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[2025] NSWSC 1457
Supreme Court of NSW
2025-12-03
Nixon J
Original judgment source is linked above.
Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: In the matter of Arbitrium Credit Partners Pty Ltd [2025] NSWSC 1457
Hearing dates: On the papers
Date of orders: 3 December 2025
Decision date: 03 December 2025
Jurisdiction: Equity - Corporations List
Before: Nixon J
Decision: 1. The Plaintiff’s costs in each of proceeding 2025/00325733 and 2025/00325708 are payable on an indemnity basis up until 20 September 2025, and thereafter on the ordinary basis.
2. The Defendants in each of proceeding 2025/00325733 and 2025/00325708 and Mr Thomas Peter Crown are jointly and severally liable for the costs referred to in order 1 above.
3. Pursuant to section 98(4)(c) of the Civil Procedure Act 2005 (NSW), the costs referred to in order 1 above be fixed in the sum of $59,000 (inclusive of GST).
4. The proceedings, including the Interlocutory Process dated 13 October 2025 in each proceeding, otherwise be dismissed.
Catchwords: COSTS – party/party costs – application to set aside statutory demand – where statutory demands were formally withdrawn – whether indemnity costs order should be made – whether appropriate to make a gross sum costs order – no issue of principle
COSTS – third party costs order – where Defendants have no assets – whether third party costs order should be made against sole director and shareholder of Defendants – no issue of principle
Legislation Cited: Civil Procedure Act 2005 (NSW) s 98
Corporations Act 2001 (Cth) s 459G
Uniform Civil Procedure Rules 2005 (NSW) rr 10.14, 42.1
Cases Cited: CGI Information Systems & Management Consultants Pty Ltd v APRA Consulting Pty Ltd [2003] NSWSC 728
FPM Constructions Pty Ltd v Council of the City of Blue Mountains [2005] NSWCA 340
Gabrielle v Abood (No 4) [2023] NSWCA 100
Hamod v State of New South Wales & Anor [2011] NSWCA 375
Hamod v State of New South Wales [2002] FCAFC 97
Harrison v Schipp (2002) 54 NSWLR 738; [2002] NSWCA 213
Harvey v Barton (No 4) [2015] NSWSC 809
In the matter of Yowie Group Ltd (No 2) [2025] NSWSC 910
Knight v FP Special Assets Ltd (1992) 174 CLR 178; [1992] HCA 2
May v Christodoulou [2011] NSWCA 75
Mistrina Pty Ltd v Australian Consulting Engineers Pty Ltd [2020] NSWSC 633
Norfeld v Jones (No 2) [2014] NSWSC 199
PM Works Pty Ltd v Management Services Australia Pty Ltd (t/as Peak Performance PM) [2018] NSWCA 168
Re Minister for Immigration and Ethnic Affairs; ex parte Lai Qin (1997) 186 CLR 622; [1997] HCA 6
Soudan Lane Pty Ltd v Glen Bradshaw t/as Pacific Coast Digital [2007] NSWSC 772
Category: Costs
Parties: In proceeding 2025/325708
Arbitrium Credit Partners Pty Ltd (Plaintiff)
Evandale Custodian Pty Ltd as trustee for the Evandale Property Trust (First Defendant)
Mereworth Custodian Pty Ltd as trustee for the Mereworth Property Trust (Second Defendant)
Leets Vale Custodian Pty Ltd as trustee for the Leets Vale Property Trust (Third Defendant)
Panawanica Custodian Pty Ltd as trustee for the Panawanica Property Trust (Fourth Defendant)
Mr Thomas Peter Crown (Respondent to Interlocutory Process)
In proceeding 2025/325733
Arbitrium Credit Partners Pty Ltd (Plaintiff)
Evandale Custodian Pty Ltd as trustee for the Evandale Property Trust (First Defendant)
Mereworth Custodian Pty Ltd as trustee for the Mereworth Property Trust (Second Defendant)
Leets Vale Custodian Pty Ltd as trustee for the Leets Vale Property Trust (Third Defendant)
Panawanica Custodian Pty Ltd as trustee for the Panawanica Property Trust (Fourth Defendant)
Mr Thomas Peter Crown (Respondent to Interlocutory Process)
Representation: Counsel:
Courtney Robertson (Plaintiff)
Solicitors:
Gadens (Plaintiff)
File Number(s): 2025/325708
2025/325733
Publication restriction: Nil
On 25 August 2025, the Plaintiff, Arbitrium Credit Partners Pty Ltd, commenced two proceedings, numbered 2025/325708 and 2025/325733 (the Proceedings), seeking orders to set aside two statutory demands issued by the Defendants, each of which was served on 6 August 2025 (the Statutory Demands).
The Statutory Demands claimed the amounts of $110,000 and $250,000 respectively, being the amount of payments made in respect of a “proposed finance facility”.
The Statutory Demands described the Defendants as being the trustees of four separate property trusts (the Property Trusts), as follows:
Evandale Custodian Pty Ltd as trustee for the Evandale Property Trust;
Mereworth Custodian Pty Ltd as trustee for the Mereworth Property Trust;
Leets Vale Custodian Pty Ltd as trustee for the Leets Vale Property Trust; and
Panawanica Custodian Pty Ltd as trustee for the Panawanica Property Trust.
Mr Thomas Peter Crown is the sole director and shareholder of each of the Defendants.
When the Proceedings were listed for directions on 29 September 2025, the Court was informed that the Statutory Demands had been formally withdrawn by the Defendants and a notation was made to this effect. At that time, the Plaintiff indicated that it wished to be heard on the issue of costs, and timetabling orders were made for that purpose, with the intent that any such issue be determined on the papers (29 September Orders).
By an Interlocutory Process dated 13 October 2025, the Plaintiff seeks an order that its costs of the Proceedings be payable on an ordinary basis until 6 August 2025 and thereafter on an indemnity basis, and also seeks a gross sum costs order. In addition, the Plaintiff seeks an order that the Defendants and Mr Crown be jointly and severally liable for the payment of those costs.
Given that the 29 September Orders did not make any provision for the filing of any evidence or submissions by Mr Crown, I listed the matter for directions on 3 November 2025. At that listing, the Plaintiff made an application, pursuant to r 10.14(3) of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR), for an order that Mr Crown be taken to have been served, as at 31 October 2025, with copies of the Interlocutory Process, the supporting affidavit of Mr David William Harrison affirmed 9 October 2025 with its accompanying exhibit, and the Plaintiff’s written submissions, by way of personal service and by sending those documents to a known email address of Mr Crown. I made an order to that effect, and directed Mr Crown to file any evidence and submissions in response to the Interlocutory Process by 5pm on 17 November 2025.
The Plaintiff is a specialist funds manager that focuses on investing in mid-market Australian corporate entities that have strong underlying fundamentals but are unable to attract traditional sources of funding.
In late 2023, Mr Crown approached the Plaintiff in order to refinance a $65m facility which had been provided by MC Coronam Pty Ltd (Merricks) to the following four entities:
Evandale Property Pty Ltd (ACN 654 842 207) in its personal capacity and as trustee of the Evandale Property Trust;
Leets Vale Property Pty Ltd (ACN 654 842 378) in its personal capacity and as trustee of the Leets Vale Property Trust;
Mereworth Property Pty Ltd (ACN 654 841 871) in its personal capacity and as trustee of the Mereworth Property Trust; and
Panawanica Property Pty Ltd (ACN 654 842 832) in its personal capacity and as trustee of the Panawanica Property Trust.
(the Borrowers)
| Borrowers | Defendants | | Evandale Property Pty Ltd (ACN 654 842 207) in its personal capacity and as trustee of the Evandale Property Trust | Evandale Custodian Pty Ltd (ACN 688 212 946) as trustee of the Evandale Property Trust | | Leets Vale Property Pty Ltd (ACN 654 842 378) in its personal capacity and as trustee of the Leets Vale Property Trust | Leets Vale Custodian Pty Ltd (ACN 688 214 486) as trustee for the Leets Vale Property Trust; and | | Mereworth Property Pty Ltd (ACN 654 841 871) in its personal capacity and as trustee of the Mereworth Property Trust | Mereworth Custodian Pty Ltd (ACN 688 203 634) as trustee for the Mereworth Property Trust; | | Panawanica Property Pty Ltd (ACN 654 842 832) in its personal capacity and as trustee of the Panawanica Property Trust | Panawanica Custodian Pty Ltd (ACN 688 216 613) as trustee for the Panawanica Property Trust. |
On 26 January 2024, each of the Borrowers executed a Non-Binding Term Sheet in respect of the Facility (Non-Binding Term Sheet). The Non-Binding Term Sheet was expressed as a “statement of present intent of the Lender and is not legally binding” save in respect of costs, confidentiality and exclusivity. Pursuant to the terms of the Non-Binding Term Sheet, a “Work Fee” of $100,000 (plus GST) was payable upon execution of the Non-Binding Term Sheet.
On 28 January 2024, an amount of $110,000 was paid in respect of the Work Fee (including GST).
On 30 April 2024, each of the Borrowers and Arbitrium Capital Services Pty Ltd (ACS) executed a Binding Term Sheet. It is important to note that ACS is not the same entity as the Plaintiff, but was a special purpose vehicle established by the Plaintiff in order to act as the lender for the proposed transaction. Accordingly, the Plaintiff was not a party to the Binding Term Sheet.
Pursuant to the Binding Term Sheet, a term sheet fee of $500,000 was payable by the Borrowers to ACS in two equal tranches, as follows:
$250,000 (plus GST) upon entry into the Binding Term Sheet; and
$250,000 (plus GST), less the Work Fee, payable upon Financial Close, being the date on which the “Facility Agreement, all security documents and associated transaction agreements are signed by all parties, all Conditions Precedent are completed to the Lender’s satisfaction and upon drawdown of the funds advanced by the Lender”.
The Binding Term Sheet provided that the term sheet fee was refundable in the event of “mutual cancellation by the Lender and Borrower”.
On 14 May 2024, an amount of $250,000 was paid in respect of first tranche of the term sheet fee.
Ultimately, the refinancing of the Merricks facility did not proceed.
On 26 March 2025, Merricks appointed Receivers and Managers to each of the Borrowers pursuant to a security agreement which had been entered at the same time as the Merricks facility. The security held by Merricks included a real property mortgage over every property owned by the Borrowers. There are ongoing proceedings in this Court between Mr Crown and the Receivers (Receivership Proceeding), which are relevant to the Plaintiff’s application and to which I will return below.
On 19 June 2025, Mr Crown caused each of the Defendants to be incorporated. Mr Crown is the sole shareholder and director of each of the Defendants.
On 4 July 2025, Mr Crown sent a letter to the Plaintiff, which demanded repayment of $360,000 in respect of the “failed Project Crown debt facility” within seven days, that is, by 11 July 2025. (The sum of $360,000 comprises the amount of $110,000 paid in respect of the “Work Fee” pursuant to the Non-Binding Term Sheet, and the amount of $250,000 paid in respect of the first tranche of the term sheet fee pursuant to the Binding Term Sheet.) In this letter, Mr Crown stated that, should payment not be received within the stipulated timeframe, he would:
“• Initiate legal proceedings for recovery and damages,
• Refer the matter to ASIC, AFCA, and any other relevant authority,
• And seek restitution for the full amount plus consequential losses, legal costs, and all applicable remedies.”
This correspondence was sent by Mr Crown personally and on a “Coronam” letterhead. The Plaintiff’s solicitor, Mr Harrison, deposes that it is his understanding that “Coronam” is Mr Crown’s family office.
On 11 July 2025, the Plaintiff’s solicitor sent a letter in response to Mr Crown’s demand, stating, relevantly, as follows:
“The Non-binding Term sheet provided, as is customary, for the payment of a work fee to [the Plaintiff] (of $100,000 plus GST), which was required to be paid (and was so paid) upon the signing of the term sheet. This fee represented the significant amount of work required by [the Plaintiff] to arrange the financing and was freely accepted as payable by you. The work fee was expressly stated to be non-refundable…
The Binding Term Sheet provided only that the first tranche would be refundable (less any costs incurred to the date of cancellation) in the event of the mutual cancellation by the parties. No such event occurred.”
On 17 July 2025, Mr Crown sent an email to the Plaintiff’s solicitor which repeated the demand for payment of $360,000 by 25 July 2025 and indicated that, if payment of that sum was not made, Mr Crown intended to “[i]nitiate recovery proceedings and claims for damages”.
Mr Crown did not institute any such proceedings. Instead, he caused the Defendants to issue the two Statutory Demands, on 6 August 2025, in the amounts of $110,000 and $250,000 respectively.
The covering letter accompanying the Statutory Demands was on the “Coronam” letterhead and was signed by Mr Crown.
The Schedule to the Statutory Demand in the amount of $110,000 described the debt as follows:
“Funds paid to the Debtor Company pursuant to executed Term Sheet dated 26 January 2024 in respect of a ‘Work Fee’ totalling $110,000 (including GST), relating to a proposed finance facility that was never funded by the Debtor Company”.
“Funds paid to the Debtor Company pursuant to executed Binding Term Sheet dated 30 April 2024 in respect of a first tranche ‘Binding Term Sheet Fee’ totalling $250,000, relating to a proposed finance facility that was never funded by the Debtor Company”.
“We require you to confirm that the Demands have been withdrawn no later than 5 pm AEST on 11 August 2025, failing which [the Plaintiff] will apply to the court to set them aside without further notice to you. [The Plaintiff] will seek indemnity costs against the claimants, should this become necessary. Given the apparent impecuniosity of the claimants, [the Plaintiff] will also seek against them security for its costs of setting aside the Demands.”
Mr Crown did not provide any response to that correspondence.
On 12 August 2025, the Plaintiff’s solicitor sent further correspondence by email to Mr Crown, which noted that:
the Plaintiff had not received any indication that the Statutory Demands had been withdrawn;
“the entities that have presented the statutory demands against [the Plaintiff]… are different to those that were counterparties to the two term sheets”; and
if the Statutory Demands were not formally withdrawn by the following day, 13 August 2025, the Plaintiff would take steps to seek to set aside the Demands and “seek indemnity costs against the Claimants”.
On 14 August 2025, Mr Crown gave an undertaking in the Receivership Proceeding that, inter alia, he would not make representations that the Borrowers had been removed as trustees of the Property Trusts (Mr Crown’s Undertaking). The Plaintiff was not informed of the terms of Mr Crown’s Undertaking until 29 September 2025, when Merricks provided the Plaintiff with a copy of the orders made by the Court in the Receivership Proceeding on 14 August 2025.
On 25 August 2025, these Proceedings were commenced within the statutory period required by s 459G of the Corporations Act 2001 (Cth).
On 8 September 2025, Mr Peter Jackson, the former solicitor for the Defendants, indicated by email to the Plaintiff’s solicitor that “his clients will no longer rely on the Statutory Demands” and proposed that these Proceedings be dismissed on the basis that each party pays its own costs.
On 9 September 2025, the Plaintiff’s solicitor requested that Mr Jackson indicate whether the Statutory Demands had been formally withdrawn, and stated as follows:
“In our letter dated 7 August 2025, we provided to Peter Crown, on behalf of the defendants, the opportunity to withdraw the demands by 11 August 2025. We stated clearly that they were an abuse of process and that, in the absence of withdrawal, the plaintiff would seek to set aside the demands and seek indemnity costs.”
“my client did not proceed with the claims at this time because of an undertaking given to the court in unrelated proceedings that restrained them from making representations necessary to prosecute the claims.”
This is plainly a reference to Mr Crown’s Undertaking.
On 22 September 2025, Mr Harrison responded to Mr Jackson’s email, requesting clarification in respect of “the nature of the undertaking given, the proceedings in which it was given and why it is relevant to your clients’ decision ‘not to proceed with the claims at this time’”. The Plaintiff did not receive any response to this request and, as noted at paragraph [32] above, the Plaintiff did not become aware of the terms of Mr Crown’s Undertaking until 29 September 2025.
Section 98(1) of the Civil Procedure Act 2005 (NSW) provides that, subject to the Rules of the Court, the Civil Procedure Act and any other Act, costs are in the Court’s discretion.
Rule 42.1 of the UCPR provides that, if the Court makes any order as to costs, the Court is to order that costs follow the event, unless it appears to the Court that some other order should be made as to the whole or any part of the costs.
Where a proceeding is discontinued or dismissed by consent, without any determination on the merits, there is usually no relevant “event”, and the proper exercise of the Court’s discretion will ordinarily be to make no order as to costs: Re Minister for Immigration and Ethnic Affairs; ex parte Lai Qin (1997) 186 CLR 622 at 624-625; [1997] HCA 6. McHugh J there observed that the Court will not, merely for the purpose of deciding a question of costs, embark on a trial of issues that have become moot. The Court may, however, make a costs order, in circumstances where there has been no determination on the merits, if the Court is satisfied that one party has effectively capitulated or has acted unreasonably.
In CGI Information Systems and Management Consultants Pty Ltd v APRA Consulting Pty Ltd [2003] NSWSC 728 at [19], Barrett J referred to the warning previously given by Santow J in several judgments, that creditors who issued statutory demands in respect of genuinely disputed debts, and who put the recipient to the expense of taking steps to set aside the statutory demand, were at risk of indemnity costs. Barrett J observed (at [21]) that the party which issued a statutory demand might, in some circumstances, be entitled to test the other party's claim that the debt was genuinely disputed. However, his Honour also noted (at [22]) that such principle had “a limit to it” and that in cases which were “so devoid of prospects of success as to be perverse” and where a defendant having been put on notice of an “obvious and irremediable weakness in its position” does not withdraw a statutory demand, it may well be appropriate for the Court to award costs to the plaintiff on an indemnity basis.
In Soudan Lane Pty Ltd v Glen Bradshaw t/as Pacific Coast Digital [2007] NSWSC 772, White J again observed that creditors are often ill-advised to proceed with a statutory demand once plausible grounds for a dispute are asserted, and they risk an order for indemnity costs if they do so. His Honour said (at [5], citations omitted):
“A person claiming to being a creditor who uses the procedure for service of a statutory demand under s 459E to seek to force payment of a genuinely disputed debt risks an order for indemnity costs. For the purposes of s 459H a genuine dispute will exist about a debt if there is a plausible contention requiring investigation that the company is not indebted … Because the threshold for establishing a genuine dispute is low, creditors are often ill-advised to proceed with a statutory demand once plausible grounds for a dispute are asserted. They risk an order for indemnity costs if they do so …”
I am satisfied both that a costs order should be made in favour of the Plaintiff and that costs should be awarded on an indemnity basis.
That is primarily because, on 14 August 2025, Mr Crown gave an undertaking to this Court in the Receivership Proceeding that he would not assert that the Borrowers had been removed as trustees of the respective Property Trusts.
Whatever Mr Crown’s state of mind at any earlier point in time, it must have been apparent to him, from the time when Mr Crown’s Undertaking was given, that the Defendants would not be able to maintain the Statutory Demands, which had apparently been issued on the basis that the Defendants had replaced the Borrowers as the trustees of the Property Trusts. Similarly, it must have been apparent to Mr Crown that, if the Borrowers did have any right to seek the repayment of moneys paid under either the Non-Binding Term Sheet or the Binding Term Sheet, such rights could only be enforced by the Receivers (and not by the Defendants or Mr Crown). As noted above, the Defendants were incorporated on 19 June 2025, several months after the Receivers were appointed.
The inference that Mr Crown was aware of those matters is supported by the fact that, when the Statutory Demands were subsequently withdrawn, the Defendants’ then solicitor, Mr Jackson, indicated that Mr Crown’s Undertaking in the Receivership Proceeding had the practical effect of preventing the Defendants from asserting any claim against the Plaintiff (see paragraph [36] above).
Upon giving this Undertaking, Mr Crown should have immediately taken steps to cause the Defendants to withdraw the Statutory Demands. If he had done so, the Plaintiff would not have been put to the expense of bringing these Proceedings (which were commenced eleven days after Mr Crown’s Undertaking was given), and would not have incurred costs in prosecuting these Proceedings in the period up until the Statutory Demands were formally withdrawn.
An award of costs, on an indemnity basis, is justified because, in the circumstances described above, the conduct of the Defendants (and Mr Crown) in maintaining the Statutory Demands after Mr Crown’s Undertaking was given in the Receivership Proceeding was unreasonable; and it was inevitable, by reason of Mr Crown’s Undertaking, that the Defendants would need to capitulate in the Proceedings (as subsequently occurred).
The Plaintiff sought its costs prior to 7 August 2025 on an ordinary basis, and costs from 7 August 2025 onwards on an indemnity basis.
I am not satisfied that there is a basis for the award of costs to extend to:
any costs incurred in the period up to 6 August 2025 (that is, costs incurred prior to the Statutory Demands being issued); or
any costs incurred prior to 14 August 2025, being the date when Mr Crown’s Undertaking was given (since it is the maintenance of the Statutory Demands after the giving of this Undertaking which justifies the award of costs).
Section 98(1) of the Civil Procedure Act grants the Court the power to make costs orders against non-parties to a proceeding.
The power to make costs orders against non-parties is to be exercised sparingly and only in exceptional circumstances: FPM Constructions Pty Ltd v Council of the City of Blue Mountains [2005] NSWCA 340 at [214] (per Basten JA, Beazley JA agreeing (as Her Excellency then was)); PM Works Pty Ltd v Management Services Australia Pty Ltd (t/as Peak Performance PM) [2018] NSWCA 168 at [35] (Leeming JA).
In Knight v FP Special Assets Ltd (1992) 174 CLR 178 at 192–193; [1992] HCA 28, Mason CJ and Deane J (with whom Gaudron J agreed at 205) observed that:
“For our part, we consider it appropriate to recognise a general category of case in which an order for costs should be made against a non-party … That category of case consists of circumstances where the party to the litigation is an insolvent person or man of straw, where the non-party has played an active part in the conduct of the litigation and where the non-party, or some person on whose behalf he or she is acting or by whom he or she has been appointed, has an interest in the subject of the litigation. Where the circumstances of a case fall within that category, an order for costs should be made against the non-party if the interests of justice require that it be made.”
“It is clear that the categories of case which may attract the exercise of the power [to make a third party costs order] are by no means closed, nor should they be. Nevertheless, the requirements of justice should not be allowed to expand an exception to the general rule, so as to undermine the rule itself. What is significant from a survey of the cases in which orders have been made against non-parties is that they tend to satisfy at least some, if not a majority, of the following criteria:
(a) the unsuccessful party to the proceedings was the moving party and not the defendant;
(b) the source of funds for the litigation was the non-party or its principal;
(c) the conduct of the litigation was unreasonable or improper;
(d) the non-party, or its principal, had an interest (not necessarily financial) which was equal to or greater than that of the party or, if financial, was a substantial interest, and
(e) the unsuccessful party was insolvent or could otherwise be described as a person of straw.”
“The discretion is at large. In determining whether to exercise its discretion to make such an order, the court will have regard to all the relevant circumstances. If those circumstances warrant making the order because it is just to do so, giving it the description exceptional does not add much. The description exceptional is not some additional criterion.”
I accept the Plaintiff’s submission that it is appropriate to order the Defendants and Mr Crown be jointly and severally liable for the Plaintiff’s costs of the Proceedings, having regard to the following matters.
First, Mr Crown is the sole shareholder and director of the Defendants, and appears to be the person with control of the Proceedings on behalf of the Defendants. He has, at all times, been the person who prosecuted the Statutory Demands on behalf of the Defendants. Mr Crown caused the Defendants to be registered shortly before the Statutory Demands were issued. There is no evidence that the Defendants were established for any purpose, or have performed any role, other than to issue the Statutory Demands and seek payment of the amounts referred to in them.
Secondly, it may be inferred that Mr Crown has funded the Defendants’ issue of the Statutory Demands and defence of the Proceedings, and has done so because of his interest in the outcome of those matters. The Defendants do not appear to have any assets, and do not appear to have any right of indemnity out of the Property Trusts. There is evidence that Mr Crown has (or, at least, in the recent past has had) substantial assets. In the course of his dealings with the Plaintiff for the purposes of refinancing the Merricks facility, Mr Crown provided to the Plaintiff a statement of the asset and liability position of himself and his wife, which showed their total net asset position as in excess of $135m and that the Property Trusts cumulatively held assets worth $84m.
Thirdly, Mr Crown should have, upon giving Mr Crown’s Undertaking in the Receivership Proceeding, immediately caused the Defendants to withdraw the Statutory Demands. Because of his failure to do so, the Plaintiff was required to commence the Proceedings and incur costs up until the point in time when Mr Crown (belatedly) caused the Statutory Demands to be withdrawn, more than five weeks after Mr Crown’s Undertaking was given. This delay by Mr Crown, which is unexplained, was unreasonable, and caused the Plaintiff to incur substantial costs in the Proceedings, which are unlikely to be recoverable from the Defendants.
Section 98(4)(c) of the Civil Procedure Act provides that the Court may award costs in a specific gross sum instead of assessed costs (s 98(4)(c)).
In Hamod v State of New South Wales & Anor [2011] NSWCA 375 (Hamod CA) at [816], Beazley JA, with whom Giles and Whealy JJA agreed, observed that:
"The terms of s 98(4), together with the more general considerations reflected in the Civil Procedure Act ..., suggest that factors that merit particular consideration include: the relative responsibility of the parties for the costs incurred ...; the degree of any disproportion between the issue litigated and the costs claimed; the complexity of proceedings in relation to their cost; and the capacity of the unsuccessful party to satisfy any costs liability ..."
“The power to make a gross sum costs order provided by s 98(4)(c) of the Civil Procedure Act 2005 (NSW) is discretionary. Authority establishes that the discretion is not confined and may be exercised whenever the circumstances warrant its exercise; it should only be exercised when the Court considers that it can do so fairly between the parties, and that includes having sufficient confidence in arriving at an appropriate sum on the materials available; courts have typically applied a discount in assessing costs on a gross sum basis; and the court is not required to undertake a detailed examination of the kind that would be appropriate to taxation or formal costs assessment...”
In cases where a gross sum costs order is appropriate, the court takes a broad-brush approach to determining the lump sum: Harrison v Schipp (2002) 54 NSWLR 738; [2002] NSWCA 213 at [22] (per Giles JA).
Notwithstanding the broad-brush approach to be adopted by the Court, an award of gross sum costs should be “based on an informed assessment of the actual costs having regard to the information before the court (for example, by relying on costs estimates or bills)”: Hamod CA at [820]. The approach to be taken in arriving at the estimate must be logical, fair and reasonable: Harrison at [22]; Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119 at 123.
In adopting a broad-brush approach, the Court will typically apply a discount to the amounts claimed in assessing costs on a gross sum basis: Lorenzato v Lorenzato & Anor (No 2) [2011] NSWSC 790 at [3] (Black J). In the recent decision of Salmon v Albarran (No 2) [2025] NSWCA 115, the Court of Appeal (Ward ACJ, Leeming and Ball JJA) applied not only a reduction in respect of solicitors’ fees in line with the evidence in that case that such costs are normally reduced by 20-30%, but also a 10% discount to counsel’s fees, “reflecting that the assessment of party/party costs is less than a full indemnity” (at [29]). The Court then applied a further discount of 10% to the total costs, which was “required, to reflect the fact that there will be no assessment, and [the party against whom the costs order is made] is losing the opportunity of doing better on assessment than on the gross sum costs assessed by this Court” (at [30]). Their Honours observed that:
“Another way of putting this is that the approach of this Court is not to do the best it can to determine the likely outcome of a costs assessment, but instead to determine an amount of which it can be said with a measure of confidence that any assessment would yield a greater amount.”
I am satisfied that, in the circumstances of this case, it is appropriate to make a gross sum costs order, for two main reasons.
First, given the Defendants’ and Mr Crown’s lack of engagement with the Plaintiff prior to the commencement of these Proceedings, and the Defendants’ and Mr Crown’s failure to take any steps in response to the Interlocutory Process, it is likely that the Defendants and Mr Crown will not engage with the Plaintiff in relation to the issue of the quantification of costs. Accordingly, it is likely that the Plaintiff would, absent a gross sum costs order, be required to incur the time and expense of undertaking an assessment of costs, in respect of a relatively modest sum.
Secondly, there is sufficient material before the Court, in the form of the affidavit filed by the Plaintiff’s solicitor (to which all relevant invoices are exhibited), for the Court to arrive at an assessment of an appropriate gross sum figure for costs. In particular, the Plaintiff’s solicitor exhibits to his affidavit:
invoices issued by Harrison Partners & Company to the Plaintiff, which contain itemised time entries in respect of work undertaken between the period of 8 July 2025 to 8 October 2025, including the time spent on each task;
an invoice from Gadens, who acted as the agent of the Plaintiff’s solicitor, which similarly sets out an itemised record of the work undertaken, the persons who performed the tasks, and the time spent on the tasks; and
invoices of the counsel briefed on this matter, Ms Courtney Robertson and Mr Jeremy Forbes, which itemise entries in respect of work undertaken, the time spent performing the work, and the hourly rate applied.
| Cost Type | Amount (incl GST) | | Harrison Partners & Company fees | $22,951.50 | | Gadens (including various disbursements for filing and service of documents) | $13,221.93 | | Counsel’s Fees | $9,559.00 | | Total (including GST) | $45,732.43 |
Mr Harrison is of the view, based on his 26 years’ experience as a litigation solicitor, that in determining costs on an indemnity basis, a discount of 10% is generally applied for solicitor’s fees and no discount for Counsel’s fees or other disbursements. The application of this discount results in a figure of around $43,437.
I consider it appropriate to apply a further discount of 10% to this sum, to reflect the fact that there will be no assessment, and the parties against whom the costs order is made are losing the opportunity of doing better on assessment than on the gross sum costs assessed by this Court (see Salmon v Albarran at [30]).
For those reasons, I will fix the Plaintiff’s costs of the Proceedings up until 20 September 2025 in the amount of $39,000 (inclusive of GST).
| Cost Type | Amount (incl GST) | | Harrison Partners & Company fees | $20,234.50 | | Gadens (including various disbursements for filing and service of documents) | $369.60 | | Counsel’s Fees | $8,580.00 | | Other disbursements (ASIC searches) | $440.00 | | Total (including GST) | $29,624.10 |
Mr Harrison is of the view, based on his experience, that in determining costs on the ordinary basis, a discount of 30% is generally applied for solicitor’s fees and a discount of around 10% (or less) for Counsel’s fees, with no discount for other disbursements. The application of those discounts results in a figure of around $22,695.
I consider it appropriate to apply a further discount to the total costs, for reasons given at paragraph [76] above.
Accordingly, I will fix the Plaintiff’s costs of the Interlocutory Process (being the Plaintiff’s costs of the Proceedings from 21 September 2025 onwards) in an amount of $20,000 (inclusive of GST).
For those reasons, I will make the following orders:
The Plaintiff’s costs in each of proceeding 2025/00325733 and 2025/00325708 are payable on an indemnity basis up until 20 September 2025, and thereafter on the ordinary basis.
The Defendants in each of proceeding 2025/00325733 and 2025/00325708 and Mr Thomas Peter Crown are jointly and severally liable for the costs referred to in order 1 above.
Pursuant to section 98(4)(c) of the Civil Procedure Act 2005 (NSW), the costs referred to in order 1 above be fixed in the sum of $59,000 (inclusive of GST).
The proceedings, including the Interlocutory Process dated 13 October 2025 in each proceeding, otherwise be dismissed.
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(2002) 54 NSWLR 738
(1992) 174 CLR 178
(1997) 186 CLR 622
(1995) 57 FCR 119
As at the date of delivering these reasons, Mr Crown has not filed any evidence or submissions in response to the Interlocutory Process. Accordingly, I have proceeded to determine the Plaintiff’s application on the basis that Mr Crown does not seek to be heard in opposition to the orders sought in the Interlocutory Process.
In addition, I am not satisfied that the award of costs, on an indemnity basis, should extend beyond the date when the Statutory Demands were formally withdrawn (namely, 20 September 2025). The withdrawal of the Statutory Demands meant that the only issue left in the proceeding was the issue of costs. Although I have determined that the Plaintiff is entitled to an award of costs in its favour, I do not consider that any basis has been established for awarding the Plaintiff its costs of the Interlocutory Process on an indemnity basis, particularly since the Defendants and Mr Crown have not taken any active role in opposing the costs orders sought in the Interlocutory Process.
I have therefore determined that:
the Plaintiff is entitled to its costs of the Proceedings from 14 August 2025 to 20 September 2025 (inclusive), on an indemnity basis; and
the Plaintiff is entitled to its costs of the Interlocutory Process (being its costs of the Proceedings from 21 September 2025 onwards), on the ordinary basis.