- Saba v Plumb & Anor

Solicitors: Smith Partners Lawyers (Plaintiff) Principal Lawyers (Defendant) File Number(s): 2017/235405

Judgment

1. On 14 December 2017 I made orders dismissing an application filed by the Plaintiff, Erma Properties Pty Ltd ("Erma") to set aside a creditor's statutory demand ("Demand") served by the Defendant, A Plus Fire Pty Ltd ("A Plus") on 17 July 2017 with costs. A Plus then indicated that it sought costs on a lump sum basis and I directed that the parties submit agreed Short Minutes of Order as to the question of any lump sum costs order by 22 December 2017 or, if there was no agreement between them, the respective Short Minutes of Order and short submissions as to the differences between them.
2. The parties did not reach agreement and, by its submissions served on 22 December 2017, A Plus indicated that it applied for a gross or fixed sum costs order under s 98(4)(c) of the Civil Procedure Act 2005 (NSW). The circumstances in which such an order may be made are well established and were not controversial in this application. I recently summarised them in Saba v Plumb & Anor [2017] NSWSC 955 at [23] as follows: "Section 98(4) of the Civil Procedure Act relevantly provides that the Court may make an order to the effect that a party to whom costs are to be paid is entitled to a specified gross sum instead of assessed costs. That power is commonly exercised where costs have been incurred in a lengthy or complex case although it is not in its terms limited to such a case: Simone Starr-Diamond v Talus Diamond (No 4) [2013] NSWSC 811 at [8]. The power to make a gross sum costs order should only be exercised where the Court considers it can do so fairly between the parties, including achieving an appropriate sum on the materials available to it, and the Court typically applies a discount in assessing costs on a gross sum basis: Ritchie's Uniform Civil Procedure NSW [s 98.65]; Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWSC 23. In Hamod v State of New South Wales [2011] NSWCA 375 at [816]-[817], Beazley JA (with whom Giles and Whealy JJA agreed) summarised factors relevant to the making of a gross sum costs order as follows: "The terms of s 98(4), together with the more general considerations reflected in the Civil Procedure Act, ss 56(1), 57(1)(d) and 60, suggest the factors that merit particular consideration include: the relative responsibility of the parties for the costs incurred (for example, Harrison v Schipp [[2002] NSWCA 213; (2002) 54 NSWLR 738]); 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: Ritchie's Uniform Civil Procedure NSW at [s 98.45]. The exercise of the power conferred by s 98(4) is particularly appropriate where the costs have been incurred in lengthy or complex cases and it is desirable to avoid the expense, delay and aggravation likely to be involved in contested costs assessment. This may arise either from the likely length and complexity of the assessment process: Beach Petroleum NL v Johnson (No 2) at 120; Charlick Trading Pty Ltd v Australian National Railways Commission; Australasian Performing Rights Association Ltd v Marlin [1999] FCA 1006; or from the likelihood that the additional costs of formal assessment would disadvantage the successful party because of the likely inability of the unsuccessful party to discharge the costs liability in any event: Harrison v Schipp; Sony Entertainment (Aust) Ltd v Smith (2005) 215 ALR 788 at [90], [194]-[195]; Hadid v Lenfest Communications Inc [2000] FCA 628."