Riva NSW Pty Ltd (ACN 113 881 815) v Mark A Fraser & Christopher P Clancy t/as Fraser Clancy Lawyers

Judgment 1EMMETT JA: On 29 October 2014, for reasons that I then gave (see [2014] NSWCA 454), I ordered that a summons filed on behalf of Riva on 16 September 2014 be dismissed. In these reasons, terms and expressions used are as defined in my earlier reasons. 2On 29 October 2014, I ordered Riva, Mr Ferella and Ms Ferella to pay the costs of Fraser Clancy of the s 69 Summons and the Dismissal Motion on the indemnity basis and ordered that the costs be paid as a lump sum (pursuant to s 98(4)(c) of the Civil Procedure Act 2005 (NSW)) to be determined by the Court. I directed Fraser Clancy to file and serve, no later than 5 November 2014, any affidavits on which they wished to rely as to the assessment of costs and directed Riva and Mr Ferella and Ms Ferella to file and serve, no later than 12 November 2014, any affidavits on which they wished to rely in opposing the assessment. I indicated that, unless the parties wished to be heard, I would determine the lump sum on the papers on the basis of the material contained in any such affidavits. 3On 6 November 2014, Fraser Clancy filed and served an affidavit sworn on 5 November 2014 by Ms Kerrie-Ann Rosati. On 13 November 2014, an affidavit sworn by Ms Sharon Drew on that day was filed. However, that affidavit was apparently not served on Fraser Clancy until 18 November 2014. Ms Drew states in her affidavit that she has been instructed by Riva, Mr Ferella and Ms Ferella "to provide expert opinion in relation to the costs payable" to Fraser Clancy in accordance with the orders made on 29 October 2014. No doubt in response to the comments that I made in my earlier reasons, on 29 October 2014, Riva, Mr Ferella and Ms Ferella filed a notice of appointment of solicitor, notifying the Court that Zali Burrows Lawyers would be acting as their solicitor in these proceedings. However, it appears that that notice of appointment may not have been served on Fraser Clancy. 4On 26 November 2011, I invited the parties to supplement their affidavit evidence by exchanging and filing short written submissions to support their contentions by 3 December 2014. 5By letter of 3 December 2014, a copy of which was apparently sent to the other parties by email and by mail, Fraser Clancy submitted that, having regard to the failure to comply with the directions given on 29 October 2014, I should not have regard to the affidavit of Ms Drew. In its letter, Fraser Clancy said that, if the Court intends to have regard to the affidavit of Ms Drew, it wished to rely on a further affidavit sworn by Mr Clancy on 3 December 2014, which responds to factual issues raised by Ms Drew's affidavit and makes further submissions in relation to the question of costs. 6In his affidavit of 3 December 2014, Mr Clancy complains that Ms Drew does not say who provided her with instructions for her affidavit and provides little or no reasoning or explanation for the opinions expressed, as required by s 79 of the Evidence Act 1995 (NSW) and the Expert Witness Code of Conduct (see r 31.23 and Sch 7 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR)) if her opinion evidence is to be admissible. There is considerable substance in Mr Clancy's complaint. Nevertheless, I have had regard to Ms Drew's affidavit. 7Ms Rosati and Ms Drew essentially agree on the relevant principles to be applied in making an assessment of party/party costs. Section 364(1) of the Legal Profession Act 2004 (NSW) sets out the criteria to be applied by a costs assessor when determining a reasonable amount for party/party costs. Thus, the costs assessor must consider:

23The costs of assessing the costs up to and including 29 October 2014 would not have been incurred at all but for the filing of the summons by Riva. In those circumstances, I consider that those costs should be assessed on the same basis. 24In the result, there are two conflicting opinions as to the costs likely to be assessed on an indemnity basis. Ms Drew's estimate is $21,979.25. On the other hand, Ms Rosati's total estimate is $37,472. The substantial difference between the two opinions is the result of differing views as to the discount rate for professional fees. 25The mere fact that charges may have been made at a different rate in relation to related proceedings does not of itself indicate that the rate presently claimed is excessive. On the other hand, Mr Clancy himself acknowledged that a discount rate of something like 20% for indemnity costs was not unreasonable. 26The purpose of ordering a lump sum for costs is to avoid unnecessary costs in assessment. Further, it is not the function of the Court when making such an order to engage in a detailed taxation exercise. I am not persuaded that the evidence of Ms Drew satisfies the onus of establishing that any of the costs described by Ms Rosati in her total of $37,472 appear to have been unreasonably incurred or to be of an unreasonable amount. In all of the circumstances, I consider that the appropriate lump sum that should be paid is $35,000. I propose to order that Riva, Mr Ferella and Ms Ferella pay that sum to Fraser Clancy in respect of their costs of the s 69 Summons and the Dismissal Motion.

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