JWR Productions Australia Pty Ltd v Duncan-Watt

1. The parties file within 7 days short minutes of order giving effect to these reasons for judgment. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

THAWLEY J: 1 The applicants' claims against the respondent, Mr Duncan-Watt, were dismissed on 5 March 2020 at the same time as the claims the applicants had made in separate proceedings against Mr Gooding: JWR Productions Australia Pty Ltd v Duncan-Watt (No 2) [2020] FCA 236. 2 On 22 April 2020, the Court made an order that the respondent's costs of the proceedings be paid on a party and party basis before 11 am on 6 September 2017 and on an indemnity basis thereafter, the costs to be in a fixed lump sum to be determined by the Court: JWR Productions Australia Pty Ltd v Duncan-Watt (No 3) [2020] FCA 528. 3 The Court also made the following order on 22 April 2020: The District Registrar (NSW Registry) call on the bank guarantees in the total sum of $155,668.50 lodged by the Applicants as security for costs pursuant to the Orders made on 4 August 2017 and 26 November 2018, and that amount be paid into the controlled monies account of the solicitors for Respondent and thereafter disbursed to the Respondent, in part satisfaction of the Orders made on 22 April 2020 at 11.00am. 4 On 28 July 2020, orders were made to facilitate the determination of the appropriate lump sum on the papers. These reasons address that issue. 5 The respondent relied on an affidavit of Mr Alasdair Doctor, the solicitor with the day-to-day carriage of the proceedings for Mr Duncan-Watt, comprising its "Costs Summary" in accordance with [4.10] of the Federal Court's Costs Practice Note (GPN-COSTS). The applicants relied upon an affidavit of Mr Damian Sturzaker which exhibited a report from Mr Michael Dudman, a lawyer practising exclusively in the area of legal costs. 6 The respondent seeks costs of $305,800 which comprises: a) for the period before 11 am on 6 September 2017: i. [solicitors'] fees of $10,959.30; and ii. disbursements including counsels' fees of $547.20; and b) for the period from 11 am on 6 September 2017 to 22 April 2020: i. [solicitors'] fees of $127,769.64; and ii. disbursements including counsels' fees of $157,501.64 c) for the period from 23 April 2020: i. [solicitors'] fees of $6,072.00; and ii. disbursements of $2,970.00. 7 Mr Dudman agreed that the amount sought by way of lump sum for professional fees was reasonable and should be allowed as sought. 8 Mr Dudman considered the amount sought by way of lump sum for disbursements was not reasonable. He considered the amount paid to Law In Order of approximately $9,000 to be a "high level of costs for a matter of this nature". He noted he had not been provided invoices. 9 Mr Dudman also considered the amount paid to counsel to be too high. He stated that he had been instructed that the invoices issued by counsel had been requested by the applicants' solicitors but not provided by the respondent. Mr Dudman also considered the rate charged by senior counsel to be too high, it being a little above the rates identified in the Federal Court's "National Guide to Counsel Fees", issued on 28 June 2013. 10 As to the lack of invoices, the respondent, in submissions filed on 25 August 2020, stated that there was no evidence that counsels' invoices had been requested by the applicants or that the request had been refused. The respondent denied Mr Dudman's assertion and submitted that it was baseless. The applicants, in their submissions filed on 2 September 2020, did not gainsay this aspect of the respondent's submission. Rather, they submitted that the respondent "made the forensic decision" not to produce counsels' invoices. 11 The Federal Court's Costs Practice Note, in addressing the lump sum costs procedure states at [4.12]: Unless leave is given by the Court in advance of filing, the Costs Summary must not exceed 5 pages in length (omitting formal parts) or, in large or complex cases, no more than 10 pages. The Costs Applicant is not required to exhibit to the Costs Summary the source material verifying the costs and disbursements claimed. However, such material must be available at the costs hearing. 12 The Costs Practice Note also states at [4.18]: Co-operation, Consent and Matters Resolved During the lump-sum costs procedure, including in advance of the costs hearing, the parties must at all times adopt a practical approach and co-operate with each other. This includes a costs party promptly responding to any sensible query raised by another costs party arising from the material filed during the procedure which, if clarified, may narrow the issues in dispute or which, if left unclarified, may make the lump-sum costs process less efficient. 13 The respondent was not required to exhibit source material to his Costs Summary. The procedure is designed to promote a quick and efficient method for determining lump sum costs. If the applicants considered that they would have been assisted by further material, they could have requested it. There is no evidence to indicate that the applicants sought the invoice from Law In Order or counsels' invoices. 14 Because costs are payable on an indemnity basis, the applicants bear the onus of showing that the costs claimed by the respondent are unreasonable and any doubt about the reasonableness of the amount charged for a particular item is to be resolved in favour of the party with the benefit of the indemnity costs order: Bouras v Grandelis (2005) 65 NSWLR 214 at [117]-[119] (Santow JA); Hancock v Rinehart (Lump sum costs) [2015] NSWSC 1640 at [61] (Brereton J); see also the definition of "costs on an indemnity basis" in Federal Court Rules 2011 (Cth) Sch 1. 15 The applicants have not shown that any part of the costs claimed were unreasonable. In any event, I consider that the costs sought are reasonable. The proceedings ran for eight days of hearing, generated lengthy written submissions prepared over a lengthy period and occupied a further full day for oral submissions. The proceedings ran concurrently with proceedings in which the respondent was Mr Gooding (NSD 327 of 2017) with the evidence in each case being evidence in the other. There were eight case management hearings, at most of which the respondent was represented by junior counsel. The court book was extensive, comprising over 4,500 pages. There were four separate claims made against the respondent. Senior counsel for the respondent charged just over 8 days in total fees, junior counsel under 26 days. These amounts of time appear to me to be plainly reasonable considering the length and complexity of the proceedings. I do not regard the rates as too high. 16 As to the amount paid to Law In Order, I do not conclude that it was unreasonable. As mentioned, the court book was lengthy. The case was document intensive. It was necessary for some documents to be enlarged and there were multiple versions of scripts from the relevant stage plays which had to be analysed. No doubt there were documents which did not make it into the court book. 17 The respondent submitted that it had incurred further costs in pursuing the lump sum costs order since the affidavit of Mr Doctor was filed on 14 May 2020 in the amount of $13,407.50, being $12,500 in professional fees and $907.50 in disbursements (junior counsel's fees). The respondent sought $8,044.50, being 40% of the amount in fact incurred and submitted to represent costs on a party and party basis. In my view, it is appropriate also to allow this amount. 18 I direct the parties to submit an appropriate order within 7 days to give effect to these reasons, having regard to the order made on 22 April 2020 referred to at [3] above. I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Thawley.