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Texts Cited: Costs Assessment Rules Committee, Costs Payable Between Parties Under Court Orders (24 October 2023)

Category: Costs

Parties: Nisserine Nassif (Plaintiff)
New South Law Group Pty Limited t/as New South Lawyers (First Defendant)

Representation: Counsel:
M Castle with A D Bailey (First Defendant)
Solicitors:
New South Lawyers (First Defendant)
Plaintiff (Self-Represented)

File Number(s): 2025/420950

Publication restriction: Nil

JUDGMENT

1. HIS HONOUR: By notice of motion filed on 7 May 2026, New South Lawyers (NSL) seeks an order pursuant to s 98(4)(c) of the Civil Procedure Act 2005 and UCPR 42.4 that Nisserine Nassif pay its costs, ordered by me on 24 April 2026 in Nassif v New South Law Group Pty L**imited t/as New South Lawyers [2026] NSWSC 412, on a lump sum basis. That is a colloquial reference to the power of the Court, in an appropriate case, to make an order for what is described in s 98(4)(c) as a specified gross sum. Ms Nassif appears unrepresented in opposition to the application for such an order.

2. In the events that have occurred, and without derogating from the strength of Ms Nassif’s opposition to the application or her reasons for it, it is fair to say that at least by the conclusion of the hearing before me on 3 August 2026 it had become apparent that the significant issue for me to decide would be whether Ms Nassif could establish an entitlement to an instalment order in accordance with UCPR 37.2. Although she did not make a formal application for such an order in accordance with UCPR 37.2(1), it was clear from Ms Nassif’s affidavit and her written submissions that that is what she wanted to raise. Moreover, Ms Castle of counsel who appeared for NSL quite properly acknowledged that Ms Nassif wished to do so. Ms Castle therefore proceeded to cross‑examine Ms Nassif on matters related to her current financial position and her ability to meet any order I might make for the payment of NSL’s costs on a specified gross sum basis.

3. However, after I reserved my judgment in these proceedings, I received notice through correspondence addressed to my Associate that Benjamin Ho and Scott Pascoe were appointed as Trustees of the Bankrupt Estate of Nisserine Nassif on 28 September 2026. In those circumstances there is no utility in Ms Nassif’s application for an order that she pay any judgment debt in these proceedings by instalments. NSL’s application for a gross sum costs order is unaffected by this development as it is only concerned with the quantification of the costs to which NSL became entitled in accordance with my earlier order.

NSL’s application

4. NSL had originally succeeded before me in proceedings commenced by Ms Nassif in which she sought to set aside the decision of a costs assessor extending the time by which NSL ought to have filed an application for an assessment of its costs incurred while acting as Ms Nassif’s lawyers in Family Court proceedings. I dismissed Ms Nassif’s application with costs. NSL’s present application relates to those costs.

5. NSL relies upon two affidavits of George Bazouni sworn respectively on 7 May 2026 and 7 July 2026. Ms Nassif did not object to those affidavits being read and did not require Mr Bazouni for cross-examination. Mr Bazouni says that NSL incurred costs in defending the proceedings heard by me totalling $42,764.51 (exclusive of GST). GST is not claimed as NSL is registered for GST and can claim an input tax credit for the amount of the GST.

6. The costs incurred by NSL in the proceedings are summarised as professional costs of $25,558.50 and counsel’s fees of $17,206.01. The total of these professional fees is therefore $42,764.51. A copy of the bill of costs for the work undertaken in respect of or incidental to the proceedings is annexed to Mr Bazouni’s first affidavit.

7. On 24 June 2026, Ms Nassif filed a notice of motion seeking a stay of the present proceedings, including the orders made by me extending time as noted earlier. In the alternative, Ms Nassif sought a stay of NSL’s application for a specified gross sum pending the determination of her Family Court appeal on 30 June 2026. His Honour Cavanagh J heard Ms Nassif’s application for a stay on 1 July 2026: see Nassif v New South Law Group Pty Ltd t/as New South Lawyers (No 2) [2026] NSWSC 811. His Honour dismissed that application with costs.

8. In those circumstances, NSL sought to include in its specified gross sum application the amount of its costs defending the unsuccessful stay application. Mr Bazouni’s second affidavit includes Ms Castle’s memorandum of fees for her appearance in that application in the amount of $2,062.50. In addition, NSL claims $6,459.50 for the professional costs and disbursements incurred in accordance with a bill of costs annexed to Mr Bazouni’s second affidavit. Those costs include the fees rendered by Andrew Bailey of counsel.

9. The total amount now raised in separate bills of costs by reference to which NSL seeks a specified gross sum order is $51,286.51.

10. Ms Nassif’s response to this application is that it should be dismissed or alternatively that the amount sought should be reduced. That latter submission must be understood as a submission that the costs claimed are excessive, for reasons that are given, rather than a reminder that a specified gross sum ought to be discounted in accordance with the principles that apply to such applications.

11. Ms Nassif contends that the legal costs claimed include duplication, in the sense that two barristers have been retained to work for NSL when one would have been sufficient. Ms Castle and Mr Bailey both charged for work connected with the hearing which Ms Nassif characterises as duplication.

12. Ms Nassif is also concerned about whether all of the work for which a charge has been raised was necessary and whether more than one person charged for the same work. She invited me to examine the bills of costs carefully to determine whether her concerns were supported and in particular whether there was evidence of any overlap between work performed by more than one person.

13. Ms Nassif does not contest the hourly rates that are claimed by NSL or that it is entitled to recover the costs of its employed solicitors undertaking work. Ms Nassif does not dispute that the hourly rates charged by employed solicitors were within the Cost Assessment Rules Committee guideline and were reasonable. She asks that I examine, to the extent that that is possible, the total amount of work said to have been performed.

Consideration

14. I should note at the outset that NSL does not claim costs for professional fees incurred by Mr Bazouni. In those circumstances, the two costs orders made in favour of NSL that are the subject of the present application entitle NSL to claim both professional costs and disbursements and are not affected by the decision of the High Court in Bell Lawyers Pty Ltd v Pentelow (2019) 269 CLR 333; [2019] HCA 29.

15. That case involved a barrister claiming fees for work done in proceedings in which she was a party. The majority and Gageler J referred to the “in-house solicitor” or “in-house lawyer” rule as remaining part of the common law of Australia. Gageler J said (at [68]):

“[68] … recovery of costs by a party using an employed solicitor is an application of the general principle rather than an exception to it. The general rule is engaged on the basis that the costs of using the employed solicitor are still awarded as indemnity for professional legal costs actually incurred in the conduct of litigation by the employer who is a party to the litigation, albeit that those professional legal costs are incurred in the form of an overhead and are therefore not reflected in a severable liability.” [Footnotes omitted.]

16. The employed solicitor rule was the central subject of the High Court’s consideration in Birketu Pty Ltd v Atanaskovic (2025) 282 CLR 300; [2025] HCA 2. The High Court found that a law firm partnership which was awarded costs was able to charge for the work of its employed solicitors but not for the work of the partners. The majority held:

“[18] … That ‘general rule’, which results from the outworking of the general common law principle, was commonly acknowledged before Bell Lawyers to admit of two ‘exceptions’. One, known as the ‘Chorley exception’ … The other, known as the ‘in-house solicitor rule’ or ‘in-house lawyer rule’, was that a litigant represented by a lawyer employed by the litigant could obtain recompense for legal work performed by the lawyer on behalf of the litigant.”

17. Birketu applied to an unincorporated legal practice. The present case involves an incorporated legal practice. The High Court recognised that a particular question had been left open in Bell Lawyers, being, “a question as to the position of an incorporated legal practice of which the sole employed solicitor is also the sole director and shareholder” (at [26]).

18. The New South Wales Court of Appeal has examined the position in relation to incorporated legal practices where the party to the litigation retains the practice of which he is the sole shareholder and seeks to charge for his work: see, for example, Spencer v Coshott (2021) 106 NSWLR 84; [2021] NSWCA 235; Elias v Smidt (No 3) [2025] NSWSC 1062; Rahman v Rahman (No 2) [2025] NSWCA 266.

19. These cases do not apply in this case, where the practice has numerous employed solicitors and the director, Mr Bazouni, is not charging any costs.

20. The power to make a specified gross sum costs order is appropriately exercised wherever the circumstances warrant it: Harrison v Schipp (2002) 54 NSWLR 738; [2002] NSWCA 213; Simone Starr-Diamond v Talus Diamond (No. 4) [2013] NSWSC 811.

21. In addition to complex cases, it may also be appropriate to order a specified gross sum in simple, straightforward cases. Such cases in which specified gross sum costs orders have been made include Anderson v Snowy Monaro Regional Council [2026] NSWSC 622, Zhang v Tech Minerals Pty Ltd [2026] NSWSC 664, A.C.N. 627 087 030 Pty Ltd v Poche (No 2) [2026] NSWCA 29 and Sweeten v Haggerty (No 2) [2025] NSWSC 897.

22. Litigation about costs readily attracts the exercise of judicial discretion to order a specified gross sum under s 98(4). In Sweeten v Haggerty (No 2), Payne JA sitting at first instance, said:

“[33] … It is overwhelmingly in the interests of justice that disputes about the assessment of costs between these parties be brought to an end. Protracted litigation about costs such as in this case attracts the exercise of judicial discretion under s 98(4)(c) of the Civil Procedure Act where it is desirable to avoid the expense, delay and aggravation likely to be involved in further contested costs assessments.

[34] … It is in exactly this kind of case that the discretion granted by s 98(4)(c) should be exercised. The plaintiffs’ suggested course of a further costs assessment (and inevitable review) is antithetical to the overriding purpose in Part 6 of the Civil Procedure Act.”

23. Cases where the costs of proceedings concerning costs assessment have been ordered include A.C.N. 627 087 030 Pty Ltd v Poche (No 2), Sweeten v Haggerty (No 2) and Johnston v Boyd [2024] NSWCA 75.

24. In determining the quantum of a specified gross sum costs order:

25. 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 v State of New South Wales [2011] NSWCA 375 at [820];

26. a “broad brush” approach is appropriate. To require the same or similar level of detail as in a formal costs assessment would defeat the purpose of the lump sum order: Kostov v Zhang (No 2) [2016] NSWCA 279 at [25]; Auspine Ltd v Australian Newsprint Mills Ltd (1999) 93 FCR 1 at 5; [1999] FCA 673; Penson v Titan National Pty Ltd (No 3) [2015] NSWCA 121 at [7];

27. the court may review “the entries in counsel’s fee notes and the solicitor’s time entry report”, in order to satisfy itself “that the total quantum of costs claimed is fair, reasonable and proportionate to the level of time and costs involved in opposing the application”: In the matter of Cardinal Group Pty Ltd (in liq) and Cardinal Project Services Pty Ltd (in liq) (Lump Sum Costs) [2018] NSWSC 895 at [9];

28. the court “is entitled to take into account that if assessed the usual rule would be that only a proportion of total costs would be recovered” and therefore to apply a discount: Bechara trading as Bechara and Company v Bates [2016] NSWCA 294 at [20];

29. the court may but need not apply a discount: Andy Vuong Duc Pham v Enterprise ICT Pty Ltd [2020] NSWSC 1089 at [35]-[36];

30. where a discount is applied, and where costs are on the ordinary basis, it has been observed that “a discount of 10-30% is typically appropriate”: Andy Vuong Duc Pham v Enterprise ICT Pty Ltd at [35]; and

31. if the court does apply a discount, it can be applied to either professional costs or disbursements or both, but it is acceptable not to apply it to disbursements, given that they are payable to third parties as incurred: see In the matter of Palladium Consulting Pty Limited [2013] NSWSC 92 at [14].

32. In the New South Wales costs assessment system the determination of fair and reasonable costs is within the discretion of the costs assessor. However, where “ordered costs” (formerly known as party/party costs) are concerned, the Costs Assessment Rules Committee has issued a non-binding guideline, “Costs Payable Between Parties Under Court Orders”. I am informed by Ms Castle and accept that all of the hourly rates of solicitors and counsel claimed in these proceedings are within the amounts of the guideline. She submitted that I could therefore have confidence that the hourly and daily rates are reasonable and that no reduction would be required to be made on that account.

33. Ms Castle submitted that very little by way of discount is required to arrive at a fair and reasonable figure for costs in this matter because:

34. the costs are moderate and proportionate to the subject matter;

35. the rates charged are within the CARC guideline;

36. the manner in which the work was carried out was reasonable;

37. the times charged for various attendances were reasonable; and

38. there is no overlap between the work performed by the solicitors and counsel.

39. In my opinion, it is appropriate in this case to make a specified gross sum costs order. There are a number of reasons for this. Principal among them is the fact that I cannot imagine, having regard to the material before me, that Ms Nassif could achieve a better outcome were I to accede to her de facto insistence that the matter proceed to a full assessment. Putting that in a slightly different context, it would be a waste of time and money if NSL’s bills of costs had to be made the subject of scrutiny and review by a costs assessor, with all of the inconvenience and delay that would be involved, rather than utilising the relevant rule promptly and more cheaply to arrive at the same place. Ms Nassif would inevitably be worse off in such a case unless she could demonstrate the existence of a reasonable prospect that the costs to which NSL’s bills of costs relate were excessive or otherwise plainly irrecoverable. They are not.

40. Secondly, and in a related sense, the discount to which specified gross sum costs orders are uniformly subjected is an additional benefit to which Ms Nassif would become entitled but which she would not receive if the bills were formally assessed. I appreciate that this is adversary litigation and that, subject to certain guidelines, the Court is not required or permitted to favour an unrepresented party at the expense of an opponent. However, it is clear to me that Ms Nassif has found it difficult to understand the difference between her view that she should never have been ordered to pay costs howsoever they might have been calculated or assessed on the one hand and the potential advantage accruing to her if the specified gross sum order sought by NSL were made on the other hand.

41. Thirdly, and fundamentally, it is in the interests of justice that the order should be made. The bill of costs annexed to Mr Bazouni’s first affidavit includes 203 individual items logged from as early as 7 October 2025 until as recently as 28 April 2026. The item descriptions are clear. The costs charged appear reasonable. I am aware that unlike a costs assessor I do not have access to the specific letters and emails or the briefs to counsel or the file notes relating to telephone calls or conferences for which fees have been charged. That disadvantage, if that is what it is, is recognised in the reference in the authorities to take a broad brush approach to the calculations and assessments I must make. The final result must always be an exercise of discretion in which minds may differ and where tolerably dissimilar outcomes are possible. It would in my opinion be a mistake for Ms Nassif to feel that the making of a specified gross sum costs order would be to deny her what might otherwise have been a valuable opportunity to achieve some unique, scientifically calibrated or empirically measurable outcome.

42. Doing the best I can, it seems to me that I should make a specified gross sum costs order in the amount of $42,250.00.

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