Bechara v Bates

Supreme Court of NSW|2015-11-18|Before: Adamson J, Beazley JA, McCallum J

Solicitors: Bechara and Company (Plaintiff) Bannister Law (Defendant) File Number(s): 2015/115082

Introduction

On 29 October 2015 I made orders and published reasons in the substantive appeal by Maria Bechara, the plaintiff (Bechara v Bates (No. 3) [2015] NSWSC 1588) (the principal judgment). By written application, the defendant (Philip Bates) sought a global sum costs order pursuant to s 98(4)(c) of the Civil Procedure Act 2005 (NSW) (the Act) in the amount of $35,289.03 (including GST).
The question of costs is to be determined by reference to the parties' written submissions. Mr Bates' written submissions were provided on 5 November 2015. Ms Bechara was directed to provide her response by 5pm on 12 November 2015. My Associate endeavoured to contact her to ascertain whether she wished to respond to Mr Bates' submissions. Ms Bechara's only response to Mr Bates' application for a global sum costs order was by email sent on 15 November 2015 in which she submitted that I ought order her to pay Mr Bates' costs as agreed or assessed. She otherwise made no substantive response to Mr Bates' submissions.

Whether a gross sum costs order ought be made in the present case

Mr Bates has succeeded on every significant issue in these, and associated, proceedings including before Buscombe LCM; Keogh LCM, McCallum J (with respect to the validity of the notice to produce); and before me in the principal judgment. Mr Bates, in the written submissions in support of his application for a gross sum costs order, reported that Ms Bechara informed him that she intends to appeal against my decision and apply for a stay pending appeal. Accordingly, no inference can be drawn that Mr Bates' claim for his outstanding fees as a barrister is at an end. I can have no confidence that, were Mr Bates required to assess his costs, the process would be other than long and costly.
I described the convoluted and protracted path of these proceedings (and their genesis in the Local Court) in my principal judgment and will not repeat it here. As is apparent from the principal judgment, Mr Bates commenced proceedings in the Local Court against Ms Bechara to recover his professional fees for acting as a barrister instructed by Ms Bechara to act on behalf of clients for whom she was the solicitor. In these circumstances, it is particularly desirable that disputes about the costs of the proceedings be brought to a swift end and not bog down in a lengthy process of assessment.
The original amount claimed by Mr Bates was not substantial. I infer that the costs expended in the Local Court and in this Court are grossly disproportionate to the amount in issue. This is not to say that Mr Bates ought not to have expended those costs, but rather it is a factor in favour of ordering costs in a specified sum instead of requiring them to be assessed.
In the circumstances of the present case I am persuaded that the present case is an appropriate one in which to make an order for specified gross sum costs under s 98(4)(c) of the Act.

The quantum of the specified sum

Mr Bates submitted that the invoices from his solicitors, Bannister Law, which set out the work done by them, were reasonable and that the charge-out rates were also reasonable. I note that the charge-out rate for Charles Bannister, the principal solicitor, was $400 per hour plus GST; and for Isabelle Dufour, the paralegal, was $300 per hour plus GST. These amounts were specified in the fee agreement dated 27 May 2014 between Mr Bates and Bannister Law.
The invoices from Bannister Law on which Mr Bates relied are summarised in the following table. Invoice Date of invoice Period Professional fees GST Disbursements (incl GST; excluding counsel's fees) Total incl GST #439 5.11.15 26.3.15-2.10.15 $14,780 $1,478 $1,356.53 $17,614.53 #431 30.10.15 2.10.15-5.11.15 $4,940 $494 $1,040.50 $6,474.50

Mr Bates submitted that he was entitled to have his solicitors commence work on 26 March 2015 as that was the date on which Ms Bechara informed Bannister Law of her intention to challenge Keogh LCM's decision, in this Court.
Mr Bates also included an invoice that he has raised dated 5 November 2015 which includes the work he has done as counsel in his own case. He said that he has not included in the amounts in the invoice any time he has spent as a client, as opposed to time spent as counsel on the case. His charge-out fee, as reflected in the invoice, was $400 per hour plus GST (not exceeding ten hours per day), which was the same charge-out rate he applied when performing work in the Haratsaris matter, in which he was instructed by Ms Bechara, and which featured in the narrative set out in the principal judgment. Mr Bates also explained that, in respect of 6 October 2015 (the day the hearing of the appeal was adjourned due to Mrs Bechara's personal difficulties), he charged half his time to 'litigant functions' and the other half to 'professional functions'. The total discounted counsel's fees claimed (inclusive of GST) are $11,200.
Accordingly, Mr Bates claimed $35,289.03 which comprised the following amounts: 1. Bannister Law's professional fees of $21,692 (inclusive of GST) (being the sum of $16,258 and $5,434); 2. Bannister Law's disbursements (other than counsel's fees) of $2,297.03 (inclusive of GST) ($1,356.53 and $1,040.50); and 3. counsel's fees of Mr Bates of $11,200 (inclusive of GST).
Ms Bechara did not challenge any of the items or make any particular submission about the reasonableness of the fees or the appropriateness or otherwise of a gross sum costs order. The nature of the work done, and the time for which a charge has been made, do not strike me as being either excessive or unreasonable. The charge-out rate does not seem to me to be unreasonable. That Mr Bates charged his own time at the same rate as Ms Bechara was prepared to accept when she retained him to appear on behalf of her clients is further support for its reasonableness.
The amount of costs claimed by Mr Bates may well be significantly more than the amount of costs that might commonly be involved in an appeal to this Court from the Local Court. However, the present proceedings were extraordinary, as the narrative in my principal judgment shows.
Although there is some support in the authorities for a discount to be applied for the purposes of a gross sum costs order, I consider the charge-out rates to be so reasonable, and, indeed, modest, that I do not consider that any discount ought be significant. There is no basis to discount the disbursements other than counsel's fees. As to Mr Bates' fees as counsel, he has built in to the amounts in his invoice such a significant discount in any event, that I am not persuaded that it would be appropriate to discount his fees further. Bannister Law appears to have been more than reasonable in its invoices. However, I apply a discount to their fees of 10% because of the broad brush nature of the task of assessing costs in this way.
The new total (taking into account the reasons set out above) is the sum of the following: 1. Bannister Law fees of 90% of $19,720 ($14,780 + $4,940) = $17,748 2. GST on allowed fees of $17,748 = $1,775 3. Total disbursements (including GST but excluding counsel's fees) = $2,397.03 ($1,356.53 + $1,040.50) 4. Counsel's fees, inclusive of GST of $11,200
The total of these amounts is $33,120.03. To reflect the broad brush approach involved in setting a gross costs sum, I round that figure down to $33,000.

Order

I make the following order: 1. Order the plaintiff to pay the defendant's costs in the specified gross costs sum of $33,000.

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: 18 November 2015

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