Section 98(4) of the Civil Procedure Act 2005 (NSW) provides:
"98 Courts powers as to costs (cf Act No 52 1970, section 76; SCR Part 52A, rules 5, 6, 7 and 8; Act No 9 1973, section 148B; Act No 11 1970, section 34)
…
(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."
As previously noted, the costs are claimed on an ordered costs, and not on an indemnity, basis. However, that does not accord with the documentation with which I have been provided. I have been given three bills of costs sent to the plaintiff for the period from the commencement of this year for sums totalling $34,156 inclusive of GST plus Mr Senior's two memoranda totalling $5,214.
The bills sent to the plaintiff are put before me for payment on the basis that "85%" of the work since 19 December 2019 is due to "the defendant's conduct in the proceedings and the delay resulting in that conduct", which amounts to $33,464.50 inclusive of GST, with the added assertion that, if the bill went to assessment, about 74% of that sum would be recoverable. The only reference to solicitor/client costs anywhere is a reference to unidentified "administrative costs" being excluded from the accounts (presumably photocopying and telephone costs) as being related to solicitor/client costs. To all intents and purposes, this is a solicitor/client bill.
It is clear that Ms Trevitt has conflated deductions from solicitor/client and party/party costs as applied to a bill in solicitor/client form with the "rule of thumb" deduction for gross sum costs orders. As to the latter, it is general practice for the court to take into account that some portion of the ordered costs may be disallowed on assessment and to deduct a certain percentage; in Bobb v Wombat Securities Pty Ltd & Ors (No 2) [2013] NSWSC 863, Beech-Jones J deducted 70%. The percentage that is deducted reflects the fact that nearly all assessments of costs are reduced by costs assessors, whether these are solicitor/client or party/party. The deduction is an adjustment for avoiding the costs and likely deductions on all bills sent for assessment, whether solicitor/client or not. This is a significant oversight.
There are also problems with the information as to quantum. I was not provided with the following documentation or information:
1. The Costs Agreement: While it is still possible to seek a gross sum costs order even where a costs agreement is void (Ventouris Enterprises Pty Ltd v Dib Group Pty Ltd & Anor (No. 4) [2011] NSWSC 720), that does not mean that the costs agreement should not even be provided. The purpose of gross sum costs being assessed by the judge is intended to be carried out based on similar kinds of information (Amos v Monsour P/L & Ors [2009] QCA 65 at [28] ff), and the greater degree of informality is no excuse for failing to provide material that would be produced as a prerequisite for costs assessment.
2. Information about GST: Liability to pay GST may depend on the contents of business activity statements filed subsequent to payment of the relevant invoices (see Merringtons Pty Ltd v Luxxotica Retail Pty Ltd [2006] VSC 25 at [10]; Penson v Titan National Pty Ltd (no 3) [2015] NSWCA 121 at [25]). As a solicitor, the plaintiff is likely to be registered for GST.
The rest of the documentation consists of a printout of time-costing which is then charged for in full at the rate of $550 per hour, on the basis that Ms Trevitt is a partner and entitled to charge at the highest rate, for each action ever taken (including each recipient of "reply all"-style emails). That raw data is not analysed or explained. The reasoning behind the assertion that 85% of these costs are attributable to the defendant's delay is not exposed.
The resulting solicitor's bill is, additionally, rather high when compared to estimates of trial costs I have been given in other defamation claims, such as Mr Goldsmith's estimate (made during a security for costs application) in Hague v Cordiner (No 2) [2020] NSWDC 23 at [3], namely between $45,000 and $58,000, of which he said 75% would be recoverable on assessment unless an indemnity costs order were made. In Mathews v Pigram [2020] NSWDC 526, where the costs of the whole proceedings up to an assessment hearing were ordered on an indemnity basis, the assessed sum is below $50,000.
There are judgments reflecting similar sums for interlocutory costs claims in the Federal Court of Australia and the Federal Circuit Court of Australia (where the preference is for gross sum costs orders). For example, in TFM Epping Land Pty Ltd v Decon Australia Pty Ltd [2020] FCA 955, a gross sum costs order was sought for the vacation of a hearing date where senior and junior counsel had been briefed; after a detailed analysis of the documentation, Marcovic J awarded $13,034 excluding GST, which was half the sum claimed. (I note, however, that most applications for lump sum costs are simply referred to the Federal Court's registrar, which makes the discernment of any trend difficult, as well as raising the question of the efficacy of a process that simply replaces a costs assessor with a registrar).
Most of the tasks billed for are simple administrative tasks such as emails to and from my associate to have the matter listed. The appearance and drafting work has been done by counsel. In circumstances where the charges are a percentage of the $550 rate for every telephone call and email ever sent, I consider the solicitors' charges to be difficult, without more information, to justify.
Ms Trevitt asks me to accept that there has been "minimal time charged by counsel". The extremely moderate nature of counsel's fees in this matter and the fact that he has done all the work of substance makes it difficult for Ms Trevitt to claim around four times that amount.
In conclusion, the entitlement to gross sum costs orders requires careful presentation in terms of content as well as of form. A bald claim of 85% of the costs being attributable to the opposing side's conduct of the litigation would not be accepted by a costs assessor, and should not be accepted by the court.
For these reasons, I could not be satisfied that I have sufficient information to conduct the careful kind of hearing necessary for the purposes of a gross sum costs order and, if I had been prepared to make an order for costs to be payable forthwith, I would not have been prepared to embark on this exercise.
[2]
Concluding remarks and orders
Looking at the wider picture of costs and case management, gross sum costs orders play an important part in effective case management, but are not necessarily a good way of keeping costs down. Nor does it seem that leaving parties to sort out issues between themselves as opposed to seeking orders from the court saves anybody much money.
The factual background for this application tends to suggest that applications seeking large costs orders payable as gross sums for interlocutory applications are best made only in clear cases, for the reasons explained by Fullerton J in Ghosh v Miller (No 2) [2016] NSWSC 713 (see also Petkovic v Koutalianos [2016] NSWSC 1817 at [205] per Hallen J). As both Fullerton J and Hallen J emphasise, this is a procedure to be used to avoid the expense, delay and aggravation of the costs assessment process, where an assessment will disadvantage the successful party in the litigation (Starr-Diamond v Diamond (No 4) [2013] NSWSC 811 at [8] per Slattery J).
The desirability of replacing costs assessments with gross sum orders on a wider basis, as occurs in the Federal Court (Federal Court of Australia, Costs Practice Note (GPN-COSTS), paragraph 4) needs to be seen in light of the likelihood of judges having success in "dealing with matters previously left to others" (the Hon Justice Murphy, "The Problem of Legal Costs: Lump Sum Costs Orders in the Federal Court", Federal Court of Australia, 17 November 2017). That is why careful preparation of such applications is an important part of the process.
In addition, when courts asked to consider gross sum costs issues, there needs to be some recognition that, in modern e-friendly litigation practice, technological novelties such as the "reply all" email (as noted above, a feature of these memoranda of fees is that each "reply all" email is charged for singly) should not be costed as if still composed with a quill pen. The speed of email and of e-record-keeping generally ought to reduce, rather than add to, the costs charged.
I have not been prepared to make the orders sought in relation to the litigation in its current state. However, the defendant should not assume that future repleading, or future delay, will be dealt with as generously as has occurred here. The past six months have been difficult for everyone, but these conditions will not last for the rest of this litigation. Fortunately the defendant's current solicitor (about whose conduct no complaint is made) is, like Mr Goldsmith, experienced in this area of the law and, hopefully, the rest of this litigation will be conducted as expeditiously as can reasonably be the case in the current uncertain climate.
Finally, noting that the merits of the case at trial are the best indicator of where the costs burden should lie, I note that I have made an order for the costs of this application to be the costs in the cause.
[3]
Orders
1. The parties to bring in Short Minutes of Order reflecting each of the occasions upon which the plaintiff is liable to pay costs thrown away by reason of his amended pleading.
2. Plaintiff's application for costs payable forthwith as a gross sum order is dismissed.
3. Parties' costs to be cost in the cause.
[4]
Amendments
21 September 2020 - Paragraph 39 "defensive triviality" is changed to "defence of triviality"
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: 21 September 2020
The plaintiff commenced proceedings for defamation, by statement of claim filed on 8 October 2019, for a publication about his conduct as a solicitor. Further causes of action were added in an amended pleading in November 2019. The defendant filed two defences which he himself drafted. These required repleading and, in about January 2020, he consulted the first of two solicitors who have represented him and drafted all subsequent pleadings and particulars.
The plaintiff complains that there have been multiple defences filed, as well as a cross-claim which had required amendment. While these amendments followed correspondence between the solicitors rather than court rulings, the plaintiff complains that the conduct of the defendant in making so many amendments resulted in such substantial costs that gross sum costs orders payable forthwith are required. The plaintiff also complains about the adequacy of particulars of the currently pleaded defence.
The orders the plaintiff seeks are as follows:
1. The defendant pay the plaintiff's wasted costs in addressing the amendments made to the defence and cross-claim, payable forthwith as a specified gross sum.
2. The defendant pay the plaintiff's costs of this application on the same basis.
3. The defendant provide a further response to the requests for further and better particulars of the third further amended defence set out at paragraphs 2, 3, 7. 8. 9. 21(ii), 22(ii), 26, 27 and 28 as set out in the plaintiff's solicitor's email of 6 July 2020, which answers are asserted to be inadequate.
4. The defendant provide further responses to the request for further and better particulars of the amended statement of cross-claim filed on 30 June 2020 set out at paragraphs 30, 31, 32, 34, 36 37 and 38 of the letter from the plaintiff's solicitor dated 6 July 2020.
The plaintiff has provided a large volume of material in support of these applications. This has included a court book containing the following:
1. Affidavit of K A Trevitt sworn 27 May 2020;
2. Affidavit of K A Trevitt sworn 8 September 2020;
3. Affidavit of K A Trevitt sworn 10 September 2020;
4. Written submissions.
The defendant acknowledges that he must pay the costs thrown away by reason of the amendments but submits that these should not be assessable now, and not in the form of a gross sum costs order.
These applications were given a special fixture as the estimate of time was two hours. In fact the hearing took much less. The complaints about particulars were dealt with in short form and, as a comparison between those objected to and those the subject of orders shows, the parties had mixed success. The procedural history which led to the bringing of this application was also relatively straightforward and I was able to make orders without needing to reserve judgment.
I have not been asked to give reasons for the relief sought in 3(c) and (d) above, but I have been asked to give reasons for my refusal to make the gross sum costs orders sought by the plaintiff. These are those reasons.
The issues raised in this application highlight some of the problems the court faces in effective and costs-conscious case management of defamation actions, the costs for which are reaching eye-watering proportions. These issues are not restricted to Australia. The best way to deal with increasingly high defamation costs has been the subject of both judgments and inquiries in other common law jurisdictions, notably in the United Kingdom (see in particular the United Kingdom Ministry of Justice 2013 report, 'Costs protection in defamation and privacy claims: the Government's proposals' and the Ministerial Statement of The Rt Hon David Gauke, Lord Chancellor and Secretary of State for Justice, dated 29 November 2018). Recent judicial commentary in other common law jurisdictions includes New Zealand (Opai v Culpan [2017] NZHC 1036, [2017] NZAR 1142 at [81]) and Canada (Bernstein v Poon, 2015 ONSC 2125 (CanLII) at [4] - [8] and [63]).
Nor are these case management/costs concerns restricted to defamation litigation. Litigation costs are increasing across the board and case management methods to deal with this do not seem to be able to stop this. As long ago as 20005, in Lemoto v Able Technical Pty Ltd (2005) 63 NSWLR 300, McColl JA warned that "satellite litigation" on costs can distort the merits of the case. Although that case related to the personal liability of a solicitor for costs incurred, this term "satellite litigation" is now widely referred to in relation to case management judgments in the context of ss 56 - 62 of the Civil Procedure Act 2005 (NSW).
The increase in legal fees is all the more puzzling given not only the improvements made to case management reflected in the Civil Procedure Act 2005 (NSW), but also the exponential growth of online technology use in the courts and in legal offices. Quicker and cheaper means of communications such as emails, Zoom conferences and data analysis should reduce the costs and delays of traditionally expensive and time-consuming tasks (as was observed in McConnell Dowell Constructors (Aust) Pty Ltd v Santam Ltd & Ors (No 1) [2016] VSC 734. However, there is little evidence of this to date.
How can courts manage interlocutory costs effectively without making orders where the weight of those costs could arguably displace the merits of the case? In particular, how are the courts to deal with the sudden and unexpected impact of Covid-19 and its subsequent aftermath? When should parties who are struggling to conduct their case efficiently in these difficult times expect the court to take a hard line on issues such as multiple attempts to plead a case, delays in compliance and/or rude correspondence? These are not easy questions to answer.
The procedural history
The matter complained of in the first version of the statement of claim filed on 8 October 2019 was an email sent by the defendant to a Ms Klopper in the following terms:
"No funds are owed to you. I presume that it's either being, Theo or Jenny that instigated this email, I suggest it best you invest your money with them and cease contract here.
As for the other investment, a new lawyer has taken over that file and will be in contact with you. Direct all inquiries to him in relation to that matter. The last lawyer, Paul, was terminated for manipulation square [sic] trust funds."
The plaintiff, a solicitor, did not provide particulars of identification in the statement of claim, but it is not in dispute that he is the "Paul" referred to in the last sentence.
This statement of claim was served on the defendant by the plaintiff personally, according to his affidavit sworn on 10 October 2019. The defendant filed a defence he drafted himself on 30 October 2019. It was not felicitously drafted but appeared to attempt to plead justification.
The plaintiff appeared before me on the first return date, 31 October 2019. As he was acting for himself, and as part of case management, I drew to his attention some issues in relation to the statement of claim as well as the defence, and also to the decision of the High Court in Bell v Pentelow [2019] HCA 29; 93 ALJR 1007; 372 ALR 555, as to the entitlement (or lack thereof) of a solicitor acting for himself to claim legal fees.
An amended statement of claim was filed on 13 November 2019. This pleading, which was prepared by the plaintiff's current solicitor, enlarged the plaintiff's claims by adding two new publications dated 24 October 2019. This is in the form of a complaint to the office of the Legal Services Commission although the publications in question are asserted to have been sent to 2 named persons (as to the second matter complained of) and 6 named persons (as to the third matter complained of). The contents are as follows:
"Schedule B
1 Dear Sir/Madam,
2 My complaint is in relation to the conduct of John Richard Paul Hunt, who simply prefers the nom de plume "Paul Hunt".
3 Over the years Paul has worked for many firms and "set up shop* under many names, E-Laws, Moissons and Hunts just to name a few.
4 Despite his inability to hold a Job and lack of ability in running a successful law, this nomadic warrior has never failed in one respect, he never issues receipts for payments, especially payments of cash, into his trust accounts, nor is there any evidence the funds made it into the trust account.
5 This all came to a head over the last few months, upon his liquidation of two entities, both non-trading and surplus, that I had an association with, over purported non-¬payments of his bills.
6 It was only through this experience that I established why he does not issue receipts, especially for cash.
7 By taking payments and not issuing receipts, Paul Hunt utilizes the "fog of time" to either
8 (1) Swallow up the funds
9 (2) Obfuscate over the whereabout of the funds.
10 (3) Or if he admits to tie funds, he will retrospectively and unilaterally, without my consent apply those funds "willy nilly" to whatever file he chooses, and most often than not, he applies the funds to a file that was previously paid up. In fact, Annexure D is a perfect example of his method operandi, at point 27 of his sworn affidavit, he has purportedly allocated my money without my consent, to various unalleged unpaid files. I never gave him consent to transfer these funds to his benefit.
11 By way of example, on the 13th of May 2019 i deposited 15,000 into his trust account, refer to annexure A, and subsequently -
12 (1) Paul did not issue an acknowledgement receipt.
13 (2) Paul did not seek consent to transfer the funds out of the trust account.
14 (3) Paul did not notify me that the funds had been transferred to his benefit.
15 (4) To reiterate I never gave Paul Hunt consent, express or otherwise, to touch those funds.
16 Now Paul is a very ingenious fellow, when called to account for the funds, he will respectively create an invoice and receipt to suit his purpose, but unfortunately for Paul, in keeping with my narrative, there is no evidence of delivery of these receipts or invoices,
17 Now lets see how this sample unfolded -
18 (1) At annexure B is an email from Paul Hunt, in the email he states, "Today is the first time I have received a request for receipts", in fact various laws require he must promptly issue a receipt for fund in trust as a matter of course.
19 (2) Also, at annexure B, he states "confirmation receipt of the $15,000 was provided to you in the form of the affidavit", now mind you, this is 7 months after the fact, and it was only done because I forced his hands. Also note, he unilaterally without my consent allocated the funds to a file of his choosing, and most conveniently away from the entity that was subject to a wind up.
20 (3) Paul also refers to an agreement made on the 30th of April 2019 and produces a copy of an email. I went through my emails and cannot locate this alleged email nor any response from me. There is truth however fiat he paid 3000 to another lawyer on my behalf but that was subsequently repaid back with cash. In essence we also see an element of mixing truth with fiction.
21 Furthermore, to support my case, at annexure C there are numerous examples of cash payments given to Paul where no receipts, or evidence of receipts or consent to touch those funds were provided.
22 On a more serious note, Paul has ignored not only my request for accountability for all the funds deposited into his trust account, but also the repeated requests from respected lawyers Amy Weiner and Ben Skinner of DSS Law in Melbourne. Refer to annexure E
23 I kindly request that you investigate the manner in which this legal practitioner operates his trust accounts, because at best, he is reckless and should not be allowed to operate trust account without oversight, or worst still, he intentionally operates in a manner designed to deceive.
24 I hope that through this investigative process you will be able to account for all my funds.
25 You may also be interested to know that several well-known investors, amongst them Babak Moini of Laser Clinic fame, have invested hundreds of thousands with this fellow only to lose it all.
26 I took forward to hearing from you, your urgent attention to this matter will be greatly appreciated.
27 Best regards Kyled Alhalek (Carl Hallak is my anglicised alias)
28 [Annexure A]
29 [Annexure B]
30 [Annexure C]
31 [Annexure D]
32 [Annexure E]"
The basis of the plaintiff's claim for costs to be payable forthwith
The plaintiff brings this application on the basis that this is a separate and completed phase of the proceedings, in that the matter proceeding on pleadings involved a new "a new beginning", relying upon Fiduciary Limited v Morningstar Research Pty Ltd [2002] NSWSC 432; 55 NSWLR 1; 55 ALR 1 at [18]:
"18 These timing factors indicate, to my mind, that the interlocutory hearing may be regarded as a separate and completed phase of the proceedings. After that hearing, there was a direction that the matter proceed on pleadings which, in a sense, involved a new beginning. The statement of claim pleading the claims of oppression and the like in full form was filed more than three months later. The defence and any cross claims are not due to be filed until more than two months from now. I think it is also fair to view this matter as one in which the defendants costs of the interlocutory application were abnormally increased by the service of very voluminous material at the last moment, the vast bulk of which was not referred to on that application. These factors, viewed in light of the likely timing of the final hearing - probably something of the order of a year after the interlocutory hearing - represents a sufficient reason, in the interests of justice, for departing from the general rule reflected by Part 52A rule 9(1)."
Mr Senior draws to my attention the factors identified in Fiduciary Limited v Morningstar Research Pty Ltd at [11] - [13] as relevant to the court's power to make an order that cost be payable forthwith:
"11 This identifies the first recognisable category of case, namely, where the application or aspect in respect of which the particular costs order is made before conclusion of the proceedings represents the determination of a separately identifiable matter or may be viewed as the completion of a discrete aspect. Examples of this may be found in Charlie Brown Pty Ltd v Green (unreported, NSWSC, McLelland CJ in Eq, 3 July 1995) and Bagley v Pinebelt Pty Ltd [2000] NSWSC 830.
12 A second factor which may incline the court to order that costs be payable forthwith is some unreasonable conduct on the part of the party against whom costs have been ordered. That was a factor taken into account by Simpson J in Gattellari v Meagher [1999] NSWSC 1279, although, in the end, her Honour did not think that the particular conduct warranted such an order.
13 A third factor is, as it was put by Giles J in Doran Constructions Pty Ltd v University of Newcastle (unreported, NSWSC, 16 December 1994), that "there is much to come in the proceedings" and "one can see a fairly long time before the proceedings are disposed of". In Horrobin (above), the decision of Priestley JA to order that costs be payable forthwith was influenced to some extent by the fact that the controversy between the parties would run for at least a further year. In Allstate Life Insurance Co v Australia and New Zealand Banking Group Ltd (unreported, FCA, 18 August 1995), Lindgren J said that it may be appropriate for greater use to be made of the analogous provision in the Federal Court Rules, "particularly in cases such as this one where the final determination of the proceedings is so far away".
Do the proceedings involve a new beginning?
Although the new beginning is asserted to be that the defence is now in final form, in practical terms, Mr Senior conceded that the defence as currently filed is more or less as that drafted by Mr Goldsmith, with the removal of the defence of triviality. In practical terms, as soon as the plaintiff consulted a practitioner with expertise in defamation, a defence of qualified privilege was pleaded. The differences between Mr Goldsmith's first and second draft relate to his removal of the defences of truth and contextual justification for the purpose of the second draft.
The facts in Fiduciary Limited v Morningstar Research Pty Ltd were that a great deal of time was spent on an issue of solvency. Some months after that had been resolved, the proceedings continued in relation to claims of oppression. As the issue of solvency was concluded, and there was a new beginning on other issues, the costs order was directed to be paid forthwith.
The fact that a defamation pleading has been through several drafts does not mean that there has been a "new beginning", or that that there are interlocutory proceedings relating to matters distinct from the substantive issues in the proceedings, as was the case in Fiduciary Limited v Morningstar Research Pty Ltd. The defendant has had more than the usual number of attempts, in that he made two attempts himself, followed by two attempts by Mr Goldsmith, but the nature of that defence has in essence remained the same. This is not a "new beginning", but a pleading that will be central to the conduct of the trial.
Even if that were not the case, I consider greater caution should be used where such an application is made in defamation proceedings, because of the much higher use of summary procedures generated by the nature of the cause of action and the legislation. For example, a ruling on capacity, or the limitation period, or a particular defence, may effectively amount to a concluded issue, but the risk of making a costs order assessable forthwith is that such an application may stultify a cause of action where the merits of the claim run counter to the interlocutory ruling. In fact, one of the complaints sometimes made about defamation case management is that interlocutory applications can be (and, it is claimed, are) used for this very purpose.
This has been an ongoing issue in defamation for decades. Two early examples are Oliver v Bryant Strata Management Pty Ltd (1995) 41 NSWLR 514 (where a defamation claim was summarily dismissed but a negligence claim remained on foot) and Johnson v Department of Community Services (No 2) [1999] NSWSC 1251 (where a plaintiff successfully appealed the striking out of a limitation claim: see the observations of Rolfe J concerning Oliver at [17]-[19]). What appears to have persuaded the court in both cases to make such orders was the very long time that cases took to get to trial in the 1990s (see the five-year delay referred to by Rolfe J in Johnson v Department of Community Services (No 2) at [14]).
Is the conduct involved unreasonable?
The following conduct is asserted to be unreasonable:
1. The defendant's pattern of appointing and removing Mr Goldsmith lawyers as his representative;
2. The defendant's statement in his email of 20 March 2020 denying there were any defects in the pleading; and
3. The contents of the defendant's email of 21 April 2020 boasting that there would be long delays in this case and that all the plaintiff would get at the end was a "Part X" for his trouble.
Two other matters were raised as being relevant. The first of these is the third category in Fiduciary Limited v Morningstar Research Pty Ltd, namely that the proceedings are "still at a very early stage" (plaintiff's written submissions, paragraph 11(f)) as the plaintiff has yet to file a reply "in circumstances where it is asserted the proceedings have "taken almost one year to get this far". The second is the asserted imminent bankruptcy of the defendant (see Alhalek v Quintiliani t/as Kells Lawyers [2020] FCA 1272), relating to bankruptcy proceedings concerning a debt incurred to a solicitor for action in the Local Court).
As to the first of these bases, I have no information before me that the defendant had a "pattern", and I am reluctant to be critical of what I consider to be reasonable conduct by Mr Goldsmith, particularly having regard to the difficulties faced by the whole of the profession over the lockdown period, which coincides with the period of time for which complaint is made. As to the statements made by the defendant in the two emails referred to, angry correspondence in defamation proceedings is not restricted to litigants in person; on occasion I have seen it from practitioners as well. It is undesirable, but not a basis for making a costs order as draconian as the one sought by Mr Senior. The advantages of a bankrupt defamation plaintiff (Toben v Nationwide News Pty Ltd [2015] NSWSC 1784 at [109]; Baltinos v Johnson (Supreme Court of NSW, Levine J, 16 December 1994) may not be shared by a defendant, but that is a bridge which must be crossed if and when bankruptcy occurs, as opposed to asking the court to make orders now in case he goes bankrupt later, in circumstances where the court would otherwise not be prepared to make the order.
As to the proceedings still being at a very early stage, this is no longer the case. When the matter next comes before the court, discovery will be well in hand and the parties will be in a position to tell the court whether interrogatories are required. The proceedings will be allocated a hearing date as soon as the steps have been taken.
Although I would not be prepared to make an order for the costs to be assessed forthwith, I set out my reasons for determining that, had I been prepared to do so, I would not have been prepared to make a gross sum costs order for the amounts sought.
There remain some issues in relation to how these publications are pleaded:
1. The matters complained of are not attached to the statement of claim in their original form; only the retyped version is provided.
2. Neither the pleading nor the retyped version identifies how or why the publication came to the attention of the named recipients. Are they being asked to investigate the plaintiff, or is this a copy of a request sent to a third party?
3. In addition, the pleader has not included any of the annexures identified, although the matter complained of refers to their contents as proof of the allegations.
The plaintiff is already complaining about the costs of this litigation. Are these matters which should just be left to the parties? One of the biggest questions in case management is whether arguments are more costly than correspondence and whether it is cheaper and quicker to leave unresolved issues to the trial judge. However, the increasing popularity of leaving case management issues to the parties or, preferably, to the trial judge, can lead to long and expensive trials foundering over some overlooked interlocutory issue such as defamatory meaning (see Hockey v Fairfax (No 2) [2015] FCA 750 at [118] - [119] where White J stated that, if the plaintiff had restricted his case to the actionable poster and tweets, the claim "may not have involved a trial at all"), at great cost not only to the parties but possibly their legal representatives as well. In the present application, the size of the costs for just exchanging correspondence is itself of concern.
In any event, the parties did not seek any rulings from the court on any of the issues in dispute at any time prior to this application.
The following orders were made by consent on 11 December 2019:
"By consent:
(1) The defendant to file and serve any defence to the amended statement of claim by 4pm on 16 December 2019.
(2) Proceedings listed for directions at 9:00am on 19 December 2019 in the Defamation List.
(3) Vacate the listing on 12 December 2019.
(4) Costs reserved."
The defendant complied with these orders by filing a defence to the amended statement of claim on 16 December 2019. Unfortunately, the defendant's flight was cancelled on 19 December 2019 and he was not able to attend court. Accordingly I made the following orders:
"(1) Matter stood over to the Defamation List on Thursday 13 February 2020 for further directions, noting that the solicitors for the plaintiff will advise the defendant of objections to the Defence."
During the court vacation, the defendant consulted a solicitor and, when the matter next came before the court on 13 February 2020, he was represented by Mr Barry Goldsmith, an experienced defamation practitioner. Mr Goldsmith candidly conceded that the defence filed by the defendant to the amended statement of claim on 17 December 2019 needed substantial revision. An amended defence was served on 17 March 2020, which was the subject of objections in correspondence from the plaintiff's solicitor.
By the time of these events, offices, places of business and courts in New South Wales had gone into lockdown by reason of the Covid-19 pandemic. I was notified (in chambers) that the plaintiff sought to strike out the defence in its current form, and that the defendant required further time to obtain legal representation. I vacated the listing of 26 March and stood the matter over to the defamation list on 7 May 2020 for further directions.
In the interim, the defendant had commenced proceedings in Waverley Local Court against the plaintiff for what appears to be some form of claim of breach of contract as well as a request for damages and declarations. Those proceedings were transferred to the District Court on or about 7 May 2020 and a timetable for those proceedings was given. The following orders were made on 7 May 2020:
"(1) Plaintiffs are to provide any Amended Statement of Claim to the defendants by 11 May 2020.
(2) The parties are to inform each other of any further applications by 5:00pm 8 May 2020.
(3) Defendants to serve any affidavits in this application by 15 May 2020.
(4) Plaintiffs to serve any affidavits in this application and in the substantive hearing by 22 May 2020.
(5) Defendants to serve any written submissions by 1 June 2020.
(6) Plaintiffs to serve any written submissions by 10 June 2020.
(7) Matter listed for argument on Monday 15 June 2020 before Gibson DCJ (estimate ½ day), to commence at 9:30am.
(8) On the application of both parties, hearing date commencing 15 June 2020 vacated.
(9) Reserve all issues of costs."
The proceedings were listed before me on 28 May 2020. Mr Goldsmith, appearing for the defendant, sought an extension of time to comply with order 4 of my 7 May 2020 orders. In the course of seeking this extension, Mr Goldsmith spoke frankly about some of the difficulties his busy office was having during these difficult times, and reminded me of his usual reliability in terms of compliance with orders. He also indicated that he was having what are generally euphemistically called "retainer problems".
When the proceedings came before me on 18 June 2020, Mr Senior made an application for the defendants defence and cross-claim to be verified. I heard argument and refused this application. I made the following orders:
"(1) The plaintiff/cross-defendant's application for the defendant/cross-claimant's pleadings to be verified refused.
(2) The defendant/cross-claimant file and serve the Amended Defence and Cross-Claim by 30 June 2020, preserving the plaintiff/cross-defendant's rights to challenge these pleadings at a later date.
(3) The plaintiff/cross-defendant serve any request for further and better particulars of the Further Amended Defence and the Amended Cross Claim 3 July 2020
(4) The defendant/cross-claimant serve a response to any request for further and better particulars by 24 July 2020.
(5) The plaintiff/cross-defendant file and serve his Reply to the Further Amended Defence and his Defence to the Amended Cross Claim by 31 July 2020
(6) Matter stood over to the Defamation List on Thursday 6 August 2020 for further directions.
(7) Costs reserved, with liberty to apply."
Although the defendant's rights to challenge the defence were preserved, no such application has been made. As noted above, the plaintiff's complaints about particulars have been quickly resolved (the plaintiff's explanation for not complying with order 5 was the claimed inadequacy of the answers to particulars). The proceedings can now move forward quickly to the Reply and discovery stage.
When the matter came before me on 6 August 2020, the parties agreed to a timetable, but the plaintiff requested a special fixture on Friday, 11 September 2020 for the hearing of the application for costs assessable forthwith in a gross sum, which was given an estimate of two hours.
Mr Senior submits that all these requirements are made out in the present case.
What these older cases demonstrate is that current case management techniques are facing very different challenges in case management of litigation. Even if the plaintiff had been able to make any of them out, the three categories set out in Fiduciary Limited v Morningstar Research Pty Ltd (a decision predating the Civil Procedure Act 2005 (NSW)) are not conclusive as to the reasons for making such an order. In particular, care should be taken, in complex actions such as defamation, not to place too much emphasis on the adequacy of pleadings in circumstances where one (and sometimes both) of the parties is (or are) struggling to get complex issues right.
I should add that the defendant appears to have acted for himself for some small part of the time covered by the costs claim. However, if I had been inclined to make such an order, this would not help him. A litigant in person is not immune from such an order, even where costs are awarded on an indemnity basis: Bhagat v Global Custodians Ltd [2002] FCAFC 51.