//
© 2026 Zoe. All rights reserved.
Zoe is a legal information platform. Always consult the Federal Register of Legislation for authoritative text.
[2025] NSWCA 185
procedural. The notice of motion filed on 3 July 2025 was dismissed. The appellant was ordered to pay the respondent's costs of the notice of motion: [59].
The Court of Appeal had legal power to replace ordinary costs assessment with fixed gross sums, but it was not persuaded that doing so was fair or justified here. The case and likely assessment were relatively straightforward, while Universal had raised apparently arguable objections to a material part of the bills. The Court could not confidently determine what costs would be allowed, and finality alone was not enough to bypass assessment. The motion was dismissed, and Manariti was ordered to pay Universal's costs of the motion.
AI-generated legal information, not legal advice. Zoe can make mistakes. Check the cited source, and for advice about your situation consult a qualified Australian lawyer.
2,184 words · generated 06/10/2026
The judgment concerns the costs stage following an appeal between Manariti Plumbing Pty Ltd and Universal Property Group Pty Ltd. The underlying dispute concerned a progress payment claim for $221,901 under the Building and Construction Industry Security of Payment Act 1999 (NSW) (SOP Act). Manariti served the claim on 31 March 2024. Universal neither paid it nor served a payment schedule under s 14 of the SOP Act [9]-[10].
10 cited instruments linked from this judgment.
Manariti commenced District Court proceedings on 10 April 2024. It alleged, among other matters, that the claim was a valid payment claim under s 13, that Universal was liable under s 14(4), and that the sum could be recovered as a debt under s 15(2) [11]. The District Court refused summary judgment because it considered that a real issue remained about the claim's validity [12].
On 19 June 2025, the Court of Appeal granted leave and allowed Manariti's appeal. It found that the payment claim was valid and ordered summary judgment for $221,901, plus interest to be determined by agreement or, failing that, by the District Court. It also ordered Universal to pay Manariti's costs in both the District Court and the appeal, on the ordinary basis [5], [13]-[14].
Manariti then sought to replace ordinary costs assessment with fixed gross sum orders: $61,815.38 for the appeal and $32,067.74 for the District Court proceedings [3]. It relied on s 98(4)(c) of the Civil Procedure Act 2005 (NSW), as well as UCPR r 36.16 [6], [15]. Universal accepted that the Court had power to make the orders, but disputed whether it was appropriate to exercise that power [8].
The application was decided on the papers [16]. Free JA gave the reasons. McHugh JA and Ball JA agreed [1]-[3]. The Court dismissed the motion and ordered Manariti to pay Universal's costs of it [4], [59].
The judgment separates the existence of power from whether using it was appropriate. Section 98(3) provides for costs orders at any stage of proceedings or after their conclusion. Section 98(4) allows an order for a specified gross sum instead of assessed costs, subject to the qualification that the costs must not already have been referred for assessment. The Court said these provisions were not subject to the procedural rules and that r 36.16 did not impose a temporal constraint on the statutory power [7]. The source of power was therefore not the obstacle.
The main question was whether the evidence and circumstances enabled the Court to set fair sums without a costs assessor. Earlier authorities allowed a court to use a broad-brush approach rather than conduct a formal assessment [34]-[35]. But “broad brush” did not mean unconstrained estimation. The approach still had to be “logical, fair and reasonable”, and the Court needed “sufficient confidence” that it could arrive at an appropriate sum on the materials available [36]. The judgment also refers to the need for a reasonable evidentiary basis and a relationship between the gross sum, actual costs and costs likely to be recovered on assessment [37].
The usual reasons that can favour a gross sum order were absent. The District Court case was brief, involving pleadings and a summary judgment application, and the appeal was straightforward and dealt with quickly [40]. The evidence did not show that a costs assessment would be protracted, unusually expensive or burdensome. Nor did it establish that assessment would cost more than the gross sum motion [41]-[44]. Manariti also accepted that Universal had the capacity to pay the judgment debt and costs, so there was no demonstrated concern that assessment would require further expenditure that could not be recovered [45].
Manariti relied on finality and the cost of a costs assessor. The Court accepted that a gross sum order brings finality, but observed that this is true of every such order. If finality alone were sufficient, gross sum orders would become the ordinary outcome in every case, displacing assessment [47]. The Court also considered the website estimate of assessors' fees, commonly $4,000 to $8,000, too general to establish the likely cost of this particular assessment [27], [42].
A further problem was the contested content of the bills. Universal identified specific items it said would be challenged, including counsel's research time, solicitor travel, duplicated work on appeal grounds and appeal materials, and work on enforcement documents that it said were not served or required [28]. The Court did not decide those objections. It said that deciding their ultimate merits was a matter for an expert costs assessor [49], [51]. Its point was that the items appeared sufficiently arguable, and together represented a material proportion of the relatively low total costs claimed [50], [52].
The proposed discounts did not give the Court adequate assurance. Manariti sought 80 per cent of solicitor costs and 90 per cent of counsel fees, despite the solicitor's evidence that expected recoveries on assessment could be higher [24]-[25]. Free JA accepted that the solicitor charge-out rates were comparatively low, but found the remaining explanations less convincing. In particular, the assertion that using two fee earners achieved substantial efficiencies was not self-evident, and comparisons with costs in commercial litigation generally did not determine whether these particular costs were reasonable and proportionate [54]-[55]. The Court concluded that there remained a real possibility that the requested gross sums would exceed the amounts recoverable on assessment [56].
Finally, the request included costs of the District Court proceedings. The judgment states that it is generally inappropriate for the Court of Appeal to spend time determining a gross sum costs claim for first-instance proceedings as well as appeal costs [57], referring to Wormald v Maradaca Pty Ltd. This was an additional problem with the form of the application.
The judgment describes the statutory power as broad and unconfined. Earlier, Harrison v Schipp considered the gross sum power under Pt 52A r 6(2)(c) of the now-repealed Supreme Court Rules 1970. The Court said that the same approach applied to s 98(4) of the Civil Procedure Act [30]. M1 v R1 was cited for the proposition that s 98's timing provisions are not subject to UCPR r 36.16 [7].
The authorities identified circumstances that could favour a gross sum order. These include a lengthy or complex costs assessment, assessment expense and delay, an inability to meet the costs of further assessment, disproportion between the assessment process and the amount at stake, and the prospect that the overall cost of litigation would become still more disproportionate [31]-[33]. The judgment does not treat these examples as an exhaustive list. It expressly notes that the discretion is unconfined and that earlier examples should not be treated as specifying every circumstance in which an order might be warranted [46].
The decision reinforces the distinction between a broad-brush estimate and a formal costs assessment. The former does not require examination of every item in the same way as a taxation or assessment, because doing so would defeat its purpose [34]-[35]. But the court must still have a sound enough basis to reach a fair figure [36]-[38]. A general discount is one way courts have accounted for uncertainty in gross sum calculations, but a discount cannot necessarily cure a weak evidentiary basis or material uncertainty about what would be allowed [38], [54]-[56].
The judgment applies these principles to the facts before it, rather than announcing a new statutory test. Its practical emphasis is that the court's confidence in the amount matters, and the presence of specific objections can be significant where the total claim is modest and the disputed items form a material proportion of it [48]-[56]. The decision does not state that any contested item defeats a gross sum application. To the contrary, it cautions against treating item-by-item objections as automatically decisive [51].
At [7], the Court explains that s 98 allows a gross sum costs order at any stage, provided costs have not been referred for assessment. In plain English, the fact that the appeal judgment had already been made did not, by itself, prevent the Court from considering a gross sum order.
At [36], the judgment says the approach must be “logical, fair and reasonable” and based on “sufficient confidence” in the sum. In plain English, a court can estimate broadly, but it must have a rational basis for believing that the number it fixes is fair.
At [42], the Court treats the published assessor-cost range as a rough guide, not evidence of what this particular assessment would cost. In plain English, general fee estimates do not establish that assessment would be more expensive than the alternative in a specific case.
At [47], the Court says finality is not enough by itself. In plain English, avoiding a further costs process is a benefit of a gross sum order, but it does not establish that such an order is justified in every case.
At [49]-[51], the Court distinguishes identifying arguable issues from deciding them. It left the ultimate merits of Universal's objections to a costs assessor, while noting that the objections appeared fairly arguable. It also warned that challenges to individual items may be trivial in a case where wider considerations favour a gross sum order.
At [56], the Court explains the risk created by uncertainty about the proposed discount: the order might impose a greater costs liability than assessment would. In plain English, a discount does not ensure fairness if the court cannot reliably estimate what the assessor would allow.
The decision is relevant where a party has an ordinary costs order and seeks a fixed gross sum instead of assessment under s 98 of the Civil Procedure Act. It confirms that the statutory power can be considered after the substantive proceedings have concluded, subject to the stated timing qualification concerning referral for assessment [7].
It is particularly relevant where the moving party relies on efficiency or finality but the underlying proceedings were short and the anticipated assessment appears straightforward. In this case, the absence of demonstrated delay, expense or other burden weighed against the application [40]-[47].
It also applies where the proposed gross sum is supported by invoices, solicitor evidence and a general discount, but the other party identifies apparently arguable disputes about particular costs. The significance of those disputes depends on context. Here they mattered because the overall claim was relatively low and the disputed items comprised a material proportion of it [48]-[56]. The judgment does not establish that an opponent can defeat an application merely by identifying individual items for challenge [51].
The decision also flags a separate institutional issue where an appellate court is asked to fix gross sum costs for proceedings below as well as for the appeal [57].
The supplied judgment does not refer to any later decision considering or applying Manariti Plumbing itself. As a result, this text alone does not establish how later courts have treated the decision.
The judgment does explain its use of earlier authorities. It applies the approach in Harrison v Schipp and Hamod to the statutory power and the circumstances that may support a gross sum order [30]-[33]. It draws on Bechara and Zepinic for the broad-brush method and the need to avoid turning a gross sum application into a formal assessment [32], [34]-[35]. It invokes Colquhoun for the importance of adequate material to support confidence in the amount [36], and Wormald for the general inappropriateness of the Court of Appeal determining first-instance gross sum costs as well as appeal costs [57].
Those are relationships between this judgment and the authorities it cites, not evidence of later treatment of Manariti. Any account of subsequent treatment would require later judgments not included in the supplied material.
The judgment leaves open how the broad discretion under s 98(4) applies to circumstances that have not been addressed in earlier authorities. It states that the recognised circumstances are not exhaustive, but it does not define the outer limits of the discretion [46].
It also does not set a numerical threshold for how much evidence, discount or itemised detail is enough to give a court sufficient confidence in a proposed sum. The decision turns on the particular combination of a straightforward matter, an unproven assessment burden, apparently arguable disputes and a relatively modest total claim [40]-[56].
Nor does the judgment decide the merits of Universal's specific objections. It expressly reserves those issues for a costs assessor [49], [51]. The decision should therefore not be read as finding that the challenged costs were unreasonable or would be disallowed.
Finally, the judgment does not quantify the costs or delay of the assessment that would have followed, or determine the sum that an assessor would have allowed. Its conclusion is narrower: Manariti did not establish a sufficiently reliable basis for the particular gross sums sought, in the circumstances presented [41]-[56].
This is general legal information, not legal advice. Zoe can make mistakes. Before acting on this, relying on it, or using any draft, have it checked by a qualified Australian lawyer.
Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: Manariti Plumbing Pty Ltd v Universal Property Group Pty Ltd (No 2) [2025] NSWCA 185
Hearing dates: On the papers
Date of orders: 13 August 2025
Decision date: 13 August 2025
Before: McHugh JA at [1];
Ball JA at [2];
Free JA at [3].
Decision: (1) The notice of motion filed by the appellant on 3 July 2025 is dismissed.
(2) The appellant is to pay the respondent’s costs of the notice of motion.
Catchwords: COSTS – Application for gross sum costs order – Lack of justification for gross sum costs order – Need for firm foundation for Court to be satisfied as to quantum – Inappropriateness of awarding gross sum costs in respect of proceedings below
Legislation Cited: Building and Construction Industry Security of Payment Act 1999 (NSW), ss 13, 14, 15
Civil Procedure Act 2005 (NSW), s 98
Legal Profession Uniform Law Application Act 2014 (NSW)
Legal Profession Uniform Law (NSW)
Supreme Court Rules 1970 (NSW), Pt 52A – now repealed
Uniform Civil Procedure Rules 2005 (NSW), r 36.16
Cases Cited: Baychek v Baychek [2010] NSWSC 987
Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119
Bechara (t/as Bechara and Company) v Bates [2016] NSWCA 294
Colquhoun v District Court (NSW) (No 2) [2015] NSWCA 54
Hadid v Lenfest Communications Inc [2000] FCA 628
Hamod v State of New South Wales [2011] NSWCA 375
Harrison v Schipp (2002) 54 NSWLR 738; [2002] NSWCA 213
M1 v R1 [2024] NSWCA 256
Tim Barr Pty Ltd v Narui Gold Coast Pty Ltd [2011] NSWSC 11
Wentworth v Wentworth (Court of Appeal, 21 February 1996, unreported)
Wormald v Maradaca Pty Ltd [2021] NSWCA 307
Zepinic v Chateau Constructions (Aust) Ltd (No 2) [2014] NSWCA 99
Category: Costs
Parties: Manariti Plumbing Pty Ltd (Applicant/Appellant)
Universal Property Group Pty Ltd (Respondent)
Representation: Counsel:
D K Smith (Applicant/Appellant)
T T Bors (Respondent)
Solicitors:
MRM Lawyers (Applicant/Appellant)
Colin Biggers Paisley (Respondent)
File Number(s): 2025/2528
MCH****UGH JA: I agree with Free JA.
BALL JA: I agree with Free JA.
FREE JA: By notice of motion filed on 3 July 2025 the appellant, Manariti Plumbing Pty Ltd (“Manariti Plumbing”), seeks an order that the respondent, Universal Property Group Pty Ltd (“Universal”), pay the appellant’s costs in respect of the appeal in the gross sum of $61,815.38. Manariti Plumbing also seeks an order in respect of the costs of the proceedings in the District Court, requiring Universal to pay the costs of Manariti Plumbing in the gross sum of $32,067.74. While the notice of motion also sought an order for indemnity costs in respect of part of the costs below, that aspect of the notice of motion was not pressed.
For the reasons which follow, I would dismiss the notice of motion, with costs.
Manariti Plumbing has proceeded on the basis that making each of the gross sum costs orders now sought would involve variation of the orders made by the Court on 19 June 2025 in disposing of the appeal brought by Manariti Plumbing. The relevant substantive orders of the Court on that date were:
(3) Appeal allowed.
(4) The orders of the District Court be set aside and in their place:
(a) an order for summary judgment in favour of the plaintiff in the amount of $221,901 plus interest in an amount to be determined by the parties or, failing agreement, the District Court;
(b) the defendant is to pay the plaintiff’s costs.
(5) The respondent is to pay the appellant’s costs.
Manariti Plumbing relies on r 36.16(3A) (and implicitly r 36.16(1)) of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) to vary those orders, on the basis that the notice of motion seeking such variation was filed within 14 days of those orders being entered.
It is unnecessary to rely on the Court’s powers under r 36.16 of the UCPR to deal with Manariti Plumbing’s application. That is because s 98(3) of the Civil Procedure Act 2005 (NSW) (Civil Procedure Act) specifically provides that an order as to costs, which is to be read in context as including an order for payment of costs on a gross sum basis, may be made at any stage of the proceedings or after the conclusion of the proceedings. The only temporal qualification that is added by s 98(4) is that an order under that subsection may only be made before costs are referred for assessment. These parts of s 98 are not subject to the rules, and as such r 36.16 does not provide a temporal constraint on a court’s power to make an order that a party pay a specified gross sum instead of assessed costs: M1 v R1 [2024] NSWCA 256 at [4].
Nothing turns on the fact that Manariti Plumbing relied in its notice of motion on r 36.16 of the UCPR in circumstances where s 98 of the Civil Procedure Act provides the relevant source of power to make the orders sought. Universal did not dispute the Court’s power to make the orders sought. Universal instead approached the matter, properly, on the basis that the question is whether it is appropriate for the Court to exercise its powers to make those orders.
The substantive dispute between the parties concerned a claim by Manariti Plumbing for a progress payment, in the amount of $221,901, pursuant to s 13(1) of the Building and Construction Industry Security of Payment Act 1999 (NSW) (SOP Act) relating to a construction contract between Manariti Plumbing and Universal. The background is set out in detail in my reasons for judgment in the appeal published on 19 June 2025 at [3]-[28]. For ease of reference, I repeat the key steps leading to the present application.
The purported payment claim was served by Manariti Plumbing on Universal on 31 March 2024. Universal neither paid the amount claimed nor served a payment schedule pursuant to s 14 of the SOP Act.
On 10 April 2024 Manariti Plumbing commenced proceedings in the District Court alleging, among other things, that the claim was a payment claim under s 13 of the SOP Act, that Universal was liable to pay the claimed amount under s 14(4) and that Manariti Plumbing was entitled to recover that amount as a debt due to it pursuant to s 15(2). Manariti Plumbing also sought interest on the outstanding payment.
Universal disputed that the claim was a valid one for the purposes of the SOP Act. Manariti Plumbing sought summary judgment in the District Court, by a notice of motion filed on the same day as its statement of claim. The primary judge refused the application, on the basis that there was a real issue to be tried as to the validity of the payment claim.
Manariti Plumbing sought leave to appeal from that decision. By its judgment on 19 June 2025 this Court granted leave and allowed the appeal. The Court found that the claim served by Manariti Plumbing was a valid payment claim for the purposes of the SOP Act and in the circumstances the District Court ought to have given summary judgment for Manariti Plumbing in respect of its application for relief arising from the claim.
By virtue of the Court’s orders of 19 June 2025, Manariti Plumbing is entitled to be paid its costs in the District Court and on the appeal, in each case on the ordinary basis. In the absence of agreement as to the amount of such costs, Manariti Plumbing would be required to seek assessment of its costs in the District Court and in this Court under the Legal Profession Uniform Law Application Act 2014 (NSW).
Manariti Plumbing seeks to avoid the costs assessment process by obtaining orders from this Court under s 98(4)(c) of the Civil Procedure Act that Manariti Plumbing is entitled to the specified gross sums instead of assessed costs.
The Court made orders for the filing of evidence and submissions and directed that the notice of motion be determined on the papers.
In support of its application Manariti Plumbing relies on the contents of the White Folder and the Supplementary White Folder that contained material relevant to the application for leave and the appeal. Manariti Plumbing also relies on an affidavit of Peter Garry Rogers affirmed 3 July 2025 and exhibit PGR-1 to that affidavit.
Mr Rogers is the solicitor on the record for Manariti Plumbing and has had daily carriage of the matter since its inception. Mr Rogers was admitted to practice in 2009 and has practised primarily in civil litigation since that time. According to his affidavit, Mr Rogers has practised almost exclusively in commercial litigation since about 2012, with the vast majority of that work being building and construction disputes. He estimates that he has been involved in over 50 costs assessments throughout his practice as a solicitor.
Mr Rogers describes in his affidavit the nature of the work that was involved in the proceedings in the District Court. The total costs and disbursements incurred by Manariti Plumbing were $37,498.99 (GST incl.), comprising:
solicitors’ costs of $20,391.25 (GST incl.);
counsel’s fees of $13,530.00 (GST incl.); and
other disbursements of $3,577.74 (GST incl.).
The relevant invoices are included in the exhibit to the affidavit of Mr Rogers.
Mr Rogers explains in his affidavit that his charge out rate as a partner is $550.00 per hour (GST incl.) and the charge out rate of his employed solicitor Mr Brodbeck, who also worked on the matter, is $385.00 per hour (GST incl). Junior Counsel, Mr Smith, charges $440.00 per hour (GST incl.).
The affidavit of Mr Rogers provides an equivalent description of the work involved in the appeal and the costs and disbursements that have been incurred. Those costs and disbursements in the appeal total $67,589.28 (GST incl), comprising:
solicitors’ costs of $28,759.50 (GST incl.);
counsel’s fees of $22,110.00 (GST incl.); and
other disbursements of $16,719.78 (GST incl.).
Mr Rogers noted that the application for gross sum costs orders and an indemnity costs order would itself involve additional costs, which he estimated to be at least $5,500.00 (GST incl.). Manariti Plumbing does not seek an order for payment of those costs in addition to the gross sums that it seeks.
Mr Rogers is not a costs assessor and does not profess to have any expertise in carrying out costs assessments, except to the extent that it might be inferred that he has gained relevant insights in that regard from being involved as a solicitor for a party in around 50 costs assessments over the last 16 years. According to his affidavit Mr Rogers expects that, upon assessment, recoveries for solicitor costs in this matter would exceed 80% for both the first instance proceedings and the appeal. He holds that opinion because his charge out rate is “much lower than that of partners at Sydney firms conducting the same type of work”, Mr Brodbeck’s charge out rate is likewise low, substantial efficiencies were achieved by having only two fee earners work on the matter and the total solicitor costs in respect of both the first instance and appeal proceedings are “low in absolute terms for commercial litigation and are proportionate to the amount in dispute”. Despite this expectation about the outcome of a costs assessment, Mr Rogers states that Manariti Plumbing seeks only 80% of its solicitor costs because “it is important that more than a full indemnity is not recovered by reason of a gross sum assessment”.
(a) 1.25 hours work was charged by counsel for research on minimum requirements for pleadings, defence and leave to appeal. Universal says this is an excessive amount of time for a simple research task, and that it is unreasonable for counsel to charge for research on the topic of “minimum requirements for pleadings”; (b) 8.5 hours work was charged by counsel in relation to research on submissions in the District Court, in circumstances where Manariti Plumbing was responding to only 2.5 pages of submissions and prepared 5 pages of submissions of its own; (c) $1,100.00 was charged for the cost of solicitor travel to and from the District Court for hearing of the application for summary judgment (calculated at 50% of the applicable charge out rates). Universal says that the time claimed is excessive and unreasonable. A similar complaint is made about costs incurred in travelling between Sydney and Newcastle for the hearing of the appeal, and $770.00 charged in respect of travel to file the supplementary white folder in triplicate (in circumstances where there is said to have been no need for a solicitor to attend to such an administrative task); (d) $5,830.00 was charged for solicitor costs on two separate dates in respect of consideration of grounds of appeal, which involves excessive time and unreasonable duplication of work on different days. A similar complaint is made about $3080.00 charged in respective of apparently administrative tasks involved in the preparation of appeal folders and authorities on two different dates in May 2025; (e) $550.00 was charged for solicitor costs in respect of preparing, filing and serving a notice of intention to appeal, which Universal says is excessive and unreasonable, given that the notice of intention to appeal involves a single sentence; and (f) $770.00 is included for the cost of preparing a notice of motion for a writ for levy of property and a garnishee order, in circumstances where no such writs were served or required.
In Harrison v Schipp (2002) 54 NSWLR 738; [2002] NSWCA 213 (Harrison v Schipp) at [21] Giles JA described the power to make a gross sum costs order instead of ordering assessed costs, conferred at that time by Pt 52A r 6(2)(c) of the Supreme Court Rules 1970 (NSW), as being unconfined and apt to be exercised whenever the circumstances warrant its exercise. The same approach applies to s 98(4) of the Civil Procedure Act: Hamod v State of New South Wales [2011] NSWCA 375 (Hamod) at [813].
One of the circumstances that has been recognised as potentially warranting the making of a gross sum costs order is where the assessment of costs would be protracted and expensive, and in particular if it appears that the party obliged to pay the costs would not be able to meet a liability to pay the order likely to result from the assessment: Harrison v Schipp at [21]. That was the situation in Harrison v Schipp, where at [30] Giles JA found that Mrs Schipp “should not have to spend a lot more money which she will not recover” in order to obtain the costs payable to her.
Even where the element of impecuniosity is not present, the length and/or complexity of the underlying proceedings and the associated likelihood of a lengthy and complex assessment are material considerations that can favour a gross sum costs order. A contested costs assessment in a matter with these characteristics is likely to involve expense, delay and aggravation of the kind that it is desirable to avoid by making a gross sum costs order: Hamod at [817]. Where there is a lack of proportionality between the complexity and cost of the assessment process and the amount at stake, that is also a factor favouring the making of a gross sum order: Zepinic v Chateau Constructions (Aust) Ltd (No 2) [2014] NSWCA 99 (Zepinic v Chateau Constructions) at [28], [31]. A related circumstance warranting such an order is where the total costs of litigation will become even more disproportionate if the costs are referred for assessment: Bechara (t/as Bechara and Company) v Bates [2016] NSWCA 294 (Bechara v Bates) at [18].
In Hamod at [816] the Court held that in determining whether the sum sought is appropriate and meets these standards, 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 costs and the capacity of the unsuccessful party to satisfy any costs liability.
Universal in its submissions draws attention to the fact that none of the circumstances that have been identified in the authorities as warranting a gross sum costs order are present in this matter.
This was not a lengthy or complex case giving rise to the prospect of a contested costs assessment with heightened levels of expense, delay and aggravation. The District Court proceeding was exceptionally brief, comprising no more than the filing of a statement of claim and defence, and the filing and hearing of an application for summary judgment. The application for leave to appeal to this Court was likewise straightforward and quickly dealt with. Nothing in the evidence suggests that a costs assessment in respect of the costs in the District Court or this Court would be protracted, expensive or particularly burdensome.
Universal goes further and submits that a costs assessment would likely be significantly cheaper than the costs of Manariti Plumbing’s motion seeking gross sum costs orders. The evidence is not sufficiently precise to support a positive finding in those terms. However, viewing the issue from the perspective of Manariti Plumbing as the party seeking to persuade the Court that a gross sum costs order is warranted, it is true that Manariti Plumbing has failed to establish that a costs assessment would be expected to be more expensive than the present application.
Manariti Plumbing relies on information drawn from the Supreme Court website indicating that the costs of an assessor are commonly in the range of $4,000.00 to $8,000.00. That is evidently an observation covering all types of litigation and all types of assessments. As such, the stated range can be no more than a very rough guide to the likely cost of the process in this particular matter. Given the relatively simple nature of the assessment process to be expected in the present matter, if the assessor’s costs in the present matter did fall within the range described it seems likely to be at the lower end of the range. That estimate relates only to the costs of the assessor, and ignores the costs incurred by the parties in participating in the assessment process. However, Manariti Plumbing has not sought to quantify its own costs in participating in a costs assessment. The bottom line is that it has not been demonstrated that the present application is any more efficient in terms of direct cost than simply proceeding to costs assessment.
Nor is there evidence of any obstacle to a costs assessment being resolved efficiently, if and when Manariti Plumbing applies for such an assessment. It is not suggested, for example, that Manariti would face a delay in finding and engaging a suitable costs assessor or that a costs assessor would be delayed in completing their work. Given the evidence, this Court can and should proceed on the basis that the process of costs assessment in this matter would be relatively straightforward and efficient, if and when it is initiated.
The orders of the Court that I would propose are:
The notice of motion filed by the appellant on 3 July 2025 is dismissed.
The appellant is to pay the respondent’s costs of the notice of motion.
**********
Manariti Plumbing Pty Ltd
Universal Property Group Pty Ltd
(1995) 57 FCR 119
(2002) 54 NSWLR 738
The notice of motion filed on 3 July 2025 was dismissed. The appellant was ordered to pay the respondent's costs of the notice of motion: [59].
In relation to counsel fees, Mr Rogers expects that on assessment recovery would be 100%, because Mr Smith’s rate is within the range for counsel of his experience, assessors do not, in the absence of some compelling reason, apply a deduction to counsel’s fees, and the total counsel fees in respect of both the first instance and appeal proceedings are low in absolute terms and proportionate to the amount in dispute. Again, despite the expectation that upon assessment Manariti Plumbing would recover 100% of counsel fees, in its gross sum costs application it seeks 90% of those fees “to avoid the risk of recovering more than a full indemnity”.
The exhibit to the affidavit of Mr Rogers includes the Guideline – Costs Payable Between Parties Under Court Orders published by the Costs Assessment Rules Committee (Guideline). I refer to relevant parts of that Guideline in my reasons below.
Finally, Manariti Plumbing relies on an extract from the Supreme Court website relating to the costs assessment process. The extract relevantly indicates that assessors’ time is currently charged at $355.00 per hour (GST excl.) and that “[a]s a guide, assessors' costs are commonly in the range of $4,000.00-$8,000.00 but may be more, depending on a variety of factors (for example: the amount in dispute and the complexity of the matter and/or objections raised).”
Universal did not adduce any evidence in respect of the notice of motion, but did file submissions in opposition to the orders sought by Manariti Plumbing. It drew particular attention to a number of features of, and alleged deficiencies in, the evidence relied upon by Manariti Plumbing including that:
there is no reference to, or copy of, any costs agreement with the solicitors or fee disclosure by counsel. Universal contends that in the absence of such documents the Court cannot be satisfied that there has been compliance with the Legal Profession Uniform Law (NSW) or that the amounts being claimed have been charged in accordance with the relevant costs agreement or fee disclosure; and
certain references in the records of costs charged by solicitors and counsel are indicative of excessive and disproportionate costs having been incurred. Universal’s submissions include a table setting out, in a non-exhaustive way, items charged by solicitors or counsel that Universal says would be disputed in a costs assessment, including the following:
A court entertaining an application for a gross sum costs order is not required to undertake a detailed examination of the kind that would be appropriate to a taxation or formal costs assessment: Hamod at [819], [823]. To require something akin to a formal costs assessment would defeat the purpose of the gross sum costs order: Bechara v Bates at [14].
A corollary of that principle is that a broad brush approach is necessarily required: Bechara v Bates at [14]; Zepinic v Chateau Constructions at [31]. In Harrison v Schipp at [22] Giles JA referred with approval to the proposition that a gross sum “can only be fixed broadly having regard to the information before the Court” (quoting Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119 (Beach Petroleum) at 124) and that the rule contemplates a court adopting a “much broader brush than would be applied on taxation”: Hadid v Lenfest Communications Inc [2000] FCA 628 at [35].
At the same time, as Giles JA emphasised in the same passage in Harrison v Schipp at [22], the approach taken to estimating costs must be “logical, fair and reasonable” and the power should be exercised “only 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”: citing Beach Petroleum at 123 and Wentworth v Wentworth (Court of Appeal, 21 February 1996, unreported). The need for the Court to have confidence in arriving at an appropriate sum was emphasised in Colquhoun v District Court of N**ew S**outh Wales) (No 2) [2015] NSWCA 54 at [6], where the deficiencies in the material in that regard were decisive.
In Baychek v Baychek [2010] NSWSC 987 at [11] Ball J referred to the principle that the Court is entitled to take a broad brush approach provided that the approach is logical, fair and reasonable, and observed that it is implicit in this that the gross sum “bear a reasonable relationship to the actual costs of the party making the application, and to the costs that that party might reasonably be expected to recover on assessment. That means, among other things, that there must be a reasonable evidentiary basis for the order the court makes”. To similar effect, in Tim Barr Pty Ltd v Narui Gold Coast Pty Ltd [2011] NSWSC 11, Barrett J at [21] held that a decision as to what is a sufficiently reliable calculation or estimate of an appropriate costs sum “will depend to a large extent on reaching some kind of view of what the outcome on assessment might be”.
As a matter of practice, courts typically apply a discount in assessing costs on a gross sum basis: Hamod at [814]. Indeed, in Zepinic v Chateau Constructions at [38] the Court described this as the invariable practice of the courts when calculating a gross sum costs order. That may involve “an impressionistic discount of the costs actually incurred or estimated, in order to take into account the contingencies that would be relevant in any formal costs assessment”: Hamod at [820]. Such an approach tends to minimise the risk of a gross sum costs order creating unfairness by allowing for the recovery of costs in excess of the amount that would in fact have been recovered if the matter had proceeded to costs assessment.
It follows that Manariti Plumbing cannot point to any substantial financial or non-financial burdens that would arise from the costs assessment process itself, including delay, that might warrant the making of a gross sum costs order.
A related consideration is that Manariti Plumbing expressly concedes that, on the evidence available, Universal has the capacity to pay the judgment debt and the costs due to Manariti Plumbing. This is not a situation where a gross sum costs order is justified because a costs assessment process would involve the party with the ostensible benefit of a costs order wasting further costs in the assessment process itself, without being able to recover such costs from Universal.
Universal is correct in submitting that none of the circumstances that have been singled out in the authorities as warranting the making of a gross sum costs order are established in the present matter. Given the unconfined nature of the discretion conferred by s 98(4), that is not necessarily fatal to the application. The authorities considered above should not be treated as if they exhaustively describe the circumstances in which a gross sum costs order is warranted. Here, however, the point remains that Manariti Plumbing cannot point to any particular circumstances of this case, whether or not of the kind considered in previous cases, that make it appropriate to make an order for costs on a gross sum basis rather than allow the matter to proceed to costs assessment.
Manariti Plumbing argues that a gross sum costs order would bring finality to the question of costs. That is a truism. Any gross sum costs order obviates the need for an assessment of costs and hence delivers finality to the parties on the issue of costs. But to treat that as a sufficient justification in itself for the making of a gross sum costs order would be to subvert the usual position and make gross sum costs orders the default arrangement in every case.
This is not a case in which the Court can have sufficient confidence that making a gross sum costs order would be fair to all parties and that the materials available to the Court enable it to arrive at an appropriate sum. Universal has drawn attention to a number of entries in the itemised costs which Universal says would be challenged in a costs assessment on the grounds of reasonableness and proportionality.
This Court is not in a position to determine the ultimate merits of those putative objections and Universal’s submissions do not invite such a determination. The point is rather that these are matters for an expert costs assessor to assess, and in circumstances where there are bona fide contests of this kind the Court is left without a logical, fair and reasonable basis to accept Manariti Plumbing’s proposed gross sums.
Consistent with the broad brush approach described in the authorities referred to above, it is sufficient to observe that the objections flagged by Universal appear on the whole fairly arguable. Universal’s submissions identify that there are multiple, ostensibly legitimate contests about claimed costs that can and should be resolved by a costs assessor.
Nothing that I have said is intended to pre-empt how an expert costs assessor, undertaking a properly informed costs assessment, would resolve Universal’s contentions. Nor should anything I have said be construed as suggesting that a party in the position of Universal can successfully resist an application for a gross sum costs order merely by singling out particular items claimed by the moving party and showing that there is a contestable issue about the reasonableness and/or proportionality that is more appropriately determined by a costs assessor. Arguments along those lines which seek to chip away at individual cost items may often prove to be trivial and unpersuasive when broader considerations favouring the making of a gross sum costs order are brought to bear, particularly having regard to the broad brush approach the Court is required to undertake.
However, in the circumstances of this case the points advanced by Universal about the contestability of various claimed costs are given added force because of the sums involved. The total costs claimed to support the gross sum costs orders are relatively low (as Manariti Plumbing itself emphasises), and the various contested items flagged by Universal comprise a material proportion of the total costs.
Manariti Plumbing in its submissions seeks to turn this point to its advantage, arguing that even if one assumes some measure of success on Universal’s part in objecting to particular cost items, that is unlikely to outweigh the cost of the assessment process itself. As this argument depends on Manariti Plumbing’s evidence about the general range of costs charged by assessors, it is flawed for the reasons I have already addressed. It also involves speculation about the proportion of claimed costs that might be contested and the degree of success Universal might have in the assessment process. A further problem with this argument is that it tends to expose that the gross sum orders that are sought may deliver Manariti Plumbing a materially better outcome than it would be entitled to on assessment, but if so, according to Manariti Plumbing, this is justified because the costs of the assessment itself are being avoided. In circumstances where the Court must have confidence that the outcome is fair between the parties, this is not a persuasive approach.
A related observation is that Manariti Plumbing is seeking gross sum costs orders that do not involve a heavy discount from the total costs incurred. In respect of solicitor costs, Manariti Plumbing is seeking to recover, on a gross sum basis, 80% of the costs incurred. The modesty of the discount means that there is little buffer to absorb any uncertainty about the amounts claimed. Mr Rogers offers some justification of that approach, including that his charge out rate and that of his employed solicitor are comparatively low. Having regard to the ranges of charge out rates contained in the Guideline for costs assessors on which Manariti Plumbing relies, that is an accurate observation.
The justification advanced by Mr Rogers is otherwise less convincing. It is not self-evident that having two fee earners work on a matter of this kind necessarily delivered “substantial efficiencies”, either generally or in respect of the particular work itemised in the invoices. Nor is it persuasive to say that the costs incurred are “low in absolute terms for commercial litigation”. Comparison with the very broad range of costs incurred in other types of commercial litigation is likely to be of little, if any, assistance when considering the reasonableness or proportionality of the solicitor costs of running these particular proceedings in the District Court and the Court of Appeal. An expert costs assessor is involved in a much more focused exercise directed to the particular proceedings in issue, as made clear by the Guideline upon which Manariti Plumbing relies.
This is not a situation where it can confidently be said that upon assessment Manariti would be found to be entitled to recover 80% or more of its claimed solicitor costs. There is instead an unsatisfactory level of speculation involved. This leaves open the real possibility that a gross sum costs order in the terms sought by Manariti Plumbing would subject Universal to a costs liability that exceeds that which would be imposed if the ordinary process of costs assessment were followed.
The application by Manariti Plumbing is also problematic to the extent that it seeks an order in respect of the costs of the District Court. It is generally not appropriate for the time of the Court of Appeal to be occupied in a consideration of a claim for a gross sum costs order in respect of proceedings at first instance as well as in the Court of Appeal: Wormald v Maradaca Pty Ltd [2021] NSWCA 307 at [16].
For all these reasons, it is not appropriate for the Court to make gross sum costs orders as sought by Manariti Plumbing.