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[2011] NSWIRComm 6
Industrial Relations Commission (NSW)
2010-12-08
Boland P, Schmidt J
Original judgment source is linked above.
REASONS FOR JUDGMENT 1This judgment concerns two notices of motion filed by Macquarie Bank Limited and Macquarie International Capital Markets Limited seeking supplemental orders to the costs orders made on 12 September 2002 in Matter Nos IRC 6973 and 6974 of 1997 by Schmidt J in Bell v Macquarie Bank Ltd [2002] NSWIRComm 235; (2002) 117 IR 281 and on 23 October 2003 in relation to Matter No IRC 5638 of 2002 by the Full Bench in Bell and Berg v Macquarie Bank Ltd [2003] NSWIRComm 363. 2In the first matter, Schmidt J made cost orders against the applicants, Michael Charles Bell and Charles Joseph Berg, as follows: [295] The usual order as to costs would be that the applicants bear the respondents' costs, as agreed or assessed. If the parties cannot agree as to the appropriate costs orders, they have liberty to approach within 21 days of the date of judgment. 3In the second matter, which was an appeal by Mr Bell and Mr Berg from her Honour's decision and orders, the Full Bench made the following costs order: ... 3. The appellants shall pay the respondents' costs of the appeal in an amount as agreed or in default of agreement, as assessed. ... 4The notices of motion sought to have the Court, rather than a costs assessor, assess the costs awarded against Mr Bell and Mr Berg in the amount of $300,000 each. 5Having heard counsel for the applicants on the motions on 8 December 2010, the Court made the orders sought. What follows are the Court's reasons. 6In the proceedings on 8 December 2010 the applicants on the motions sought leave to dispense with the service of the motions and to have the motions heard ex parte. The reason for doing so was that the applicants had been unable to find either Mr Bell or Mr Berg. Apparently they had left Australia, and whilst some information existed that Mr Berg had moved to the United States of America (but could not be found), no trace had been found of Mr Bell. 7Evidence of attempts over a number of years to trace Mr Bell and Mr Berg was provided in affidavits of Mr Bryan Belling, the applicants' solicitor on the record and Mr Jeffrey John Cox, Managing Director of ASAP Process Services Pty Ltd. Mr Cox's firm had been engaged in April 2009 to conduct an investigation to locate Mr Bell and Mr Berg, but had been unsuccessful despite efforts during 2009 and 2010. I note that Mr Bell and Mr Berg were in Australia, according to the evidence, at the time the costs orders were made. 8Rule 10.1 of the Uniform Civil Procedure Rules 2010 ("UCPR") provides the Court with the discretion to dispense with service of filed documents. I was satisfied that reasonable efforts had been made by the applicants to locate Mr Bell and Mr Berg for the purpose of service. Neither person was able to be located. Accordingly, I considered it appropriate to dispense with service and to hear the applications ex parte. I note the preservation of the respondents' rights to seek the judgment be varied or set aside under UCPR 36.16. 9The situations where supplemental orders may be appropriate were identified by Allsop J in Owston Nominees No 2 Pty Ltd v Branir Pty Ltd [2003] FCA 629; (2003) 129 FCR 558 at 569: Thus, the common law appears to recognise, relevantly, at least four relevant possible bases for the exercise of power to deal with entered orders (i) ambiguity, invoking the need for construction, (ii) where the order does not reflect what the court decided, (iii) where something is to be added not dealt with by the court, which circumstance is probably limited to "ancillary" or "consequential" matters, and (iv) a supplemental order, the need for which arises from circumstances occurring after the order was made. (I leave aside the slip rule, fraud and self executing orders.) See also Preston Banking Company v William Allsup & Sons [1895] 1 Ch 141 at 143-144; Caboolture Park Shopping Centre Pty Ltd (in liq) v White Industries (Qld) Pty Ltd (1993) 45 FCR 224 at 235. 10I accept the submissions of the applicants that the Court has power to make a supplemental order regarding the assessment of costs. The power of the court to assess costs arises under s 181 of the Industrial Relations Act 1996 and s 98 of the Civil Procedure Act 2005, which grant a wide discretion to determine to what extent costs are to be paid, at any time during or after the conclusion of proceedings. Section 98(4)(c) provides:
98 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, ... 11Section 56 of the Civil Procedure Act further requires that this power is exercised in a way that facilitates the just, quick and cheap resolution of proceedings. 12Given the time, trouble and expense involved in the applicants' unsuccessful efforts to locate the respondents, it seemed to me that, consistent with the powers under the Industrial Relations Act and ss 56 and 98 of the Civil Procedure Act, the appropriate course was for the Court to assess the costs. 13The applicants submitted that the assessment by the Court of costs should be in accordance with the principles set out in Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWSC 23 at [9] and Hamod v New South Wales (No 13) [2009] NSWSC 756 at [3]-[4] per Harrison J. In Idoport , Einstein J stated: [9] For present purposes it seems convenient to commence with a recitation of the principles which inform the exercise of the discretion: i. the purpose of the rule is to avoid the expense, delay and aggravation involved in protracted litigation arising out of taxation: Beach Petroleum NL v Johnson (1995) 57 FCR 119, Von Doussa J p 265: [following Purchase J in Leary v Leary [1987] 1 All ER 261 who described the purpose of the rule allowing the fixing of a gross sum as 'the avoidance of expense, delay and aggravation involved in protracted litigation arising out of taxation' (All ER p 265)]; ii. the touchstone requires that the Court be confident that the approach taken to estimate costs is logical, fair and reasonable: Beach Petroleum 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] NSWCA 213, per Giles JA at [22]; [following ( Wentworth v Wentworth (CA, 21 February 1996 unreported, per Clarke JA) and adopted in Sony Entertainment v Smith (2005) 215 ALR 788; [2005] FCA 228; BC200500963 at [199]; 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 ... 14It may be seen then, in referring to s 98(4)(c) of the Civil Procedure Act, Einstein J in Idoport identified the relevant principles applicable to a claim for a specified gross sum instead of assessed costs. These principles included, inter alia , that the purpose of the rule was to avoid the expense, delay and aggravation involved in protracted litigation arising out of taxation; that the Court be confident that the approach taken to estimate costs is logical, fair and reasonable; that the Court had sufficient confidence in arriving at an appropriate sum on the materials available; that the gross sum "can only be fixed broadly having regard to the information before the Court"; and that 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. 15The applicants relied on the affidavit evidence of Ms Roslyn Margaret Capell, legal practitioner and legal costs consultant regarding the costs assessments. Ms Capell has been providing legal cost assessment services for approximately 15 years. Ms Capell was engaged by Mr Belling to provide not a full costs assessment, but rather an estimate of the likely liability of Mr Bell and Mr Berg for the costs of the relevant proceedings. Ms Capell deposed that to do a proper costs assessment in these matters would be a protracted affair and would cost somewhere in the vicinity of $40,000 at a conservative estimate. Ms Capell further deposed that an estimate of the costs to be recovered was an amount of around $340,000 to $380,000 in the Berg matter, whilst the Bell matter would be around $380,000 to $420,000. 16There is no proper basis to require the applicants to undertake a costs assessment in the circumstances. Mr Bell and Mr Berg were aware of the costs orders made against them. They have obviously chosen to make themselves scarce and despite an international search by an experienced process server, the two individuals have not been able to be located. 17Having regard to Ms Capell's affidavit and the annexures to it, which described the process undertaken in estimating the costs, the Court accepted that the estimate of $300,000 by Ms Capell was fair and reasonable and any orders determining costs in each case at that amount would be consistent with the Idoport principles and the Court's statutory obligations.
Orders 18The Court confirms the following orders made on 8 December 2010 in the following terms:
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 February 2011
Bell
Macquarie Bank Limited
(2002) 117 IR 281
(1993) 45 FCR 224
(2003) 129 FCR 558
(1995) 57 FCR 119
(2005) 215 ALR 788