Dickens v State of New South Wales & Ors

Principles governing the award of a gross sum costs order

1. The power to order costs in a specified gross sum under s 98(4)(c) of the Civil Procedure Act is conferred in broad terms. In Harrison v Schipp (2002) 54 NSWLR 738; [2002] NSWCA 213, Giles JA held at [21] that: [t]he power… 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.
2. The decision in Harrison v Schipp was in relation to s 98(4)(c)'s predecessor, Pt 54 r 6(2) of the Supreme Court Rules. Giles JA's statement of principle at [21] has been held to be equally applicable to the current provision: Hamod v State of New South Wales [2011] NSWCA 375 at [813]. In that case, Beazley JA (as her Honour then was), with whom Giles and Whealy JJA agreed, made the following relevant observations about s 98(4)(c) (citation omitted): [816] The terms of s 98(4), together with the more general considerations reflected in the Civil Procedure Act, ss 56(1), 57(1)(d) and 60, suggest the factors that merit particular consideration include: the relative responsibility of the parties for the costs incurred (for example, Harrison v Schipp); 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. [817] The exercise of the power conferred by s 98(4) is particularly appropriate where the costs have been incurred in lengthy or complex cases and it is desirable to avoid the expense, delay and aggravation likely to be involved in contested costs assessment. This may arise either from the likely length and complexity of the assessment process or from the likelihood that the additional costs of formal assessment would disadvantage the successful party because of the likely inability of the unsuccessful party to discharge the costs liability in any event. [818] 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.
3. When determining the "expense, delay and aggravation likely to be involved in contested costs assessment" the court is entitled to take into account its experience of the litigation the subject of the proposed order: Starr-Diamond v Talus Diamond (No 4) [2013] NSWSC 811 at [18]; Chaina v Presbyterian Church (NSW) Property Trust (No 26) [2014] NSWSC 1009 at [50(c)]; Wakim v State of New South Wales [2017] NSWSC 1492 at [10].
4. In Chaina v Presbyterian Church (NSW) Property Trust (No 26) [2014] NSWSC 1009 at [50(c)] Davies J considered a gross sum costs order more strongly justified where the party liable to pay costs is unrepresented and likely to remain unrepresented through any costs assessment process. In such circumstances, despite authority describing the power as particularly suited to complex litigation (see for example, Hamod v State of New South Wales at [817]; Auspone Ltd v Australian Newsprint Mills Limited [1999] FCA 673 at [11]; Leary v Leary [1987] 1 All ER 261), the order may be appropriate in simple cases where "the straightforwardness of the case [rather] than any complexity… [makes it] entirely appropriate to save the parties the difficulties and inconvenience, and added expense, of a taxation": Australasian Performing Rights Association Limited v Marlin [1999] FCA 1006 at [4]. Rares J said in Keen v Telstra Corporation Limited (No 2) [2006] FCA 930 at [6]: [The power to order costs in a lump sum]… is also appropriate to be used in cases which are simple and in which there would be utility in the court cutting the Gordian knot of protracted fights about costs
5. A further factor in favour of the making of a s 98(4)(c) order is the probable inability of the costs debtor to pay the costs ordered: Harrison v Schipp at [21]; Starr-Diamond v Talus Diamond (No 4) at [9]. This is because the carrying out of a contested costs assessment would likely inflict further disadvantage on the successful party in that the costs debtor would not be able to pay the additional costs of the assessment process.

Consideration: appropriateness of the gross sum award

1. In his written submissions of 24 November 2017 the plaintiff contends that I ought not to exercise my discretion under s 98(4)(c) and instead allow the matter to proceed to assessment in the usual manner. In support of this it was submitted that "there is no affidavit from an independent costs assessor to support the motions, the affidavits, the submissions and the amounts sought" and that "each individual item needs to be properly assessed by an independent expert assessor on costs". The plaintiff attempted to develop this argument in his submissions of 8 December 2017. He asserted that Lehane J's judgment in Hadid v Lenfest Communications Inc [2000] FCA 628 is authority for the proposition that the absence of an affidavit or other evidence from a legal costs consultant verifying the reasonableness of the costs claimed by the defendants precludes or at the least tends against the making of a gross sum order.
2. That submission proceeds on a misapprehension of the purpose of a gross sum costs assessment conducted by the Court. The power to make an order under s 98(4)(c) presupposes that the Court may proceed without the assistance of independent costs assessors in an appropriate case. The costs assessor's evidence in Hadid v Lenfest Communications Inc was directed merely towards the time and expense likely to be incurred in an assessment: at [22]. The evidence was not, as the plaintiff appears to have understood, given in support of the amount of costs claimed.
3. The plaintiff's submissions do not raise any matter of principle in support of the bare assertion that the costs assessment should be undertaken by an independent assessor. They are for the most part addressed to the quantum of costs claimed by the defendants (considered below at [19]-[28]), to gratuitous agitation of matters decided against him on 5 September 2017 and to his concerns about the state of family law in this country. I will disregard the submissions insofar as they relate to the two latter subjects; they are irrelevant to the resolution of the notices of motion.
4. The second and third defendants have each provided submissions in support of the gross sum applications. These collectively raise the following matters said to provide a basis for the making of an order under s 98(4)(c): 1. the plaintiff is unrepresented and is likely to remain so throughout a costs assessment; 2. given the history of the litigation it is likely the assessment process would be protracted and costly and 3. the plaintiff is not of financial substance.
5. I accept the defendants' submissions on these matters. The Court's experience of the plaintiff's conduct of this litigation is sufficient to satisfy me that he is likely to remain unrepresented throughout any costs assessment process. On 5 September 2017, after dismissing the plaintiff's case against the second and third defendants, I cautioned him about proceeding against the first defendant without legal representation, referring to his manifest lack of legal training and the complexity of his allegations. Nonetheless, in the continuance of these proceedings against the first defendant and in relation to the second and third defendants' notices of motion, the plaintiff has remained self-represented. In the proceedings against the first defendant he has been ordered to re-plead twice on the basis that his statement of claim is embarrassing and cannot fairly be responded to.
6. The likelihood of the plaintiff remaining unrepresented during the costs assessment process leads me to the view that a regular costs assessment would be protracted and costly. The plaintiff has great difficulty in confining himself to matters relevant to the dispute at hand. His submissions and affidavits are invariably lengthy, repetitive, largely irrelevant and contain apparently far-fetched allegations of conspiracy and wrongdoing by lawyers and police. Given this history, the plaintiff's submission that he "need[s] time to review and reply to each individual item of the defendants' costs" does not augur well for the efficiency of a contested assessment.
7. Documents annexed to the plaintiff's statement of particulars of personal injury filed on 6 March 2017 (and reproduced at Annexure C to the affidavit of Timothy Randolph Price sworn 9 November 2017) reveal that he has been in receipt of a Newstart Allowance from Centrelink since 23 February 2012. The documents also disclose that his taxable income for each of the years 2012-2015 has been between approximately $14,000 and $32,000. He does not own any real property. It is clear that the plaintiff is unlikely to be able to satisfy a costs debt of the order likely to be assessed under the orders I have made, still less the additional costs of the assessment process. It follows that proceeding with a regular costs assessment is likely to impose further disadvantage on the second and third defendants.
8. Accordingly I am of the view that it is appropriate for me to assess the second and third defendants' costs in a specified lump sum. Despite the plaintiff's resistance to this course I am satisfied that it is not only in the second and third defendants' interests but in his. He has demonstrated a proclivity for protracted and baseless disputation, causing the defendants to incur substantial costs and giving rise to his own liability for those costs. The making of a gross sum order will save all parties time and expense.

Principles governing assessment of the gross sum

1. The principles on which a specified gross sum is quantified for the purposes of an order under s 98(4)(c) are well established and usefully summaried in Hamod v State of New South Wales (citation omitted and emphasis added): [819] The assessment of any lump sum to be awarded must represent a review of the successful party's costs by reference to the pleadings and complexity of the issues raised on the pleadings; the interlocutory processes; the preparation for final hearing and the final hearing. In the exercise of its discretion the court is not required to undertake a detailed examination of the kind that would be appropriate to taxation or formal costs assessment. [820] 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.
2. In Hadid v Lenfest Communications Inc, the method of quantifying a lump sum for the purposes of an order under s 98(4)(c) was described as a "broad brush" approach, distinguished from the approach applied by a costs assessor on taxation.

Amounts claimed

1. The second and third defendants have provided separate evidence as to their costs which enables the Court to make a logical and fair assessment of a reasonable gross sum. Ms Nun's affidavit at [9] provides a breakdown of the second defendant's costs of the matter, excluding GST, as between the various professional service providers: SOURCE OF COSTS AMOUNT Professional costs $24,655.10 Counsel's fees $10,325.00 Disbursements $1,743.73 TOTAL $36,723.83

1. Ms Nunn has produced itemised tax invoices (KLN-01 and KLN-02) issued to the second defendant's insurer and invoices from counsel who appeared for the second defendant at the hearing on 9 August 2017 (KLN-03 and KLN-04).
2. The itemised tax invoices relate to the periods 23 May to 9 June 2017 and 13 June to 27 September 2017. Broadly speaking the items for which costs have been incurred are as one would expect having regard to the nature of the proceeding. The rate at which professional fees have been charged, $375.00 per hour for each of two solicitors, is fair and reasonable given their legal experience of 13 years and over 30 years respectively.
3. The second defendant also seeks its costs of the notice of motion for the gross sum application in the sum of $5,000, comprised of $4,000 in professional fees and $1,000 for disbursements.
4. In total, the second defendant seeks a gross sum award of $29,000. To arrive at this figure a discount of 20% has been applied to professional fees, including those fees relating to this notice of motion, and a further discount of approximately 20% has then been applied to the total.
5. For the third defendant, the affidavit of Mr Price at [14] deposes to expenditure of $89,953.76 in preparing and prosecuting his client's summary dismissal application. The third defendant's costs as between the various professional service providers, exclusive of GST, are: SOURCE OF COSTS AMOUNT Professional costs $31,830.00 Counsel's fees $56,200.00 Disbursements $1,923.76 TOTAL $89,953.76

1. There is a substantial difference, in the order of $50,000, between these costs and those incurred by the second defendant. From the tables at [21] and [26] above, it is clear that the majority of the difference (approximately $45,000) is attributable to counsel's fees incurred by the third defendant. This can in part be explained by the retention of both junior and senior counsel by the third defendant whereas the second defendant did not see fit to brief silk.
2. Junior counsel for the third defendant appeared without a leader in the interlocutory hearings prior to the final hearing on 9 August 2017 of the defendants' application for summary dismissal of the statement of claim. Exclusive of GST, senor counsel's total fees for the proceedings come to $24,000 and junior counsel's are $32,200.
3. The professional fees charged by the solicitors for the third defendant are of a similar order to those charged by the solicitors for the second defendant. I consider the rates at which those fees were charged, which are comparable to those charged by the second defendant's solicitors, are reasonable and commensurate with the experience of the various solicitors who worked on the matter.
4. Like the second defendant, the third defendant has included in the total calculation of fees and disbursements an amount for conducting the present gross sum application. The third defendant's figure for that aspect is $8,000. The third defendant proposes a discount of 30% on its professional costs, no discount on counsel's fees or on disbursements and an overall discount of 20% on the total. This results in a final claimed figure of $74,000.

Plaintiff's objections

1. The plaintiff's objections to the second and third defendants' quantification are, broadly: 1. the second and third defendants collectively engaged three barristers including senior counsel in their prosecution of the summary dismissal application, despite their contention the plaintiff's case was "hopeless"; 2. the second and third defendants incurred significant costs in relation to applications for orders against the plaintiff that were not successful; 3. the defendants collaborated, shared information and assisted each other in preparing their documents and in so doing duplicated their costs; 4. principles said to have been stated in Hunter Area Health Service & Anor v Presland (2005) 63 NSWLR 22; [2005] NSWCA 33, namely that "criminal conduct excused by legal policy or principle remains unlawful and should not be compensated" (plaintiff's submission of 8 December 2017 at [35]), preclude the second and third defendants' recovery of costs; 5. the second and third defendants should not be awarded costs because their actions caused child abuse and violated the plaintiff's human rights and 6. the costs are excessive taking into account that the proceedings involving the second and third defendants culminated in a one day hearing.

Assessment

1. In the statement of claim which was dismissed the plaintiff alleged against the second and third defendants, both legal practitioners, tortious misconduct in connection with Family Court proceedings, which is said to have resulted in the making of ex parte orders which should never have been made and consequent damage to the plaintiff including in his relations with his young children. These were allegations that could have significantly impacted upon the professional standing of each of these defendants and on their livelihoods, either immediately or during the course of the proceedings or in the outcome. In those circumstances it was warranted for the defendants to take a thorough approach to their applications for summary dismissal of the proceedings. To that end it was justified for the third defendant to brief senior counsel.
2. Separate representation of the second and third defendants, each engaging independent counsel, was also justified. The two defendants fulfilled different roles in the Family Court proceedings and the allegations against them respectively were different. They economised in the briefing of counsel, appropriately, in that only the third defendant briefed senior counsel and the second defendant's counsel allowed him to take the lead in arguing points of legal principle that affected both.
3. The considerations referred to at [32] and [33] dispose of the plaintiff's submissions (1), (3) and (6). I reject submission (2); no significant time or cost was incurred on any aspect of the proceedings in which the defendants were unsuccessful. Submissions (4) and (5) have no factual or legal foundation.
4. The substantial counsel's fees now claimed by each of these defendants, particularly the third, are in part explicable by the appalling state of the plaintiff's pleading. No doubt required considerable time consuming analysis was required to grapple with exactly what the plaintiff sought to allege against each of the three defendants, before the law could be researched and arguments formulated.
5. I nevertheless consider that a significant reduction must be applied to counsel's fees now claimed by the third defendant and I therefore approach the application of discounts in a manner different from that which the third defendant has proposed. The number of days of junior counsel's reading and preparation may be deduced by dividing into his total fee the daily rates which have been supplied in Mr Price's affidavit and by deducting one and a half days for the final hearing of the motion and for conferences and the like. I consider it reasonable to adopt a gross sum that reflects slightly over four days of reading and preparation for junior counsel. This reduction takes into account an inherent inaccuracy of a gross sum assessment and the fact that some reduction would likely be made if the matter proceeded to assessment. On those considerations it is also warranted to discount the amounts for senior counsel and for the third defendant's solicitors, but by a lesser percentage (to $20,000 and $24,000, respectively). The resulting gross sum assessed for the third defendant is $60,000.
6. As mentioned at [25] the amount of $29,000 claimed by the second defendant has been derived by applying discounts to figures that otherwise result from the application of hourly rates which I find reasonable. The discounts adopted by the second defendant in my view sufficiently address the inherent uncertainties of the exercise and the magnitude of reduction which could be expected to result from a formal assessment.

Orders

1. The orders of the court are: 1. Pursuant to section 98(4)(c) of the Civil Procedure Act 2005 (NSW) costs payable by the plaintiff to the second defendant under order 2 made 5 September 2017 with respect to the second defendant's notice of motion are to be paid in the gross sum of $29,000. 2. Pursuant to section 98(4)(c) of the Civil Procedure Act 2005 (NSW) costs payable by the plaintiff to the third defendant under order 2 made 5 September 2017 with respect to the third defendant's notice of motion are to be paid in the gross sum of $60,000. 3. Each of the gross sums assessed includes the respective defendant's entitlement to costs under order 2 made on 5 September 2017 for the costs of the plaintiff's notice of motion filed 14 July 2017.

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