Solicitors:
Ms D Purcell (self-represented - Applicant on Interlocutory Processes dated 4 December 2023)
Collins Clare Solicitors (for Liquidator)
Bugden Allen Graham (for Owners Corporation)
File Number(s): 2023/317162
2023/319753
[2]
Nimmitabel Waters Pty Ltd - Nature of the application
The Defendants in these proceedings, who are respectively the liquidator of NWPL ("Liquidator") and an Owners Corporation ("Owners Corporation") which brought the winding up application in respect of NWPL, seek orders quantifying costs that are payable to them on a gross sum basis.
I should first set out something of the history of the proceeding, before turning to the parties' affidavit evidence, the applicable principles, and their submissions. Addressing first the history of the proceedings, by Interlocutory Processes filed on 4 December 2023 in these proceedings and other proceedings concerning Jaridel Pty Ltd ("Jaridel") (which I address below), Ms Purcell, who indicates that she is a shareholder in NWPL, sought a range of relief. She there identified a number of matters which she sought to raise, including constitutional issues, some of which she addressed again in submissions today. The Liquidators and the Owners Corporation took issue with the form and substance of that application. At a hearing on 5 February 2024, Ms Purcell indicated that she did not press the Interlocutory Process in that form and would instead proceed with a more orthodox application for a stay of the winding up of NWPL under s 482 of the Corporations Act 2001 (Cth).
In my ex tempore judgment delivered on 5 February 2024, I noted that, in case there was any doubt as to Ms Purcell's position, I was satisfied that the Interlocutory Process in its then form should be dismissed and indicated the basis on which I had formed that view. I also there held that Ms Purcell should be ordered to pay the costs thrown away, or wasted costs, of the applications to date, and I ordered that:
"…Ms Purcell pay the wasted costs of and incidental to the Interlocutory Processes filed on 4 December 2023 as agreed or as determined on a gross sum basis prior to and as a condition of leave to file and serve any amended interlocutory process or to bring any further application in respect of the matters, the subject of the applications."
I in turn made orders for a process to define the amounts of costs in issue and progress the quantification of those costs if they were disputed (as is the case) and to bring that dispute to hearing.
I now turn to the information provided by the parties, and the affidavit evidence led, in respect of the application, dealing first with the position of the Liquidator and then with the position of the Owners Corporation. By a letter dated 7 February 2024, sent in accordance with the process indicated in my earlier judgment, the Liquidator advised Ms Purcell of the amount of its (revised) quantification of its gross sum costs claim, from which it had excluded, rightly, amounts of the Liquidator's fees which were not recoverable in such an application. By a letter dated 11 February 2024, Ms Purcell advised the Liquidator's solicitor that she did not agree with the costs claimed for NWPL or for Jaridel and did not propose any alternative calculation.
The Liquidator now relies on the affidavit dated 15 February 2024 of its solicitor, Mr Moloney, in support of the quantification of its gross sum costs claim. He outlines the circumstances of the solicitor's engagement to act in relation to Ms Purcell's Interlocutory Processes, and refers to the engagement of counsel, Mr Ball, for the Liquidator in relation to the application. He refers to the initial indication of the costs claimed made by the Liquidator, and to their subsequent recognition, to which I referred above, that Liquidator's fees were not properly recoverable in the application and the further advice to Ms Purcell in that respect.
Mr Moloney's affidavit there notes that, unsurprisingly where the two Interlocutory Processes raised identical matters, the Liquidator and his solicitors had conducted the two matters together, and Mr Moloney there quantifies the amount of costs incurred, across the two matters, as $11,507.83, comprising $7,144.50 in solicitor fees and $4,363.33 in disbursements comprising counsel fees. Mr Ball, who as I noted above appears for the Liquidator, properly accepts that, where a calculation is made on that basis, the amount of costs that would properly be allowed on a gross sum basis on each matter would be half of the total costs incurred, where the two matters raised identical issues and it is a proper inference that the work done in respect of each of them would have been of equal magnitude.
Mr Moloney also there sets out work in progress and makes an estimate of costs that would be recoverable to the conclusion of this application. That increases the amount claimed, across the two Interlocutory Processes, to $14,780.33 inclusive of GST (comprising $9,207 in solicitor's fees and $5,573.33 in counsel's fees), then increased, after the hearing of this application, to $19,730.33 inclusive of GST (comprising $11,517 in solicitor's fees and $8,213.33 in counsel's fees). I should add to my oral ex tempore judgment that I am satisfied that Ms Purcell should pay the additional costs of this quantification application for the reasons noted below.
I again note that that amount claimed by the Liquidator would, so far as NWPL is concerned, be divided in half, so far as half of the costs were attributed to each of the matters. I also proceed on the basis that GST is not properly recoverable where Mr Ball fairly accepts that that amount would likely be recoverable by the Liquidator as a tax credit and could not be recovered against Ms Purcell where it was recoverable in that way.
Mr Moloney also indicates, consistent with the approach adopted by the Court in many applications of this kind, that he has proceeded on the basis that between 70 and 75% of solicitor fees and 90 to 100% of counsel fees would be recovered, and he discounts the amount of fees ultimately claimed on that basis to $16,851.08 inclusive of GST, from which GST would need to be excluded on the basis noted above. An exhibit to Mr Moloney's affidavit includes the costs and an indication of the work done, both by the solicitors by way of a detailed narrative schedule, and by counsel by way of invoices.
Turning to the position in respect of the Owners Corporation, the Owners Corporation had originally indicated the gross sum costs claimed by a letter dated 6 February 2024 to Ms Purcell, but a number of the amounts claimed in that letter related to work that was not property recoverable in respect of this application, so far as it related to wider aspects of the disputes between the parties, and has subsequently been omitted from a revised calculation of the amount claimed by the Owners Corporation. Ms Purcell also advised the Owners Corporation that she did not agree with those costs and did not undertake an alternative calculation.
The Owners Corporation in turn relies on the affidavit dated 16 February 2024 of its solicitor, Mr Doyle, who outlines the range of matters raised by Ms Purcell in submissions at an earlier stage of the Interlocutory Process, and the steps which have been taken to address those matters by the Owners Corporation, and annexes a detailed calculation comprising a bill of costs, which, as I noted above, has subsequently been revised. By letter dated 13 March 2024 to Ms Purcell, the Owners Corporation in turn provided a further estimate of the bill of costs, in respect of the NWPL matter, which rightly excluded costs previously claimed which do not seem to me to be properly recoverable, but also updated the calculation for subsequent attendances and anticipated costs, allowing a 30% discount on professional fees. I should add to my oral ex tempore judgment that I am satisfied that Ms Purcell should pay the additional costs of this quantification application for the reasons noted below. However, those amounts were calculated inclusive of GST, which it does not seem to me should be allowed for the reasons noted above.
Ms Purcell in turn relies on her affidavit dated 28 November 2023 which was filed on 11 March 2024. It is plain from the date of that affidavit that it addressed the substance of the matters in dispute, prior to Ms Purcell's abandonment of and the dismissal of Ms Purcell's Interlocutory Process, and it does not specifically address the question of the quantum of the gross sum costs claimed by the Liquidator or the Owners Corporation. Ms Purcell there indicates, variously, that there are constitutional issues in relation to the matter and that the legislation, implicitly the strata titles legislation, was enacted "to illegally take property and give [it] to foreign powers such as the Chinese Communist Party". Ms Purcell indicates that she wishes to have the strata managers removed, although that wish does not raise a matter that could properly be determined in an application in respect of the winding up of NWPL, as distinct from proceedings relating to the strata scheme.
Ms Purcell also indicates her view, perhaps surprisingly, that both the NSW government and Australian government are currently listed on the New York Stock Exchange and the Securities Exchange Commission and are both now foreign bankrupt corporations, and challenges aspects of the conduct of the Owners Corporation or strata managers. She indicates that no receiver or liquidator is to be engaged until those matters are resolved, although that had the difficulty that a liquidator was previously appointed to NWPL by reason of its failure to comply with a creditors statutory demand.
[3]
Applicable principles and submissions
The applicable principles in matters of this kind are well established and I summarise them in my judgment in Re Beverage Freight Services Pty Ltd [2020] NSWSC 797. Section 98(4) of the Civil Procedure Act 2005 (NSW) relevantly provides that the Court may make an order to the effect that a party to whom costs are to be paid is entitled to a specified costs order instead of assessed costs, and I have already made such an order, in my judgment delivered on 5 February 2024. That power is commonly exercised in complex cases, having regard to the several matters identified by Beazley JA (with whom Giles and Whealy JJA) agreed in Hamod v State of New South Wales [2011] NSWCA 375 at [816] - [817], but the power is not limited to such a case: Simone Starr Diamond v Talus Diamond (No 4) [2013] NSWSC 811 at [8]; Beverage Freight Services at [19].
The power to make such an order should only be exercised where the Court considers it can do so fairly between the parties, including achieving an appropriate sum on the materials available to it, and the Court will typically apply a discount to professional fees in assessing costs on a gross sum basis, although there are cases in which it has not done so. Here, the Liquidator and Owners Corporation both accept that the relevant professional fees should be subject to a discount, although disbursements, including counsel feels, should not in accordance with the common practice. In particular, a gross sum costs order may be made to avoid the expense, delay and aggregation involved in litigation arising out of an assessment: Harrison v Schipp (2002) 54 NSWLR 738; [2002] NSWCA 213. Where a gross sum order is made, the Court is not required to undertake a detailed examination of the kind which would be undertaken in a cost assessment in determining a gross sum payable, and will adopt a "broad brush" approach: Hadid v Lenfest Communications Inc [2000] FCA 628 at [35]; Harrison v Schipp at [22]; Beverage Freight Services at [19].
Here, the Liquidator and the Owners Corporation each advance relatively simple submissions, which point to the principles in which a gross sum costs order may be ordered (as it has previously been made here), by reference to the case law to which I have referred above. Mr Ball submits, and I accept, that there is no doubt that an assessment of costs, for which Ms Purcell contends, would be a complex and difficult matter where there is every reason to think that the assessor would be asked to deal with similar matters to those which the Court is asked to deal in submissions. Mr Ball also outlines the basis on which costs have been calculated, pointing out, as I noted above, that costs have been quantified by the Liquidator across the two matters so that a costs order made in one of them would be divided in two, on the basis, noted above, that the costs are likely to have been incurred equally in the two matters.
Mr Doyle, for the Owners Corporation, in turn refers to the history of the matter, and points out in submissions that, although a number of the matters raised by Ms Purcell were unusual, so far as an application brought in a winding up was concerned, the Owners Corporation was obliged to deal with them, where it could not know, until the hearing on 5 February 2024, that Ms Purcell would not press the then form of application or that the Court would dismiss that application on the basis set out in my earlier judgment. Mr Doyle also there addresses the basis on which the costs have been quantified.
Ms Purcell's submissions range across a wider territory, although I should recognise that Ms Purcell has made clear, both in her written and oral submissions, that she does not wish to have a gross sum costs order made and wishes the matters to go to assessment. There are several difficulties with that submission. The first is that, as I noted above, a gross sum costs order was previously made, by my judgment on 5 February 2024, and all that remains is to determine the quantification of costs allowed and deal with the costs of this process. The second is that the range of matters raised by Ms Purcell in submissions, to which I will refer below, are indicative of the difficulties which would arise in an assessment and are reasons why a gross sum costs order rather than an assessment is appropriate in this case. The third difficulty, for completeness, is that I allowed Ms Purcell an opportunity and time to lead evidence to challenge the quantification of the costs claimed by the Liquidator and Owners Corporation, including leading expert evidence which she foreshadowed she would do, but she has not done so.
Turning now to Ms Purcell's submissions, she begins with a wide proposition, namely that the gross sum costs order is made under:
"delegated subordinate legislation to steal the property of Australians in order to satisfy the requirements of the Chinese communist party and the real estate agents and legals who work for them, selling out our nation."
Not all would agree with that view of the state of the nation. Putting that aside, the Court is here exercising a statutory power, conferred on it by State legislation under s 98 of the Civil Procedure Act 2005 (NSW), to determine the amount of costs to be payable on a gross sum basis, in a manner that has been exercised by courts in this State for many years, including appellate courts. In these circumstances, I can properly proceed on the basis that there is no constitutional issue as to the validity of s 98 of the Civil Procedure Act, where appellate courts have applied it, for many years, without any question as to its validity.
Ms Purcell in turn addresses aspects of her concern about the management of the strata property, but I should emphasise here that this is an application in respect of the winding of NWPL, not an application in respect of the management of the strata property. Here, a winding up order was made; Ms Purcell filed an application that, in effect, sought to remove the Liquidator, without satisfying the requirements of s 482 of the Act or raising any other proper basis for the Liquidator's removal; and Ms Purcell then abandoned and the Court then dismissed that application and made orders for gross sum costs against Ms Purcell. Those orders reflect the fact that the application was dismissed, in circumstances that Ms Purcell had herself indicated she would instead pursue an application under s 482 of the Act, and the consequences for costs do not depend upon the question whether the strata manager is managing the property well or badly. Ms Purcell also submits that she runs her property better than any third party, a submission which does not recognise the nature of a strata property in which Ms Purcell or associated entities holds several units. Those submissions, I should emphasise, do not address any question as to the quantification of costs by either the Liquidator or the Owners Corporation, other than for Ms Purcell's submission that the matter should be one of assessment and not a gross sum costs order.
By further submissions dated 15 March 2024, in respect of these proceedings and the Jaridel proceedings, Ms Purcell submitted that the Civil Procedure Act, apparently in its entirety, is unlawful because there is no head of power for costs orders to be made, and submitted that costs orders were used to keep cases out of Court and to promote reprehensible behaviour by the legal profession. I do not, with respect, accept those submissions. First, the Civil Procedure Act, including s 98 of the Act, is an exercise of the legislative power of the State of New South Wales. Second, there can be no conceivable suggestion that costs orders are made to keep cases out of Court, where such orders have been made for many years in order to compensate the successful party in litigation brought by an unsuccessful party against it. Third, it seems to me that there is here no room to characterise the costs jurisdiction as directed to misconduct of members of the legal profession where, after all, it was Ms Purcell who brought the application in its present form; Ms Purcell who chose not to proceed with it, rightly, given the difficulties which existed in respect of it; and the Liquidator and the Owners Corporation and their legal representatives had no real alternative other than to respond to the applications in the form in which Ms Purcell had brought them.
Ms Purcell in turn submits that gross sum costs orders are a "complete scam", which she characterises as of a similar character to strata costs, and are used as a "vindictive order" to stop matters proceeding. She submits that costs should follow the event and should be paid "at the end, if at all." Here, the gross sum costs order that was made is compensatory in character, directed to the position of successful parties who have been put to the costs of defence of the applications in the form that Ms Purcell brought them. The costs follow the event, so far as Ms Purcell has abandoned the applications she brought, and the Court has indicated it would dismiss them in any event, and the costs are paid at the end of those applications. It may be that, once these costs are paid, Ms Purcell will be entitled to bring a different application to terminate the winding up under s 482 of the Act or on another proper basis, which may agitate the matters that are truly in issue in respect of the termination of a winding up, namely the solvency of NWPL and Jaridel. However, Ms Purcell's entitlement to bring a different and proper application, once the costs of her earlier application is paid, does not have the consequence that these applications are in any way incomplete.
Ms Purcell in turn submits that the Owners Corporation does not act for her or her family members. That matter also does not impact on the Owners Corporation's entitlement to costs, where Ms Purcell brought an application which she abandoned, and which was dismissed, and an order for costs has been made in their favour. Ms Purcell also made submissions as to the authority of registrars in this Court, which I need not address, and a further submission that the Court was formerly operating under maritime law, and now operates under global law or martial law. Again, I do not accept either aspect of that submission. The Court is here exercising a corporations jurisdiction, largely by reference to the powers conferred on it under the Corporations Act 2001 (Cth), but also by reference to state legislation including the Civil Procedure Act to which I have referred above. It is not exercising a maritime jurisdiction, still less is it exercising a jurisdiction conferred by global or military or martial law or, as Ms Purcell at one point suggested, the United States Constitution as an extension of global, military or martial law, without excluding, she indicated, the possibility of the application of the Australian Constitution. Happily, it is also not necessary for me to address the circumstances in which the port of Darwin was sold off or aspects of the history of the ports of Western Australia, also raised by Ms Purcell in submissions.
Finally, I should recognise that Ms Purcell submits that the costs of the lawyers need to be properly assessed, but I have referred above to the difficulties which would arise from an assessment process, illustrated by Ms Purcell's submissions above, and to the evidence which is available in respect of the costs that are now claimed pursuant to the gross sum costs order that the Court has made. I recognise that those costs are substantial, and have been increased by the costs of the quantification application which will still be much less than the costs of an assessment. Once again, I also recognise that Ms Purcell brought the applications, in the form in which they were brought, and that has in turn generated the width of the issues that had to be addressed, before the application was abandoned by Ms Purcell and dismissed by the Court. Ms Purcell also asks for an order that the "unlawfully appointed" Liquidator and the "adjunct barrister" supply an itemised bill of costs, but I am satisfied that the costs incurred properly emerge from the evidence led in this application, and I will not make such an order.
[4]
Determination and orders
I am satisfied that the Liquidator has established, by the evidence to which I have referred above, the basis of his costs claimed, subject to dividing the costs incurred in total, between the two matters, so as to allocate half to each of them, and excluding the amount claimed by GST. I am satisfied that, in the particular circumstances and in order to avoid recurrent costs applications, and potential applications for the costs of the further costs applications, the costs incurred should include the anticipated costs of this application, which are not likely to exceed the actual cost given the manner in which Ms Purcell has conducted the application.
I am also satisfied that the Owners Corporation have established the basis of its claim for costs, in respect of this matter, as quantified by the bill of costs dated 13 March 2024, which I note had excluded several costs which I would otherwise have found were not properly recoverable under a gross sum costs order in respect of this proceeding. Again, GST should be excluded from the amount of costs recoverable by the Owners Corporation.
I should add to my oral ex tempore judgment am also comfortably satisfied that, in addition to the costs ordered by my 5 February judgment, Ms Purcell must pay the Liquidator's and the Owners Corporation's costs of this quantification application, which have been included in the amounts quantified above. That costs order follows the event, where Ms Purcell has unsuccessfully contested the orders sought by the Liquidator and the Owners Corporation, on grounds that were plainly untenable.
The proper course in these circumstances is to direct the Liquidator and Owners Corporation to submit draft orders, within a specified time, to give effect to this judgment. Those orders will not be controversial, where simply require a mathematical calculation in accordance with my findings above.
In the matter of Nimmitabel Waters Pty Ltd, proceedings 2023/317162, I direct the respondents to Ms Purcell's Interlocutory Application to submit draft orders to give effect to my judgment by 4pm on 19 March 2024 and provide a copy of those draft orders by email to Ms Purcell.
[5]
Costs in respect of Ms Purcell's corresponding application concerning Jaridel Pty Ltd
The liquidator of Jaridel Pty Ltd and the Owners Corporation, which was again the plaintiff in the winding up, here also seek the quantification of the gross sum costs order also made by the Court on 5 February 2024. This matter raises the same issues as those raised in respect of NWPL, so far as the Liquidator relies on the same evidence, but its costs in conducting the two proceedings are to be divided in two, half each to each of the proceedings. The Owners Corporation relies on similar evidence to that which it led in respect of NWPL, namely the affidavit dated 16 February 2024 of Mr Doyle and a bill of costs provided to Ms Purcell on or about 13 March 2024, which has excluded certain costs which I would otherwise not have allowed as part of a gross sum cost order.
Ms Purcell relies in all of the matters she raised in respect of NWPL and I reach the same conclusions as to those matters. Ms Purcell also raises one additional matter, which may be briefly addressed. She points out that Jaridel is the trustee of a family trust, and her brother has four units, and she has two, in that trust. That is not a matter that is material to this application for two reasons. First, the order of costs is to be made against Ms Purcell personally so far as this was Ms Purcell's application, and it is not to the point whether Jaridel holds its assets in its own right or as trustee of a trust in making an order as to costs against Ms Purcell personally. Second, even if, contrary to the fact, it were relevant, a cost order is made against a trustee company in its own right, and it is then a matter for that company to exercise any right of indemnity or exoneration it may have against the assets of the trust, so the identity of unit holders in the trust is irrelevant in that respect.
I reach the same conclusion here as in the NWPL matter, for the same reasons. Here, the Liquidator should have his gross sum costs of the total amount claimed divided by half, in these proceedings, but excluding GST. The Owners Corporation should have the total amount claimed in its 13 March 2024 bill of costs, excluding GST, for the same reasons as noted in my earlier judgment in respect of NWPL.
For these reasons, I make the same order as in the NWPL proceedings, namely that the respondents to Ms Purcell's Interlocutory Application bring in orders to give effect to this judgment by 4pm on 19 March 2024.
[6]
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Decision last updated: 26 March 2024