Lu v Minter

District Court of NSW|2022-04-28

Solicitors: Defendants: Banki Haddock Fiora File Number(s): 2020/00279718

The application before the court

On 20 October 2021, I made orders for the summary dismissal of these proceedings and reserved the issue of costs, with liberty to apply: Lu v Minter (No.3) (District Court (NSW), 20 October 2021, unrep.
Pursuant to the leave granted in that judgment, this is the defendants' application for a specified gross sum costs order pursuant to s 98(4)(c) of the Civil Procedure Act 2005 (NSW). The defendants rely upon the affidavit of Bruce Norman Burke sworn on 17 March 2022.
A brief history of the circumstances leading to the orders I made on 20 October 2021 is as follows. As is set out in paragraphs 9 - 21 of that affidavit, an application for summary dismissal, first brought before Judge Wilson on 25 March 2021, was the subject of multiple adjournments while the plaintiff, who represented herself, sought leave to amend the statement of claim. After multiple opportunities given to the plaintiff, which included pro bono legal advice and a judgment in which I set out the necessary steps she had to take (Lu v Minter (District Court (NSW), 12 August 2021, unrep), the plaintiff was still unable to provide a statement of claim in coherent form, and the proceedings were accordingly dismissed.
The plaintiff, who appeared in person for part of the hearing today before leaving the courtroom, opposed the application, on the following grounds: 1. The application for costs cannot be dealt with because the plaintiff has an appeal pending in the Court of Appeal. 2. The application for costs cannot be dealt with because the plaintiff has commenced proceedings for defamation in the Federal Court of Australia. 3. The application for costs cannot be heard because the plaintiff has new evidence to put before the court. 4. The application for costs cannot be heard because the plaintiff was not served personally with the documentary material supporting the application. In addition, the email and personal addresses at which attempts were made to serve the plaintiff are no longer current. 5. The defendants' solicitors and barrister are not authorised to appear on behalf of the defendants and the court should force them to provide evidence of their retainer. 6. There has been fraud and misconduct on a massive scale by the defendants, their lawyers, the pro bono lawyer appointed by the court and certain university officials. The plaintiff's life has been threatened, her emails have been deleted, a relative of the pro bono lawyer sought to solicit a bribe and the court has failed to provide procedural fairness to her. She has complained to disciplinary bodies in relation to the conduct of all of these persons and as they are all under investigation, this application cannot proceed. All of these matters have been reported to the police and the police have advised the plaintiff that this costs application cannot go ahead.

Is there an appeal on foot?

The plaintiff filed a Notice of Intention to Appeal on 16 November 2021. As is set out in more detail below, she told the court that she had served the defendants personally (as opposed to their solicitors) on 13 January 2022 (CB 202). Mr Burke sets out at paragraph 20 of the affidavit filed in support of the notice of motion: "At that time, I had ascertained after enquiries were made of the NSW Registry that the Plaintiff had filed a notice of intention to appeal the Judgment. I have never been served with any notice of intention to appeal by the Plaintiff. I understand that on or around 14 January 202, the Plaintiff sent an email to the Defendants attaching a document that appeared to be a cover page of a filed notice of intention to appeal. It appears from that document that a notice of intention to appeal may have been filed on 16 November 2021"
The plaintiff wrote to the defendants on 13 January 2022 as follows: "From Justice Fairness Date: 13 January 2022 To: [redacted] Subject: Notice of intention of Appeal - Supreme Court Dear All, Please be informed that the case of defamation and other Torts have filed for the intention of appeal. As the UCPR requirement and prudence, you are being served The respondents have been included in this email Meanwhile, please be noted that the instance manager, [name redacted], has the same surname of the purported pro bono barrister as the purported remedy [sic] to me. [Name redacted] refused to let me claim the public liability insurance and asked me to pay $3500+ recently. Due to these conducts and cyber security concerns, but not limited to, the solicitors of UNSW were required to stay away with me and I am not willing to communicate with them. The direct parties will be notified and have duty of care dealing the case, all above conducts will be considered as the respondents' instructions, if there are no any clarifications. Another case of unlawful discrimination is being filed with the Federal court against UNSW as the solicitor of UNSW refused to do conciliation. Thanks & regards, Ms Lu"
The plaintiff sent a further email on 27 April 2022: "From: winandwin win Sent: Wednesday, April 27, 2022 2:15 pm To: [redacted] Subject: [Urgent legal action] required Authorization Dear All, It is regarding the defamation with the court. As defendants, please provide the authorization letter of the solicitors nominated for the court case. This is the second time I sent the request. If I don't receive the authorization letter by midnight of today, those legal representatives and the documents were and are invalid and illegal. As I believe they did some concerned illegal adverse actions. Also, please provide the bank details for the payments. Otherwise, that means your guys are receiving special interest transferring as the public staff or some staff instructed them to send interest to you guys. I need to see your signatures and sworn by you. Thanks & regards."
There is no reference in any of this material to the commencement or prosecution of any appeal in the Court of Appeal.
However, even if there were an appeal on foot, that would not prevent this court from hearing and determining the costs of the proceedings. To the contrary, the Court of Appeal would probably welcome such a step, as it is generally desirable for all aspects of the hearing at first instance (including costs) to be determined by the first instance judge.

The proceedings in the Federal Court

A search of the Federal Court registry shows that the plaintiff has commenced proceedings in that court, although those proceedings appear to be a claim of human rights.
If the plaintiff has commenced proceedings in the Federal Court in relation to the same publications for which she commenced proceedings in this court, there would be significant limitation problems and she would require leave under s 23 of the Defamation Act 2005 (NSW). The commencement of fresh proceedings in another court would not, however, deprive the defendants in this court of the opportunity to have their application for costs in this court heard: Dye v Commonwealth Securities Limited (No 2) [2012] FCA 407.

New evidence

The plaintiff did not reveal what the new evidence was. Whatever it is, that part of these proceedings are over, so the plaintiff's asserted discovery of new evidence is irrelevant.

Service

The affidavit of Benjamin Micah Regattieri of 27 April 2022 sets out full details of service of the plaintiff. Personal service was not in fact required because the requirement for personal service is limited to the initiating process; all other material is to be served at the address for service nominated by each of the parties, and costs applications fall into that category.
The plaintiff told the court that the addresses she had previously provided to the court (both physical and electronic) were all no longer valid, and refused to provide any fresh address in their place on the basis that she feared for her life if the court or her opponents found out where she was.
However, Uniform Civil Procedure Rules 2005 ("UCPR") r 4.5 places the onus for providing a proper address squarely upon the litigant(s) providing those addresses. This is to ensure litigants cannot misuse the court's process by hiding their true place of residence: Troiano v Voci [2019] VSC 859; Kostov v Zhang; Kostov v Fairfax Media Publications Pty Ltd [2017] NSWDC 7; Aboriginal Group Training (WA) v PEEDAC Pty Ltd [2004] WASC 51; Sheen v Burke [1993] 1 VR 584. The plaintiff is not entitled to withhold her current address from the defendants and from the court and cannot object if, in those circumstances, she has been served at addresses she has herself given to the court in affidavits and correspondence.
I am satisfied, from the material contained in Mr Regattieri's affidavit, that the plaintiff was in fact served with all relevant material.

Retainer issues

The defendants' solicitors filed a Notice of Address for Service in these proceedings on 17 November 2020 and at all relevant times have been represented in court by Mr Senior.
If the plaintiff had any concerns about their retainer in the proceedings, those concerns should have been raised long ago.

Death threats and other accusations

If the plaintiff has allegations to make, these should be made to the proper authorities. The fact that she has made such allegations is no bar to the determination of costs.

The relevant principles of law

Section 98 of the Civil Procedure Act 2005 (NSW) is as follows: "98 Courts powers as to costs (1) Subject to rules of court and to this or any other Act - (a) costs are in the discretion of the court, and (b) the court has full power to determine by whom, to whom and to what extent costs are to be paid, and (c) the court may order that costs are to be awarded on the ordinary basis or on an indemnity basis. (2) Subject to rules of court and to this or any other Act, a party to proceedings may not recover costs from any other party otherwise than pursuant to an order of the court. (3) An order as to costs may be made by the court at any stage of the proceedings or after the conclusion of the proceedings. (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. (5) The powers of the court under this section apply in relation to a married woman, whether as party, tutor, relator or otherwise, and this section has effect in addition to, and despite anything in, the Married Persons (Equality of Status) Act 1996. (6) In this section, costs include - (a) the costs of the administration of any estate or trust, and (b) in the case of an appeal to the court, the costs of the proceedings giving rise to the appeal, and (c) in the case of proceedings transferred or removed into the court, the costs of the proceedings before they were transferred or removed."
The principles governing specified gross sum costs orders have recently been considered in Ahern v Aon Risk Services Australia Ltd (No 2) [2022] NSWCA 39 as follows: "14 The principles relevant to the Court's exercise of discretion under s 98 were set out in Hamod v New South Wales [2011] NSWCA 375 at [813]-[820] (Beazley JA) (Hamod). Her Honour noted at [813]: [813] The discretion thereby conferred upon the court is not confined and may be exercised whenever the circumstances warrant its exercise, having regard to the scope and purpose of the provision: Harrison & Anor v Schipp [2002] NSWCA 213; 54 NSWLR 738 per Giles JA at [21]-[22]. In Harrison v Schipp, Giles JA considered that the discretion in s 98(4) may be exercised where the assessment of costs would be protracted and expensive and, in particular, if it appeared that a party obliged to pay the costs would not be able to meet a liability of the order likely to result from the assessment. However, his Honour stated, at [22]: "The power should only be exercised when the Court considers that it can do so fairly between the parties, and that includes sufficient confidence in arriving at an appropriate sum on the materials available." 15 The principal purpose of a specified gross sum costs order under s 98(4)(c) is to avoid the expense, delay and aggravation likely to be involved in a contested costs assessment process: Hamod at [816]-[817]. As Basten JA noted in James v Australia and New Zealand Banking Group Ltd [2017] NSWCA 84 at [3]: The power to make such an order is governed by the obligation of the court to give effect to the overriding purpose of the Act, as identified in Pt 6 of the Civil Procedure Act. The court is to ensure that the issues between the parties are resolved "in such a way that the cost to the parties is proportionate to the importance and complexity of the subject-matter in dispute" (Civil Procedure Act, s 60); that obligation extends to the disposal of disputes as to costs. Although questions of costs undoubtedly play an important practical role in commercial litigation, disputes as to quantification are ancillary to the primary issues in dispute and consequential upon the resolution of the primary issues. Costs provide an opportunity for ongoing litigation about "non-essential issues" which should be resolved with as little technicality and expense as reasonably practicable. [footnotes omitted] 16 Primary considerations relevant to the exercise of the s 98(4)(c) discretion 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": Hamod at [816]; see also Kostov v Zhang (No 2) [2016] NSWCA 279 at [22]; eInduct Systems Pty Ltd v 3D Safety Services Pty Ltd (No 2) [2015] NSWCA 422 at [30]. 17 The power to award a gross sum should only be exercised when the Court considers that it can do so fairly between the parties and where an appropriate sum can be determined from the available materials: Harrison v Schipp (2002) 54 NSWLR 734 at 743; [2002] NSWCA 213 at [22]. The power may be exercised where a party's conduct has unnecessarily contributed to the costs of the proceedings, especially where the costs incurred have been disproportionate to the result of the proceedings: Hamod at [818]. 18 If it considers it appropriate to make the order, the Court may adopt a "broad brush" approach to quantification, as to require the Court to undertake a detailed examination of the kind carried out in a formal costs assessment would defeat the purpose of the order: Harrison v Schipp at 743; Penson v Titan National Pty Ltd (No 3) [2015] NSWCA 121 at [7]. The costs ordered 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 at [820]. Courts have typically applied a discount when assessing costs on a gross sum basis, though the aptness of a discount primarily depends on the accuracy and reliability of the costs evidence available to the Court: Hamod at [814]."
There are two prerequisites for such an order to be made: 1. The proceedings should be an appropriate vehicle for the awarding of a specified gross sum costs order; and 2. The court should be satisfied that it can assess such as some from the available materials in a manner which is fair between the parties: Bechara trading as Bechara and Company v Bates [2016] NSWCA 294.
The principal purpose of a specified gross sum costs order is to avoid the expense, delay and aggravation likely to be involved in a contested costs assessment process: Hamod v New South Wales [2011] NSWCA 375 at [816] - [817]; James v Australia and New Zealand Banking Group Ltd [2017] NSWCA 84 at [3].
Considerations relevant to the exercise of the discretion to make such an order include: 1. The relative responsibility of the parties for the costs incurred. 2. The degree of any disproportion between the issue litigated in the costs claimed. 3. The complexity of proceedings in relation to the costs. 4. The capacity of the unsuccessful party to satisfy any costs liability.
Although courts were initially cautious in relation to the award of such orders other than in "megalitigation" actions, gross sum costs orders for small sums, particularly where the opposing party was a litigant in person or failed to attend, have been made on an increasingly common basis since Fairfax Radio Network Pty Ltd v Printlane Pty Ltd (No. 2) [2011] NSWDC 121. The willingness of inferior courts to make such orders has been accompanied by a similar approach in the Supreme Court, as Brereton J (as his Honour then was) noted in In the matter of optimisation Australia Pty Ltd (Costs) [2018] NSWSC 280 at [29]. Gross costs orders are now widely accepted as being appropriate where the costs in question are within a fairly modest parameters, as is the case in these proceedings.
If the court considers it appropriate to make the order, the court may adopt a "broad brush" approach to the quantification, as to require the court to undertake a detailed examination of the kind required for a formal costs assessment would defeat the purpose.
Courts generally apply a discount when assessing costs on a gross sum basis, to allow for the cost savings and advantages to the party seeking the costs by this method, and to take into account the possibility that costs assessor may not have been as generous as the court. This is sometimes referred to as the "Bobb v Wombat" discount (Bobb v Wombat Securities Pty Ltd & Ors (No 2) [2013] NSWSC 863).
Costs follow the event (UCPR r 42.1), but the general practice of awarding costs on either the ordinary or the indemnity basis, as set out in s 98(1)(c) of the Civil Procedure Act, must also be taken into account. An order for costs on an indemnity basis has the practical result that a much higher percentage of the costs is awarded. Is it necessary to make a formal order for costs on an indemnity basis on part or all of the sums sought before proceeding to the making of the gross sum costs order?
A judge making a costs order with the benefit of a detailed analysis of what those costs are is in a very different position to a judge making a generic costs order such as an order for indemnity costs. Although I am unaware of any authority to support such a view, I consider that the specific types of orders referred to in s 98(4) not only permit but encourage a judge, where the situation is appropriate, to make these kinds of gross sum costs orders without the confining requirement of actual orders for costs on the "either/or" standard or indemnity basis.

The application of these principles to this case

I am satisfied that this is an appropriate case where a specified gross sum costs order should be made. The reasons for doing so arise principally from the requirement in s 56 of the Civil Procedure Act 2005 (NSW) that case management focus on cases being conducted in the interests of a just, cheap and quick resolution of the issues. I summarise these as follows: 1. The nature of the litigation and the fact that the application is made by defendants: When looking at whether proceedings are "just", fairness and frankness in pleading and particularising the claim are significant. The potential for defamation actions to be brought without merit (as "SLAPP suits" or "stop writs"), particularly when the plaintiff is a "reluctant gladiator" ( Bi v Mourad [2010] NSWCA 17), has long been the subject of concern: "Report of the Law Reform Commission on Defamation" (LRC 13, 1971); Brian Walters SC, "Slapping on the Writs", University of NSW Press, 2003. Another relevant factor is that the defendant has been brought to the court and can only look forward to costs orders, unlike a plaintiff seeking damages. Gatley on Libel and Slander has noted both these policy considerations concerning costs in defamation actions, and emphasized the care necessary when making costs orders against a defendant (see, for example, the 10th edition at [35.15], citing Ritter v Godfrey [1920] 2 KB 47 at 53 per Lord Sterndale MR). These policy considerations and issues were referred to in Griffith v Australian Broadcasting Corporation (No 2) [2011] NSWCA 142, where a plaintiff who succeeded on a justification defence (but lost the action) was nevertheless refused the substantial costs ($300,000) of successfully defeating the justification defence at the trial. 2. Delay: The second relevant factor under s 56 is "quick". The plaintiff's multiple applications for adjournments, failure to comply with directions and general unreadiness, set out in the affidavit of Mr Burke at paragraphs 9 - 21, paint a vivid picture of a plaintiff who was never ready to proceed and ran up considerable unnecessary costs in the process. 3. Incurring costs by unreasonable conduct: It should not be forgotten that third of the three directives in s 56 is "cheap". Not only have the plaintiff's multiple applications for adjournments significantly increased the costs of the proceedings, but she has used these occasions to send vituperative and insulting correspondence to the defendants and their legal representatives as well as to the court and its administrative staff. Courts have long struggled with the best way to deal with such correspondence; in McGuirk v University of New South Wales [2010] NSWCA 104, the NSW Court of Appeal was not prepared to sanction a litigant in person who sent voluminous, bizarre and threatening correspondence (at [12] - [14] (per Giles JA), [49] - [52] (per Young JA). The views expressed at [140] - [148] by Sackville A-JA) as to the case management provisions of ss 56 - 62 Civil Procedure Act are, however, closer to modern views of case management. The result is that litigants (and, for that matter, their legal representatives) who behave in the manner adopted by Mr McGuirk should not do so at the expense of their opponents, and this is accordingly a relevant factor to take into account. 4. Proportionality of costs: Section 60 of the Civil Procedure Act permits adjustment of costs where the conduct of the successful party or disproportion between the claim and the result render this appropriate: Jones v Sutton (No 2) [2005] NSWCA 203. Where the costs of the assessment would be disproportionate to the merits of the litigation, that is a relevant factor to take into account. 5. The undesirability of satellite litigation: Unlike other common law jurisdictions such as the United Kingdom, defamation actions are not conducted under the benefit of a costs management order (see for example Tim Yeo MP v Times Newspapers Limited [2015] EWHC 209) and defamation costs can be eye-watering (in Dyer v Chrysanthou (No 3) (Costs) [2021] FCA 642, the costs of an interlocutory motion totalled $430,000). The likelihood is that the plaintiff's contribution to the assessment process would be similar to her conduct of this litigation and the resultant time spent, including the appeal process, is estimated by Mr Burke to be up to one year (paragraph 42 of his affidavit). 6. Futility: Mr Burke sets out at paragraph 44 of his affidavit that it is unlikely that the plaintiff would be able to satisfy a costs liability (see also Tab 5 of the Exhibit to his affidavit).

Quantum of the costs

I first note that in making such an order, the court applies an impressionistic or broad brush approach in terms of costs generally: Hamod at [820]. In general terms, the court is entitled to take into account that the usual outcome of applications of this kind is that the costs recovered represent a proportion in the range of 60 - 85% of the total costs incurred: Bechara at [69]; Ahern [42].
I next note that the quantum in question reflects the actual costs, and that the adjustment in question for this sum should not only reflect an allowance for what occurs on assessment but also the extremely high solicitor/client component which would have resulted from the defendants' difficulties in dealing with multiple adjournments and failures to comply with timetables. The manner in which the plaintiff conducted the hearing of this application this morning is but one example of those difficulties.
I have read the detailed assessment of costs as set out in the annexures to the affidavit of Mr Burke. Mr Burke has set out his many years of experience in relation to costs estimates and billing in defamation proceedings and estimates that recoverable costs in these proceedings would be at the high end of the scale, given the cost-sharing arrangements in place for the multiple defendants (and, in some cases, potential defendants); see paragraphs 22, 23 and 26.
He next sets out the rates charged including by reference to the 2016 CARC Guideline published by the Supreme Court of New South Wales. The method of presentation is as follows: 1. Mr Burke has summarised the invoices at Tab 2 and included counsel's fees as well. This results in a total of $42,032.90 for the solicitors' costs and $16,401 for counsel's fees. Both figures are inclusive of GST. The corrected total, according to Mr Senior's submissions (there is an incorrect figure in the affidavit) is $58,433.90. 2. Mr Burke deposes that an additional amount of $5,505.50 remains unbilled as work in progress, and that the revised figure to include this amount is $63,939.40. 3. Mr Burke estimates that an additional $3,960 inclusive of GST will be incurred for this application (paragraphs 35 and 37 of his affidavit). The revised total is thus $70,055.40. 4. Mr Burke sets out (at paragraph 41) a final calculation which, allowing for the mathematical error referred to above, is corrected by Mr Senior to an amount of between $56,044.32 and $63,049.85 (being 80 - 90% of the total costs, a figure attributable to the costs-sharing agreement savings).
I am satisfied that I can, on the available evidence, arrive at a quantification which is "fair, logical and reasonable" (Hamod at [815]), for the following reasons: 1. The amounts charged are reasonable and the charge rates conform to the CARC Guidelines. 2. Comparison of the items charged to the history of the application as set out in the JusticeLink records confirms the fairness and accuracy of the time and dates for the work charged for. 3. The percentage to be reduced is a reasonable one in the circumstances, having regard to the special factors in this case.
In my capacity as a judge of this court, I have had occasion to make gross sum costs orders on many occasions, not only in relation to non-defamation actions (Fairfax Radio Network Pty Ltd v Printlane Pty Ltd (No. 2)) but also in defamation proceedings (Matthews v Pigram [2020] NSWDC 526). Costs estimates are commonly provided in applications for security for costs and I am aware of the costs of interlocutory proceedings in this court, where the emphasis on case management and costs orders for non-compliance helps keep those costs to a figure lower than is the case in superior courts. This has given me a degree of familiarity with costs estimates of the kind put before me in these proceedings.
Taking all of the above into account, I accept the calculation of the defendants that an amount of $49,038.78 would represent a fair, logical and reasonable amount to award as the defendants' gross costs, applying the impressionistic approach and an appropriate discount to the total amount of costs incurred. I propose, however, to round this figure down to $49,000.

Concluding remarks

I was not addressed as to any claim for interest on the costs.
As the plaintiff left the court early today, the court will provide her with a copy of this judgment and a sealed copy of the orders. I have also made orders for copies of the orders and of this judgment to be served by the defendants on the addresses currently available for the plaintiff.

Order: 1. Defendants' Notice of Motion granted; pursuant to s 98(4)(c) of the Civil Procedure Act 2005 (NSW) the defendants' costs of the proceedings are to be assessed as a specified gross sum in the sum of $49,000. 2. Defendants are to provide a copy of the judgment to the plaintiff at the address for service nominated by her earlier affidavit material, namely [redacted], and the email addresses [redacted].

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: 29 April 2022

Civil Procedure Act 2005(NSW)s 98, ss 56

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Judgment (14 paragraphs)

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