Kiwi Munchies Pty Limited v Stern & Ors

S Paras (Pltf in person) Terence Stern (1D - submitting appearance) COUNSEL : John Bartos (2D - submitting appearance) Clifford Boyd-Boland (3D - submitting appearance) M G McHugh (4D)

SOLICITORS : Plaintiff in person Ebsworth & Ebsworth (4D)

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

1 HIS HONOUR: This is an appeal from an assessment by a costs assessor of the legal costs payable by the plaintiffs. The assessment arose from proceedings in the Local Court where the plaintiffs sued the fourth defendant in the proceedings before me for damages in the sum of $10,000. As I related in a judgment with respect to an adjournment application yesterday, the matter was fixed for arbitration on a particular date but did not proceed on that day. The parties reached agreement that the matter would not proceed and, as part of that agreement, the plaintiff agreed to pay the "costs thrown away of the defendant, ie the costs of today and the preparation thereof."

2 The parties were unable to agree on those costs and a bill was prepared which was ultimately assessed by Costs Assessor Stern.

3 The plaintiff did not accept that assessment and sought a review under the Act by a Costs Review Panel, which took place. The plaintiff did not accept the assessment after it had been reviewed and brought proceedings in this Court which were fixed for hearing before me yesterday.

4 Following review, the amount of the assessed costs was the sum of $5,922.66. The matter came before me yesterday and after discussion between the parties and in order to avoid the possibility of the matter having to be returned for further assessment, agreement was reached that the proceedings should proceed on the assumption that the plaintiffs' appeal had been successful and I should proceed to a re-determination of the application.

5 If the proceedings had followed that course, I would have been required to determine two matters. Firstly, I would have been required to determine the plaintiffs' claim that, by reason of the fact that the relevant insurance policy did not respond to the plaintiff's claim made on the fourth defendant, no costs were payable pursuant to the original agreement. I would also have been required to determine whether the amount of costs determined following review should have been further reduced by reason of evidence that not all of the amount claimed has in fact been billed to the principal, nor presumably paid.

6 Notwithstanding that the parties had agreed that the matter should proceed on that assumption, during the course of the day it became apparent that there would be difficulties, and the agreement was put to one side and the matter proceeded as a conventional appeal.

7 Evidence was tendered and submissions were made by Ms Paras, who is the sole director of the plaintiff company, whom I joined as a party in the proceedings and who represented the company in the matter.

8 Those submissions were not complete when the matter was adjourned yesterday, although many matters had been canvassed. In particular, the question of any re-determination, if that were necessary, had not been addressed when the matter was adjourned. My associate received a letter from Kiwi Munchies Pty Limited signed by Ms Paras this morning. In that letter, Ms Paras says: "...it appears to us that Your Honour has already predetermined the Plaintiff's Appeal and we see no utility in appearing before you tomorrow morning and wasting the Court's time any further. We note that during today's hearing, Mr McHugh [who appeared for the fourth defendant] conceded that the indemnity principle has been breached. Your Honour also indicated that the Court would re-determine the assessment on this basis under section 208L(3). To avoid wasting the Court's time any further, the plaintiff consents to judgment in the sum of $4941 being entered on the re-determination. ( such sum being inclusive of GST ). This sum is in accordance with the Schedule attached to my Affidavit filed on 14 September 2005 and read in these proceedings. Even though this results in a GST windfall for the fourth defendant, we are prepared to waive this amount in the interests of disposing this matter."

9 There are three matters which require comment in the letter. Firstly, although there was significant debate yesterday about the legal principles underlying the plaintiffs' submission and their strengths and weaknesses explored, I had not reached any concluded view in relation to the matter. No doubt some of my observations could have been interpreted as indicating a preliminary view on some aspects of the matter. The debate had not been concluded and, in particular, I had not heard from Mr McHugh, who appeared for the fourth defendant. Furthermore, the question of re-determination, if any, and the basis for that re-determination had not been explored.

10 In relation to the comment with respect to Mr McHugh's concession, insofar as I understand what is said in the letter, I have no recollection of Mr McHugh making such a concession. Indeed, as I understood his argument, the fundamental proposition was that the fourth defendant was entitled to be indemnified by the Through Transport Mutual Insurance Association (Eurasia) Limited.

11 The third matter which requires comment is that once it had been determined that the matter should proceed as a conventional appeal, I indicated that if that appeal was to succeed, then I would proceed to re-determine the matter rather than return it for further debate before a costs assessor. However, no determination having been made as to whether or not the appeal could succeed, I have not decided that a re-determination should take place.

12 Kiwi Munchies and Ms Paras did not appear in court this morning. The letter indicated that they would not be here. However, as I have indicated, the letter confirms that the plaintiff will consent to judgment in the sum of $4,941. That sum is the amount which reflects a re-determination of the amount of costs assessed following the decision of the Review Panel, less amounts which, although claimed, have apparently not been paid by the insurer.

13 The fourth defendant has indicated that it will consent to the matter being resolved on the basis that it will have judgment in that sum and I, accordingly, will make appropriate orders.

14 The fourth defendant seeks an order for costs. The matter of costs was discussed briefly yesterday and in written submissions filed with the court and provided to the plaintiff and Ms Paras. The fourth defendant indicated that it would seek an order for fixed sum of costs pursuant to the court's inherent jurisdiction and Uniform Civil Procedure Rule 42.4. In support of that application, the fourth defendant reads an affidavit of the solicitor who has the day-to-day conduct of this matter. That affidavit discloses that the client has already been billed, exclusive of counsel's fees, a sum of $20,506.30. Unbilled costs and disbursements, excluding counsel's fees, are indicated to be $15,808.50. Counsel's estimated fees are indicated to be $6,737.50. The total amount is $43,052.30. The affidavit also contains a reference to costs in relation to a motion for security which was brought in these proceedings but the fourth defendant does not persist with any claim for those amounts. The affidavit has annexed to it detailed accounts, which I have carefully examined.

15 Although I am satisfied that the fourth defendant is entitled to an order for costs in a significant sum, I do not believe the full sum claimed in the affidavit is appropriate in all the circumstances of this case.

16 I have in mind that, having regard to the nature of the dispute and the amount involved, a conservative view should be adopted of the amount which could be recovered on a party-party basis. Furthermore, as I have indicated, in part, the plaintiffs have, by reason of the judgment which will ultimately be entered, succeeded in these proceedings in having the assessed costs reduced. That reduction is not large and the evidence in relation to it was not lengthy and would not have required significant debate in the proceedings. Nevertheless, the order for costs which I make should reflect the plaintiff's partial success.

17 Having regard to the history of this litigation and the complexity of disputes which have arisen in relation to a very modest sum, I am completely satisfied that it would not be appropriate to require a further process of taxation and assessment to be undertaken in relation to any costs order which I may make in relation to these proceedings. That would merely impose further costs on the parties which, having regard to the original dispute and the costs originally assessed, would not reflect favourably upon the judicial system and, in my opinion, it would not be a just outcome in all the circumstances. Accordingly, it is necessary for me in approaching the matter of costs to do the best I can with the available evidence.

18 As the fourth defendant has substantially succeeded in these proceedings, I should make an order for costs in its favour. Having regard to the matters to which I have referred, bearing in mind that the orders should reflect an appropriate sum on a party-party basis and the plaintiffs' partial success in the matter, in my opinion, an order for costs in the sum of $24,000 would be appropriate to compensate the fourth defendant.

19 I have given consideration to the appropriate form of the orders. The mechanism provided by the statute for an appeal is within s 208L. The structure of the section requires consideration of an appeal which, if upheld, entitles the court to re-determine the matter.

20 An appeal is confined to a question of law. In the circumstances which have arisen, the parties having consented to a resolution of the matter by a re-determination in a lump sum, I am required to reflect their agreement in orders consistent with s 208L. However, I do so reflecting the agreement of the parties without otherwise independently determining the matter.

21 In these circumstances, the appropriate orders are:

1. Plaintiffs' appeal upheld.
2. I re-determine the assessment of costs in a sum of $4,941. 3. Order the plaintiffs to pay the fourth defendant's costs in a sum of $24,000.

22 In making appropriate orders in relation to this appeal, there has been no occasion to review any orders for costs made by the assessor or the review panel. Those orders remain as made by each of the assessor and the Review Panel.

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.