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Category: Costs

Parties: Commonwealth Securities Ltd (Plaintiff)
Arjun Prakash (Defendant)

Representation: Counsel:
Mr J Foley (Plaintiff)
Mr Arjun Prakash (self-represented)
Solicitors:
Norton Rose Fulbright Australia (Plaintiff)
Mr Arjun Prakash (self-represented)

File Number(s): 2026/322470

JUDGMENT

Background and affidavit evidence

1. By orders made on 25 August 2026, for the reasons set out in an ex tempore judgment (“Judgment”) delivered on that date, I declared that documents dated 20 July 2026 (“Purported Statutory Demand”) issued by the Defendant, Mr Prakash, to the Plaintiff, Commonwealth Securities Ltd (“CSL”) did not constitute a creditor’s statutory demand within the meaning of s 459E of the Corporations Act 2001 (Cth), and restrained Mr Prakash from taking any step to attempt to wind up CSL based on any alleged failure to comply with the Purported Statutory Demand.

2. At CSL’s request, I made orders that CSL file and serve any interlocutory application seeking costs on an indemnity or gross sum basis, together with its affidavit evidence and submissions, by 4.00pm on 1 September 2026 and that Mr Prakash file and serve any affidavit evidence and submissions in response by 4.00pm on 15 September 2026, with the application as to costs to be determined in Chambers.

3. On 26 August 2026, before CSL had brought any application, Mr Prakash made written submissions in anticipation of an application by CSL for a costs order. He submitted that such an application represented an “unconscionable attempt to manufacture an interlocutory costs liability” and referred to an underlying “permanent and fatal default” in CSL’s primary case. The making of a costs order in a proper case gives rise to but does not “manufacture” a liability as to costs. The proposition that there was any “permanent and fatal default” in CSL’s case for declaratory relief as to the Purported Statutory Demand is untenable, where CSL succeeded in obtaining the declaration that it had sought. Mr Prakash also there sought to reagitate the question whether it was sufficient for CSL to rely on evidence of its solicitor in seeking the declaration as to the Purported Statutory Demand, but that question was determined adversely to Mr Prakash in the Judgment.

4. By Interlocutory Process filed on 1 September 2026, CSL sought an order that Mr Prakash pay its costs of the proceedings on an indemnity basis, or alternatively on an ordinary basis, and that those costs be quantified in the gross sum of $75,000 or such other amount as the Court determined.

5. CSL relied on the affidavit dated 1 September 2026 of its solicitor, Ms Zhara, in support of that application. Ms Zhara there set out the steps which had been taken by CSL in responding to the Purported Statutory Demand, identifying the solicitor/client costs and disbursements incurred by CSL to 25 August 2026, including substantial Counsel’s fees. Ms Zhara expressed the view that 90% of the costs incurred would be allowed if those costs were assessed on an indemnity basis, and that approximately 70% of costs incurred would be allowed if costs were assessed on the ordinary basis. CSL sought an order for costs, on an indemnity basis, in the gross sum of $75,000, or alternatively on an ordinary basis, in the gross sum of $60,000. In response, Mr Prakash relied on his affidavit dated 13 September 2026, which addressed, briefly, his underlying dispute with CSL, and issues in respect of the Purported Statutory Demand which was set aside by the orders made on 25 August 2026.

Whether costs should be ordered against Mr Prakash on an indemnity basis

6. By submissions made on 1 September 2026, CSL referred to the Court’s power to award costs on an indemnity basis under s 98(1)(c) of the Civil Procedure Act 2005 (NSW) (“Civil Procedure Act”) and to the circumstances in which such costs may be awarded, and observed that an indemnity costs order may be made where a party’s conduct was “unjustifiable and unwarranted”.

7. I bear in mind that s 98 of the Civil Procedure Act provides that costs are in the discretion of the Court. That section confers on the Court a wide discretion with respect to costs, and the Court has discretion to determine by whom, to whom and to what extent costs are to be paid; and costs will ordinarily 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, in accordance with r 42.1 of the Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”). A successful party in proceedings has a “reasonable expectation” of being awarded costs against an unsuccessful party, unless there is good reason for that presumption to be displaced: Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11 at [134]. The principle that costs should follow the event is the “guiding principle” with respect to costs, and the onus is on the losing party to establish the basis for a departure from the usual costs rule in UCPR r 42.1: Waterman v Gerling Australia Insurance Co Pty Ltd (No 2) [2005] NSWSC 1111 at [10]; Northern Territory v Sangare (2019) 265 CLR 164; [2019] HCA 25 at [24]–[25].

8. I also bear in mind the applicable principles in respect of an order for indemnity costs, which I summarised in Re Hermitage Engadine Pty Ltd [2025] NSWSC 414 at [18] as follows:

“The applicable principles as to an order for indemnity costs are also well-established. Costs are awarded on an ordinary basis unless there are exceptional circumstances: Leichhardt Municipal Council v Green [2004] NSWCA 341. An order for indemnity costs is not made to punish an unsuccessful plaintiff for persisting with a case that fails, but to compensate a successful defendant fully for costs incurred, when the Court takes the view that it was unreasonable for the plaintiff to have subjected that party to the expenditure of costs: Hamod v New South Wales (2002) 188 ALR 659; [2002] FCAFC 97 at [20]. In Ingot Capital Investments Pty Ltd v Macquarie Equity Capital Markets Ltd (No 7) (2008) 65 ACSR 324; [2008] NSWSC 199, McDougall J observed (at [24]) that there must usually be some special or unusual feature to justify departure from the ordinary rule as to costs, and that delinquency is not necessary for an order for indemnity costs, but is relevant to whether it should be made. The relevant principles were also considered by the Court of Appeal in Cabport Pty Ltd v Marinchek (No 2) [2013] NSWCA 131 at [6], where the Court observed that an order for indemnity costs may be made where a party’s conduct in proceedings is plainly unreasonable or involves an element of delinquency, and by Bell CJ in Brown v Stables Perisher Management Pty Ltd (No 2) [2022] NSWSC 902. [Counsel] also refers to my summary of the principles applicable to an award of indemnity costs in Re Allscope Concrete & Pumping Pty Ltd (in liq) [2024] NSWSC 1680 at [5], in substantially the terms that I have set out above.”

9. CSL also referred to Peden J’s summary of these principles in Council of the City of Broken Hill v Redenbach Group Pty Ltd (No 2) [2026] NSWSC 367 at [83]–[85] to the effect that the Court may adopt a “broad brush” approach to quantification, which may involve an impressionistic discount of the costs actually incurred; there must be sufficient material before the Court to enable the Court to carry out an informed assessment of actual costs incurred; a discount of 10% to 30% is typical when quantifying a gross sum costs order (WLD Practice Holdings Pty Ltd v Stockham [2020] NSWSC 1354 at [11]); and each case will ultimately depend upon the evidence before the Court.

10. CSL submitted that an order for indemnity costs should be made because Mr Prakash was aware that he did not have a valid judgment debt that supported the Purported Statutory Demand and did not take steps to withdraw the Purported Statutory Demand, after he was given notice on 24 July 2026 that the Purported Statutory Demand was deficient.

11. Mr Prakash submitted that the making of an indemnity costs order against a self-represented litigant would be disproportionate and contrary to the overriding purpose of s 56 of the Civil Procedure Act and that the Court should order that each party bear their own costs of the application. Mr Prakash also submitted that there was no delinquency or ulterior purpose in his approach to the proceedings. I do not accept these submissions. It seems to me that this is a proper case for costs to follow the event and there is no basis to order that each party bear its own costs of the application.

12. I am also satisfied that an order for costs should be made against Mr Prakash on an indemnity basis. I accept that the fact that Mr Prakash is a self-represented litigant is relevant to whether his conduct of the proceedings was sufficiently unreasonable to warrant an order for indemnity costs, although I also bear in mind that he has had an opportunity to familiarise himself with Court processes in his previous unsuccessful claims against CSL in other courts. Although Mr Prakash was self-represented, it seems to me that any reasonable assessment by him of the deficiencies in the Purported Statutory Demand, which CSL had drawn to his attention, would have indicated that it was unsustainable and should be withdrawn, and that matter provides good reason to order costs on an indemnity basis against him. I am also satisfied that the matters noted in the Judgment, including the facts that the amount claimed in the Purported Statutory Demand was plainly disputed at all relevant times, that Mr Prakash had been unsuccessful in several other proceedings seeking to establish a right to that amount, and that Mr Prakash could not have verified and did not verify that there was no genuine dispute as to the asserted debt, demonstrate that Mr Prakash’s resistance to the relief sought by CSL was unreasonable and involved an element of delinquency sufficient to support an order for indemnity costs against him.

Whether a gross sum costs order should be made

13. CSL seeks a gross sum costs order on the basis that any costs assessment is likely to be protracted and expensive; that the costs incurred have been greater than they would have been had Mr Prakash conducted the proceedings properly and reasonably; and there is reason to believe that Mr Prakash may be unable to pay any costs that were ordered against him. CSL also referred, in that respect, to the commencement of several other proceedings in other courts by Mr Prakash and the extent of Mr Prakash’s correspondence in respect of the matter, including multiple emails sent over a relatively short period. CSL also addressed the quantification of the costs that it claimed in submissions.

14. The circumstances in which the Court may make a gross sum costs order are also well-established. I summarised those principles in Saba v Plumb [2017] NSWSC 955 at [23] as follows:

“Section 98(4) of the Civil Procedure Act 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 gross sum instead of assessed costs. That power is commonly exercised where costs have been incurred in a lengthy or complex case although it is not in its terms limited to such a case … The power to make a gross sum costs 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 typically applies a discount in assessing costs on a gross sum basis ... ” [citations omitted]

15. I again adopted that summary in Re Beverage Freight Services Pty Ltd [2020] NSWSC 509 at [74], and I also addressed the relevant principles in Re Beverage Freight Services Pty Ltd [2020] NSWSC 797 at [19] as follows:

“As I noted in the Earlier Judgment [in that case], s 98(4) of the [C**ivil P**rocedure Act] 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 gross sum instead of assessed costs. … that power is commonly exercised where costs have been incurred in a lengthy or complex case, but it is not limited to such a case: Simone Starr-Diamond v Talus Diamond (No 4) [2013] NSWSC 811 at [8]. … the power to make a gross sum costs 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 typically applies a discount in assessing costs on a gross sum basis: Ritchie’s Uniform Civil Procedure NSW [s 98.65]; Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWSC 23. A gross sum costs order may also be made to avoid the expense, delay and aggregation involved in litigation arising out of an assessment: Harrison v Schipp [2002] NSWCA 213; (2002) 54 NSWLR 738. Where a gross costs order is to be 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 apply “a broad brush” approach: Hadid v Lenfest Communications Inc [2000] FCA 628 at [35]; Harrison v Schipp above at [22].”

16. I have also here drawn on my judgment in Re Sirrah Pty Ltd [2024] NSWSC 1277 at [16]–[17]. In Gabrielle v Abood (No 4) [2023] NSWCA 100 at [6], the Court of Appeal in turn observed that:

“The power to make a gross sum costs order provided by s 98(4)(c) of the [C**ivil P**rocedure Act] 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: see Hamod v New South Wales [2011] NSWCA 375 at [813] –[820] and authority there cited.”

17. Mr Prakash submitted that the making of a gross sum costs order against a self-represented litigant would be disproportionate and contrary to the overriding purpose of s 56 of the Civil Procedure Act*.* I do not accept that submission, where a gross sum costs order is a mechanism to assess costs in a fair and cost-efficient manner and both parties to proceedings will be advantaged by that approach in a proper case. There is here no disadvantage to Mr Prakash in not putting him, and CSL, to the costs of an assessment where the amount of costs payable to CSL can be fairly determined on a gross sum basis.

18. I accept CSL’s submission that an assessment of costs against Mr Prakash is likely to be expensive and time consuming, and I bear in mind Mr Prakash’s practice, which has continued since the Judgment, of sending repeated and voluminous correspondence directed to his underlying dispute with CSL. I also accept that it is at least possible that Mr Prakash will not be able to meet an order for costs made against him, where costs orders have also likely been made against him in his several previous unsuccessful proceedings brought against CSL. I am satisfied that the evidence led by CSL is sufficient to support the quantification of its costs in the amount that it claimed, particularly where those costs are to be paid on an indemnity basis. In reaching that view, I have not neglected the fact that the costs claimed by CSL are substantial, in the context that the difficulties with the Purported Statutory Demand served by Mr Prakash were clear enough. However, I also recognise that, first, Mr Prakash’s approach to litigation and the volume of his correspondence will have increased those costs; and, second, that a financial institution is plainly entitled to treat the issue of a creditor’s statutory demand against it as a serious matter in determining the resources to be devoted to responding to that demand. The size of the costs claimed by CSL does not provide sufficient reason not to make the gross sum costs order sought by CSL in these circumstances, where the costs claimed are sufficiently supported by the evidence.

Orders

19. Accordingly, I order that Mr Prakash pay the costs of Commonwealth Securities Ltd of these proceedings on an indemnity basis, quantified in the gross sum of $75,000.

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