The Secretary's Application
20 By the Interlocutory Application the Secretary seeks orders for quantified lump sum costs over two defined periods as well as his costs of applying for the lump sum costs. The orders for lump sum costs are sought pursuant to r 40.02(b) of the Rules which provides:
40.02 Other order for costs
A party or a person who is entitled to costs may apply to the Court for an order that costs:
…
(b) be awarded in a lump sum, instead of, or in addition to, any taxed costs; …
21 Mr Grabovsky opposes the making of those orders. He does so on the grounds of opposition raised in his affidavit and included in his submissions. I will consider each of those in turn.
22 First, Mr Grabovsky submits that the application is misconceived. That is not so. Sparke Helmore acts for the Secretary in these proceedings. It makes the application on behalf of the Secretary in that capacity. It is not the case that the Secretary needs to render a combined account for its costs to Mr Grabovsky before any action can be taken in the nature of this application. The orders made by Edmonds J on 21 and 24 October 2014 require Mr Grabovsky to pay the Secretary's costs of the interlocutory application filed on 25 September 2014 and of the appeal. The procedure adopted by the Secretary in attempting to recover his costs is proper and is not misconceived.
23 Secondly, Mr Grabovsky alleges the ground upon which the application is made is not applicable to Mr Grabovsky as Sparke Helmore is not a party to the proceeding. As noted, Sparke Helmore acts for the Secretary. The Interlocutory Application is made by those solicitors on the Secretary's behalf. There is no requirement that the Secretary render an invoice to Mr Grabovsky for his costs. The Secretary can make the Interlocutory Application as he has. I do not accept this submission.
24 The fact that Sparke Helmore has not provided a "Certificate under Division 10 of the Legal Profession Act 2004 stipulating grounds based on provable facts for the reasonable prospect of success" and made submissions and filed documents "in violation of ss 345 and 347 of the Legal Profession Act 2004" is not applicable. Noting that the Legal Profession Act 2004 (NSW) has been repealed, those sections relate to a claim or a defence of a claim for damages where certification is required. They have no application to these proceedings. There has been no misconduct on the part of Sparke Helmore and this submission is rejected.
25 Mr Grabovsky's grounds of opposition and submissions made on the basis that the Secretary is not a proper party to the proceedings and that there was no valid defence, attempt to raise the substantive issues which were determined in the appeal by Edmonds J and subsequently raised in the Extension of Time Application. They have been determined and are not relevant to the Interlocutory Application.
26 The submission that the costs have been improperly, unreasonably and negligently incurred is not persuasive. I repeat my comments at [16] above.
27 The Secretary relies on the decision of Yates J in Cameron in which a similar application was made. In that decision at [5] Yates J refers to the decision in Nine Films & Television Pty Limited v Ninox Television Limited [2006] FCA 1046 at [8] where Tamberlin J set out the following principles in setting a lump sum:
In fixing a lump sum, the exercise is one of estimation or assessment and not of arithmetic calculation or precision. As pointed out in Harrison v Schipp (2002) 54 NSWLR 738 at [22], the rule contemplates the application of a much broader brush than that applied on taxation. The approach must be logical, fair and reasonable, and should only be exercised when the Court considers that it can do so fairly as between the parties: see also Jacobson J's discussion in Sony Entertainment (Australia) Ltd v Smith (2005) 215 ALR 788 at [198]-[199]. In that case, his Honour allowed the applicants to recover only 40 percent of the amount claimed. Counsel for Nine points out that in Sony, his Honour did not have the advantage of a detailed assessment of costs by an expert consultant as in the present case. However, I note that the amount sought by the applicants in Sony as a gross sum was only 60 percent of the actual costs incurred. His Honour reduced that claim by a further 20 percent. Although the circumstances in the present case differ from the circumstances presented in the Sony matter, I consider that the approach of Jacobson J affords a broad general pointer to an appropriate range when determining a gross sum. In Donohoe v Britz (No. 2) (1904) 1 CLR 662 at 666, Barton J pointed out that when considering the amount of costs to be awarded as between party and party, the luxuries of litigation must be paid for by those who indulge in them and only the necessary costs are to be paid for by the losing side. The principles and approaches are also set out and considered by von Doussa J in Sparnon & Ors v Apand Pty Ltd [1998] FCA 164 in which his Honour fixed a gross amount of $634,320.54 where the actual costs paid by the client totalled $1,040,135.80. This amounted to a discount of some 39 percent.
28 In Cameron Yates J found, on the evidence before him, that the sum claimed for work up to a certain period was modest and was satisfied that it was less than the amount that was likely to be awarded on a party/party basis should the respondent's costs be taxed. Yates J was also satisfied that the respondent should have his costs of seeking the lump sum costs and made an order for a further lump sum to be paid for those costs.
29 I also note the decision of Middleton J in Playcorp Group of Companies Pty Ltd v Peter Bodum A/S (No 2) [2010] FCA 455 where Middleton J said at [3] and [4] of the predecessor rule to r 40.02(b) that it was "expressed in general terms and is not limited to only complex and protracted litigation. Even in very simple cases a gross sum assessment may be appropriate" and that the "purpose of the sub rule is to avoid the expense, delay and aggravation involved in protracted litigation arising from the taxation process". Middleton J went on to observe at [6] that:
Further, the court should now be mindful in interpreting and applying the Rules of the Court to best promote the "overarching purpose" of the civil practice and procedure provisions, which is to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible: see s 37M of the Federal Court of Australia Act 1976 ("the Federal Court Act").
30 In my view, the promotion of the overarching purpose of the civil practice and procedure rules is best served by making the orders for lump sum costs sought by the Secretary and not requiring the Secretary to go to the expense of preparing a bill of costs in taxable form and engaging in the taxation process. The Secretary made an attempt to avoid the need to file the Interlocutory Application by seeking to settle the claim for costs. While Mr Grabovsky says that he did not receive the relevant letter until he was served with Dr Thompson's affidavit, he also says that earlier receipt of that letter would not have changed his attitude to the Interlocutory Application.
31 I have considered the calculation of the amounts sought. The Secretary has explained the basis of his calculation of the lump sums. He seeks only party/party costs, only those costs that would be allowed on a taxation and has applied a "discount" by not including minor items and by reducing the total calculated by approximately 30%. This method has been applied both to the amount sought up to 28 October 2014 and the amount sought since 28 October 2014. I am satisfied that the amounts sought are reasonable and are appropriate.