after state of the law
Before: The authorities cited (Beach Petroleum; Leary; Hadid; Idoport; Harrison; Hamod; Baychek (2010)) already established the governing framework: the Court may order a gross sum where assessment would be expensive, protracted or futile; when doing so it must act judicially and ensure its approach is logical, fair and reasonable, and may apply an impressionistic discount relative to actual incurred costs to reflect what would be recoverable on a standard assessment.
After: This judgment applies those principles to an enforcement context where defendants have ignored orders and not engaged in enforcement processes. It reinforces two practical points:
Non-participation and likely inability to satisfy an assessed costs liability are strong factual grounds supporting a s 98(4)(c) order to avoid pointless taxation.
When the underlying costs entitlement is not indemnity, the appropriate methodology is to discount actual fees (with disbursements left intact) to approximate party-and-party recoverable amounts; the Court will quantify the discounts (here, 25% and 10%) and fix a single gross sum.
This decision therefore sits comfortably within the pre-existing principles and provides a concrete example of discount percentages applied by the Court in a case with a similar factual posture.
Key passages with plain-English translation
"This is an application by the plaintiff for a gross sum costs order pursuant to section 98(4)(c) of the Civil Procedure Act 2005 (NSW)." ([1])
Plain English: The plaintiff asked the Court to set a single lump sum for costs instead of making those costs the subject of a detailed assessment.
"As I understand it, the defendants have not responded to the orders made thus far. This favours the award of a lump sum costs order thereby reducing wasted costs on any unnecessary costs assessment."
Plain English: Because the defendants have not engaged or complied, making them go through a detailed costs assessment would likely waste time and money, so a lump-sum order is preferable.
"The solicitor's invoices total $70,814.70. Counsel's hourly rate is reasonable and the total fees are not disproportionate to the hearing... However, the costs order made in September 2019 was not an indemnity costs order. Thus, I will discount the solicitors and counsel's fees to estimate what they would recover on an assessment on a party and party basis."
Plain English: The bills are accepted as reasonable, but because the plaintiff does not have an indemnity costs order (which would allow recovery of all costs), the Court will reduce those bills to what would likely be recoverable on normal party-and-party rules.
"I have discounted the solicitor's fees by 25% and counsel's fees by 10%, leaving disbursements in full."
Plain English: The judge applied a 25% cut to the solicitor's invoices and a 10% cut to counsel's fees to reach the lump sum; the out-of-pocket payments (disbursements) were kept unchanged.
"Order ... that the plaintiff is to be entitled to a specified gross sum in the amount of $103,280 including GST..."
Plain English: The court formally ordered the plaintiff to be awarded $103,280 in costs (GST included) as a single lump-sum payment.
What fact patterns trigger this precedent
This decision is most directly instructive where:
A successful party has incurred substantial costs and the unsuccessful party has failed to comply with or respond to court orders, making enforcement necessary and taxation likely to be unproductive or wasteful;
There is evidence (invoices, counsel fees, expert fees, court fees) showing the costs actually incurred and their reasonableness;
The costs entitlement is not on an indemnity basis, requiring the Court to estimate what is recoverable on a party-and-party basis and thus to apply an impressionistic discount to the bills;
There is reason to believe that a taxed assessment will be protracted or that the paying party lacks either capacity or will to pay any taxed amount.
In short, non-compliance with orders, non-participation in enforcement and good evidentiary material supporting the amounts claimed are the factual triggers for this style of order.
How later courts have treated it
The judgment itself cites and applies pre-existing authorities on the subject (Beach Petroleum, Idoport, Harrison, Hamod, Baychek (2010), Dunstan, Hadid). Rees J treated those authorities as setting the correct analytical framework and followed their guidance. The present judgment functions as an application of that framework rather than a change in law. Practitioners and later courts will treat this decision as an example of the exercise of s 98(4)(c) in an enforcement context and of the practical approach to discounting actual bills where there is no indemnity order. The judgment expressly relies on earlier precedents for both the test for when to award a gross sum and the method for estimating a fair gross sum (see the references to Idoport [9], Beach Petroleum, Hamod [793], [816], [820], and Baychek [11]).
Still-open questions
Quantification method: The judgment applied a 25% reduction to solicitor fees and 10% to counsel fees. While these figures were explained by reference to the absence of an indemnity order, the judgment does not set a formulaic method or explain in detail why exactly those percentages were chosen rather than other discount rates. This leaves scope for variation in future cases and for argument about appropriate discount percentages in different factual matrices.
Enforcement practicality: The judgment cites the defendant's likely inability or unwillingness to satisfy a taxed assessment as a factual justification. The court did not, on the present material, conduct or require detailed probing of the defendants' assets or means. A question remains about what level of evidence of impecuniosity or non-cooperation is required before taxation should be avoided.
Treatment of additional enforcement costs: The plaintiff had incurred further enforcement costs ($6,802.69). The judgment reflects that additional costs were incurred, but the order does not itemise how those further enforcement costs were treated within the specified gross sum. Future litigants may seek more explicit treatment of enforcement-specific costs in the gross sum computation.
This judgment is, however, a straightforward application of settled principles: where assessment would be wasteful or futile, and the materials support a reasonable estimate of recoverable costs, a court may fix a gross sum and apply an impressionistic discount to actual bills to approximate party-and-party recoverable amounts.
This is general legal information, not legal advice. I can make mistakes. Before you act on, rely on, or use any part of this analysis or any draft, get a qualified Australian lawyer to check it.
Judgment (6 paragraphs)
[1]
Judgment
This is an application by the plaintiff for a gross sum costs order pursuant to section 98(4)(c) of the Civil Procedure Act 2005 (NSW).
On 5 September 2019, I found that the second defendant had engaged in oppressive conduct and ordered the second defendant to purchase the plaintiff's shares in the first defendant company for $69,000 and for the defendants to pay the plaintiff's directors loan of $45,120: In the matter of Mosman & Co Pty Limited [2019] NSWSC 1155. The defendants did not comply with these orders and judgments were entered against defendants in specific sums. The plaintiff has sought to enforce the judgment and orders through garnishee orders.
In support of the application for a gross sum costs order, the plaintiff's solicitor, Kerry Sidaway, has sworn an affidavit and exhibited the tax invoices rendered by solicitors, counsel and the joint expert together with invoices rendered for court filing fees, hearing fees and service fees as follows (including GST):
Solicitor's costs $70,814.70
Counsel's fees $42,900.00
Half share of valuer's fees $1,435.50
Court listing fee $2,241.00
Disbursements $2,512.60
Total $119,903.80
[2]
In addition, the plaintiff has incurred additional costs and disbursements in the sum of $6,802.69 in his efforts to enforce the orders made.
The plaintiff submitted that it was just and fair that the Court make a specified gross sum order, given the lack of any adherence to the Court's orders by the defendants, or any received further communication by them. It was further submitted that the plaintiff's costs have been accurately calculated and do not appear to have been inflated or unreasonably incurred, so that no injustice is caused to the defendants.
[3]
Whether appropriate to make lump sum costs order
Section 98(4)(c) of the Civil Procedure Act provides:
Courts powers as to costs
(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 -
…
(c) a specified gross sum instead of assessed costs …
As Giles JA noted in Harrison v Schipp (2002) 54 NSWLR 738; [2002] NSWCA 213 at [21]:
The power … of [section 98(4)] is not confined, and may be exercised whenever the circumstances warrant its exercise. It may appropriately be exercised where the assessment of costs would be protracted and expensive, and in particular if it appears that the party obliged to pay the costs would not be able to meet a liability of the order likely to result from the assessment …
It is a relevant consideration "where the financial capacity of the party liable to pay costs is such that the additional cost of taxation will impose a significant burden on the party in whose favour costs are ordered without real prospects of recovering those costs": Dunstan v Human Rights and Equal Opportunity Commission (No 3) [2006] FCA 916 at [24], citing Hadid v Lenfest Communications Inc [2000] FCA 628; Sparnon v Apand Pty Ltd [1998] FCA 164; Sony Entertainment (Australia) Ltd v Smith (2005) 215 ALR 788; [2005] FCA 228. That may be a relevant factor in this case, as Kenny J observed in Bitek Pty Ltd v iConnect Pty Ltd (2012) 290 ALR 288; [2012] FCA 506 at [17]:
In the present case, the respondents have wasted the applicant's resources and time by their ongoing refusal to respond to the applicant's communications, the institution of this proceeding, and court orders. Moreover, the respondents' conduct, as evidenced by the affidavits sworn by the applicant's solicitor, Mr Tye, indicates that they are unlikely to co-operate in any further court processes and meet any liability for costs in an efficient and appropriate way. There is evidence, as in a further affidavit of Mr Tye sworn on 30 March 2012, that the respondents' failure to progress the litigation or to comply with court orders is on-going, notwithstanding the service of these orders and the applicant's continued attempts to communicate with the respondents. … In all the circumstances, in order to avoid a further waste of time and money that the applicant may not be able to recoup readily from the respondents or at all, I consider it appropriate to make a lump sum costs order.
[4]
Fixing a sum
In Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWSC 23, Einstein J summarised the principles which inform the exercise of the discretion to specify a gross sum, at [9]:
…
ii. the touchstone requires that the Court be confident that the approach taken to estimate costs is logical, fair and reasonable: Beach Petroleum [NL v Johnson (1995) 57 FCR 119] at [16];
iii. the fairness parameter includes the Court having sufficient confidence in arriving at an appropriate sum on the materials available: Harrison v Schipp (2002) 54 NSWLR 738, per Giles JA at [22] …;
iv. a gross sum assessment, by its very nature, does not envisage that a process similar to that involved in a traditional taxation or assessment of costs should take place: Harrison v Schipp at [22];
v. the gross sum "can only be fixed broadly having regard to the information before the Court": Beach Petroleum at 124;
[In Hadid v Lenfest Communications Inc [2000] FCA 628 at [35] it was said that the evidence enabled fixing a gross sum "only if I apply a much broader brush than would be applied on taxation, but that … is what the rule contemplates".]
vi. nevertheless the power to award a gross sum must be exercised judicially, and after giving the parties an adequate opportunity to make submissions on the matter: Leary v Leary [1987] 1 WLR 72 at 76, and Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119 at 120;
vii. In terms of the necessity for the approach taken to be logical, fair and reasonable, Von Doussa J in Beach Petroleum NL & Anor v Johnson & Ors (No 2) (1995) 57 FCR 119, put the matter as follows, at [16]:
"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: Leary v Leary at 265 …"
His Honour's summary has been cited with approval in the Court of Appeal: Hamod v New South Wales [2011] NSWCA 375 per Beazley JA, with whom Giles and Whealy JJA agreed, at [793]. Her Honour continued, at [816]:
… the factors that merit particular consideration include: the relative responsibility of the parties for the costs incurred … the degree of any disproportion between the issue litigated and the costs claimed; the complexity of proceedings in relation to their cost; and the capacity of the unsuccessful party to satisfy any costs liability…
[5]
Consideration
The solicitor's invoices total $70,814.70. Counsel's hourly rate is reasonable and the total fees are not disproportionate to the hearing. The expert's fees for a valuation report were $2,871, which appears reasonable, and only half of the fee is sought.
However, the costs order made in September 2019 was not an indemnity costs order. Thus, I will discount the solicitors and counsel's fees to estimate what they would recover on an assessment on a party and party basis. I have discounted the solicitor's fees by 25% and counsel's fees by 10%, leaving disbursements in full. The total thus arrived at is $103,280 including GST.
For these reasons I make the following order:
1. Order pursuant to section 98(4)(c) of the Civil Procedure Act 2005 (NSW) that the plaintiff is to be entitled to a specified gross sum in the amount of $103,280 including GST in respect of his costs of these proceedings.
[6]
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Decision last updated: 11 September 2020
Order pursuant to s 98(4)(c) Civil Procedure Act 2005 (NSW) that the plaintiff is to be entitled to a specified gross sum of $103,280 including GST in respect of his costs of these proceedings.
As I understand it, the defendants have not responded to the orders made thus far. This favours the award of a lump sum costs order thereby reducing wasted costs on any unnecessary costs assessment. I consider that this is an appropriate case to specify a gross sum instead of putting the plaintiff to the further time and expense involved in an assessment of his legal costs in circumstances where it is apparent that the defendants are unlikely to participate in that process; it is unclear whether the defendants have the ability to pay the costs order in any event; and, placing an additional burden on the plaintiff to undertake a costs assessment process may be for no useful purpose.
And at [820] (citations omitted):
The costs ordered should be based on an informed assessment of the actual costs having regard to the information before the court (for example, by relying on costs estimates or bills). The approach taken to estimate the costs to be ordered must be logical, fair and reasonable. This may involve an impressionistic discount of the costs actually incurred or estimated, in order to take into account the contingencies that would be relevant in any formal costs assessment.
Further, as Ball J explained in Baychek v Baychek [2010] NSWSC 987 at [11]:
…Implicit in this principle is that the gross sum bear a reasonable relationship to the actual costs of the party making the application, and to the costs that that party might reasonably be expected to recover on assessment. That means, among other things, that there must be a reasonable evidentiary basis for the order the court makes. That evidentiary basis is normally provided by the costs applicant in the form of an affidavit setting out the actual costs incurred and how they were calculated. Often, the evidence also includes evidence of the amount that is likely to be recovered on assessment.