HER HONOUR: This is an application before me by notice of motion filed 13 August 2020 by the plaintiff (National Australia Bank Limited), seeking an order pursuant to s 98(4)(c) of the Civil Procedure Act 2005 (NSW) (Civil Procedure Act) that the plaintiff's costs of these proceedings be paid by the defendant (Bilal Sayed), fixed on a gross sum basis, and that the costs of the notice of motion form part of the costs to be fixed on a gross sum basis.
In support of that application the plaintiff relies upon three affidavits sworn by the plaintiff's solicitor (Ms Danielle Lysenko), those being the affidavits sworn 13 August 2020 and 11 September 2020, together with an earlier affidavit sworn 29 July 2020.
Mr Sayed did not appear at the (virtual) hearing of the plaintiff's application. He was on notice of the listing for hearing of the application and I am informed that he advised my associate that he did not intend to appear on the application. On at least two occasions the Court of Appeal has made orders for referral of Mr Sayed for pro bono assistance. I infer that he has at present no representation. I note that Mr Sayed appeared in person (in the virtual court) before me on the telephone hearing of the application that has led to the present costs application.
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Background
There has been a relatively lengthy history to this matter. The background was set out in my earlier judgment in these proceedings (National Australia Bank v Sayed [2020] NSWSC 1002).
Briefly, I here note the following. The dispute concerned a property at Woonona (the Woonona Property). In 2015, Harrison AsJ determined in favour of the plaintiff an application for, amongst other things, possession of the Woonona property (see National Australia Bank Limited v Sayed (No 4) [2015] NSWSC 420 (NAB v Sayed (No 4))). There have been a number of applications since then, both in the Common Law Division and in the Court of Appeal, in relation to the Woonona Property.
What came before me in late July this year was an urgent application by the plaintiff for an order, pursuant to s 74MA of the Real Property Act 1900 (NSW), that Mr Sayed withdraw a caveat that had been lodged by him on the Woonona Property. The urgency of the matter was that the plaintiff, as mortgagee in possession, had entered into a contract for the sale of the Woonona Property; and completion of the sale was scheduled for 3 August 2020.
I was of the view that the caveat that had been lodged by Mr Sayed did not disclose a caveatable interest (for the reasons explained in my earlier judgment), and I made orders that required Mr Sayed to withdraw the caveat and for the entry of those orders forthwith. I also made orders (having regard to decisions such as Martin v Carlisle [2008] NSWSC 1276) for costs to be awarded on an indemnity basis in favour of the plaintiff and reserved for later consideration, as the plaintiff had requested, whether there should be any further or other order as to costs, including an order that the costs be awarded as a specified gross sum.
Subsequently, the present motion has been filed. The plaintiff submits that a gross sum costs order is appropriate in this case because the defendant is impecunious (pointing to the basis on which orders for pro bono referral were twice made by the Court of Appeal in Mr Sayed's favour) and the plaintiff ought not be left to incur further irrecoverable costs by having to resort to the costs assessment regime. Reference has also been made to the litigious history of the case in support of the application for a gross sum costs order.
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Determination
The principles applicable on such an application are set out in Hamod v State of New South Wales [2011] NSWCA 375 (Hamod) at [813]-[820], per Beazley JA, as Her Excellency then was, Giles and Whealy JJA agreeing. Before exercising the power to make a gross sum costs order, the Court should be confident that the approach taken to estimating costs is fair, logical and reasonable. Further, having regard to the terms of s 98(4) of the Civil Procedure Act, together with the more general considerations reflected in ss 56-60 of the Civil Procedure Act, the factors that merit particular consideration in this context include the degree of any disproportion between the issue litigated and the costs claimed, and the complexity of proceedings in relation to their cost.
As was noted by Slattery J in Bahamad v Wong [2020] NSWSC 991 at [19], the power may be exercised where a party's conduct has contributed unnecessarily to the cost of the proceedings, especially where the costs incurred have been disproportionate to the result of the proceeding.
The Court in Hamod indicated that the assessment of any lump sum to be awarded must represent a review of the successful party's costs by reference to the pleadings and complexity of the issues raised on the pleadings, interlocutory processes and preparation for hearing and for hearing, but that in the exercise of its discretion the Court is not required to undertake a detailed examination of the kind that would be appropriate to a formal costs assessment process; rather the costs ordered should be based on an informed assessment of the actual costs having regard to the information before the Court (see at [819]-[820] of Hamod).
As I have said, the approach to be taken is required to be logical, fair, and reasonable, but this 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 process.
In Harrison v Schipp [2002] 54 NSWLR 738; [2002] NSWCA 213, at [52], Giles JA noted that the specified gross sum can be fixed under s 98(4)(c) of the Civil Procedure Act by the application of what has been described as a "broad brush" approach. (See also Hadid v Lenfest Communications Inc [2000] FCA 628 at [35], per Lehane J; Penson v Titan National Pty Limited (No 3) [2015] NSWCA 121 at [7], per Campbell AJA; and, more recently, Reliance Financial Services Pty Ltd v Altair Investments Pty Ltd [2020] NSWSC 1138 (Reliance v Altair) at [46], per Kunc J.)
In Reliance v Altair, Kunc J adopted as a convenient summary the statement by the Court of Appeal in Bechara trading as Bechara and Company v Bates [2016] NSWCA 294 at [12]-[15], those principles including that courts typically apply a discount in assessing costs on a gross sum basis (by reference to what was said in Hamod at [814]).
In Hamod at [815], reference was made also to the decision in Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119; 135 ALR 160 where von Doussa J noted that the specified gross sum costs procedure was particularly useful in complex cases, that the power must be exercised judicially and only after giving the parties an appropriate opportunity to make submissions, and that before exercising the power the Court should be confident that the approach taken to estimate costs was fair, logical and reasonable.
I have had regard to those principles on the current application. I have also had regard to the material provided in the court book prepared by the plaintiff. That material included material that the defendant had requested be brought before the Court for the purposes of this application, including the facility agreement of November 2005, facility agreement details, and other documents, including Harrison AsJ's decision in NAB v Sayed (No 4). I have had regard to those materials.
The affidavits sworn by Ms Lysenko set out the professional fees and disbursements (including counsel's fees) that have been incurred in the matter, by reference to relevant invoices and fee notes. Ms Lysenko deposes to the hourly rates of the solicitors involved in the matter, and in particular to the fact that the solicitors have given a discount of 20% on their normal rates in relation to the matter.
What is sought in relation to the gross sum costs order involves a reduction of the actual solicitor/client costs (other than in respect of disbursements, and excluding GST) of 10%, to which a further 10% reduction has been added as a "buffer" in accordance with the principles to which I have already referred. Insofar as that 20% reduction includes counsel's fees, it seems to me that this is a very conservative estimate, in circumstances where on an assessment process one might ordinarily expect (reasonable) counsel's fees not to be reduced.
In the circumstances, I am satisfied that the total amount that is here sought (including the amount of the present application) is reasonable and involves an appropriate discount to take into account the contingencies that might have occurred under a costs assessment process.
I am also satisfied that it is appropriate, having regard to the history of the litigation to date and the manner in which one can discern from the previous decisions that the litigation has been conducted, here to order a gross sum (or lump sum) costs in respect of the indemnity costs the subject of my earlier order, so as to avoid the very real spectre of further irrecoverable costs being incurred in a costs assessment process; and that the fixed sum costs order should include the costs of the notice of motion. I accept that a broad brush approach is appropriate and that an appropriate discount has been suggested. In those circumstances, I am satisfied that it is appropriate to make the orders that have been sought.
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Order
I therefore order, pursuant to s 98(4)(c) of the Civil Procedure Act, that the plaintiff's costs of these proceedings be paid by the defendant and be fixed on a gross sum costs basis in the amount of $31,000 (noting that the costs of the present notice of motion form part of the costs so fixed).
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Decision last updated: 28 September 2020