Cao v Apollo Phoenix Resources Pty Ltd

mr cao's Adjournment application 8 When the Costs Applications came on before me for hearing Mr Cao made an application for an adjournment of the hearing. 9 In support of that application Mr Cao relied on an affidavit sworn by Belle Lou, a solicitor in the employ of ABLA with day-to-day carriage of the matter on Mr La Hood's behalf. Ms Lou deposed to the following matters: (1) Mr Cao does not speak English and relies on legal representatives in Sydney to protect his interests, particularly in this proceeding. Ms Lou speaks and reads both Mandarin and English fluently and has spoken with Mr Cao on the telephone several times to take instructions; (2) Maddocks appeared in this proceeding until March 2019 and also provided legal services to Mr Cao in late May 2019 in relation to proceeding NSD557/2019, a proceeding between Mr Cao as applicant and Apollo Phoenix and Messrs Daws and Kingswood as respondents in which, I was informed, Mr Cao seeks leave to appeal from Cao (No 2) (NSD557/2019); (3) ABLA filed a notice of appearance on behalf of Mr Cao in NSD557/2019 and appeared before his Honour Justice Lee on 5 July 2019 in that proceeding; (4) on or about 4 July 2019 ABLA became aware that the Costs Applications were listed on 29 July 2019. At that time they had not been provided with a copy of Maddocks' file; (5) on 12 July 2019 the solicitors for Apollo Phoenix served a copy of the Hodges Affidavit and Apollo Phoenix's submissions on ABLA and the solicitors for Messrs Kingswood and Daws served a copy of their clients' outline of submissions and list of authorities on ABLA; (6) on 19 July 2019 ABLA received the physical file from Maddocks. According to Ms Lou, prior to that time ABLA did not know the precise details of this proceeding, including the evidence served by the respective parties. By that time, the time for compliance with the 30 May Orders had passed; (7) to the best of Ms Lou's understanding, Apollo Phoenix and Messrs Daws and Kingswood have not attempted to resolve the issue of costs with Mr Cao through mediation or any other step to achieve settlement. Mr Cao wishes to resolve the issue of costs via mediation before a Registrar of the Court or by other alternate dispute resolution and ABLA is instructed to participate in any such process; (8) ABLA has not had sufficient time since receiving Mr Cao's file from Maddocks to review it so as to be able to properly advise Mr Cao if the lump-sum costs sought are reasonable; and (9) ABLA estimates that it would take a further period of 14 days to review the Maddocks file, which is contained in 10 archive boxes of A4 folders, and to provide advice to Mr Cao. 10 Mr Cao submitted that he sought an adjournment in order to engage in mediation as provided for in the Court's Costs Practice Note (GPN-Costs) (Costs Practice Note), which he would be able to engage in face-to-face as he would be coming to Australia, and to enable him to file and serve evidence in response to the evidence relied on by the defendants in support of the Costs Applications. 11 As to the latter issue Mr Cao submitted that the costs sought were significant and that if he is denied the opportunity to properly consider them he will effectively be "punished". That submission was made on the following basis: (1) he has been denied the opportunity to try to resolve the quantum of costs claimed as contemplated by Pt 3.2 of the Costs Practice Note and he will have been denied the opportunity to try to resolve the quantum of costs claimed as contemplated by Pt 4.18 of the Costs Practice Note or via mediation or other alternate dispute resolution mechanism; (2) ABLA has been hamstrung in being able to properly advise him on the appropriateness and reasonableness of the quantum claimed given the complexity and nature of the case; (3) in the absence of any legal representatives in Australia at the time of the 30 May Orders and up to 21 June 2019 he had suffered actual and real prejudice in his ability to serve any evidence opposing the Costs Applications in accordance with the 30 May Orders; and (4) because of lack of the file ABLA has not been in a position to advise him of various issues relative to the costs claimed in the Costs Applications including make-up of the legal team, deployment of the legal team, use of counsel, hourly rates and the appropriateness of the discount applied. 12 For the following reasons I refused Mr Cao's application for an adjournment. 13 Mr Cao has been aware of the Costs Applications since their service on him, deemed to have taken place on 24 and 26 May 2019 respectively. In addition, Messrs Daws and Kingswood sent a copy of, among other things, their costs application and the Fairweather Affidavit to Maddocks. While those solicitors no longer acted for Mr Cao in this proceeding, the evidence established that at that time they were acting for Mr Cao in NSD557/2019. I would infer that in those circumstances Maddocks would, at the very least, have also provided the material to Mr Cao. Contrary to Mr Cao's submission he did have legal representation in Australia prior to 21 June 2019 albeit not in this proceeding. 14 The evidence also established that the 30 May Orders were served on Mr Cao. 15 On 4 July 2019 ABLA became aware of the Costs Applications and filed a notice of acting in this proceeding. Mr Cao said that by then the time allowed for him to file and serve evidence in reply had passed. However, no steps were taken by ABLA to approach the solicitors for the defendants and to attempt to extend the time by consent for Mr Cao to file any evidence in reply. 16 Similarly, no steps were taken by ABLA on behalf of Mr Cao to seek to have the matter re-listed in order to extend the time by which Mr Cao was required to file any evidence in reply and any submissions and, if necessary, to adjourn the hearing. That course was open to Mr Cao but he did not avail himself of it. Rather Mr Cao waited until the hearing to seek an adjournment. By that time the defendants had filed their material and were ready to proceed with their Costs Applications including, in the case of Apollo Phoenix, by briefing counsel to appear and, in the case of Messrs Daws and Kingswood, by having their solicitor travel from Perth to Sydney to appear at the hearing. 17 ABLA had been acting for Mr Cao in this proceeding since 4 July 2019. That was more than three weeks prior to the hearing date. Given the nature of the Costs Applications, that was an ample amount of time within which to consider the material filed by the defendants and to prepare material in response, including any submissions. To the extent that ABLA required access to Maddocks' files in order to understand the nature of the proceeding, they had the "physical" file since 19 July 2019. There was no evidence about their attempts, if any, to review the file or the status of any review. Mr Cao had simply done nothing in the hope that further time would be allowed. 18 Mr Cao submitted that any prejudice to at least Apollo Phoenix had been cured by the fact that it had received $150,000 from the moneys paid by him into Court for security for Apollo Phoenix's costs without there having been any argument about quantum. True it is that Mr Cao has paid $390,000 into Court for security for Apollo Phoenix's costs and that on 25 March 2019, upon being satisfied that more than $150,000 had been incurred by Apollo Phoenix in party-party costs in defending the proceeding, I made an order that there be payment of that amount to Apollo Phoenix on account of its costs incurred as at that date. 19 However, Mr Cao misunderstands the prejudice that would be occasioned to the defendants by reason of an adjournment. It does not concern the ability to secure payment for costs already incurred which, in the case of Apollo Phoenix, are secured to a significant degree by the monies paid into Court by Mr Cao pursuant to orders made for security for its costs. It concerns the additional costs the defendants would incur as a result of an adjournment and the further delay. The prejudice to the defendants occasioned by an adjournment would not be met by a costs order in their favour: Mr Cao resides in China; there was no evidence that he has any assets in Australia; the security paid by Mr Cao for Apollo Phoenix's costs is insufficient to cover its costs incurred as at the date of the hearing; Mr Cao failed to pay all but one instalment of the security he was ordered to pay for Messrs Daws' and Kingswood's costs; and no offer was made to provide any further security for the defendants' costs at the time of making the adjournment application. 20 Finally, I should address the submission that one purpose of the adjournment was for Mr Cao to attempt to mediate or negotiate a settlement of the Costs Applications. The Court encourages parties to attempt to settle their disputes without recourse to litigation. However, in circumstances where ABLA has been acting since 4 July 2019 and there was no evidence of any attempt to negotiate or mediate a settlement of the Costs Applications or indeed to even arrange a time for mediation, it was difficult to accept that a further period would assist Mr Cao in that endeavour. In any event it remains open to Mr Cao to attempt a settlement of the Costs Applications after the hearing.

Legal principles 21 The Court has power to award costs to a party in a specified sum: see s 43(3)(d) of the FCA Act and r 40.02(b) of the Rules. 22 In LFDB v MS S M (No 2) [2018] FCA 2062 at [6]-[8] I summarised the principles applying to the Court's power to order lump-sum costs, and to the quantification of costs where such an order is made, as follows: 6 The Court's power to order lump sum costs is discretionary and may be exercised whenever the circumstances warrant it: Su v Australian Fisheries Management Authority (No 3) [2008] FCA 2018 at [1] (Reeves J). 7 A Full Court of this Court (Allsop CJ, Besanko and Middleton JJ) in Paciocco v ANZ (No 2) (2017) 253 FCR 403 at [16]-[17] explained the following in relation to the Court making orders for lump sum costs: 16 On 25 October 2016 the Chief Justice issued the Central Practice Note: National Court Framework and Case Management (CPN-1) ('Central Practice Note') and the Costs Practice Note (GPN COSTS) ('Costs Practice Note'). The Central Practice Note states that the determination of the quantum of costs of a successful party (in a proceeding) should not be delayed and, to this end, the Court will, where appropriate, facilitate the making of lump sum costs orders. The Costs Practice Note provides that the Court's preference, wherever it is practicable and appropriate to do so, is to make a lump sum costs order so as to finalise costs and avoid potentially expensive and lengthy taxation hearings. It makes clear that the Court should now proceed on the basis that taxation "should be the exception" and confined to matters which are unable to be determined otherwise: Costs Practice Note at [3.3]. The guiding principles are to reduce delay and cost when quantifying costs: Costs Practice Note at [3.1]. 17 The Costs Practice Note provides for the Court to make use of sophisticated costs orders and procedures, and to take such steps as it considers necessary to ensure that it has the requisite level of detail to make a costs determination that is fair, logical and reasonable and to avoid orders that lead to potentially expensive and lengthy taxation hearings: Costs Practice Note at [3.3]. 8 In Bitek Pty Ltd v IConnect Pty Ltd (2012) 290 ALR 288; [2012] FCA 506 at [18] Kenny J said the following in relation to the determination of the appropriate quantum of a lump sum costs order: 18 The starting point for the fixing of costs is the charges rendered by the applicant's solicitors: Beach Petroleum at FCR 124; ALR 165 and Hamod v New South Wales [2011] NSWCA 375 at [820] per Beazley JA (with whom Giles and Whealy JJA agreed). The sum of costs fixed should also be proportionate to the nature, including the complexity, of the case: see Canvas Graphics Pty Ltd v Kodak (A'asia) Ptd Ltd [1998] FCA 23. As Beazley JA said in Hamod, at [820], citing, among others, Beach Petroleum at FCR 123; ALR 164: [820] 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 … [Citations omitted.] 23 As Mr Cao relies on the decision in Sandalwood Properties Ltd (Subject to a Deed of Company Arrangement) v Huntley Management Ltd (No 2) [2019] FCA 647 (Sandalwood Properties), it is convenient to set out a summary of that decision. In that case Colvin J dismissed an application for a lump-sum costs assessment. Colvin J described the nature of the proceeding which led to the making of the costs order which was the subject of the application for lump-sum costs at [1]-[4] of his reasons. In particular, it is apparent that while the proceeding was brought urgently, it had a confined scope and concerned resolutions passed at a meeting removing Sandalwood Properties Ltd (subject to a deed of company arrangement) (receivers and managers appointed) (SPL) as the responsible entity for a particular project. Relevantly, Colvin J noted that the hearing occupied one morning, the factual issues were canvased in a few affidavits, which principally concerned what occurred at the meeting, and there was no cross-examination. His Honour described the forensic task on the application as "confined" and the factual dispute to be "narrow in compass". Against that his Honour noted that SPL sought a lump-sum costs order in the amount of approximately $220,000 (excluding GST) based on actual legal costs and disbursements incurred on the application in the sum of approximately $370,000. 24 At [8]-[23] Colvin J set out the principles applicable to a lump-sum costs application. In doing so his Honour noted at [12]-[14] that: 12 There must be an appropriate basis for the Court to be able to make a judicial decision rather than a guess. Faux calculations that provide no real basis upon which to conclude that it is reasonable to assess a particular lump-sum as an appropriate amount to be paid pursuant to the Court's cost order do not suffice. The process requires that there be a proper foundation for the lump-sum assessment, taking account that there is a trade-off between the risk of injustice in forming a conclusion as to a lump-sum on limited information and the likely injustice that flows from the costs and delay involved in undertaking a detailed assessment. 13 One way of supporting the reasonableness of the costs is to provide evidence of the independent opinion of an experienced costs consultant who has been given sufficient information about the overall nature of the case to be able to express such an opinion. Parties may be expected to act upon advice of this kind in resolving by agreement claims as to costs without detailed assessment and it is reasonable for the Court to act on the same basis. However, when the opinion is advanced as a basis upon which the Court should make a lump-sum costs order it is important to ensure that the view expressed by the cost consultant is truly an independent view and not one expressed as an advocate for the interests of one of the parties. 14 Another way is to apply a percentage discount to the actual total costs incurred by the party entitled to the benefit of the costs order where the court is satisfied that the overall costs were reasonably incurred. The expectation that most parties act commercially in incurring costs may provide this assurance. In such instances, the discount to be applied is based upon a consideration of the procedural course of the particular case and is facilitated in many instances by the familiarity of the case managing judge with the course of the proceedings. The decided cases reveal considerable variation in the discount applied. Formulating the discount requires the court to bring to account factors in the circumstances of the particular case that may have affected the extent to which the costs incurred exceed that which is provided for by the nature of the costs order made. However, care must be taken with this approach because it is anchored in the actual costs incurred and the task in most instances is to assess a reasonable amount of costs on a party and party basis. There may be a concern that a party who has chosen to incur substantial costs in excess of those that might be incurred by a reasonable party in the same position acting prudently in its interests may recover an excessive costs award by a top down approach to assessment. This exposes the importance of the broad categories of costs as described in the costs summary which must be provided in support of the application (see below). By dividing the costs claimed into relevant categories the Court is able to check the quantum for particular kinds of work against amounts generally claimed under lump sum assessments and to apply principles of proportionality in a logical way. 25 At [19] Colvin J addressed the affidavit which the Costs Practice Note requires be provided in support of an application for lump-sum costs noting that it must "provide a sufficient basis for the court to undertake a robust assessment of the reasonableness of the costs claimed on a lump-sum basis". His Honour also noted that the summary should "adopt a breakdown that suits the nature of the particular case and the forensic course of the proceedings", that it should not be as itemised as a bill of costs, as that would "defeat the whole purpose of the procedure", but that it should not "be expressed at such a level of generality that an assessment of the reasonableness of the costs is not assisted by the breakdown in the summary" and should not "be expressed by reference to categories that are meaningless, such as the time spent by named practitioners rather than categories of work to be done". His Honour said that the former may be used to determine the latter but that the extra step must be taken. 26 At [21] his Honour said: The whole process of lump-sum assessment depends upon the preparation of a sensible costs summary that has a form of breakdown of costs that logically assists the task of undertaking the lump-sum assessment in the particular case. The costs summary then becomes a practical document with which the party who is liable under the costs order is able to engage by way of response. The parts that are disputed can be identified and brief reasons given for disputing the particular amount and why a different amount should be assessed. 27 One of the criticisms made by Colvin J of the affidavit in support of the application for lump-sum costs before him was in relation to the manner in which it referred to the costs consultant, Mr Nicholas. In that affidavit the deponent gave evidence that Mr Nicholas was briefed as an expert and that Mr Nicholas' advice had been taken into account in preparing the costs summary. His Honour observed that nothing was said about the actual advice provided by Mr Nicholas or the basis upon which it was provided and described the approach taken as meaningless and as providing no basis upon which the Court might conclude that a particular amount is a reasonable lump-sum. Justice Colvin continued as follows: … reliance on the fact that the advice has been obtained without any statement to the effect that the costs claimed reflect the independent opinion of the cost consultant suggests that the advice from Mr Nicholas does not assist the lump-sum claim and is a matter that counts against the reasonableness of the amount sought. This is especially so given that the affidavit in support of the application says that Mr Nicholas has charged only $1,155 for his work relating to the costs application… 28 His Honour then referred to the particular amounts attributed to various categories of work claimed by SPL describing them as "confronting amounts for a short hearing of the kind" described above and noting that at the applicable rates they represented about five weeks of full-time work for two experienced practitioners. After setting out a number of other criticisms of the affidavit in support of the application his Honour said that this was a case where "the preparation of an itemised bill for assessment would not be unduly burdensome" and that the items that would need to be considered "are quite confined": at [36]. Justice Colvin concluded that it would be consistent with the purpose of avoiding expense and delay in the assessment of costs for that procedure to be applied in circumstances where the application before him did not provide the proper foundation for the Court to assess costs on a lump-sum basis. 29 The Costs Practice Note applies to all proceedings in this Court. It relevantly provides: (1) at paragraph 2.1 that when considering costs related issues parties and their lawyers should familiarise themselves with ss 37M, 37N and 43 of the FCA Act and relevant parts of Pt 40 of the Rules; (2) at paragraph 3.1 that the procedure for determining the quantum of costs for a party who is successful at a final hearing should not be delayed and should be as inexpensive and efficient as possible. Paragraph 3.2 notes that the Court expects parties to make a genuine effort, wherever it is practicable to do so, to negotiate with a view to resolving costs issues between them and that, where appropriate, parties are encouraged to utilise formal "offers to compromise" or otherwise make offers to settle disputes; (3) paragraphs 3.4 and 3.5 provide as follows: 3.4 The early determination of costs involves the determination of who is entitled to be paid the costs of a proceeding and on what basis - eg. on a "party and party" or "indemnity" basis ("costs entitlement question"). The costs entitlement question may be determined in the judgment or order following the trial as to liability and/or quantum or penalties ("judgment") or will otherwise be determined at the earliest practicable and appropriate time following judgment. 3.5 The early determination of costs also involves the determination of the quantum of the costs to be paid ("quantum of costs question"). The quantum of costs question will usually be determined through one of the following procedures: (a) in appropriate cases, by the judge, through a lump-sum costs procedure within approximately 6 weeks after determination of the costs entitlement question (see Part 4 below); or (b) by a registrar through the estimate of costs procedure (see Part 40 of the Federal Court Rules and Part 5 below). (footnotes omitted.) (4) Part 4 of the Costs Practice Notice concerns lump-sum costs orders. It provides that the Court's preference is to make a lump-sum costs order wherever it is practicable and appropriate to do so but that use of the lump-sum costs procedure will always be at the discretion of the judge: see paras 4.1 and 4.2; (5) paragraph 4.4 provides that in the case of a "regular" costs scenario the costs hearing dealing with lump-sum costs will take place within six weeks following the determination of the costs entitlement question or as soon as possible at any other time considered to be appropriate by the judge. At the time of listing the costs hearing, or soon after, the judge will timetable the filing of relevant costs material; (6) paragraphs 4.10 to 4.14 inclusive concern the material in support of and in response to a lump-sum costs application. In summary, costs applicants are required to file an affidavit in support of the lump-sum claim, referred to as the Costs Summary, which succinctly addresses the relevant matters set out in Pt B of "Annexure A - Guide for Preparing a Costs Summary" (Annexure A) as well as verifying the matters set out in Pt A of that annexure. The Costs Summary must be "clear, concise and direct and not resemble a bill of costs". The intent of the lump-sum costs procedure is "to streamline and expedite the determination or resolution of the quantum of costs question and not to replicate the taxation process". Unless leave is given by the Court the Costs Summary must not exceed five pages in length or in large or complex cases, ten pages; and (7) the costs respondent may file an affidavit responding to the matters raised in the Costs Summary, referred to as the Costs Response, in accordance with any timetable set by the judge. The Costs Response must be "clear, concise and direct and briefly summarise the categories of any disputes arising in respect of the Costs Summary". It should not exceed four pages in length or, in large or complex cases, eight pages.

The Costs Summaries 30 Apollo Phoenix's Cost Summary is comprised of the Hodges Affidavit. Apollo Phoenix also relied on an affidavit sworn by Dana Levi on 26 July 2019 (Levi Affidavit) in which Ms Levi identified an omission in the Hodges Affidavit and updated the amount claimed to include the costs incurred in the making and hearing of its costs application. Apollo Phoenix seeks an order that its costs be paid in a lump-sum in the amount of $402,615.34. 31 Messrs Daws and Kingswood's Costs Summary is comprised of the Fairweather Affidavit. Messrs Daws and Kingswood seek an order that their costs be paid in a lump-sum in the amount of $201,442.65. 32 The Hodges Affidavit and the Fairweather Affidavit were prepared having regard to the requirements of Annexure A. They each include: (1) the verification required by Pt A of Annexure A. In that regard Messrs Daws and Kingswood are not entitled to claim input tax credits in respect of any GST relevant to the claims in their Costs Summary. Notwithstanding that they claim their professional costs exclusive of GST but their disbursements and counsel's fees inclusive of GST in accordance with para 6.6(a) of the Costs Practice Note; (2) the information required by Pt B of Annexure A insofar as it is relevant as follows: (a) the amount of the lump-sum sought; (b) how that amount has been calculated, including any discounts that have been applied; (c) a summary of the categories of work, including an estimate in percentage terms of the proportion that each category of work constitutes of the total costs claimed; (d) in relation to each person who has performed the work, a summary of their hourly rate, total hours worked and an estimate, in percentage terms, of the proportion of the total sum claimed attributable to that person; (e) a summary of the disbursements incurred including fees charged by counsel; (f) a clarification of the amount of any "skill, care and responsibility" claimed, how it has been calculated and the bases for it being claimed; and (g) whether the amounts claimed fall within the amounts permitted for any item under the Court's Scale and the Court's National Guide to Counsel Fees (National Guide). 33 Mr Cao raised an issue about the level of detail provided by the defendants in relation to the requirement that a summary of the categories of work fairly and reasonably incurred in the conduct of the litigation be provided. In that regard: (1) in the Hodges Affidavit the following was included: (f) The following categories of work have been fairly and reasonably incurred in the conduct of the litigation in this matter and include an estimate (expressed in percentage terms) of the proportion that each category of work constitutes of the total costs claimed: Summary of categories of work incurred Estimates % of total costs claimed Attendances 30 Preparing documents 50 Reading/reviewing documents and forms 20

(2) in the Fairweather Affidavit the following was included: (f) The following categories of work have been fairly and reasonably incurred in the conduct of the litigation, including an estimate (expressed in percentage terms) of the proportion that each category of work constitutes of the total costs claimed: Summary of categories of work incurred Estimated % of total costs claimed Attendances 24% Preparing documents 48% Reading /reviewing documents 25% Research 3%

Consideration 34 Mr Cao opposes the Costs Applications both in relation to whether a lump-sum costs order should be made and, if such an order is to be made, the quantum of costs sought by Apollo Phoenix on the one hand and Messrs Daws and Kingswood on the other. I deal with each of those issues in turn below.

Are the defendants entitled to a lump-sum costs order? 35 Mr Cao's principle submission in opposition to the Court making an order that the defendants' costs be paid on a lump-sum basis was that there was insufficient evidence before the Court to satisfy it that the amount sought would be recoverable in a taxation. Mr Cao raised two matters in support of that submission. 36 First, while Mr Cao did not cavil with the proposition that the Court takes a broad-brush approach in determining an application for costs on a lump-sum basis, relying on the decision in Sandalwood Properties he submitted that the approach taken by, in particular, Apollo Phoenix did not meet that standard and lacked any sufficient detail. Mr Cao contended that was so because first, insofar as the defendants said in their respective Costs Summaries that they had been prepared with the assistance of Ross Nicholas, a legal costs consultant, the Court could not be satisfied that any useful assistance was given by Mr Nicholas. This was so because, in the case of Apollo Phoenix, Mr Nicholas' costs were recorded as a disbursement in the sum of $1,200 and, in the case of Messrs Daws and Kingswood, while no itemised amount was claimed for Mr Nicholas' costs, they only sought $6,000 for their costs of the preparation of their Costs Application. 37 Mr Cao submitted that the defendants rely on Mr Nicholas' involvement to provide a bulwark for their position but he does not know in fact what assistance was given by Mr Nicholas in the preparation of the Costs Summaries and whether Mr Nicholas was provided with the underlying source material. Mr Cao further submitted that it is not said that Mr Nicholas provided an independent view and that the only evidence relied on was given by two interested parties, Mr Hodges and Mr Fairweather who could not be said to be truly independent. Relying on [13] of Sandalwood Properties Mr Cao submitted that, on the evidence, there was no independent person who deposed to the fact that the costs claimed by the defendants were reasonable. 38 The second matter raised by Mr Cao in support of his principle submission was that the summary of categories and estimated percentage of work attributed to each category of work were too vague and expressed at such a high level of generality that they were not of assistance. Mr Cao contended that in the absence of a more detailed breakdown both the Court and he were not given any indication of what was involved in each category. Mr Cao submitted that the onus was on the defendants to prove that what they seek to recover is fair and reasonable and that the summaries provided do not provide the specificity required and fail to meet the requisite standard. 39 Relying on Sandalwood Properties at [21] Mr Cao submitted that the Hodges Affidavit and the Fairweather Affidavit do not provide a summary that has "a form of breakdown of costs that logically assists the task of undertaking the lump-sum assessment in a particular case". 40 Mr Cao also submitted that the Hodges Affidavit and the Fairweather Affidavit did not disclose any steps taken to attempt to settle the costs issue and there was no evidence before the Court of any attempt to negotiate, despite the requirements of para 3.2 of the Costs Practice Note. 41 The first thing to observe is that the facts of this case are quite different to those in Sandalwood Properties. The Costs Applications do not concern claims for costs of an application which was brought before the Court on an expedited basis over a short period and which related to a single or confined issue. Rather, this proceeding was commenced by Mr Cao in June 2018, it involved a series of allegations about the conduct of Apollo Phoenix and its two directors, had a level of urgency about it such that steps were taken to have the matter listed for hearing in as short a period as possible, and interlocutory applications were heard and case management steps for its preparation for hearing were taken by the defendants to meet the timetable imposed for that purpose. Given the issues involved, the matter was listed for hearing for five days commencing on 25 March 2019. At the hearing, the matter was dismissed because of Mr Cao's failure to appear and to pay security as ordered by the Court. By that time, all necessary preparatory steps for the hearing had been taken by Apollo Phoenix and Messrs Daws and Kingswood. The costs now claimed cover work done over a period of approximately nine months and in the context described. 42 Secondly, while each of Apollo Phoenix and Messrs Daws and Kingswood note in their respective Costs Summaries that, in each case, it was prepared with the assistance of Mr Nicholas, they do not represent that Mr Nicholas was retained as an expert in the preparation. Rather, as required by Pt B of Annexure A, they inform that Court and Mr Cao that the Costs Summaries were prepared with the assistance of a costs consultant. In other words, Apollo Phoenix and Messrs Daws and Kingswood have made the disclosure required of them and, I would infer, received some assistance in preparing their respective Costs Summaries from Mr Nicholas. In those circumstances, I would not draw any negative inference from the amount charged by Mr Nicholas in relation to his involvement in the preparation of Apollo Phoenix's costs summary. Messrs Daws and Kingswood do not claim any specific amount for Mr Nicholas' costs in their Costs Summary. They include as sum of $6,000 for the costs incurred in preparing their Costs Application. Mr Fairweather explained to the Court that, while their actual costs of preparation of their Costs Application were higher, in the circumstances of the case they did not intend to make any additional claim for those costs. 43 Finally, in my opinion the Hodges Affidavit and the Fairweather Affidavit are not, in the way in which they describe the categories of work the subject of the costs claimed, so lacking in particularity as to be of no assistance. In the case of Apollo Phoenix, the Hodges Affidavit includes three categories of work and the estimated percentage of the total costs attributed to each category. While the categories are broadly described and might have been assisted by some further description or particularisation, they are not meaningless having regard to the nature of the proceeding and steps taken by the parties during the course of the proceeding. Further, those categories are to be considered in light of other information provided in the Hodges Affidavit such as the hours spent by the solicitors who worked on the matter. The costs summary is not to resemble a bill of costs but is to be a succinct document prepared in accordance with Pt B of Annexure A to the Costs Practice Note. 44 In the case of Messrs Daws and Kingswood, the Fairweather Affidavit includes four categories of work and the estimated percentage of the total costs attributed to each category (see [33(2)] above). Messrs Daws and Kingswood also relied on an affidavit sworn by Mr Fairweather on 14 March 2019 in which Mr Fairweather set out a more detailed description of the categories of work undertaken as at that date, which was approximately two weeks prior to the hearing. As submitted by Messrs Daws and Kingswood the summary categories included in the Fairweather Affidavit need to be considered in light of that more fulsome description and having regard to Sch 3 to the Rules titled "Costs allowable for work done and services performed". That schedule includes itemisation of the types of attendances that are associated with a broader description such as those included in the Fairweather Affidavit, and the Hodges Affidavit, namely "attendances", "preparing documents", "reading" and "research". 45 As Mr Cao submitted, there is no evidence of any attempt by the defendants to settle their claims for costs. The Court encourages parties to attempt to settle disputes and para 3.2 of the Costs Practice Notice recognises and encourages that practice in relation to costs issues, where it is practicable to do so. However, the lack of any evidence of any such attempt or, indeed, a failure to do so, is not a reason to refuse to make an order that costs be assessed on a lump-sum basis. 46 I am satisfied that it is appropriate for the Court to make an order that costs be assessed on a lump-sum basis in this case. The Court has a wide discretion to make an order that costs be quantified on that basis. There is nothing in this case that persuades me that such an order should not be made. On the contrary, the circumstances of the case support the making of such an order. Mr Cao resides in China, there is no evidence that he has any assets or other ties to this jurisdiction and he failed to comply with orders requiring him to provide security for the costs of Messrs Daws and Kingswood and to appear at the final hearing of the matter. In those circumstances the parties ought not to be put to the trouble and expense of a taxation. It is in the interests of all parties and reflective of the requirements of s 37M of the FCA Act that Apollo Phoenix and Messrs Daws and Kingswood's costs be assessed on a lump-sum basis.

What amount of costs should be awarded? 47 That then leaves the quantum of costs to be awarded to each of Apollo Phoenix and Messrs Daws and Kingswood. I will deal with each in turn. 48 Apollo Phoenix claims costs on a lump-sum basis in the amount of $402,615.34. The Hodges Affidavit addresses the matters set out at [32] above. In addition, Mr Hodges explains that the lump-sum claimed in that affidavit of $364,229.98 has been calculated by: (1) adding together Mills Oakley's and Steinepreis Paganin's professional fees which were reduced so that charge-out rates do not exceed the amounts prescribed in Sch 3 to the Rules; (2) discounting that amount by 30% to account for Apollo Phoenix's estimated party-party costs; (3) adding an additional 5% for "skill, care and responsibility" based on the experience of the lawyers working on the matter; (4) adding the costs of preparing for and appearing at (estimated) the hearing of the Costs Applications; (5) adding counsel's fees, which were reduced where necessary so as not to exceed the amounts in the National Guide and then by 20% to account for party-party costs; and (6) adding other claimable disbursements in full, as particularised in the Hodges Affidavit. 49 In the Levi Affidavit, Ms Levi updates Apollo Phoenix's claim for lump-sum costs to an amount of $414,615.34 by: (1) adding an early invoice which had been omitted from the Hodges Affidavit and two invoices that were issued since the date of the Hodges Affidavit. The professional fees claimed in those invoices were first reduced by 30% to account for Apollo Phoenix's estimated party-party costs and then increased by 5% for "skill, care and responsibility", making an amount of $37,508.25; (2) adding costs for additional disbursements incurred since the date of the Hodges Affidavit in the sum of $5,919.11; and (3) adding additional counsel's fees, reduced to reflect the charges allowed under the National Guide as applicable to items of work, in the amount of $6,958. 50 The amount in fact sought by Apollo Phoenix as a lump-sum for its costs is $402,615.34. This reflects a reduction in the total amount claimed by the amount included in the Hodges Affidavit for the costs of preparing for and appearing at the hearing of the Costs Applications of $12,000. This is because the Levi Affidavit includes in the additional amount claimed the actual costs incurred for those items. In other words the reduction is properly made to avoid double counting the costs for those items. 51 Mr Cao submitted that in relation to the lawyers acting on the matter: (1) there was no description of Mr Hodges' level of experience as a partner acting in litigation of this nature. While Mr Cao said it could be seen as reasonable for a partner to involve himself in a matter and incur 11% of the total costs, he does not necessarily admit it is reasonable; and (2) Ms Levi, a senior associate, spent 305.2 hours on the matter while Ms Young, a lawyer, spent 228.3 hours on the matter making up, between them, 63% of the time spent, but there is no evidence of the seniority of each of those lawyers. Mr Cao submitted that it would assist the Court to know their relative seniority in order to be satisfied that there was no duplication between them. In the circumstances Mr Cao submitted that a deeper discount of approximately 40% might be appropriate to apply to Ms Young's costs as the more junior member of the team. 52 I do not accept those submissions. First of all the Court would not be assisted by understanding more about Mr Hodges' experience in the context of this application. In my opinion, it was reasonable for Mr Hodges to spend the time he did on the matter given its nature. Mr Hodges' rate was reduced to reflect the rate allowed for a partner in Sch 3 to the Rules. A further discount of 30% was then applied before an uplift of 5% for "skill, care and responsibility". Mr Cao has not explained why the resulting costs for Mr Hodges are not fair and reasonable. In my opinion they are. Secondly, Mr Cao has not satisfied me that a deeper discount should be applied to Ms Young's costs. Ms Young's costs accounted for 20% of the total costs incurred, which does not suggest overuse of Ms Young. There is nothing to suggest that there was any duplication of work between Ms Young and other members of the solicitor team. The approach to be taken on a lump-sum costs application is not of the granular nature Mr Cao suggests in this regard. In any event to the extent there has been any duplication between solicitors working on the matter, that is accounted for by the 30% discount applied to the total costs. 53 Having considered the Hodges Affidavit and the Levi Affidavit, I am satisfied that an order should be made that Mr Cao pay Apollo Phoenix's cost on a lump-sum basis in the amount of $402,615.34. 54 I turn then to consider the quantum claimed by Messrs Daws and Kingswood. They seek an amount of $201,442.65. In the Fairweather Affidavit, Mr Fairweather explains that amount has been calculated by: (1) taking professional fees (claimed exclusive of GST) for the lawyers involved which were discounted both as to rate and at the time of billing to ensure that the costs charged were fairly and reasonably incurred; (2) applying a further discount of 20% to account for estimated party-party costs; (3) adding an additional 5% for "skill, care and responsibility", making a total amount claimed for professional fees of $119,217.84; (4) adding counsel's fees adjusted in accordance with the National Guide and then reduced by 20% to account for estimated party-party costs making a total of $59,360.40 (including GST); (5) adding claimable disbursements in the sum of $10,864.41, as itemised in the Fairweather Affidavit with disbursements related to travel discounted by 33%; and (6) adding $12,000 for the costs of preparing for and appearing at (estimated) the hearing of Costs Applications. 55 Mr Cao submitted that 94% of the time spent on the matter was by Mr Fairweather who was the principal of the firm and acted as junior counsel. He contended that this raises a question of reasonableness and whether more junior staff should have been involved in the matter. Mr Cao also submitted that it was open to Messrs Daws and Kingswood to brief junior counsel in Sydney and thus avoid the costs incurred by Mr Fairweather travelling to Sydney for attendances or to utilise videolink for some attendances. 56 The large proportion of time spent by Mr Fairweather on the matter reflects the nature of the firm, Fairweather Litigation, where Mr Fairweather is essentially a sole practitioner. In the Fairweather Affidavit, he deposes to the fact that he was assisted by a graduate in the matter until she became ill. Fees for that solicitor accounted for 6% of the total professional fees incurred. Despite the fact that the work was done almost exclusively by Mr Fairweather, I am satisfied that the costs incurred are fair and reasonable. That is because Mr Fairweather reduced his usual charge-out rate by approximately 10%, making it less than the rate charged by, for example, the senior associate who worked on the matter for Apollo Phoenix; he scrutinised each bill before it was issued and did not charge for time spent travelling between Perth and Sydney to attend Court or other attendances to account for the fact that Messrs Daws and Kingswood would only be entitled to claim costs on a party-party basis; he applied a further 20% discount to the professional fees; and, despite being entitled to do so, no GST is claimed on the professional fees. 57 Mr Fairweather did not charge for time spent travelling between Perth and Sydney. The only travel costs were the associated disbursements for airfares and accommodation. Those charges have been reduced by 33%. While it is the case that some use could have been made of the Court's video facilities, for example at case management hearings, or Sydney counsel could have been retained for such hearings, Messrs Daws and Kingswood were entitled to have the solicitor who had been acting for them, and I infer had detailed knowledge of the matter, appear. As there has been no charge for travel time and a reduced charge for disbursements associated with travel I am satisfied that the disbursements associated with Mr Fairweather's travel are fair and reasonable. 58 I am satisfied that an order should be made that Mr Cao pay Messrs Daws and Kingswood's costs on a lump-sum basis in the amount of $201,442.65.

conclusion 59 I will make orders that Mr Cao pay Apollo Phoenix's and Messrs Daws and Kingswood's costs on a lump-sum basis in accordance with these reasons. As Apollo Phoenix and Messrs Daws and Kingswood have been successful I will also make an order that Mr Cao pay their costs of the Costs Applications. In that regard I note that the amounts claimed and which have been determined as payable on a lump-sum basis include amounts for the costs of preparation for and appearance at the hearing of the Costs Applications. Thus no further amount will be payable by Mr Cao to Apollo Phoenix or Messrs Daws and Kingswood in relation to those costs orders. I certify that the preceding fifty-nine (59) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Markovic.