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[2025] NSWCA 266
procedural. Mr Rahman was ordered to pay the first respondent $60,000 for the leave-to-appeal application costs and $2,860 for the costs motion, and the second and third respondents $50,000 and $7,000...
The Court decided that the costs should be fixed as lump sums rather than sent through a detailed assessment. It considered further assessment likely to be expensive and protracted, and the costs records sufficiently informative to fix fair amounts. It ordered Mr Rahman to pay $60,000 to Ms Rahman and $50,000 to the two trustees for the leave application, plus separate amounts for the costs motions. However, the trustees could not include charges for their own personal work merely because they billed that work through incorporated law practices.
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2,527 words · generated 06/10/2026
This was a post-judgment costs decision following the Court of Appeal’s principal judgment in Rahman v Rahman [2025] NSWCA 219. The principal decision was handed down on 2 October 2025. The proceedings before the primary judge remained ongoing, with directions listed for 16 December 2025 ([1]). The costs applications were decided on the papers ([2]).
6 cited instruments linked from this judgment.
The successful respondents each sought a gross sum, or lump sum, costs order. The first respondent, Ms Mita Rahman, sought an order within a stated range of $74,751.37 to $80,501.47, or another amount fixed by the Court. She also sought an order under the Vexatious Proceedings Act 2008 (NSW), but that part of her application had been remitted to the Equity Division ([3]–[4]). This judgment did not determine the vexatious-proceedings application.
The second and third respondents, Stefano Calabretta and Andrew Fleming, who had acted as joint trustees for sale, initially sought $82,423.94 for appeal costs and a separate amount for their costs motion ([5]). The Court asked them to identify the charges for work they had personally undertaken through their respective firms. They identified $15,312, including GST, for Mr Fleming’s personal work and $8,294, including GST, for Mr Calabretta’s personal work. Removing those items reduced the appeal-cost claim to $58,817.94 ([7]–[8], [29]–[30]).
Mr Rahman opposed the applications. He challenged the costs evidence, argued that the trustees could not claim costs for their own time, and sought dismissal or deferral of the motions, including pending a proposed special leave application ([35]–[37], [53]–[58]). The Court observed that the evidence showed an email expressing an intention to apply for special leave, but no evidence that an application had actually been filed ([57]).
The Court ordered Mr Rahman to pay Ms Rahman $60,000 for the leave application and $2,860 for her costs motion. It ordered him to pay the trustees $50,000 for the leave application and $7,000 for their costs motion ([88]–[89]). The sums claimed for the trustees’ own personal work were not included.
The statutory power came from s 98(4) of the Civil Procedure Act 2005 (NSW). Before costs are referred for assessment, the Court may order that the successful party receive a specified gross sum instead of assessed costs ([60]). The Court described s 98 as conferring a wide discretion and referred to the principles in Hamod v New South Wales and Gabrielle v Abood (No 4) ([61]).
The discretion is not automatic. The Court said a gross sum should be ordered only where it can be done fairly and an appropriate amount can be determined from the available material. It cited Harrison v Schipp, Beach Petroleum NL v Johnson (No 2) and Zepinic v Chateau Constructions (Aust) Ltd (No 2) for that proposition ([63]). At the same time, the Court emphasised that the assessment should use a “broad brush”. Requiring the same degree of detail as a formal assessment would undermine the point of fixing a lump sum ([64]).
The evidence and the procedural history were central to the decision to use that power. The Court accepted that a formal assessment would be protracted and expensive and that Mr Rahman was likely to delay final resolution and generate further disproportionate costs in the assessment process and any ensuing appeals ([65]). It also accepted Mr Fleming’s evidence that, without a gross sum order, the applicant’s share of the sale proceeds might be exhausted by costs ([65]).
The Court was concerned that the costs process itself could become another forum for relitigating unrelated disputes. It pointed to Mr Rahman’s material about observations at the auction of Property 1A, which the Court considered irrelevant to the costs question ([66]). It also referred to the history of the litigation and the material filed in response to the costs motions as supporting a prompt final determination ([67]–[70]).
On the costs themselves, the Court rejected the contention that the claims were excessive or related to matters other than the appeal. It found that the Trustees’ costs were supported by itemised particulars, time records and justified hourly rates. It also referred to repeated applications and resulting appearances and updates to appeal materials ([71]). For Ms Rahman, the Court considered that the invoices’ detailed narratives and related evidence gave it enough information to make an informed assessment ([80]). For the trustees, it considered the remaining material sufficient after the personal-work charges were removed ([83]–[85]).
The separate question about the trustees’ own time turned on the difference between personal litigation work and the work of an employed in-house solicitor. The Court explained that Bell Lawyers Pty Ltd v Pentelow abolished the English Chorley exception, which had allowed a solicitor in some circumstances to recover costs for their own work. The High Court did not abolish the in-house solicitor rule, which permits an employed lawyer to represent their employer and recover costs for that work ([74]).
The Court relied on the reasoning of Leeming JA in Elias v Smidt (No 3). There, the question concerned a solicitor who retained an incorporated legal practice of which he was sole director and shareholder. The Court of Appeal agreed that incorporation did not change the essential character of a solicitor’s personal work in litigation ([75]–[77]). It considered that allowing recovery simply because the time was charged through an incorporated firm would be inconsistent with the rule preventing a sole practitioner from recovering for their own time defending litigation ([76]–[78]).
Although the trustees argued that their position was theoretically closer to the in-house solicitor exception, the Court rejected that analogy. It considered them a long way removed from the employed solicitor in Commonwealth Bank of Australia v Hattersley ([78]). The Court distinguished the trustees’ personal work from an employee acting for a separate employer, and held that the charges for their own time could not be recovered in these costs orders ([79]).
The judgment applied an existing statutory and precedential framework rather than announcing a new general test. Before this decision, s 98(4) already empowered a court to order a specified gross sum instead of assessed costs before referral to assessment ([60]). Earlier decisions, including Hamod, Harrison v Schipp, Beach Petroleum and Auspine, supplied principles about the discretion, fairness, evidentiary sufficiency and broad-brush quantification ([61]–[64]).
The judgment’s application of those principles is fact-specific. It held that a costs assessment was likely to be protracted and expensive in this litigation and that the available records permitted the Court to fix sums without a formal assessment ([65]–[71], [80]–[85]). It does not say that a history of contentious litigation, by itself, always justifies a gross sum order. The stated statutory constraint remains that the Court must be able to act fairly and determine an appropriate sum from the materials available ([63]).
The other significant issue arose against the background of Bell Lawyers, which abolished the Chorley exception but left the in-house solicitor rule undisturbed ([74]). The Court applied the analysis in Elias v Smidt (No 3) to personal work charged through incorporated legal practices. It concluded that the corporate structure did not make the charges recoverable where the solicitors themselves were parties to the litigation and had personally undertaken the work ([76]–[79]).
The judgment therefore provides a concrete application of the distinction between, on one hand, an employed solicitor acting for an employer and, on the other, a solicitor personally conducting litigation through a company they work in or control. Its reasoning rejects the idea that incorporation alone transforms a solicitor-litigant’s personal time into recoverable professional costs. The Court did not determine every possible form of incorporated practice or employment arrangement; its conclusion concerned the facts and arguments before it ([77]–[79]).
The decision also separates a trustee’s right to be indemnified from the ability to recover personal professional charges from an opposing party under a costs order. The Court said that the trustees could be indemnified against the trust corpus, subject to an order of the primary judge, but were not entitled to the costs charged personally by each through an incorporated practice ([79]). That distinction matters because the judgment did not treat the trust indemnity question as equivalent to an entitlement to party-and-party costs.
At [63], the Court said a gross sum order should be made where the Court can act fairly and determine an appropriate sum from the materials. In plain English, a lump sum is not simply a shortcut available whenever a party asks for one. There must be enough evidence to make a fair estimate.
At [64], the Court said a “broad brush” approach is appropriate. It cited Auspine and Penson v Titan National Pty Ltd (No 3). The practical meaning is that the Court need not replicate a full assessment, examining every item with the same degree of detail. The summary materials still need to support the result.
At [65], the Court found that assessment would be protracted and expensive and accepted evidence that the applicant’s entitlement to sale proceeds might become nil or negative if the trustees’ involvement continued. This explains why the Court treated a lump sum as serving both efficiency and finality in this particular case.
At [71], the Court rejected the claim that the trustees’ costs were excessive or unrelated to the appeal. It identified itemised particulars, time records and hourly rates, and referred to the work caused by repeated applications and amended appeal documents. In plain English, the Court considered that the claimed work was documented and that the litigation conduct had generated substantial work.
At [74], the Court explained that Bell Lawyers abolished the Chorley exception but did not abolish the in-house solicitor rule. The distinction is important: the judgment did not say that no solicitor’s work can ever be recovered. It distinguished an employee doing legal work for an employer from a solicitor seeking costs for their own personal work in litigation.
At [76], the Court agreed that it would be difficult to justify treating a sole practitioner differently from a solicitor who performs the same personal work through a company they own or control. The plain-English point is that putting the work through a company does not necessarily change whose time was spent or the character of the work.
At [78]–[79], the Court concluded that the trustees’ position was not sufficiently like the in-house solicitor example. They were parties to the litigation and had personally undertaken the disputed work. The Court therefore excluded those charges from the respondents’ costs recovery, while recognising the separate possibility of indemnity against the trust corpus by order of the primary judge.
The decision is relevant to costs proceedings where a successful party asks a court to fix a lump sum instead of sending the matter to a detailed costs assessment. The key features here were evidence that assessment would be lengthy and expensive, a history suggesting further delay was likely, and records that allowed the Court to estimate the recoverable amount ([65]–[71], [80]–[85]). A party considering the relevance of this case would need to compare those features with the evidence and procedural history in the matter at hand. The judgment does not establish that every expensive or contentious assessment should be replaced by a gross sum order.
The decision is also relevant where a solicitor who is personally involved in litigation seeks to recover the value of their own time through an incorporated legal practice. The facts the Court emphasised were that Mr Fleming and Mr Calabretta were respondents, had personally performed work, and had charged that work through legal practices with which they were associated ([77]–[79]). The judgment indicates that the use of a corporate entity does not, by itself, resolve the costs question in favour of recovery.
A separate comparison may arise where legal work is performed by an employed in-house solicitor for an employer. The Court recognised that the in-house solicitor rule survived Bell Lawyers, but held that the trustees’ situation was materially different from the employee example in Hattersley ([74], [78]). The precise relationship between the solicitor, the client and the litigation would therefore matter to any comparison.
The decision also concerns trustees seeking costs in litigation connected with trust property. The Court recognised the possible distinction between indemnification from the trust corpus and recovery of costs from another party ([79]). It did not decide the full scope of trustee indemnity rights; it stated that indemnification was appropriate by order of the primary judge.
This judgment was delivered on 11 December 2025. The text provided contains no decisions after that date and therefore does not establish how later courts have treated Rahman v Rahman (No 2). No later treatment can be reported from this source.
The judgment itself places its reasoning within earlier authorities. It refers to Hamod and Gabrielle on gross sum costs principles, and to Harrison v Schipp, Beach Petroleum and Zepinic on fairness and the ability to determine an appropriate sum ([61]–[63]). It adopts the broad-brush approach associated with Auspine and Penson ([64]).
On solicitor costs, the Court discusses Bell Lawyers and Birketu and follows the reasoning of Leeming JA in Elias v Smidt (No 3) ([74]–[78]). It refers to Hattersley to explain why the in-house solicitor rule did not cover the trustees’ personal work ([78]). Those are the authorities’ treatment within this judgment, not evidence of subsequent appellate consideration of this decision.
The decision does not set a numerical threshold for when the cost, duration or likely complexity of assessment justifies a gross sum order. It applies the statutory discretion to the evidence and litigation history before it ([63]–[71]). The judgment therefore leaves fact-sensitive questions about how much evidence is enough and when the risks of a protracted assessment outweigh the advantages of detailed item-by-item scrutiny.
The judgment also does not specify a formula for calculating the discount to be applied to claimed costs in every gross sum assessment. It states that the Court applied an overall discount to Ms Rahman’s claim and used a broad-brush approach for the trustees’ reduced claim, then fixed the sums at $60,000 and $50,000 ([81]–[85]). It does not provide a general percentage rule for other cases.
On solicitor-litigants, the Court decided the treatment of personal work charged through incorporated legal practices in the circumstances before it. It did not comprehensively define the boundary of the preserved in-house solicitor rule for every corporate structure, employment relationship or retainer. Its reasoning does, however, emphasise that the label or structure of an incorporated practice cannot alone answer whether the work is equivalent to personal work by a solicitor defending their own litigation ([76]–[79]).
Finally, the judgment did not resolve the separate application under the Vexatious Proceedings Act 2008 (NSW), which had been remitted to the Equity Division ([3]–[4]). Nor did it determine the ongoing proceedings before the primary judge, or the proposed special leave application beyond observing that the material did not establish that an application had been filed ([1], [57], [70]).
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Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: Rahman v Rahman (No 2) [2025] NSWCA 266
Hearing dates: On the papers
Date of orders: 11 December 2025
Decision date: 11 December 2025
Before: Payne JA, McHugh JA, Free JA
Decision: First respondent gross sum costs order
Mr Rahman to pay the first respondent:
(1) $60,000 for the costs of the application for leave to appeal; and
(2) $2,860.00 for the costs of the motion.
Second and third respondent’s gross sum costs order
Mr Rahman to pay the second and third respondents:
(1) $50,000 for the costs of the application for leave to appeal; and
(2) $7,000 for the costs of the motion.
Catchwords: COSTS – gross sum costs orders – assessment of gross sum – orders made – quantum of order
COSTS – gross sum costs order – second and third respondents each retained a firm in which they were employed to act for them – whether second and third respondents entitled to costs for their own time
Legislation Cited: Civil Procedure Act 2005 (NSW), s 98
Vexatious Proceedings Act 2008 (NSW), s 8
Uniform Civil Procedure Rules 2005 (NSW), r 42.25
Cases Cited: Auspine Ltd v Australian Newsprint Mills Ltd (1999) 93 FCR 1
Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119
Bell Lawyers Pty Ltd v Pentelow (2019) 269 CLR 333; [2019] HCA 29
Birketu Pty Ltd v Atanaskovic [2025] HCA 2; 99 ALJR 321
Brown v The Stables Perisher Management Pty Ltd (No 2) [2022] NSWSC 902
Commonwealth Bank of Australia v Hattersley (2001) 51 NSWLR 333
Elias v Smidt (No 3) [2025] NSWSC 1062
Gabrielle v Abood (No 4) [2023] NSWCA 100
Hamod v New South Wales [2011] NSWCA 375
Harrison v Schipp (2002) 54 NSWLR 734
Penson v Titan National Pty Ltd (No 3) [2015] NSWCA 121
Rahman v Rahman [2025] NSWCA 219
The London Scottish Benefit Society v Chorley (1884) 13 QBD 872
UBS AG v Tyne (2018) 265 CLR 77; [2018] HCA 45
Vanvalen v Neaves [2005] NSWSC 1003
Category: Costs
Parties: Mr Fahmid Rahman (applicant)
Ms Mita Rahman (first respondent)
Stefano Calabretta (second respondent)
Andrew Fleming (third respondent)
Representation: Counsel:
In person (applicant)
J Brown (first respondent)
T O’Brien / L McIntyre (second and third respondents)
Solicitors:
In person (applicant)
Marsdens Law Group (first respondent)
Fleming Law (second and third respondents)
File Number(s): 2025/202852
Publication restriction: None
THE COURT: On 2 October 2025, the principal judgment involving these parties was handed down: Rahman v Rahman [2025] NSWCA 219. In what follows, familiarity with that judgment is assumed. The proceedings before the primary judge, Slattery J, are ongoing and are next listed for directions on 16 December 2025 before the Equity Registrar.
Subsequent to the publication of this Court’s reasons for judgement, the successful respondents sought the making of lump sum orders for costs. Directions were made for the exchange of evidence and submissions. The applications were considered on the papers.
- That the Applicant to pay the First Respondents costs of the proceedings in a specified gross sum pursuant to s 98(4) of the Civil Procedure Act 2005 (NSW) in an amount between $74,751.37 and $80,501.47 or, in the alternative such sum as the Court sees fit.
- That the Court make an order pursuant to Section 8(7)(b) of the Vexatious Proceedings Act 2008 (NSW) that the Applicant, Fahmid Rahman, is prohibited from instituting proceedings in New South Wales against:
(a) Mita Farjina Rahman or her spouse; or
(b) Stefano Calabretta; or
(c) Andrew John Fleming.
without first obtaining leave of this Court, or in the alternative, such order that the Court sees fit.
- In the alternative, the application for the order pursuant to Section 8(7)(b) of the Vexatious Proceedings Act 2008 (NSW) be referred to a single judge of the Equity Division or Court of Appeal.
- Any such further orders as the Court sees fit.
On 22 October 2025, the Registrar of the Court of Appeal remitted the application for an order under the Vexatious Proceedings Act 2008 (NSW) to the Equity Division.
On 16 October 2025, the successful second and third respondents filed a Notice of Motion seeking the following orders:
1. An order, including pursuant to section 98(4) Civil Procedure Act 2005 (NSW), that the second and third respondents' costs of the appeal (including the notices of motion filed on 4 June 2025 and 15 August 2025) be fixed in the amount of $82,423.94 or such other amount as the Court sees fit.
- An order that the costs of this motion be fixed in the amount of $12,056 (or, in the event this notice of motion is determined on the papers, fixed in the amount of $8,756) or such other amount as the Court sees fit.
- An order that this motion be dealt with on the papers.
4. Any further or other order as the Court sees fit.
Evidence was exchanged and written submissions were made by each party:
The evidence of the first respondent comprised an affidavit of Bharath Balasubramanian sworn 16 October 2025.
The evidence on behalf of the second and third respondents comprised two affidavits of Andrew John Fleming sworn 17 October 2025 and 5 November 2025.
The evidence of the applicant was an affidavit he swore on 14 November 2025.
On 20 November 2025, the Court directed the second and third respondents to provide further details identifying costs claimed for work undertaken by the second and third respondents personally, via their respective law firms, which were included in their original calculation of total costs. The second and third respondents filed further submissions and evidence in response. A marked-up schedule of the invoices exhibited to Mr Fleming’s affidavit of 16 October 2025 was annexed to the submissions and the relevant entries, being the time billed for personal work conducted by each of the second and third respondents, were highlighted. The Trustees had initially claimed $15,312 (incl. GST) in legal costs for work undertaken personally by the third respondent and $8,294 (incl. GST) for work undertaken personally by the second respondent. Removing those charges, the total cost claimed for professional fees with respect to the appeal was $58,817.94 (noting the original amount of $82,423.94 identified in the 16 October 2025 Notice of Motion).
The costs for the present gross sum costs order application remained unmodified at $8,756 (the amount identified in the Notice of Motion), as the second and third respondent did not personally charge for work related to the application for costs itself. Disbursements claimed were the same.
Mr Balasubramanian stated in his affidavit that he has practiced as a solicitor with his present firm, Marsdens, since about August 2013 and that he has experience in matters subject to the costs assessment regime.
There was a rate increase during the time Marsdens was acting for the first respondent in this matter. Two sets of rates were therefore provided and can be summarised as follows:
Barath Balasubramanian, Solicitor: $700 per hour exclusive of GST (admitted August 2013)
Roland Blackstone, Partner: $600 per hour exclusive of GST (admitted July 2017)
Jade Ellis, Senior Associate, Solicitor: $500 per hour exclusive of GST (admitted June 2024)
Amber-Jayne Mathews, Solicitor: $440 per hour exclusive of GST (admitted February 2025)
Tony Daoud, Solicitor: $400 per hour exclusive of GST (admitted August 2023)
Lily Chester, Solicitor: $400 per hour exclusive of GST (admitted June 2024)
Korcula Cowan, Law Clerk: $290 per hour exclusive of GST
McKenzie Young, Law Clerk: $290 per hour exclusive of GST
Mr Balasubramanian gave evidence that he was familiar with rates charged by other law firms of solicitors practicing in commercial litigation and the rates set out were “comparable and in many cases less than is charged by larger firms”.
Professional fees and disbursements from the below proceedings were acknowledged as being necessarily excluded for the purposes of this application. Mr Balasubramanian stated that to date, the first respondent has incurred professional fees of $74,661.42 (including GST) in respect of the leave to appeal application before this Court, and fees in the amount of $24,521.52 (including GST) for disbursements.
In preparing the present cost application, a further $5,338.66 in professional fees (inclusive of GST) were said to have been incurred but remained unbilled. Mr Balasubramanian estimated an additional $4,400 in professional fees is to be expected in dealing with this application for costs and estimates approximately $990 having been or to be incurred in disbursements (incl. GST).
Annexed to his affidavit were documents used in the calculations of costs. It was noted in Mr Balasubramanian’s affidavit that the excluded costs related to the proceedings below were highlighted, and that all other line items related to the costs of these proceedings (and the final figure given accords with that assumption).
Fee schedules for the engagement of junior counsel were set out in the affidavit and supported by documents annexed thereto. Mr Brown, the appointed counsel for these proceedings, undertook work at a rate of $500 per hour or $5,000 daily (plus GST). The total charged by counsel was set out in the affidavit text, and an itemised list of charges was included in the memorandum of fees annexed to Mr Balasubramanian’s affidavit. Counsel fees were $23,100 in total (incl. GST).
The affidavit of Mr Balasubramanian states his expectation that on an assessment of her ordinary costs the first respondent would be entitled to receive approximately 70% of professional fees paid and 100% of disbursements. The following figures were identified as the post-discount amounts to which the first respondent was entitled:
(1) Professional fees (70%): $52,262.99
(2) Disbursements in GST & counsel fees: $24,521.52
(3) Costs of the Notice of Motion seeking a Gross Sum costs order: $10,638.66
Mr Fleming stated he has over 20 years practice experience and extensive experience as a court appointed administrator and Trustee for Sale, as well as experience in cost assessments in this Court.
The hourly rates for Walker & White, the firm that acted for Mr Fleming from the time he was joined as a third respondent to the appeal proceedings on 4 June 2025, were listed as being:
Andrew Fleming, Legal Practitioner Director: $600 per hour exclusive of GST (admitted May 2005 in NSW)
Jamie Cklamovski, Senior Lawyer: $550 per hour exclusive of GST (admitted October 2013)
Shelley Potter, Junior Lawyer: $350 per hour exclusive of GST (admitted November 2023)
Joshua Cklamovski, Legal Assistant: $100 per hour exclusive of GST
The hourly rates for Emerson Lewis Group, the firm that has acted for the second respondent Mr Calabretta (with the assistance of Walker & White) since the time he was joined as a third respondent to the appeal proceedings on 4 June 2025, were:
Stefano Calabretta, Legal Practitioner Director: $650 per hour exclusive of GST (admitted April 2009)
Andrew Hack, Senior Associate: $500 per hour exclusive of GST (admitted August 2025)
Ruby-Ann Schmelzer, Associate: $400 per hour exclusive of GST (admitted September 2021)
Itemised tax invoices for both Walker & White and Fleming Law, and for Emerson Lewis Lawyers, for the period between 30 June 2025 to 2 October 2025, were provided.
Walker & White had incurred approximately $40,384 for professional fees regarding the appeal proceedings as calculated on an indemnity basis, and $12,880.02 for disbursements (including GST). Emerson Lewis Group Pty Ltd had incurred professional costs of approximately $16,522 in the appeal proceedings as calculated on an indemnity basis, and $12,673.92 for disbursements (including GST). As noted above at [6], the Trustees incorporated claims of $13,920 in legal costs for Mr Fleming personally via Walker & White ($15,312 inclusive of GST), and $7,540 personally for Mr Calabretta via Emerson Lewis Group ($8,294 inclusive of GST).
Cost disclosures and invoices related to the engagement of the services of Mr Lachlan McIntyre, Barrister, and Mr Tom O’Brien, Barrister, were provided. Mr McIntyre’s rates were $300 per hour or $3,000 daily. Mr O’Brien’s rates were $525 per hour and a $5,250 daily rate.
Mr Fleming gave evidence that, in his experience, costs recoverable following assessment would be in the following ranges:
(1) On the indemnity basis, 90% for professional fees, and 100% for disbursements; and
(2) On the ordinary basis, 70% for professional fees, and 100% for disbursements
An additional affidavit was filed to provide evidence of the settlement of the remaining trust property (Property 1A) on 31 October 2025. The property was purchased by the applicant Mr Rahman, and his daughter, Wafa Rahman.
Also included was an email from Mr Rahman to the Registry of the High Court of Australia indicating an intention to apply for special leave to appeal the 2 October 2025 decision of this Court.
The details of orders facilitating the consideration of a possible gross sum cost orders in the court below, made by Slattery J on 24 October and 30 October 2025, were also provided. Slattery J indicated in those orders that a lump sum cost order could be made in respect of some, but not all, of the litigation in the ongoing proceedings of the Court below. Those orders were as follows:
His Honour makes the following orders, notations and directions:
1. DIRECT the trustees to notify Mr Kent within 14 days of completion of the sale of property 1A.
2. NOTE the Court will consider making a lump sum costs order Civil Procedure Act 2005, s 98(4)(c) with respect to the qualification of the costs orders previously made by Kunc and Lindsay JJ against Mr Rahman (“the lump sum costs determination”).
3. DIRECT the Trustees and the solicitors for Ms Rahman to provide by 10.00am Wednesday, 29 October 2025 a bill of costs together with such evidence as they wish to rely upon to justify the making of a lump sum costs under Civil Procedure Act 2005, s 98(4)(c) to assist the Court in the making of the lump sum costs determination.
4. DIRECT Mr Rahman by Monday 3 November 2025 to provide any evidence or submissions in reply as to the amount of the costs in the lump sum costs determination.
5. DIRECT all parties to provide to the chambers of Slattery J written submissions as to the quantification of the lump sum costs determination by Monday 3 November 2025.
- DIRECT Mr Rahman to provide submissions in reply on the lump sum costs determination by Monday, 10 November 2025.
7. GRANT liberty to Mr Fleming to relist the matter if trustees require further directions from the Court.
8. DIRECT the cross-defendant Ms Wafa Rahman to file and serve all the submissions and documents she seeks to rely upon on her motion by 4pm today.
9. DIRECT the Cross-Claimant to file and serve short written submissions on the issue of solicitor’s costs by 10am, 27 October 2025.
10. DIRECT the trustees to file and serve their submissions in reply by 5pm Monday, 27 October 2025.
11. GRANT leave to the trustees to relist the proceedings at an appropriate time after the sale of property 1A takes place but in any event by 1 December 2025
In response to a request from the Court, additional information regarding costs was provided. If the costs attributable to the work personally undertaken by the second and third respondents were removed from the claims made, the total costs claimed by the Trustees was $58,817.94 for the leave to appeal application, plus $8,756 for the preparation of the present costs application (both figures inclusive of GST).
The Trustee’s further submissions summarised their claim as follows:
The Trustees have claimed $13,920 in legal costs for Mr Fleming [the third respondent] ($15,312 inclusive of GST), and $7,540 for Mr Calabretta [the second respondent] ($8,294 inclusive of GST). If these costs were removed from the claims made, the total costs claimed by the trustees would be $58,817.94, plus $8,756 for the preparation of this application (both inclusive of GST). Those remaining costs include employed solicitor costs, which are recoverable in accordance with Birketu Pty Ltd v Atanaskovic [2025] HCA 2; (2025) 99 AJLR 231 at [2], and disbursements.
Mr Rahman filed an affidavit on 14 November 2025. Virtually all of that evidence is irrelevant to the present applications.
An affidavit affirmed 17 July 2025 and submitted pursuant to proceedings below was annexed to Mr Rahman’s affidavit. An affidavit filed 14 October 2025, similarly filed in relation to the proceedings below, referring to asserted jurisdictional and constitutional issues, was also annexed.
Affidavits of Dr Faruque Ahmed, Mr Ruhul Amin, Mr Abu Rai, Mr Majher Bobby Syed, Mr John Chabuailuk and M Ahsanul Haque, all dated 13 October 2025, were annexed to the applicant’s affidavit, and all, with remarkable consistency, gave evidence about their own observations regarding participants involved in the auction of Property 1A. These statements all observed the first respondent talking to someone during the auction, who later talked to the real estate agent sometime after. The statements were made to suggest that the first respondent engaged this person to bid with no intention to purchase with a view to artificially raise the property price.
Judgments of and communications referencing determinations made in the Federal Circuit and Family Court of Australia (‘FCFCA’) were annexed to the applicant’s affidavit. Correspondence related to a hearing before NCAT where the former matrimonial home, Property 1, was the subject matter was also annexed, a matter that related to the termination of the former tenant’s occupancy around August 2023.
The affidavit contained submissions that the first respondent’s costs submissions and the second and third respondent’s costs submissions were not itemised and were given without proof.
It was further submitted that the Trustees for Sale, the second and third respondents, were not able to claim professional time through their own firm and that those costs should not be recoverable pursuant to Bell Lawyers Pty Ltd v Pentelow (2019) 269 CLR 333; [2019] HCA 29 and the abolishment of the Chorley exception in Australia.
Jurisdictional assertions which were rejected in the appeal were again advanced.
The Court has power to make gross sum cost orders per s 98(4)(a) of the Civil Procedure Act 2005 (NSW) “to avoid the expense, delay and aggravation involved in protracted litigation which may arise out of contested costs assessments”: Vanvalen v Neaves [2005] NSWSC 1003 at [38].
It was submitted that such orders were necessary in this case because:
(a) The First Respondent has been put to an extraordinary expense in paying the costs associated with applications by the Plaintiff which he continuously sought the same relief and he had no proper basis for.
(b) Responding to various amended documents.
(c) The conduct of the applicant, including:
(i) his refusal to act reasonably; and
(ii) his relentless pursuit of applications for interlocutory relief which lacked merit, despite presumably having the benefit of legal advice noting that despite appearing himself in Court to make submissions his various applications were signed off by the Applicant’s solicitor, Mr Mohammad Chaudhry.
(d) The effect of a protracted assessment on the First Respondent.
(a) the pursuit and then abandonment of meritless grounds of appeal;
(b) the vast number of repetitive interlocutory applications; and
(c) the raising of apparently complex questions as to jurisdiction which were ultimately meritless.
The affidavit of Mr Balasubramanian was submitted as being sufficient “to enable the court to make an informed assessment of the actual costs”.
It was further submitted that it is usual to apply a discount of 30-35% in the case of a party/party order when assessing a gross sum costs order. In those circumstances it was submitted by the first respondent that a costs order of between $73,051.44 to $76,784.51 would result from the application of these principles, applying Hamod v State of NSW [2011] NSWCA 375.
It was submitted that, with respect of the present application, costs of approximately $4,400 (incl. GST) were incurred, per the affidavit of Mr Balasubramanian, and that, consistent with Bell CJ in Brown v The Stables Perisher Management Pty Ltd (No 2) [2022] NSWSC 902 at [39], an allowance of $2,860, or such other amount as the Court considers appropriate, should be allowed for the first respondent regarding the present application.
The Trustees relied on the two affidavits sworn by Andrew John Fleming in respect of the Trustees’ Notice of Motion for a gross sum costs order.
It was submitted that the power to make a gross sum costs order “is unconfined and apt to be exercised whenever the circumstances warrant its exercise”, one example of which being a scenario where assessment of costs would be protracted and expensive and where there were concerns regarding the impecuniosity of the payer. The second and third respondents relevantly pointed to their affidavit evidence that indicated:
Mr Fleming deposes to various liabilities and his concern that unless the trustees’ involvement in these proceedings is brought to an end, the applicant’s entitlement to the proceeds of sale may become nil or negative…
The Trustees are of the view that any cost assessment process will be long and costly, and likely subject to appeals by Mr Rahman.
The Trustees wish to expeditiously bring a final accounting to end their involvement in these proceedings and the further incurring of costs. Now that both the sales of both Property 1 and 1A have settled, the trustees’ involvement can hopefully be brought to an expeditious end for the benefit of all parties (including Mr Rahman).
The second and third respondents further submitted that, as Mr Rahman’s appeal and motions before the Court wholly failed, he should bear the Trustees’ costs from his entitlement to the proceeds of sale, noting that per r 42.25 of the Uniform Civil Procedure Rules 2005 (NSW) (‘UCPR’), Trustees are ‘ordinarily’ paid all of their costs (though a discount typical for a lump sum assessment was accepted).
In response to Mr Rahman’s further submissions, the second and third respondents submitted that the costs claimed were calculated by reference to itemised particulars, time records, and justified hourly rates, and that the Trustees were, at all relevant times, represented.
The second and third respondents further submitted that they were entitled to recover the costs charged personally in these proceedings by Mr Fleming and Mr Calabretta because they have been empowered to charge their fees against the trust corpus by order of Slattery J on 16 December 2024. Those orders made by his Honour were as follows:
(IN CHAMBERS)
The Court:
- ORDERS that Mr Stefano Calabretta of Emerson Lewis Lawyers and Mr Andrew Fleming of Walker & White be appointed as joint trustees for the sale of the land situated at:
a. 1 XXX Street, Roselands, contained in certificate of title folio identifier 1/872522; and
b. 1A XXX Street Roselands, contained in certificate of title folio identifier 3/878487, (together, the “Roselands properties”).
- ORDERS that the Roselands properties be vested in such trustees subject to any incumbrances affecting the entirety of the lands but free from incumbrances (if any) affecting any undivided share or shares therein to be held by the said trustees upon statutory trust for sale under Division 6 of Part 4 of the Conveyancing Act 1919 (NSW).
3. NOTES that it has been informed that Mr Calabretta and Mr Fleming (“the joint trustees”) both consent to this appointment and requests that they provide their respective written consents to their appointment to the Court on or before Friday, 20 December 2024.
4. NOTES that the joint trustees are authorised to charge their professional fees and necessary disbursements to execute the statutory trust for sale and, subject to the Court’s approval of those fees and necessary disbursements, the trustees are authorised to deduct all such professional fees and necessary disbursements from the proceeds of sale of the Roselands properties in a manner consistent with the orders of this Court and of the Federal Circuit and Family Court of Australia applicable to the parties.
- GRANTS liberty to the joint trustees to apply to the Court as required for any judicial advice or directions in relation to the execution of the statutory trust for sale.
The second and third respondents submitted that their fees are a liability of the trust, and they are entitled to be indemnified against the trust corpus. It was further argued that their charging of fees is consistent with what the High Court said in Birketu Pty Ltd v Atanaskovic [2025] HCA 2; 99 ALJR 321 as their individually accrued fees were charged to professional firms, Walker & White and Emerson Lewis Group. The third respondent, Mr Fleming, is a Director of Walker & White and the second respondent, Mr Calabretta, a Director of Emerson Lewis Group. In this way it was argued the charges of the respondents were dissimilar to those considered in Bell Lawyers and Birketu*,* as here the Trustees’ fees were “actually incurred”, and their charges were at least theoretically more aligned with the in-house solicitor rule preserved in Bell Lawyers. They argued that the structure of the firm within which they worked, as incorporated law firms, further supported that conclusion.
What was said by Justice Leeming, sitting at first instance, in Elias v Smidt (No 3) [2025] NSWSC 1062 was suggested as fortifying the position of the Trustees.
The applicant’s submissions in response largely relitigated the matters presented in the substantive appeal. In essence, the applicant’s argument remains one of causation, that is, ‘but for’ the first respondent failing to execute the property sale ordered by the FCFCA, the resultant costs would not have been incurred and in such a case, “costs should fall on those who’s conduct created the litigation”. In addition, the independent Trustees for Sale were suggested to have unnecessarily duplicated costs having “pursued overlapping applications in multiple jurisdictions” and it was submitted that the Court is mandated to take into account these matters. The “overlapping applications” referred to were not identified in the applicant’s submissions.
The applicant further submitted that the first respondent failed to provide an itemised bill or time records to substantiate her claim for costs, and that the second and third respondents claimed their costs without having provided itemised particulars, time records or an hourly rate justification.
The submission that the Trustees acted in person and therefore could not seek professional remuneration “for their own attendances” was also reiterated.
Finally, the applicant submitted that any costs assessment should be deferred in circumstances where a special leave application presently before the High Court and an appeal of the original FCAFC decision are pending:
The appropriate order is that the Respondents’ costs motions be dismissed or, in the alternative, stood over to a date after the High Court and FCFCOA (Division 1) outcomes.
The evidence before the Court of the application to the High Court of Australia comprises an email addressed to the High Court Registrar from Mr Rahman indicating an intention to appeal. No evidence of any application for leave to appeal actually filed was included in the affidavit of Mr Rahman, dated 12 November 2025.
The relief sought by the applicant was thus:
- That the Notice of Motion dated 16 October 2025 be dismissed;
- That no order be made under s 8(7)(b) Vexatious Proceedings Act 2008 (NSW);
- That no gross-sum costs order be made; alternatively, that any costs be reserved for detailed assessment;
- That the Respondents bear the costs of these Motions and of this appeal; and
- Such further or other orders as the Court considers just.
98 Courts powers as to costs
[…]
(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.
A gross sum costs order can be made any time before costs are referred for assessment. Section 98 confers a wide discretion on the Court. The principles were stated by Beazley JA (as her Excellency then was) in Hamod at [813]-[820], see also Gabrielle v Abood (No 4) [2023] NSWCA 100 at [6] per Bell CJ, Kirk JA, and Adamson JA.
In Hamod, Beazley JA at [813] identified some of the factors which merit particular consideration, including 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.
The power to award a lump 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 [21]-[22]; Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119 at 123; [1995] FCA 350; Zepinic v Chateau Constructions (Aust) Ltd (No 2) [2014] NSWCA 99 at [28]-[29].
A “broad brush” approach is appropriate when a gross sum costs order is made. To require the same or a similar level of detail as in a formal costs assessment would defeat the purpose of the lump sum order: Auspine Ltd v Australian Newsprint Mills Ltd (1999) 93 FCR 1 at 5; [1999] FCA 673 per O’Loughlin J; Penson v Titan National Pty Ltd (No 3) [2015] NSWCA 121 at [7].
We are satisfied that it has been shown that this is a case where any assessment of costs would be protracted and expensive, and the party ordered to pay the costs, the applicant, is likely unnecessarily to delay any final resolution of these proceedings and to cause disproportionate costs to be expended in the assessment of costs and the inevitable appeals from that process. We accept Mr Fleming’s evidence that, unless the Trustees’ involvement in these proceedings is brought to an end now by the making of a gross sum costs order, the applicant’s entitlement to the proceeds of sale may become nil or negative.
We are persuaded that, if a lump sum costs order is not made now, the applicant will continue to seek to litigate completely irrelevant matters in relation to the costs issue against all the respondents, as demonstrated by the irrelevant material sought to be deployed on the present application about observations of participants allegedly involved in the auction of Property 1A. This was not an issue litigated in this Court and, even if it were, the observations about the first respondent which were made could have no bearing on the making of a gross sum costs order.
We accept Mr Rahman’s submission that the Trustees were not entitled to claim for costs charged personally by Mr Fleming and Mr Calabretta via an incorporated legal practice.
The High Court in Bell Lawyers Pty Ltd v Pentelow explained that solicitors who appear for themselves cannot recover costs for the value of their time spent in litigation. The Chorley exception (named after the English case The London Scottish Benefit Society v Chorley (1884) 13 QBD 872) was abolished. The Court, however, did not disturb the "in-house solicitor rule**"** which allows in-house lawyers to represent their employers in litigation and recover costs for that work. The High Court returned to this issue in Birketu.
Subsequent to these decisions, Leeming JA, sitting at first instance, in Elias No 3, closely analysed the relevant principles in the case of an incorporated legal practice and concluded that:
[53] … Whether or not there is professional independence, whether or not litigation is used to make profits, and whether or not there is equality before the law are not answered by the proposition that there is a distinction between the solicitor and the corporation which the solicitor owns and controls. For that reason, the recoverability of professional costs should not depend on whether the solicitor is a sole practitioner or is employed by his or her own company.
As Leeming JA pointed out, one purpose for abolishing “the Chorley exception” was its affront to equality before the law. It is now impossible to justify to the defendant faced with a costs order obtained by a solicitor that if the solicitor had been a sole practitioner, the costs would not include the solicitor’s time, but because the solicitor had incorporated a company of which he or she was the sole director and shareholder, the solicitor was entitled to recover his or her costs of work undertaken personally. If the former is an affront to equality, so too is the latter. We agree.
In Elias No 3, a solicitor retained an incorporated legal practice of which he was the sole shareholder and director to act for him. The claim for that time was the largest component of the costs order sought. Leeming JA held that the solicitor was not allowed to recover his own costs, even though billed via the incorporated legal practice. For essentially the same reasons as given by Leeming JA, we are not persuaded that the structure of the firms within which Mr Fleming and Mr Calabretta work, as incorporated law firms, makes any difference to the analysis.
In Elias No 3, as here, an individual personally acted through the vehicle of an incorporated legal practice and charged costs of defending litigation in which the individual was a party. This was the case for both the second and third respondent. Recovery of costs charged by the second and third respondents for personal work via an incorporated legal practice is dissonant with the rule against sole practitioners recovering costs for work done defending themselves in litigation. We accept that the position of Mr Fleming and Mr Calabretta is perhaps “theoretically” more aligned with the in-house solicitor exception preserved in Bell Lawyers (see Commonwealth Bank of Australia v Hattersley (2001) 51 NSWLR 333 referred to in Bell Lawyers by the plurality at [47]-[48]). Nevertheless, it seems to us incongruous that the second and third respondents could essentially recover the legal costs of personally acting for themselves (albeit through an incorporated legal practice). Mr Fleming and Mr Calabretta are a long way removed from the “employed solicitor” of the Commonwealth Bank Legal Department the subject of Hattersley.
Mr Fleming and Mr Calabretta are entitled, of course, to be indemnified against the trust corpus. It is appropriate that they do so by order of the primary judge, Slattery J. Mr Fleming and Mr Calabretta are not entitled to be paid costs charged personally by each via an incorporated legal practice.
We find that the evidence provides a sufficient foundation to permit the Court to make an informed assessment of the actual costs incurred by the first respondent. The invoices contain detailed narratives of the work undertaken. The Court is satisfied that it has the means to make an informed determination of the amount of costs to be ordered.
The amount of the claim is between $74,751.37 and $80,501.47. Applying the ‘broad brush’ approach appropriate for such orders, the Court proposes to apply an overall discount in fixing the amount of this gross sum costs order.
The applicant must pay to the first respondent costs of the application for leave to appeal of $60,000.
We find that the evidence provides a sufficient foundation to permit the Court to make an informed assessment of the actual costs incurred by the second and third respondents. As we have said, those costs were calculated by reference to itemised particulars, time records and justified hourly rates. The Court is satisfied that it has the means to make an informed determination of the amount of costs to be ordered.
The original claim by the second and third respondents was for costs of $82,423.94. After removal of the claims for the costs claimed by Mr Fleming via Walker & White, and Mr Calabretta via Emerson Lewis, the total claimed is almost $59,000.
Applying the broad-brush approach to costs that is appropriate for gross sum costs orders we arrive at a figure of $50,000 for costs to be paid by the applicant to the second and third respondents.
For essentially the same reasons as we have given in awarding a gross sum cost order, a gross sum cost order should be made for the costs of the Notices of Motion. Given the regrettable history of these proceedings, any further costs assessment would almost certainly invite further delay, disruption, and further unnecessary expenses incurred by all parties.
Based on the evidence given about the cost of these applications and identifying that the figures submitted necessarily incorporate prospective estimates at least in part, the Court proposes to fix the amount of $7,000 for the second and third respondents costs of this application, and $2,860 for the first respondents costs of this application.
We order Mr Rahman to pay the first respondent:
$60,000 for the costs of the application for leave to appeal; and
$2,860.00 for the costs of the motion.
We order Mr Rahman to pay the second and third respondents:
$50,000 for the costs of the application for leave to appeal; and
$7,000 for the costs of the motion.
**********
Rahman
Rahman
(1999) 93 FCR 1
(1995) 57 FCR 119
(2019) 269 CLR 333
(2001) 51 NSWLR 333
(2002) 54 NSWLR 734
(2018) 265 CLR 77
Mr Rahman was ordered to pay the first respondent $60,000 for the leave-to-appeal application costs and $2,860 for the costs motion, and the second and third respondents $50,000 and $7,000 respectively for those costs. Their personal-work charges were excluded.
The history of protracted litigation, and the submissions of the applicant on this application, are a cogent demonstration that it is appropriate to bring this dispute about costs to an end now. The present case is an appropriate one to make a gross sum costs order.
The Trustees are entitled now to conduct a final accounting and to bring to an end their involvement in these proceedings. Now that the sales of both Property 1 and 1A have settled, the Trustees’ involvement should be brought to an end as soon as possible. This is to the benefit of all parties, including Mr Rahman. It is overwhelmingly in the interests of the just, quick and cheap determination of the real issues to avoid the expense, delay and aggravation which will, as a matter of near certainty, be involved in a costs assessment.
The same observations apply to the application for a gross sum order made by the first respondent. The evidence filed by Mr Rahman on this application is a cogent demonstration that he is unable or unwilling to address the real issues which are engaged in any proper consideration of the costs of the proceedings. If a gross sum order is not made now, it is clear that Mr Rahman proposes to seek to relitigate all of his past grievances against the first respondent.
Mr Rahman’s submission that any costs order should await determination of an as yet unfiled special leave application or the determination of other proceedings involving the first respondent should be rejected. Such a delay would needlessly increase the costs of all parties and would be antithetical to the overriding purpose in Part 6 of the Civil Procedure Act.
We reject Mr Rahman’s submissions that the costs claimed by the Trustees are excessive or relate to matters other than this appeal. We find that those costs were calculated by reference to itemised particulars, time records and justified hourly rates. The disproportionate amount of costs spent on this leave application is entirely the fault of Mr Rahman. His conduct has needlessly caused all three respondents to spend much more than should have been necessary to defend these proceedings. Mr Rahman characterised the Trustees’ involvement in these proceedings as limited to procedural steps. This is not correct. The repetitive applications brought by Mr Rahman necessitated six appearances before the Registrar, an urgent listing before Price AJA, and repeated updates to material before the Court to deal with amended appeal documents.
A gross sum costs order should be made in favour of the first respondent and the second and third respondents.