This matter comes before me today by way of a motion filed by the plaintiff dated 29 October 2021 seeking two orders being:
1. an order that the defendant pay the plaintiff's costs on an ordinary basis up to 5 July 2018 and on an indemnity basis from 6 July 2018; and
2. an order pursuant to r 36.16(1) of the Uniform Civil Procedure Rules 2005 (NSW) and s 98(4)(c) of the Civil Procedure Act 2005 (NSW) ("CPA"), that the Court make a gross sum costs order.
The plaintiff reads two affidavits from the solicitor for the plaintiff, Robert Andrew Algie, dated 29 October and 8 November 2021.
Mr Bailey of counsel appears for the plaintiff and Mr Hall, solicitor, appears for the defendant on the application. Mr Hall appeared for the defendant on the hearing. Mr Bailey provided extensive and helpful written and oral submissions. Mr Hall provided succinct submissions essentially accepting that an order for indemnity costs must be made having regard to the terms of the offers of compromise but disputing the plaintiff's entitlement to a lump sum gross costs order.
I entered judgment for the plaintiff on 15 October 2021 in the sum of $1,273,125. I ordered the defendant to pay the plaintiff's costs. [1]
Miles v Doyle [2021] NSWSC 1524 | Case summary | Zoe
By way of its motion the plaintiff seeks to vary that costs order. As set out in my judgment, I assessed damages in that amount including a sum for interest of approximately $200,000. As I recorded in that judgment, damages for sexual assault must be assessed at common law and not having regard to the damages restrictions set out in the Civil Liability Act 2002 (NSW). Interest was thus payable and the discount rate was 2.5% rather than 5%. It is not necessary that I further discuss the components of my damages assessment at this time.
The plaintiff made three offers. On 5 July 2018 the plaintiff served an offer of compromise in the sum of $830,000, then on 24 June 2019 the plaintiff served an offer in the sum of $680,000 and then on 22 April 2021 the plaintiff served an offer of $425,000. Plainly, the plaintiff did better than each of those offers.
The defendant appropriately did not wish to be heard on the issue of whether the plaintiff was entitled to indemnity costs. The defendant did not put before the Court any evidence to suggest that it would have not been reasonable for him to have accepted the first offer made by the plaintiff.
In reality, this case was very hard fought. It was extensively case-managed from the commencement of the proceedings. One of the principal reasons why it required such extensive case management was the refusal of the defendant to make appropriate concessions in his defence. Indeed, on my analysis of the documentation and the amendments to the defence even following my orders as to what should occur, the defendant continued to adopt a position which left the plaintiff uncertain as to what he had to prove.
The matter was originally listed for ten days on the basis that the plaintiff felt it necessary to call a number of witnesses as to the defendant's tendency involving sexual assault and young persons. It was not until more extensive case management closer to the hearing that the parties agreed that the matter could be shortened to five days on the basis that the plaintiff anticipated that it would be unnecessary to call such evidence.
Even on the first day of the hearing, the defendant sought to adduce evidence being statements from him and two witnesses in circumstances in which he had consistently maintained throughout the conduct of the proceedings that he would not be calling such evidence.
Further, of course, the defendant entered into bankruptcy some weeks or months before the hearing.
None of this is the responsibility of the current solicitor for the defendant. As pointed out in the submissions of Mr Bailey, the defendant retained a number of different law firms along the way.
In any event, I am satisfied that the order for indemnity costs sought by the plaintiff should be made having regard to the original offer of compromise.
In the circumstances, I order that the defendant pay the plaintiff's costs on an ordinary basis up to 5 July 2018 and on an indemnity basis from 6 July 2018.
[2]
Gross lump sum costs order
The plaintiff also seeks an order for a lump sum costs order pursuant to s 98(4) of the CPA. As set out in s 98(4) of the CPA, the Court may make an order to the effect that the party to whom costs are to be paid is entitled to a specified gross sum instead of assessed costs.
The power to order costs on this basis is appropriately exercised wherever the circumstances warrant its exercise. [2]
The questions which arise are, firstly, whether such an order is appropriate and, secondly, what is the appropriate specific gross sum in all the circumstances.
I should emphasise that the awarding of a gross sum instead of assessed costs is not the norm. It does not seem to me that in most cases the Court would be awarding any gross sum costs order because to do so would remove from the party entitled to the costs the obligation to prepare a proper assessment and remove from the other party the entitlement to have the costs challenged by way of an appropriate assessment process.
However, plainly, there is a power to order costs on a lump sum basis in certain circumstances. In my view, the circumstances in this matter are such that a lump sum costs order should be made
The circumstances in this matter include:
1. the matter has an extensive history which unnecessarily involved the defendant taking all points and in my view causing additional work on the part of the plaintiff. I should say that does not apply to Mr Hall's conduct of the hearing;
2. the defendant has this year entered into bankruptcy;
3. the events which give rise to these proceedings happened in 1985. The proceedings were commenced in 2018. The matter had a protracted history prior to that time. Whilst the fact of the defendant's bankruptcy did not prevent the proceedings being continued or pursued, that is a relevant fact in determining what may happen from here if a lump sum costs order is not made; and
4. further, the defendant is dealing with at least one other matter in which I understand judgment is reserved.
In Bobb v Wombat Securities Pty Ltd (No 2) [3] Beech-Jones J (as his Honour then was) observed that a common category in which lump sum costs will be awarded is a very short and relevantly straightforward case. In such cases it can be expected that costs will be modest so that the pursuit of the costs assessment process might lead to unnecessary expense. His Honour observed that this is particularly so where there is doubt about the payer's financial capacity.
Of course, the costs are not modest in this matter, but I can bring to bear my own experience in considering the costs which have been incurred and indeed even the range of fees which are charged by the solicitors for the plaintiff and Counsel for the plaintiff.
It seems to me in circumstances in which the defendant is bankrupt and has taken a particular attitude to the case and having regard to the Court's familiarity with these types of matters and the general procedures and processes which must be pursued to obtain a judgment, this is a matter in which a lump sum costs order should be made.
The only remaining question is the amount of the lump sum costs order. Mr Algie has provided extensive material in support of the costs incurred by the plaintiff. I am generally satisfied that they have been properly incurred in the sense that they all were necessary for the purposes of these proceedings.
Having said that, there is certainly an issue as to the rates charged. It is a matter between the plaintiff and his solicitors and Counsel as to the rates which are charged, but Mr Bailey appropriately conceded that, despite Counsel's experience, it might be said that the rates are on the high side of what is set out in the Costs Assessment Rules Committee Guidelines published on the Supreme Court website. He means by this that I can have regard to the guidelines as part of assessing what amount should be awarded.
Mr Hall opposes the awarding of a lump sum gross costs order on the basis that the plaintiff has not submitted a detailed costs assessment and his client has not had the opportunity to send the matter off to his own costs assessor for the purposes of challenging the plaintiff's assessment.
As I said at the outset, the awarding of lump sum costs is not the norm and it is not appropriate in general terms to award a lump sum costs order if there is likely to be a significant dispute between the parties as to the precise amount or at least not until both parties have had the opportunity to prepare their own assessment and present detailed arguments as to costings which the defendant may wish to challenge.
Having said that, this matter is different for the reasons I have already set out. I am satisfied that I can bring to bear my own experience in these sorts of matters and I am satisfied that it would be appropriate to award a lump sum costs order with a reasonable discount. The discount I propose is 30%. That is, despite the order for indemnity costs, I would make an order for lump sum costs with a discount in the order of 30%.
The amount I order for the plaintiff's costs would be $210,000. The plaintiff is also entitled to the costs of this application. I allow for that and the amount I order including the costs of this application is $213,000.
I make an order in favour of the plaintiff for costs pursuant to s 98(4) of the Civil Procedure Act 2005 (NSW) in the total sum of $213,000. That order includes the costs of this application.
[3]
Endnotes
Miles v Doyle (No 2) [2021] NSWSC 1312.
Harrison and Another v Schipp (2002) 54 NSWLR 738 at 742; [2002] NSWCA 213 (Giles JA).
[2013] NSWSC 863 at [6].
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Decision last updated: 30 November 2021