HIS HONOUR: I decided the principal proceedings on 10 July 2023: see Fordyce v Leung as executor of the estate of the late Robert Ho; Fordyce v Leung as executrix of the estate of the late Robert Ho [2023] NSWSC 778. The parties have now provided me with written submissions on the question of who should pay the costs of the proceedings before me.
[2]
Defendants' submissions
The defendants sought a specified gross sum costs order. Section 98(4)(c) of the Civil Procedure Act 2005 provides as follows:
(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--
(a) costs up to, or from, a specified stage of the proceedings, or
(b) a specified proportion of the assessed costs, or
(c) a specified gross sum instead of assessed costs, or
(d) such proportion of the assessed costs as does not exceed a specified amount.
The defendants submitted that the Court's power to order a specified gross sum on account of costs may be appropriately exercised in cases where any further costs assessment is likely to be unduly protracted and add unnecessarily to the costs of the proceedings.
The defendants drew upon the long history of these matters and the extensive contest about costs generated by this litigation. They referred to the fact that there have been two appeals in the District Court from the same costs assessment, and an appeal in the District Court from another assessment between the same parties. Mr Fordyce also made clear in oral submissions that he intends to appeal from the final certificates issued by the assessor in these assessments. There are other costs orders in the defendants' favour that have not been assessed. Mr Fordyce has not paid anything in satisfaction of the judgments entered against him. The defendants submitted that all of these factors militate strongly in favour of a gross sum costs order in these cases. They fear that with the benefit of the procedural history, any assessment will be unnecessarily protracted and lead to further litigation.
The power to award a gross sum should only be exercised when the court considers the available material allows a fair assessment of an appropriate costs sum. The simplicity of these proceedings makes a fair assessment a reasonably straightforward and uncomplicated task. For example, there were no interlocutory hearings, the hearing before me took only one day, despite an original estimate of four days and there was a reasonably large amount of evidence served by Mr Fordyce, most of which was not referred to but needed to be read by the defendant. Moreover, the costs assessments themselves had complex procedural histories that needed to be considered and there was no direct authority on the legal point, thereby necessitating some legal research and consideration.
The defendants submitted that the costs ordered should be based on an informed assessment of the actual costs having regard to the information before the court. In this case, I have been provided with counsel's fee notes and a summary of work in progress from the solicitor. The defendants submitted that the rates are clearly within an acceptable range and that the time taken is reasonable in the circumstances.
It is uncontroversial that courts are entitled to take a "broad brush" approach to determining the amount of costs. It is usual for a discount from solicitor/client costs to be applied as an appropriate way to reflect this. In many cases, the solicitor's costs have been discounted but counsel's fees have not.
The total legal costs are $26,750 (counsel) and $18,159 (solicitors). The defendants submitted that an appropriate amount to order would be in the range of $37,000 to $43,000 (ex. GST).
[3]
Mr Fordyce's submissions
These proceedings occurred only because the defendants, without explanation and against what would appear to be their commercial interests, chose to file an application for disbursements only in the sum of $291,427.42 on 27 June 2019. The defendants never filed an application for the assessment of the defendants' professional costs of $515,781.89. This was done by Mr Fordyce.
Mr Fordyce submitted that one of the major factors in the costs claimed by the defendants is the issue of the exceptional extent to which Mr Wong and Ms Leung have been involved in the proceedings, referred to as "micro-management", from 2011 onwards, allegedly thereby significantly increasing the costs incurred. Mr Fordyce suggested that Mr Webeck, the solicitor for the defendants, has at all times denied any micro-management, despite the opinion of the cost assessors to that effect. Mr Fordyce submitted that this should be a source of disquiet for me in the present application. Mr Fordyce contended that any amount of costs that I might allow should take account, favourably to him, of past micromanagement.
Mr Fordyce emphasised that, in his submission, the initial question must be whether I can be confident in arriving at a determination of any gross sum costs conclusion that all of the contingencies "that historically have only been uncovered through the more thorough and stringent cost assessment process" have been taken into account.
Mr Fordyce submitted that if I were to decide to make the gross sum cost order sought by the defendants, the determination should be made on the following bases and having regard to the following matters:
1. The courts have typically applied a discount in assessing costs on a gross sum basis and 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 making a gross sum costs order, the Court is entitled to take into account that if assessed on the ordinary basis, the usual outcome is that the costs recovered represent a proportion in the range of 60% to 85% of the total costs incurred.
3. In Ahern v Aon Risk Services Australia Ltd (No 2) [2022] NSWCA 39 at [49], although an expert cost assessor had provided evidence that 80% of the costs would be recovered, the Court reduced the costs by 30% rather than the 20% that the cost assessor said would be recoverable. Mr Fordyce submitted that I must allow for contingencies and a potential margin of difference in the costs assessment process.
4. In this case it is Mr Webeck, the solicitor for the party, who refused to acknowledge micro-management of the litigation by Mr Wong and Ms Leung, despite the costs assessors' conclusion to the contrary, who is giving the court information as to the amount of costs that he submits should be allowed.
5. In the special circumstances of matters where Mr Wong and Ms Leung are micro-managing the litigation, if I am going to make the type of quick assessment I am being pressed to make, the reduction in fees should be even less than the 60% figure "because it is known that unusual involvement of Mr Wong and Ms Leung significantly increase the costs".
Finally, Mr Fordyce submitted that the main issues in the case were legal issues, with the facts of the case providing a background for consideration by me "but not being intricately involved for the determination of the outcome of the case". They established that the point of law in issue was relevant and unresolved by any binding legal determination.
[4]
Consideration
Doing the best I can, it seems to me that much of Mr Fordyce's contentions are beside the point of the present application. They have little if anything to do with the defendants' application for a gross sum costs order relating to the proceedings heard by me. The fact that there may have been prior conduct, which Mr Fordyce refers to as "micromanagement" by the defendants, and also by implication by Mr Webeck, that allegedly increased the costs incurred in the original litigation, such alleged conduct does not reliably inform the task I am required to undertake in the discrete circumstances of this application. Submissions by Mr Fordyce, to that effect, are no more than an attempt, as the defendants point out, to re-litigate issues that have already been dealt with in the principal costs assessments.
Mr Fordyce was unsuccessful in the proceedings before me and does not contend that he should not be ordered to pay the defendants' costs. Nor has Mr Fordyce taken issue with the specific items, as opposed to the quantum of the items, for which the defendants now claim their costs.
In my opinion, particularly having regard to the prolonged, protracted and tortuous path travelled so far, there is much to be said for the just, quick and cheap resolution of the current dispute. There is nothing of substance to be said against the making of a gross sum costs order. None of Mr Fordyce's contentions convinces me otherwise. The material relied upon by the defendants in support of the application appears to me to be fair, logical and reasonable: see Ahern v AON Risk Services Australia (No 2) at [38].
The total costs claimed by the defendants are $26,750 for counsel and $18,159 for the solicitor, plus GST. I consider that an amount of $35,000 including GST should be allowed. Accordingly, my formal orders are as follows:
1. Order Mr Fordyce to pay the defendants' costs of the proceedings before me.
2. Order pursuant to s 98(4)(c) of the Civil Procedure Act 2005 that the defendants be paid the costs referred to in Order (1) in the specified gross sum amount of $35,000 including GST.
[5]
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Decision last updated: 16 August 2023