Frank John Pudarich v Anthony Pudarich; Milagros Discaya v Anthony Pudarich; Anthony Pudarich trading as on behalf of the Estate of the late Ivan Pudarich v Frank John Pudarich

Supreme Court of NSW|2024-08-29|Before: Stern J

JUDGMENT

The issue before the Court is as to what costs orders should be made following a late adjournment, on 22 August 2024, of the trial of these proceedings which was listed for four days commencing on 26 August 2024. The hearing was adjourned following an oral application for an adjournment, made by Frank Pudarich without notice during a directions hearing on 20 August 2024, reagitated by way of notice of motion filed and heard on 21 and 22 August 2024 (the "Adjournment Application"). There are also issues as to what, if any, costs orders should be made in respect of: 1. an application for Michelle Pudarich to be removed under Uniform Civil Procedure Rules 2005 (NSW), r 7.18(1)(b) ("UCPR") as the tutor of Frank Pudarich, which the Court refused on 22 August 2024 (the "Withdrawal Application"); and 2. an application made (without notice) on 20 August 2024 for orders that Frank Pudarich's solicitor Ken Neville and counsel Hamish Stitt be given leave to withdraw from the proceedings on the basis that their difficulties in obtaining instructions from Michelle Pudarich, as tutor for Frank Pudarich, were such that they could neither comply with their duties to the Court, nor to their clients (the "Removal Application"). Ultimately, that application was withdrawn on 21 August 2024.
This is not the occasion to consider what, if any, costs orders should be made in respect of the directions hearings which took place before Slattery J between 12 June and 2 August 2024 (inclusive). I do not accept that the costs of those directions hearings are costs thrown away by reason of the late adjournment. Those directions hearings were necessary to ensure the orderly preparation of the matters for hearing and were not wasted by reason of the adjournment.

The proceedings

Frank Pudarich, by his tutor Michelle Pudarich, is the plaintiff in proceedings 2023/193214, which were commenced by summons filed on 16 June 2023. In those proceedings (the "Specific Performance Proceedings"), which are brought against the Estate, Frank Pudarich seeks orders acknowledging the validity of and specifically performing a written agreement he says he reached with his father in 2014, pursuant to which his father agreed to sell him a property at 122 The Lake Circuit, Culburra Beach, NSW 2540 (the "Culburra Property") for $250,000, $245,000 of which remains unpaid but upon which no interest accrues. Unless Frank Pudarich succeeds in the Specific Performance Proceedings, the Culburra Property will form part of Ivan Pudarich's residuary estate, which is to be divided equally between Anthony and Frank Pudarich. Frank also seeks an order that provision be made for his maintenance and advancement of life pursuant to s 59 of the Succession Act 2006 (NSW) out of the estate and/or notional estate of Ivan Pudarich.
Frank Pudarich is also the defendant to: 1. proceedings brought by the Estate, which were commenced by statement of claim filed on 9 February 2024 (2024/51507). In those proceedings, the Estate seeks judgment for possession of the Culburra Property and leave to issue a writ of possession forthwith (the "Possession Proceedings"). By orders of 12 June 2024 Slattery J ordered that the Specific Performance Proceedings be consolidated with the Possession Proceedings. 2. proceedings brought by Milagros Discaya, against the Estate (2023/322211), seeking an order that provision be made for her maintenance and advancement in life pursuant to s 59 of the Succession Act (without intending any disrespect I will describe these as the "Discaya Proceedings"). Ms Discaya only seeks family provision in the event that the Court finds that she was not in a bona fide de facto relationship with Ivan Pudarich at the time of his death and was thus not entitled to a bequest of a property which Ivan Pudarich owned at 11 Mainsbridge Avenue, Liverpool, NSW 2170 (the "Liverpool Property") under a condition to that effect in Ivan Pudarich's will dated 21 June 2006 (the "Will"). The Estate does not contest that Ms Discaya and Ivan Pudarich were in a bona fide de facto relationship, but until 22 August 2024, Frank Pudarich did. In these circumstances, by orders of 2 August 2024, Slattery J ordered that that "in the event that the plaintiff in the [Discaya Proceedings] establishes that she was in a bona fide domestic relationship with the deceased at the time of his death after a contested hearing on that issue, the costs of the [Discaya Proceedings] will be borne by Frank and neither by Anthony, nor by the Estate of the deceased". By orders of 29 November 2023, Meek J ordered that the Specific Performance Proceedings, the Possession Proceedings and the Discaya Proceedings be heard together.
As to the value of the two properties, the most recent evidence before the Court indicates that the Liverpool Property was appraised (as between two separate appraisals) in August 2024 as having a market value of between $1,000,000 and $1,050,000, and the Culburra Property was appraised in August 2024, by means of a drive-by inspection, as having a reasonable selling price of between $720,000 and $800,000 (as set out in an affidavit of Anthony Pudarich affirmed on 15 August 2024). The value of the estate was estimated by Anthony, as executor, on 15 August 2024 as being $1,880,354.

The orders of 22 August 2024

The orders of the Court on 22 August 2024 were: "1. Notes the evidence being put before the court in an affidavit of Ken Mark Neville affirmed 22 August 2024 that Frank Pudarich has given instructions that he admits Milagros Discaya and the late Ivan Pudarich were in a bona fide de facto relationship at the time of the death of Ivan Pudarich which was the condition upon which a property at 11 Mainsbridge Avenue Liverpool was bequeathed to Milagros Discaya in the will of Ivan Pudarich from 21 June 2006 and the Court notes there is an additional condition that Ms Discaya discharge the mortgage on that property within a period of three months of being asked to do so. 2. Adjourns the matter for a period of two months to a day to be confirmed by the chambers of Justice Stern with a time estimate of three days. 3. Direct that any applications as to costs be heard by Justice Stern on Wednesday 28 August 2024 at 10.15am (with a half day time estimate). 4. Orders that the hearing listed for 26 August 2024 for four days be otherwise vacated. 5. Refuse the application made orally for Michelle to be removed as tutor for Frank Pudarich. 6. Directs that having regard to Michelle Pudarich's refusal of consent further to act as tutor for Frank Pudarich, Frank Pudarich and those whom he instructs in these proceedings should take all available reasonable steps to enable if possible an alternative tutor for Frank Pudarich to be appointed as a matter of urgency."
Order (2) was varied on 23 August 2024 such that the fixing of a date for the adjourned hearing was referred to the Deputy Equity Registrar. Order (3) was varied on 27 August 2024 such that any costs application be heard on 29 August 2024. The proceedings have now been fixed for a three day hearing commencing on 15 October 2024.

The costs orders sought

Frank Pudarich contends that the Court should direct either that the Estate and Ms Discaya's costs are to be costs in the cause of the substantive hearing on the ordinary basis, or paid by Frank Pudarich on the ordinary basis, and in either event, that such costs are to be paid by a gross sum costs order.
The Estate submits that Frank and/or Michelle Pudarich should pay the Estate's costs thrown away, to include the costs from 12 June 2024 for wasted directions hearings, updated affidavits, new subpoenas and notices to produce which will have to be issued afresh, hearing allocation fees and other disbursements and the costs of the applications before the Court on 20, 21 and 22 August 2024. As to disbursements, these costs are explained in an affidavit affirmed on 28 August 2024 of Adrian Corbould as being: Hearing allocation fee. Mr Corbould says that he anticipates that he will be required to pay a fresh hearing allocation fee. $2,697.00 Subpoena (filing fees) and conduct money. Mr Corbould says that he issued notices to produce as to Frank Pudarich's medical conditions, assets and bank statements and anticipates that he will have to reissue such subpoenas. $684.00 Counsel's fees at an hourly rate of $500, a ½ day rate of $2,500 applicable for any contested application of 1 hour or more and $5,000 per day all plus GST. These are supported by a fee invoice from Justin Brown, counsel, which covers the period 5 June 2024 to 27 August 2024. $18,837.50 Anticipated costs application. Counsel's fees. Mr Corbould explains that he expects such a bill on the basis of a ½ day hearing plus 2 hours preparation plus GST. $3,850.00 Total $26,068.50

Professional fees are explained by Mr Corbould as being: Updating affidavits. These are said to be necessary going to the estate's present value and competing needs of Anthony Pudarich. $11,000.00 Affidavits of costs. This is said to be the costs thrown away in preparing updating affidavits as to the Estate's costs. $500.00 (whilst Mr Courbould estimated this cost as $550, only $500 is claimed on this account in the Estate's submissions.) Costs of attending to subpoenas thrown away. This is said to relate to the costs thrown away in preparing, filing, serving and obtaining orders for access to various subpoenas and notices to produce. $6,000.00 Failure to pay expert fees. These are costs thrown away by steps having to have been taken to have Frank Pudarich comply with his share of the costs of the expert report. $330.00 Dealing with directions. These are explained as $1,000 for each of 8 directions hearings from 12 June to 20 August 2024. $8,000.00 Dealing with motion. This is explained as professional fees incurred in preparing for, instructing and attending the Adjournment Application. $5,151.30 Dealing with motion seeking costs. This was explained during submissions as an estimate only. $6,000.00 Total $36,981.30

The Estate submits that, on an ordinary basis, the professional fees (but not counsel's fees or disbursements) would be discounted by 30%, and the total of disbursements plus professional fees would thus be $51,955.41. The Estate submits that this should then be subject to a further "broad brush" reduction of 10%, and that a gross costs order should be made ordering that Frank and Michelle Pudarich, jointly and severally, be liable to pay the Estate's costs in the sum of $46,759.87.
Ms Discaya seeks an order that Frank Pudarich, forthwith, pay her costs of and thrown away by reason of the Adjournment Application, the Withdrawal Application and the Removal Application, in the amount of $28,814.50 or such other amount determined by the Court. Ms Discaya contends that the costs of all of directions hearings, and hearings of the various applications described below, were wasted by reason of the late adjournment, as were the costs of preparing updating affidavits, appearing before the Deputy Equity Registrar to secure a hearing date, and the costs of preparing for and appearing at the hearing to determine what costs orders should be made.
This is supported by an affidavit sworn on 28 August 2024 of Patrick Doherty. Mr Doherty explains that his costs are at an hourly rate of $500 per hour plus GST, and that those of counsel were at an hourly rate of $260 per hour, or $2,600 per day, plus GST. Mr Doherty says that in his experience, those costs are unlikely to be reduced on assessment. He says that on 27 August 2024 the Deputy Equity Registrar made orders for updating affidavits to be filed no later than 28 days before the hearing commencing on 15 October 2024, which means that the earlier updating affidavits of Ms Discaya of 3 July 2024 and Patrick Doherty of 1 August 2024 have been wasted. Mr Doherty says that the costs occasioned by the hearings from 12 June 2024, and thrown away by the adjournment, including anticipated costs of the hearing on costs, are: 1. Solicitors' professional fees $19,305.00 incl GST 2. Counsel $9,509.50 incl GST
Mr Doherty also annexes to his affidavit a bank statement for Frank Pudarich which shows that, as of 21 July 2024, the balance in his account was $219,815.13.

Relevant principles

The principles that apply where an application is made for a gross sum costs order under s 98(4)(c) of the Civil Procedure Act are uncontroversial. They were helpfully summarised in Bechara (t/as Bechara and Company) v Bates [2016] NSWCA 294 (Beazley P, Meagher and Payne JJA) (Bechara): "[12] The power to award a lump-sum should only be exercised when the Court considers that it can do so fairly between the parties and where an appropriate sum can be determined from the available materials: Harrison v Schipp (2002) 54 NSWLR 738; [2002] NSWCA 213 at 742-723 [21]-[22]; Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119 at 123. [13] 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: Hamod v New South Wales [2011] NSWCA 375 at [818] per Beazley JA (Giles and Whealy JJA agreeing). [14] A "broad brush" approach is appropriate. To require the same or similar level of detail as in a formal costs assessment would defeat the purpose of the lump sum order: Auspine Ltd v Australian Newsprint Mills Ltd (1999) 93 FCR 1; [1999] FCA 673 at 5 [16]; Penson v Titan National Pty Ltd (No 3) [2015] NSWCA 121 at [7]. [15] The courts have typically applied a discount in assessing costs on a gross sum basis: Hamod v New South Wales at [814]."
In Bechara, the Court added that it was entitled to take into account that, if assessed, the usual rule would be that only a proportion of total costs would be recovered. Whilst the power to award a gross sum costs order must be exercised judicially and the Court should be confident that the approach taken is fair, logical and reasonable, an order that costs be assessed as a gross sum "does not envisage that any process similar to that involved in taxation should take place": Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119 at 120, 123 (von Doussa J) (Beach Petroleum). The assessment of such order may involve an impressionistic discount of the costs actually incurred or estimated, to take into account contingencies that would be relevant on any formal costs assessment: Beach Petroleum at 124.
It is also well established that the Court has power to make a costs order against a tutor, who may be personally liable for costs: see eg Yakmor v Hamdoush (No 2) (2009) 76 NSWLR 148; [2009] NSWCA 284 at [18], [24] (Giles JA, Ipp and Tobias JJA agreeing) (Yakmor). As was noted in Yakmor (at [20]-[22]), responsibility for costs is one purpose of appointing a tutor. Giles JA further observed (at [25]) that "[t]he cases do not generally distinguish between the tutor's liability to pay costs pursuant to an order made against the person under an incapacity, and the tutor's liability to pay costs pursuant to an order made against the tutor him or herself." In either case, his Honour held, the liability is clear. In these circumstances, it is a matter for the discretion of the Court whether to specify that costs are payable by the tutor. As Giles JA noted in Yakmor (at [28]), orders are commonly made only against the person who sues or defends by a next friend or tutor but may be enforced against the tutor. Where there has been a period of incapacity, followed by a period when one or more tutor is appointed, the tutor last appointed is responsible for the whole of the costs of the proceedings although it is not clear whether this is a rule of practice or a rule of law and the Court nonetheless retains a discretion whether to make such order: Al Mousawy bht Imelda Margaret Dodds v Howitt-Stevens Constructions Pty Limited (No 2) [2010] NSWSC 1398 at [23]-[33] (Hoeben J).
An order for indemnity costs may be made "in circumstances involving relevant delinquency on the part of the unsuccessful party in order more adequately to compensate the successful party to the disadvantage of what otherwise would have been the position of the unsuccessful party in the absence of such delinquency on its part": Seller v Jones [2014] NSWCA 19 at [58] (McColl JA with Ward JA, as her Honour then was, agreeing).

The Withdrawal Application

This application, which was made orally on 20 August 2024, was explained by counsel as being prompted by an inability to obtain instructions for the purposes of the proceedings which was such that neither counsel, nor Mr Neville, was able to discharge the duties he owed to both their client, and to the Court. That application was supported by an affidavit affirmed on 19 August 2024 by Mr Neville, and which set out a chronology dating from 29 September 2023 to 19 August 2024, identifying repeated and prolonged difficulties which Mr Neville had had in seeking to obtain instructions from Frank Pudarich, and since the appointment of Michelle Pudarich as Frank Pudarich's tutor, from Michelle Pudarich. In Mr Stitt's oral submissions on that application particular emphasis was placed on difficulties in obtaining instructions from Michelle Pudarich on urgent matters relating to these proceedings over a period from 15 August and persisting up to 19 August 2024.
At the hearing on 20 August 2024 it became apparent that Michelle Pudarich had not been notified of the Withdrawal Application, albeit that both she and Frank Pudarich had been notified in June 2024 of an earlier (unsuccessful) application for withdrawal. In those circumstances, the Court directed that the application be stood over until 4.30pm on 21 August 2024, and that affidavit evidence be filed going to whether Michelle Pudarich, as tutor for Frank Pudarich, has been given proper notice of the Withdrawal Application and whether r 7.14(2) of the UCPR had been drawn to the attention of Michelle Pudarich. The Court also gave leave for Michelle Pudarich to appear by audio-visual link at the hearing at 4.30pm on 21 August 2024.
By email of 20 August 2024 at 7.31pm, Mr Stitt contacted the associate to Stern J, copied to all parties, indicating the following: 1. Michelle Pudarich had withdrawn her consent to act as tutor. 2. Frank Pudarich had stated that he was prepared to resume giving instructions in the matter but wished to persist with the application for an adjournment. 3. That Mr Stitt and Mr Neville had spoken with Professor Greenstein, Frank Pudarich's treating nephrologist, who was preparing an affidavit in support of the adjournment application. 4. That Mr Stitt and Mr Neville were no longer making an application for leave to withdraw.
Having regard to these matters, it is appropriate that the costs of the withdrawal application should follow the event: UCPR, r 42.1. They should be borne by Frank Pudarich, noting that, consistent with the principles discussed above, Michelle Pudarich as tutor will also be jointly liable for those costs. Whilst it was not an application made on her instructions, it was an application necessitated by the difficulties flowing from her conduct of the litigation. I will not order that those costs be paid on an indemnity basis. Including having regard to the medical difficulties that Frank Pudarich has been having and the difficulties discussed below that Michelle Pudarich has had, the threshold for such an order has not been crossed.

The Removal Application

Michelle Pudarich was appointed as Frank Pudarich's tutor by order of Slattery J on 2 August 2024, subject to the filing and receipt of a Consent to Act as Tutor by Michelle Pudarich. A consent to act as tutor form, signed by Michelle Pudarich on 4 August 2024, was filed with the Court on 21 August 2024. Thus, it was from that date that Michelle Pudarich was appointed as Frank Pudarich's tutor. Mr Neville, in his oral evidence on 21 August 2024, confirmed that prior to Michelle Pudarich's appointment as tutor, he explained to her that she would be taking on the "legal costs responsibility of being the tutor" and that, from Mr Neville's perspective, Michelle understood the obligations of being a tutor.
Under UCPR, r 7.18(1)(a), the Court's power to appoint a tutor is predicated upon the party (for whom the tutor will be appointed) being "a person under legal incapacity". It is thus implicit in the order appointing a tutor that Slattery J was satisfied that, as at 2 August 2024, Frank Pudarich was a person under legal incapacity, within the meaning of UCPR, r 7.13 which defines "person under legal incapacity" as including a person who is incapable of managing his or her affairs. The evidence before Slattery J on 2 August 2024 included an affidavit of Mr Neville affirmed 2 August 2024. That affidavit identified the many medical issues from which Frank Pudarich was then suffering, including that he had had a kidney transplant five years previously, had been continuously hospitalised since October 2023 following a heart attack, that he had had three stents inserted, unstable angina, low lung function, a brain infection and several minor strokes which also affected him psychologically. He also had chronic pain syndrome and post-traumatic stress disorder. Mr Neville said that Frank Pudarich had had to have surgery to insert a catheter deferred because of chest pain, and that his renal transplant had failed so he had to have surgery for dialysis access. The affidavit also annexed a "Certificate of Incapacity" dated 30 July 2024 from Kate Veljaca, clinical psychologist, stating: "Mr. Pudarich is facing very serious health complications causing significant biopsychosocial distress and impairment. He currently does not have capacity to attend to any matters of a serious nature, including legal dealings."
Ms Veljaca also opined that appointment of a tutor would be "indicated at present."
As set out above, on 21 and 22 August 2024 the Court heard an oral application, without notice, for the Court to remove Michelle Pudarich under UCPR, r 7.18(1)(b) as tutor for Frank Pudarich. This followed the email to the Court at 7.31pm on 20 August 2024 from Mr Stitt, described above. It also followed the filing, on 21 August 2024 at 8.07am, of a form (which had been adapted from the form for withdrawal of a solicitor) entitled "Notice of Ceasing to Act as Tutor" with the Court. This was signed by Michelle Pudarich and set out that: "I, Michelle Pudarich, have ceased to act as the tutor of Frank John Pudarich, plaintiff in these proceedings."
A tutor cannot unilaterally "cease to act" as tutor. Rather, once appointed, it is for the Court under UCPR, r 7.18(1)(b) to remove a tutor. Thus, the purported notice did not itself have the effect of removing the tutor.
On the evidence before the Court on 21 August 2022, it was not appropriate to remove Michelle Pudarich as tutor, leaving Frank Pudarich with no tutor. As was recognised by Sackar J in Daniel Henry Resler Walton by his Tutor John Mann v Terence George Hartmann as Executor of the Estate of Wanda Resler [2020] NSWSC 1628 at [19], the mere fact that a person may have some stable episodes may be "a long way away from a proper assessment" of whether they are capable of giving instructions, taking advice, or making decisions in their own interest. Of particular note here was the oral evidence of Mr Neville that he formed the view from the end of June 2024 that Frank Pudarich did not have capacity to give him instructions, and that he only re-assessed that position, on the basis of one phone call with Frank Pudarich, on 20 August 2024. Mr Neville explained that he was "quite surprised" when Frank Pudarich seemed "quite lucid and quite together and with it" during that phone call. Mr Neville's evidence was that up until the conversation on 20 August 2024, he had been concerned that in a stressful situation Frank Pudarich would "lose it", and that when Frank had "lost it" in the past he had become agitated and it was not possible to reason with him.
Professor Greenstein's evidence on 21 August 2024 was that he was not an expert on assessing mental capacity, that his usual mode of communicating with Frank Pudarich was to convey news or advice via Michelle Pudarich, that every time they consented Frank Pudarich for a medical procedure they did so in the presence of Michelle and that Professor Greenstein's advice to his juniors was to make sure Michelle was there when they obtained consent from Frank Pudarich. Professor Greenstein said that, whilst Frank did basically understand what they were saying to him, this was not always the case because Frank did "get flustered" and that is why Michelle was consulted. Professor Greenstein said, candidly, that he did have concerns about Frank Pudarich's understanding and ability to consent to medical matters.
The evidence also included an email from Ms Veljaca dated 19 August 2024 which stated that both Frank and Michelle Pudarich were in "a state of heightened psychological distress and overwhelm in response to Frank's deteriorating condition" and that they were both "at significant risk of further deterioration and harm under the present conditions."
Having regard to these matters, the Court refused the application to remove Michelle Pudarich as tutor for Frank Pudarich.
Again, it is appropriate that the costs of this application should follow the event: UCPR, r 42.1. They should be borne by Frank Pudarich, noting that Michelle Pudarich will have joint responsibility for those costs. This does not cross the threshold for an order that costs be paid on an indemnity basis.

The Adjournment Application

On 11 March 2024 these proceedings were listed for a four day hearing before Slattery J commencing 26 August 2024. During a directions hearing on 12 June 2024 counsel for Frank Pudarich indicated that he was having serious medical issues. On 12 July 2024, again, counsel for Frank Pudarich raised that he was having serious health issues and had been hospitalised again. The orders of Slattery J on 12 July 2024 included the following: "NOTE that [on] the next occasion, the solicitors for Frank Pudarich are expected to report to the Court, as best they can, as to the medical condition of Frank Pudarich supported if possible by medical certificates and such other evidence that will put the court in a position to determine whether the hearing of these proceedings take place on the appointed date in August 2024."
At a further directions hearing on 16 July 2024, an affidavit of Mr Neville affirmed on the same date was read. This affidavit annexed letters from Professor Greenstein identifying Frank Pudarich's medical difficulties. On that occasion, Slattery J made the following orders: "1. NOTES that the plaintiff, Frank John Pudarich ("Frank") is said to be in hospital and having only limited communications with his solicitors, Branston Neville who are asking to withdraw from acting in the proceedings and that the solicitor's withdrawal is likely to result in the Court being unable to communicate with Frank. … 7. NOTES that there is a contest as to whether or not the hearing of this matter will proceed on the appointed commencement date, on 26 August and the Court will consider vacating the hearing on the basis of a contest of evidence on the fitness of Frank and Anthony Pudarich to attend to give evidence in their cases at the hearing, AND because the fitness of each is in contest, the Court expects that any party who wishes to vacate the hearing date on the adjourned date of 25 July 2024 should provide up-to-date medical evidence that such party is presently unfit and likely to be unfit to give evidence at the hearing, noting that the evidence required in order for that to be determined should be from a treating medical practitioner who may be required for cross-examination."
An adjournment application, made orally, was rejected by Slattery J on 2 August 2024. His Honour made the following order: "NOTES the orders on the last directions hearing about the provision of medical evidence to justify the Court vacating these proceedings and, in the absence of sufficient medical evidence being advanced today on behalf of the plaintiff the Court declines to vacate the hearing date, given the medical condition of the other parties and the resulting need for the early resolution of these proceedings".
Notwithstanding these orders, it was not until 21 August 2024 that an application for adjournment, supported by affidavit evidence from Professor Greenstein who attended for cross-examination, was made. Of particular significance on that application was Professor Greenstein's evidence that over the past weeks or months, Frank Pudarich had had a range of serious medical problems, including a failing kidney transplant, a series of operations (including a further stent recently placed into one of his coronary arteries), and had only recently been placed back on dialysis. Professor Greenstein said that by reason of these matters Frank Pudarich had become progressively more frail and ill over the last few weeks and months. Professor Greenstein said that Frank Pudarich would not be up to participating in legal proceedings in light of his recent heart surgery and having recently started on dialysis, that he may "lose it" in a stressful situation, and that there may be physical sequelae of such an episode.
It was also of some significance that Professor Greenstein did not anticipate that this situation would continue indefinitely. To the contrary, he said that it was his hope and expectation that Frank Pudarich's condition would improve in some weeks, or even months, now that he was receiving effective dialysis for the first time. It was thus apparent that Frank Pudarich's current frailty and medical difficulties were the result of a particular combination of unfortunate recent medical complications, and his condition was expected to improve in a relatively short space of time.
In granting an adjournment of two months, I also took into account the undesirability (although not impossibility) of Michelle Pudarich continuing as tutor for a contested trial when she had withdrawn consent to do so, and the difficulties which had been experienced in obtaining instructions from her as tutor, including when needed urgently. I considered it was desirable for attempts to be made to find an alternative tutor for Frank Pudarich for the adjourned trial.
Having regard to the matters set out above, the costs of, and thrown away by, the adjournment application should be borne by Frank and Michelle Pudarich, to be assessed on an ordinary basis. Again, the threshold for an indemnity costs order is not reached.
Those costs include any costs of preparation for trial, and the lost filing fee, and the costs of filing updating evidence. I am not satisfied that further subpoenas will be required, given the relatively short adjournment. I am also satisfied that the cost of the updating affidavits will be less than the costs of the earlier affidavits, as they need only deal with matters which have occurred since the previous affidavits were filed, noting the adjournment is for only a relatively short period of time.

The parties' respective financial positions

I have already referred to Mr Doherty's evidence as to Frank Pudarich's financial position. This satisfies me that Frank Pudarich has the financial resources to meet an order as to costs.

Previous directions hearings

As I have already indicated, it is not appropriate that the Court should make costs orders now which encompass the directions hearings prior to the hearing on 20 August 2024. The same position applies as regards the costs of seeking that Frank Pudarich paid his share of the expert report of Ms Holt.
As regards the directions hearing on 20 August 2024 the position is different. To the extent that this was a hearing directed to checking that all was in place for the immediate preparation for the hearing, those costs were thrown away by reason of the late adjournment. Beyond that, the hearing was occupied by the Withdrawal Application. Those costs should be paid on an ordinary basis.

Determination

I am satisfied that this is an appropriate case to make a gross sum costs order under s 98(4)(c) of the Civil Procedure Act to cover the costs of and occasioned by the three applications, and the costs thrown away by the adjournment. First, it is clearly inappropriate for the expense of an assessment of costs to be incurred given how significant costs have already had to be spent dealing with these applications. It is clearly more efficient and cost effective for the Court to make a gross sum costs order. Second, the evidence before the Court is sufficient for the Court fairly to assess the costs, albeit not with the precision that would be involved in an assessment. Third, I am satisfied that Frank and Michelle Pudarich's conduct has led to the parties expending additional sums which would otherwise have been unnecessary. As is apparent from the evidence set out above, these costs are not insignificant.
In the circumstances, I am satisfied, taking the broad brush approach supported by the authorities, and taking into account the evidence before the Court, that costs should be awarded on the following basis: 1. The costs should cover the costs of the hearings on 20, 21 and 22 August 2024, the Withdrawal, Removal of Tutor, and Adjournment Applications, the costs thrown away by reason of the adjournment and the hearing before the Deputy Equity Registrar. I am not satisfied that a further 7 hours of preparation for counsel for the Estate will be required and will therefore allow only 3.5 hours of this time. These costs should be assessed as follows. 1. For the Estate: 1. Mr Corbould in his affidavit affirmed 28 August 2024 states that costs occasioned by dealing with the directions hearing on 20 August 2024 were $1,000 and the costs of dealing with the Adjournment Application were $5,151.30. I will use this as a starting figure. 2. The starting figure for counsel's fees should be $10,375, including a reduced figure for wasted preparation time of counsel, plus GST of $1,037.50. 1. For Ms Discaya: 1. The starting figure for solicitors' fees should be $9,100 plus GST of $910. 2. The starting figure for counsel's fees should be $5,395 plus GST of $539.50. 1. The costs of the costs application and hearing: 1. I am not satisfied that the costs as claimed by the Estate for this hearing are reasonable. In this regard I note that the hearing in fact took less than an hour and I was informed that anticipated travel costs of the Estate's solicitors were not incurred as they were able to undertake other tasks in Sydney. I will allow as a starting figure of $4,500 for solicitor's fees plus GST of $450, noting the very detailed solicitor's affidavit prepared, and $1,000 for counsel. 2. For Ms Discaya, as a starting figure I will allow as solicitors' fees the sum of $4,500 plus GST of $450 and counsel's fees in the sum of $540 plus GST of $54. 1. The costs of subpoenas should not be included. I am not satisfied that these will be required. 2. The costs of getting Frank Pudarich to contribute to the costs of the expert should not be allowed. 3. The costs of updating evidence should be included, but that should be done by only allowing as a starting figure a third of the costs of the previous updating affidavit evidence. This gives the following figures: 1. Estate: $3,666.67, being the previous fee of $11,000 reduced by two thirds, plus GST of $366.67; and 2. Ms Discaya: $266.67, taking entries 10 and 11 on the bill of costs annexed to Mr Doherty's affidavit and reducing this by two thirds, plus GST of $26.70. 1. I am not satisfied that there will be any need to pay the hearing allocation fee again. Upon making enquiries, the Court was informed that this fee is not re-charged when a hearing is vacated and relisted. 2. This gives, by way of starting figures: 1. $27,547.14 for the Estate (inclusive of GST); and 2. $21,781.87 for Ms Discaya (inclusive of GST). 1. Overall, a discount of 35% should be applied to the costs to reflect both what would be a likely reduction on assessment, the risk that items may be included that would not be allowed on assessment, that to some extent these are estimates of the work that was associated with the various applications as opposed to being related to general preparation for the hearing, that over the period there were some discussions about resolving the Discaya Proceedings which do not flow from the three applications and to reflect the need to ensure that the costs ordered are proportionate. This is consistent with the impressionistic approach supported by the authorities: see eg Idoport Pty Limited v National Australia Bank Limited & Ors, Idoport Pty Limited v Donald Robert Argus [2007] NSWSC 23 (Einstein J) at [13]. This gives figures of: 1. $17,905.64 for the Estate; and 2. $14,158.22 for Ms Discaya.
Those costs should be paid within 14 days. Having regard to the authority at [19] above, and noting that Michelle Pudarich appears to have been acting as tutor throughout the entirety of the relevant period notwithstanding that her consent to so act was not filed until 21 August 2024, Frank and Michelle Pudarich should be jointly liable to pay those costs.

Orders

The order of the Court is that: 1. Frank and/or Michelle Pudarich jointly are, within 14 days, to pay the costs of and occasioned by the application on 20 August 2024 for leave for counsel and solicitor for Frank Pudarich to withdraw from the proceedings, the application of 21 August 2024 for Michelle Pudarich to be removed as tutor for Frank Pudarich, and of the adjournment application of 21 August 2024, and the costs thrown away by the late adjournment of the hearing listed for 26 August 2024 of the Estate and Ms Discaya by way of gross sum costs order in the sums of: 1. $17,905.64 for the Estate; and 2. $14,158.22 for Ms Discaya.

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: 05 September 2024

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