Eliezer v Sydney Water Corporation [2021] NSWDC 111 | Case summary

District Court of NSW|2021-04-07

The Applicant's submissions

Mr Roset submits that the discretion to order costs in s 98(4)(c) of the Act, including, specifically, the power to order a gross specified sum in lieu of an assessment, is exercisable having regard to general case management principles. This includes, in particular, ss 59 and 60 of the Act, concerning the elimination of delay and the proportionality of costs, generally. He submits that the costs of an assessment would be disproportionate to the small amount claimed.
Mr Roset referred the Court to the decision of Slattery J in Bahamad v Wong [2020] NSWSC 991 where his Honour emphasised (at [15]-[16]) two considerations which might incline the court to exercise its power, being: 1. the avoidance of the expense, delay and aggravation of an assessment; 2. the probable inability of the party (upon whom the obligation to pay costs is imposed) to pay the costs order.
Other considerations are relevant, such as the relative responsibility of the parties for the costs incurred, the complexity of the proceeding in relation to costs, and the capacity of the unsuccessful capacity to satisfy any costs liability: Harrison v Schipp (2002) 54 NSWLR 738 at [21]-[22].
As to the latter consideration, Mr Roset referred the Court to the circumstance that the plaintiff is currently involved in bankruptcy proceedings, in which, to put the matter specifically, she is applying to set aside a bankruptcy notice.
Mr Roset submits that the amount claimed is reasonable. He acknowledges the usual practice, for applications of this kind, that a discount be given and argues that the amount claimed could be viewed as two components: a figure of $5,200 (which represents a 20% discount), plus an additional sum ($182) representing the filing fee on this motion.

Consideration

I will address the points raised by the respondent in turn. Because of the circumstances I have referred to, where there was overlap between the two sets of written submissions dealing, respectively, with the entitlement in the applicant for costs and the issue of the lump sum order, to some extent, regrettably, there is some repetition.
As to the respondent's first point, Mr Roset annexed to his affidavit the costs disclosure and costs agreement between the firm and AMBA Commercial Collections Pty Ltd. The costs agreement is a copy of a business record and is admissible under s 48(1)(b) of the Evidence Act 1995 (NSW). Further, the cost agreement contains a representation that AMBA Commercial Collections was appointed as agent for the applicant. That representation is admissible for the truth of its contents under s 69(2) of the Evidence Act. Further, the Court can and does infer that the nature of the defendant is such that is may wish to use an agent to collect its debts and to instruct lawyers to do so on its behalf. I find, therefore, that Mr Roset's firm, Manion McCosker entered into a costs disclosure and costs agreement with ABA Commercial Collections Pty Ltd with the latter being the agent for the applicant. There is no suggestion that the charge out rates and work performed by Mr Roset, as details in the latter's affidavit of 17 March 2021 were not in accordance with the terms of that agreement.
As to the respondent's second point, if there was any merit in the point, it could have been advanced as a defence in the Local Court proceedings for being an abuse of process. It was not. Had such defence been raised, it would, thereafter, have been subject to scrutiny in accordance with the standard of proof that such serious accusation would require. It is too late for the respondent to raise it now. As to the respondent's complaint about the rejection of the terms of a notice of discontinuance, I allude to this in my main reasons and have also addressed it above (paragraph 9(b)). I need not repeat myself. As to the respondent's complaint of Mr Roset charting the progress of bankruptcy proceedings, the submission misses the point about the way that Mr Roset referred to and relied upon that proceeding in the hearing of the respondent's appeal, bearing as it does upon the improbability of the applicant recovering its costs as being a factor militating in favour of a lump sum order, rather than an assessment.
As to the respondent's third point, that plainly does relate to the issue of whether a lump sum order is appropriate, but not in a way in which it assists the respondent. First, her submission is no more than a bare assertion without articulating in what way the costs were disproportionate. She did not adduce evidence of how the applicant, as defendant to an appeal which the respondent had commenced in this Court, could have proceeded any more cheaply than it did. She did not try to suggest, for example, that the work performed, as set out in Mr Roset's supporting affidavit was unnecessary. She did not suggest that Mr Roset's charge out rate was excessive for the work involved. It is true that the costs recoverable are significant in proportion to the underlying debt, but that was inevitable, once the respondent invoked this Court's jurisdiction to appeal from a decision from the Small Claims Division of the Local Court in respect to a money claim which was small, even by the standards of money claims in the Small Claims division of the Local Court. Having invoked the Court's jurisdiction, plainly the applicant was entitled to seek representation and then to seek the costs of representation should it succeed.
As to the respondent's fourth point, the contribution, or lack thereof, of Mr Roset, as solicitor-advocate, towards his client's ultimate success is irrelevant. It is not the function of the Court, when considering an application for a lump sum costs order, to engage in a refined process of identifying which parts of a party's lawyer's contribution produced the successful result, or try to place a 'value' upon a party's assistance in getting to the ultimate result, even if that was possible.
Associated with the last point was the submission, not previously raised, about a collateral agreement between the applicant and respondent about her paying a debt in instalments. That, too, rests upon no more than bare assertion. It was not raised in the Local Court.
Further, notwithstanding her success in having the bankruptcy notice against her set aside, the Court has no understanding of the reasons for that result and no evidence otherwise to indicate what the respondent's financial capacity to meet a costs order actually is, should the assessment process proceed.

Consideration

In my opinion, the conduct of the parties in relation to what, with all respect to them, involves a small commercial debt, is a very vivid demonstration of the aptness of the Court making a lump sum order; particularly to bring an end to the parties' apparently boundless dispute without further delay and cost (to the successful party) being incurred and the probability that the applicant may have some difficulty obtaining a costs order against the respondent; notwithstanding the setting aside of the bankruptcy notice.
Specifically, the contest about this application for costs has been much more complex and protracted than it needed to be. This is the responsibility of the respondent in large measure who, in the course of two extensive sets of written submissions, made many unmeritorious points. Making full allowances, given her unrepresented status, many of the submissions raised by the respondent, particularly in her supplementary submissions dated 18 March 2021, were needlessly personal against Mr Roset; if not offensive; and would not have been tolerated had they been made by an admitted practitioner.
Adopting the broad brush approach appropriate to applications of this type, I am satisfied that Mr Roset's evidence supplies the Court with sufficient confidence to determine find that the amount claimed is reasonable and appropriate. I find that it does not place the respondent in any worse position than would be the case if the matter proceeded through to an assessment.
I therefore accede to the applicant's application in its notice of motion.
Pursuant to s 98(4)(c) of the Civil Procedure Act 2005 (NSW), the defendant is entitled to the plaintiff paying it a specified gross sum for its costs in the amount of $5,382, which amount includes the costs of its notice of motion filed on 18 March 2021.

Endnote

Eliezer v Sydney Water Corporation [2020] NSWDC 66 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: 07 April 2021

Civil Procedure Act 2005(NSW)ss 29, 59, 60, 98

Evidence Act 1995(NSW)s 48, 69

The defendant's entitlement to a costs order

By s 98(1) of the Act, costs are in the discretion of the Court. Nevertheless, by r 42.1 of the Uniform Civil Procedure Rules 2005 (NSW), unless it appears to the court that some other order should be made (wholly or partly), the general rule is that costs follow the event. The 'event', here, was the determination of the appeal. The result of that event was that the plaintiff failed in her appeal. The general rule would see the plaintiff paying the defendant's costs.
The plaintiff contends that some other order should be made in circumstances where: 1. the defendant commenced the proceeding of the Local Court at the height of the Covid-19 lockdowns, at a time when other companies were suspending payment requirements; 2. the plaintiff requested a discontinuance on terms that the dispute be resolved through alternative dispute resolution, but the defendant refused that request; 3. given the small amount, several Calderbank offers were made which would have ended the litigation; 4. the plaintiff was in a vulnerable position due to prolonged litigation, being away from her property; 5. the defendant sent disconnection notices, but failed to disconnect and allowed charges to continue to incur; 6. the defendant has been obsessively following other cases involving the plaintiff. That litigation concerns a Local Court claim commenced in 2013.
The plaintiff submits, with reference to certain authorities, that in the circumstances there has been 'disentitling conduct' on the part of the defendant which should displace the general rule.
I do not accept the plaintiff's submission that there has been any conduct by the defendant which disentitles it from the operation of the general rule.
Taking each of the matters raised by the plaintiff in turn. 1. the timing for the defendant to commence the proceeding, and the circumstances that other companies were suspending payment requirements, is irrelevant. There was no suggestion, for example, that suspension of payment requirements by other companies was extended to a moratorium on enforcement action in relation to existing debts; or that the defendant was subject to such legislative or regulatory requirement. 2. there was no obligation and it was not unreasonable for the defendant to reject a term, or terms, of the notice of discontinuance offered by the plaintiff. The result that the defendant has procured vindicates its position.
It was not unreasonable for the defendant to reject 'Calderbank' offers made by the plaintiff. Mr Roset says that no offer, informal or otherwise, was made in relation to the disposal of this litigation. It is unnecessary to determine any factual dispute about this. It suffices to say that it is not been demonstrated that the defendant obtained a no more favourable outcome than that which the plaintiff had offered to it.
Whatever the plaintiff means by being in a 'vulnerable' position, this is irrelevant to the exercise of the discretion. Whatever the personal circumstances of the plaintiff were, they did not confer any immunity upon her from the ordinary operation of court rules relating to liability to costs should her appeal be determined to be unsuccessful: Northern Territory v Sangare (2019) 93 ALJR 959; [2019] HCA 25; at [27].
The defendant's alleged sending of disconnection notices appears to relate to the merits of the plaintiff's case run in the Local Court, but that is irrelevant to the costs outcome of her unsuccessful appeal.
It was not illegitimate, or improper, for the defendant to refer to other litigation in which the plaintiff was involved. As I noted in my reasons dismissing the appeal, the matter was relevant to the question of a potential waiver to the plaintiff's allegation of bias against the Assessor in the Local Court. The outcome of that other litigation is also irrelevant.
The defendant, as the successful party, is entitled to its costs of the appeal to this Court.

Eliezer v Sydney Water Corporation

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