Tim Barr Pty Ltd & Anor v Narui Gold Coast Pty Ltd

Judgment 1The following order was made in these proceedings on 28 September 2010: "The plaintiffs pay the defendant's costs of the proceedings, including the cross-claim." 2The plaintiffs are, of course, Tim Barr Pty Ltd ("TBPL") as first plaintiff and Mr Barr as second plaintiff. The defendant is Project 28 Pty Ltd, formerly Narui Gold Coast Pty Ltd ("NGC"). 3It was also ordered on 28 September 2010 that the defendant's application under s 98(4)(c) of the Civil Procedure Act 2005 for a gross sum costs order be fixed for hearing on 10 December 2010. By notice of motion filed on 25 November 2010, and heard on 10 December 2010, NGC sought the following order: "Pursuant to section 98(4)(c) of the Civil Procedure Act 2005 (NSW), the plaintiffs pay the defendant's costs of the proceedings, including the cross-claim, in the gross sum of $1,850,000 instead of assessed costs." 4It is with this application that I am now concerned. 5In the course of the hearing of the notice of motion, counsel for NGC made it clear that the application is, in reality, for an order in the sum of $1,850,000 or such smaller sum as the court should think fit. If the court decides that a gross sum costs order is appropriate but considers a sum less than $1,850,000 to be the proper sum, NGC's position is not that the court should decline to make an order in that smaller sum, so that quantification becomes a matter for a costs assessor in the normal way. Rather, NGC says, the court should, in that event, proceed to make a gross sum order according to its decision as to the proper sum. 6Each plaintiff was separately represented on the hearing of the motion. Mr Lazarus of counsel appeared for Mr Barr and made certain submissions (to which I shall return) that were not adopted by Mr Dawson of counsel who appeared for TBPL. All submissions of counsel for TBPL were, however, adopted by counsel for Mr Barr. 7Two questions arise on this application: first, whether the court should order a specified gross sum for payment in satisfaction of the existing costs order in NGC's favour and thereby sanction departure from the usual course under which quantification of costs is the product of the assessment process provided for in Part 3.2 Division 11 of the Legal Profession Act 2004; and, second, if so, what that sum should be. 8It is necessary, at the outset, to refer to the relevant statutory provisions. Section 98(1)(a) and (b) of the Civil Procedure Act 2005 provides: "(1) Subject to rules of court and to this or any other Act: (a) costs are in the discretion of the court, and (b) the court has full power to determine by whom, to whom and to what extent costs are to be paid, . . ." 9Section 98(4)(c) provides: "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: . . . (c) a specified gross sum instead of assessed costs, . . ." 10These provisions had counterparts in earlier rules of court and are similar to provisions in force in other jurisdictions. Decisions pre-dating the Civil Procedure Act and decisions from outside New South Wales accordingly provide relevant guidance. 11The approach to be taken to the question whether it is appropriate to make a gross sum costs order was summarised by Giles JA in Harrison v Schipp [2002] NSWCA 213; (2002) 54 NSWLR 738 at [21] - [22] and repeated in a number of other cases: "[21] The power [to make a gross sum order] is not confined, and may be exercised whenever the circumstances warrant its exercise. It may appropriately be exercised where the assessment of costs would be protracted and expensive, and in particular if it appears that the party obliged to pay the costs would not be able to meet a liability of the order likely to result from the assessment ( Leary v Leary (1987) 1 WLR 72; Sparnon v Apand Pty Ltd (von Doussa J, 4 March 1998, unreported); Beach Petroleum NL v Johnson (1995) 57 FCR 119; Hadid v Lenfest Communications Inc [2000] FCA 628). [22] Of its nature, specification of a gross sum is not the result of a process of taxation or assessment of costs. As was said in Beach Petroleum NL v Johnson at 124, the gross sum 'can only be fixed broadly having regard to the information before the Court'; in Hadid v Lenfest Communications Inc at [35] it was said that the evidence enabled fixing a gross sum 'only if I apply a much broader brush than would be applied on taxation, but that ... is what the rule contemplates'. The approach taken to estimate costs must be logical, fair and reasonable ( Beach Petroleum NL v Johnson at 123; Hadid v Lenfest Communications Inc at [27]). The power should only be exercised when the Court considers that it can do so fairly between the parties, and that includes sufficient confidence in arriving at an appropriate sum on the materials available ( Wentworth v Wentworth (CA, 21 February 1996, unreported, per Clarke JA)." 12A later statement of relevant principles appears in the judgment of Einstein J in Idoport Pty Ltd v National Australia Bank Ltd [2005] NSWSC 1273 at [9]: "I note that there are authorities which arguably support the following propositions: ·The purpose of a gross sum costs award is to avoid the expense, delay and aggravation involved in protracted litigation arising out of a taxation (and by an1alogy an assessment): Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119 at 120; Sony Entertainment (Australia) Ltd v Smith (2005) 215 ALR 788 at 812 [190]. ·The discretion to award a gross sum is not confined and may be exercised whenever the circumstances warrant its exercise: Harrison v Schipp (2002) 54 NSWLR 738 at 742 [21]. ·It may appropriately be exercised where an assessment of costs would be protracted and expensive, and in particular if it appears that the party obliged to pay the costs would not be able to meet a liability of the order likely to result from an assessment: Harrison v Schipp (2002) 54 NSWLR 738 at 742-743 [21]-[22]; Vrkic v Otta International [2003] NSWSC 641 at [28]; BC200304171; Sony Entertainment (Australia) Ltd v Smith (2005) 215 ALR 788 at 812 813 [189], [194]-[195]; Sparnon v Apand Pty Ltd unreported, Federal Court of Australia 4 March 1998, von Doussa J; Beach Petroleum NL v Johnson ; Hadid v Lenfest Communications Inc [2000] FCA 628; BC200002428. ·The discretion is particularly suited to complex litigation where the costs of assessing or taxing a bill would be considerable, and the delay and inconvenience involved would also be considerable: Beach Petroleum NL v Johnson at 120; Australasian Performing Rights Association Ltd v Marlin [1999] FCA 1006; BC9905295. ·Specification of a gross sum is not the result of a taxation or assessment of costs: Harrison v Schipp at 743 [22]. The rule contemplates application of a much broader brush approach than would be applied on taxation: Hadid v Lenfest Communications Inc at [35]. It is to be fixed broadly having regard to the information before the Court: Beach Petroleum NL v Johnson at 124. To descend into the level of detail required on taxation or assessment defeats the purpose of a gross sum order: Auspine Ltd v Australian Newsprint Mills Ltd (1999) 93 FCR 1 at 5. ·Nevertheless the power to award a gross sum should only be exercised when the Court considers that it can do so fairly between the parties, and that includes sufficient confidence in arriving at an appropriate sum on the materials available: Wentworth v Wentworth unreported, NSW Court of Appeal, 21 February 1996 per Clarke JA; Harrison v Schipp at 743. ·The approach taken to estimate costs must be logical, fair and reasonable: Beach Petroleum NL v Johnson at 123; Hadid v Lenfest Communications Inc at [27]; Harrison v Schipp at 743. On the one hand the Court must be astute to prevent prejudice to the unsuccessful party by overestimating the costs, and on the other hand must be astute not to cause an injustice to the successful party by an arbitrary 'fail safe' discount on the costs estimate submitted to the Court: Leary v Leary [1987] 1 All ER 261 at 266 per Purchas LJ; Beach Petroleum v Johnson at 123; Charlick Trading Pty Ltd v Australian National Railways Commission [2001] FCA 62 9 ; Auspine Ltd v Australian Newsprint Mills Ltd at 4; Hadid v Lenfest Communications Inc . ·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; the interlocutory processes; the preparation for final hearing and the final hearing: see Smoothpool v Pickering [2001] SASC 13 1 at [12]. ·Expert evidence from a legal costs consultant has been accepted as appropriate to support an application of this kind (see, for example, Beach Petroleum v Johnson and Charlick Trading Pty Ltd v Australian National Railways Commission ). ·The expert's evidence will commonly canvass the following matters: i. that the preparation of an assessment/taxation is likely to be protracted and expensive: Hadid v Lenfest Communications ; ii. the manner in which an assessment or taxation is ordinarily undertaken by a costs assessor. For example, the expert might depose as to the discount ordinarily imposed by a costs assessor: Beach Petroleum v Johnson ; and iii. the complexity and novelty of the proceedings: Charlick Trading at [46]." 13Einstein J stated the principles again at a later stage of the same proceedings, but in somewhat different form ( Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWSC 23 at [9]): "For present purposes it seems convenient to commence with a recitation of the principles which inform the exercise of the discretion: i. the purpose of the rule is to avoid the expense, delay and aggravation involved in protracted litigation arising out of taxation: Beach Petroleum NL v Johnson (1995) 57 FCR 119, Von Doussa J p 265: [following Purchase J in Leary v Leary [1987] 1 All ER 261 who described the purpose of the rule allowing the fixing of a gross sum as 'the avoidance of expense, delay and aggravation involved in protracted litigation arising out of taxation' (All ER p 265)]; ii. the touchstone requires that the Court be confident that the approach taken to estimate costs is logical, fair and reasonable: Beach Petroleum at [16]; iii. the fairness parameter includes the Court having sufficient confidence in arriving at an appropriate sum on the materials available: Harrison v Schipp [2002] NSWCA 213, per Giles JA at [22]; [following ( Wentworth v Wentworth (CA, 21 February 1996 unreported, per Clarke JA) and adopted in Sony Entertainment v Smith (2005) 215 ALR 788 Sony Entertainment v Smith (2005) 215 ALR 788 [20 05] FCA 228; BC200500963 at [19 ] ; at 200500963 at [199]; iv. a gross sum assessment, by its very nature, does not envisage that a process similar to that involved in a traditional taxation or assessment of costs should take place: Harrison v Schipp at [22]; v. the gross sum 'can only be fixed broadly having regard to the information before the Court': Beach Petroleum at 124; [In Hadid v Lenfest Communications Inc [2000] FCA 628 at [35] it was said that the evidence enabled fixing a gross sum 'only if I apply a much broader brush than would be applied on taxation, but that ... is what the rule contemplates'.] vi. nevertheless the power to award a gross sum must be exercised judicially, and after giving the parties an adequate opportunity to make submissions on the matter: Leary v Leary [1987] 1 WLR 72 at 76, and Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119 at 120"; vii. In terms of the necessity for the approach taken to be logical, fair and reasonable, Von Doussa J in Beach Petroleum NL & Anor v Johnson & Ors (No 2) (1995) 57 FCR 119, put the matter as follows, at [16]: On the one hand the Court must be astute to prevent prejudice to the respondents by overestimating the costs, and on the other hand must be astute not to cause an injustice to the successful party by an arbitrary "fail safe" discount on the cost estimates submitted to the Court: Leary v Leary at 265 ..." 14NGC relies on the affidavit and oral evidence of its solicitor, Mr Tassell, plus certain documentary evidence, including spreadsheets showing the "bottom line" figures of numerous memoranda of costs and disbursements rendered to NGC by solicitors and counsel. A direction was made under s 50 of the Evidence Act 1995 allowing evidence of those "bottom line" figures to be adduced in the form of the summaries in the spreadsheets. 15It may readily be accepted in this case that assessment of costs in the usual way will be a protracted and expensive matter. The court file shows that the proceedings were before the court on no fewer than 120 separate days between May 2002 and December 2010. The trial itself, which resulted in the judgment of 5 February 2010, occupied 28 days (unfortunately with several lengthy intervals), following which consequential matters (including the present motion) came before the court on seven occasions. Behind all this, of course, lay the expenditure of a very great deal of time, effort and money by the parties. 16It may also be readily accepted that TBPL and Mr Barr, the parties liable for costs, are in no position to meet the liability, whatever the quantification might ultimately be. TBPL has admitted that it has no assets of any significance other than (a) the fruits of this litigation and (b) certain costs orders already made in its favour in the proceedings. 17As to (a), there will be in reality no such "fruits" since, pursuant to the orders made on 28 September 2010, the restitutionary sum due to TBPL ($699,120) is to be set off against the aggregate of the damages and interest awarded against TBPL on the cross-claim ($163,378) and TBPL's liability for costs which, in every conceivable eventuality, must exceed the difference between $699,120 and $163,378. As to (b), there were a few interlocutory costs orders in favour of the plaintiffs, including, in particular, an order of 8 January 2008 and an order in relation to the 2009 security for costs application. But those interlocutory costs will not be great, at least in the context with which I am dealing. 18In the case of Mr Barr, there is an admission that he has no real property in Australia and that he does not have the financial means to pay $750,000. 19Given the financial circumstances of the parties liable for costs, as just described, it is relevant to quote the following passage in the judgment of Lehane J in Hadid v Lenfest Communications Inc [2000] FCA 628 at [25]: "How, then, does evidence of the financial position of a party liable under a costs order fit into that picture? In my view it does so substantially in the way suggested by the sixth respondent. Where the amount of costs likely to be payable is very substantial and where, in any event, taxation is likely to be drawn-out, burdensome and expensive, the burden borne by the successful party is aggravated if it appears that, in any event, the party obliged to pay costs may not be able to meet a liability of the order likely to be involved. For that reason, in my view, in a case where the liability for costs may be expected to be large and a taxation complex and expensive the financial position of the party liable is a matter relevant to be taken into account in exercising the discretion." 20For two related reasons, therefore - the size and complexity of the assessment task and the financial disabilities of the parties liable for costs - this is an appropriate case for a gross sum costs order, provided that the court has at its disposal the means of doing justice between the parties by fixing a proper sum. As to that, it is necessary to bear in mind what was said by von Doussa J in Beach Petroleum NL v Johnson (1995) 57 FCR 119 at 123: "[B]efore exercising the power to fix a gross fee, the Court should be confident that the approach taken to estimate costs is logical, fair and reasonable. On the one hand the Court must be astute to prevent prejudice to the respondents by overestimating the costs, and on the other hand must be astute not to cause an injustice to the successful party by an arbitrary 'fail safe' discount on the cost estimates submitted to the Court." 21Although the court, upon an application of this kind, does not attempt to emulate a costs assessor or taxing master and applies "a broader brush" than would be applied on assessment, it must be confident that the material before it enables it to make a sufficiently reliable calculation or estimate of an appropriate costs sum. And a decision as to what is an appropriate sum will depend to a large extent on reaching some kind of view of what the outcome on assessment might be. 22It is on the question of the sufficiency of the material placed before the court that the main submissions in opposition to NGG's application were made by Mr Dawson. His submissions in that respect were adopted by Mr Lazarus. 23I turn therefore to the evidence. Mr Tassell has deposed that NGC's actual costs and disbursements, excluding those of the present motion and NGC's unsuccessful security for costs application in 2009, are at least $3,221,233 made up of: (a) Hickey Lawyers, counsel and experts' fees and disbursements up to 10 September 2003 - $244,802; (b) Hickey Lawyers fees and disbursements October 2003 to July 2009 - $380,524; (c) Jackson Smith's costs and disbursements - $34,478; (d) Verekers' costs and disbursements - $1,097,956; (e) Counsel's fees March 2005 to date - $1,307,374 (f) Expert and professional witnesses' fees - $156,099. 24Mr Tassell, whose qualification as an experienced litigation solicitor is not questioned, has expressed an opinion that, if NGC's costs were assessed, it would be likely to be awarded between 65% and 75% of the actual outlays, that is, something between $2,093,800 and $2,415,925. 25It is submitted on behalf of TBPL that Mr Tassell's evidence constitutes an insufficient basis for a decision to make the order NGC seeks. There are several aspects to that submission. 26First, it is noted that NGC has not attempted to place before the court an opinion of a costs assessor or other costs expert unconnected with the proceedings (Mr Tassell, of course, was NGC's solicitor in the proceedings from a point in 2003 and, before that, the city agent of Hickey Lawyers who acted as NGC's solicitors). As Mr Dawson pointed out, in most of the cases in which a court has been asked to make a gross sum costs order, the application has been supported by an opinion of such an unconnected expert as to the likely outcome on assessment or taxation. 27It is clear, as Mr Dawson conceded, that the fact that an expert witness has a connection with a party does not destroy the expert status or the capacity to give expert testimony. He referred to Collins Thomson Pty Ltd v Clayton [2002] NSWSC 366 where it was held that expert evidence of a company liquidator in proceedings to which he and the company were parties satisfied the requirements of s 79 of the Evidence Act despite the obvious lack of independence. It is commonplace for liquidators, as expert insolvency practitioners, to file reports on solvency in recovery proceedings they bring and for those reports to be admitted into evidence. 28While no issue of inadmissibility arises as to Mr Tassell's opinion evidence, his connection with NGC as its solicitor over a long period is relevant to the weight that the evidence should be given in areas where it is questioned: see the observations of Ormiston JA in FGT Custodians Pty Ltd v Fagenblat [2003] VSCA 33. There is an unavoidable apprehension that someone in a position such as that occupied by Mr Tassell, despite the very best intentions of conscientiousness in giving objective and dispassionate evidence, might be unconsciously influenced by loyalty to his client. Such an apprehension will not arise in relation to evidence given by an unconnected and independent expert. 29Reliance by NGC on Mr Tassell's evidence alone and its deliberate decision not to favour the court with an appraisal of the relevant costs questions by an independent costs expert is a matter that does, to some extent, militate against the court's ability to proceed with confidence to come to a just conclusion on the matter before it. I hasten to say, however, that that factor is by no means decisive. 30I should add, in this connection, that, as Mr Neil SC pointed out on behalf of TBPL, Harrison J, in Hamod v State of New South Wales [2009] NSWSC 756, proceeded to make a gross sum costs order on the basis of evidence given by solicitors who had been involved in the proceedings. But as Mr Dawson observed, those solicitors were employed by the Crown Solicitor's Office and accordingly had no financial interest in the costs quantification; added to which one of them had been employed by the Law Institute of Victoria in the Costs Advisory Section and had, between 1985 and 2000, practised as a costs consultant. That sets the evidence of those solicitors in that case apart from Mr Tassell's evidence in this case. 31The second matter to which Mr Dawson referred is the quality of the evidence emerging from the summaries in the spreadsheets mentioned at paragraph [14] above. 32The summaries in question are annexures to two affidavits of Mr Tassell, one of 12 May 2009 (originally read upon the security for costs application heard in that year) and the other of 2 July 2010. It is necessary to describe them briefly. 33Annexure B to both the 2009 affidavit and the 2010 affidavit is headed "Hickey Lawyers' Memoranda". There are two columns, one headed "Date" and the other "Amount". An amount stands against each of 20 dates ranging from 17 June 2002 to 10 September 2003. There is then a total of $244,802.74. Mr Tassell states in the affidavit that, on 6 March 2009, Hickey Lawyers provided him with "copies of the summary pages of their memoranda of fees and disbursements in respect of the Lease proceedings from their commencement up to 10 September 2003" and that the annexure B "is a summary of those memoranda of fees and disbursements". 34Annexure C to the 2009 affidavit is headed "Legal Bills (Since Leda's Acquisition on 10 September 2003)". The annexure is arranged in columns showing amounts for Verekers (Mr Tassell's firm), Hickey Lawyers, Jackson Smith, Mr Einfeld QC, Mr Dubler SC and "Misc" (for "miscellaneous"). For each "Misc" amount, a service provider is identified, sometimes an expert and, in many cases, a barrister other than Mr Einfeld and Mr Dubler. 35Mr Tassell explains in his affidavit how the annexure C was prepared. It is based on another spreadsheet which, Mr Tassell is informed by an employee of Leda (NGC's holding company), was prepared and progressively updated by other employees of Leda from September 2003 so as to record legal costs and disbursements incurred by NGC in these proceedings from 10 September 2003. Mr Tassell says that he examined the Leda spreadsheet and reconciled it to Verekers' accounting records in respect of costs and disbursements related to these proceedings, with the result that: "I am satisfied that the spreadsheet [ie, the annexure C] reconciles with the accounting records maintained by my firm except in the case of certain witness expenses which were invoiced directly by those witnesses to Narui [ie, NGC], being the invoices rendered by Bolster & Co, Tony Hart and Darryl Anderson." 36In his 2010 affidavit, Mr Tassell explains the genesis of the spreadsheets that are the annexures C, D, E and F to that affidavit. These deal with costs and disbursements rendered by Verekers (annexure C), counsel's fees (annexure D), experts' fees (annexure E) and "external disbursements" (annexure F) - the last including items such as postage, telephone, facsimile, courier, "registration", court fees, transcript, "agents" and "T&A". 37Mr Tassell explains that annexure C was initially prepared by DSA Cost Consultants Pty Ltd (which company he calls "the consultant"), a costs consultant retained to review and assemble, in consultation with Mr Tassell himself, the records kept by NGC and Verekers of NGC's costs and disbursements incurred in these proceedings in the period of Verekers' involvement (Mr Tassell also describes the records that were reviewed by the consultant). 38The annexure C spreadsheet initially prepared by the consultant to summarise Verekers' memoranda of costs and disbursements issued in respect of these proceedings was then reviewed by Mr Tassell who made any necessary correction (particulary to eliminate aspects related to unsuccessful security for costs applications) and observed that the entries were otherwise accurate. 39In relation to the annexure D to the 2010 affidavit, Mr Tassell does not refer specifically to anything done by the consultant but does refer to elimination of items related to security for costs applications. 40The spreadsheets constituting the annexures E and F to the 2010 affidavit were first prepared by the consultant and then reviewed and corrected by Mr Tassell. 41The material placed before the court by NGC in the form of the several spreadsheet summaries shows no more than dates and amounts. There was a submission that, because summaries were admitted pursuant to s 50 of the Evidence Act , the court, in reality, had before it the whole of the content of the underlying documents. I do not see how that can be so in any practical sense. The court can glean from the summaries only what they show. 42Given the nature and content of the summaries, precisely what was done to warrant the charging of a particular fee or the incurring of a particular disbursement is left entirely unexplained by the evidence adduced by NGC. Any finding that a particular sum was properly charged or incurred in connection with or for the purposes of these proceedings can thus be a product of no more than evidence of the charging or incurring and Mr Tassell's assertion of connection or purpose. 43As I have said, a court asked to make a gross sum costs order does not emulate a costs assessor and "a broader brush" is to be applied. It is nevertheless instructive to note certain aspects of the costs assessment process as it relates to party/party costs. 44Sub-sections (1) and (2) of s 364 of the Legal Profession Act 2004 set out criteria for assessment of costs the subject of an order of a court or tribunal: "(1) In conducting an assessment of legal costs payable as a result of an order made by a court or tribunal, the costs assessor must consider: (a) whether or not it was reasonable to carry out the work to which the costs relate, and (b) whether or not the work was carried out in a reasonable manner, and (c) what is a fair and reasonable amount of costs for the work concerned. (2) In considering what is a fair and reasonable amount of legal costs, a costs assessor may have regard to any or all of the following matters: (a) the skill, labour and responsibility displayed on the part of the Australian legal practitioner or Australian-registered foreign lawyer responsible for the matter, (b) the complexity, novelty or difficulty of the matter, (c) the quality of the work done and whether the level of expertise was appropriate to the nature of the work done, (d) the place where and circumstances in which the legal services were provided, (e) the time within which the work was required to be done, (f) the outcome of the matter." 45Each of the criteria in paragraphs (a) and (b) of s 364(1) is, as it were, a stand-alone criterion, in the sense that it is not further explained or elaborated. The s 364(1)(c) criterion is explained or elaborated in s 364(2). 46A n applicant for assessment of party/party costs under the Legal Profession Act must provide the information called for by Form 3 Application for Assessment of Party/Party Costs: "(a) Details of the proceedings in respect of which the costs are payable, including the identity of the parties to the proceedings and of their legal representatives: (b) The total amount of costs payable: (c) The relevant work done in those proceedings and the period over which that work was done: (d) The identity of the person/s who did that work (including the position of the person/s eg partner, associate, etc); (e) The basis on which the costs have been calculated and charged (whether on a lump sum basis, an hourly rate basis, an item of work basis, on a part of proceedings basis or other basis); (f) The facts relied on to justify the costs charged as fair and reasonable by reference to the above, the practitioner's skill, labour and responsibility, the complexity, novelty or difficulty of the matter, the quality of work done or any other relevant matter:" 47Although the court is not expected to act as a costs assessor would act, it must, of necessity, pay attention to certain fundamental matters. For example, on what basis were solicitors' costs and counsel's fees calculated and charged? Was a time-based system adopted; and, if so, what were the hourly rates for the several professionals who spent time on the matter? Was there, in any of the bills, an additional item for "care, skill and responsibility"; and, if so, on what basis was that calculated? What were the terms of the respective retainers and costs agreements? These are important considerations in any decision about amounts that should be regarded as reasonable remuneration of legal practitioners. 48In the 2005 Idoport decision (see paragraph [12] above), Einstein J pointed to another important consideration. A ny lump sum 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, the interlocutory processes, the preparation for final hearing and the final hearing. There must therefore be adequate information about all these matters, the sums connected with them and the calculation of those sums so that the court can make such a review. 49I am not satisfied that the material upon which NGC bases its application for a gross sum costs order is sufficient to permit any reliable quantification to be made. All that is proved as to NGC's costs burden is that certain sums were actually charged by and paid to solicitors, barristers, experts and other service providers and that, according to Mr Tassell's view of matters, all such outlays were relevantly connected to these proceedings. There is nothing before the court that permits the court to confirm the correctness of that view; and it is significant that, in cross-examination, Mr Tassell was prepared to accept that the view might not be reliable in certain respects. 50In relation to Hickey Lawyers' bills, for example, Mr Tassell conceded in cross-examination the possibility that they may include costs related to criminal proceedings against Mr Barr and NGC's involvement in those proceedings as a person subpoenaed to produce documents. He was simply unable to say whether Hickeys had separately charged for those matters, unrelated as they were to these proceedings. Mr Tassell also accepted that he had not appropriately taken into account the effect of an order for costs thrown away made by Einstein J upon an amendment application determined in 2008; that fees of some experts not called as witnesses by NGC had been included in the amounts taken into account by him; that, for a very considerable period up to the second week of the trial, three counsel had been employed in circumstances where there must be substantial doubt as to whether fees of a third would be allowed on assessment; that he had himself performed (and charged at his partner charge-out rate) tasks that could properly have been performed by a more junior solicitor; and that work done in preparing amended pleadings in respect of which leave to amend was refused had been included. 51Mr Tassell made these concessions frankly and candidly. They emphasise the unsatisfactory nature of the material on which the court is invited to make its decision. A response - but, in my view, an irrelevant response - is that these and like matters are, as it were, taken care of by the discount factor of 25% to 35% that NGC accepts as a common result of the assessment process. 52The assumption or application of a discount factor is, however, beside the point until a reliable picture has been obtained of the sums properly attributable to the several phases and aspects of the proceedings. The court must, in the first place, see that a system of quantification has been adopted which can confidently be expected to ensure that only items properly connected with the proceedings are claimed, that duplication is avoided and that, so far as can reasonably be judged, items very likely to be disallowed on assessment are excluded. And fundamentally, of course, the court needs to see the basis of charging, the rates applied and the method by which the qualification has been made. 53The material presented in this case does not fulfil these needs. 54I return to the cross-examination of Mr Tassell. Dealing specifically with the matter referred to in s 364(1)(b) of the Legal Profession Act , he gave the following evidence: "Q. I suggest to you that there is nothing in your affidavits, including any exhibits or annexures to those affidavits, that would assist the Court in determining whether or not any particular item of work was carried out in a reasonable manner? A. Well, apart from the implication I'm an experienced solicitor who did this work and wouldn't, hopefully, do it in an unreasonable manner, you're quite right. There's nothing specific in the affidavit about it." 55This serves to confirm the reservations already expressed. 56Because the material on which NGC relies upon this application is insufficient to ground a well-informed exercise of the discretion to make a gross sum costs order, the court will not make such an order; and this is so despite the matters of complexity of costs assessment and impecuniosity of the plaintiffs liable for costs that would otherwise make such an order appropriate. 57This conclusion makes it unnecessary for me to deal with a particular submission made by Mr Lazarus on behalf of Mr Barr. I shall nevertheless address it briefly. 58Mr Lazarus's submission emphasises the discretionary nature of the power to make a gross sum costs order. He says that, because Mr Barr is impecunious, the effect of a gross sum costs order would be to stultify an appeal that he intends initiating (the substance of the appeal will be that the court erred in making Mr Barr, along with TBPL, jointly and severally liable for NGC's costs of the proceedings: see Tim Barr Pty Ltd v Narui Gold Coast Pty Ltd [2010] NSWSC 1106 at [36] to [42]). That being so, it is submitted, the order should not be made. 59I would not have accepted that submission. The case law makes it clear, as already mentioned, that apparent inability of the party liable for costs to meet the liability is a factor in favour of the making of a gross sum costs order. The contrary proposition at the centre of the submission is therefore not sustainable. 60In any event, the effect of a gross sum costs order is simply to quantify a liability already existing because of the adverse costs order. The gross sum order produces the same result as the assessment process. A liability in a sum yet to be fixed becomes a liability for a fixed sum. It is, to say the least, a novel suggestion that the costs assessment process should be stayed just because an impecunious party liable for costs intends to appeal. 61Furthermore, there is no clear basis on which to conclude that any appeal will be stultified. The possibility that Mr Barr may become bankrupt is not of itself conclusive. 62Finally, the proper occasion for argument of any such issue of stultification of appeal would be, in my opinion, an application for a stay of a combination of the adverse costs order and the gross sum costs order. Any question of stultification goes to due process in relation to an appeal, not to perfection of the costs liability at first instance. 63NGC's notice of motion filed on 25 November 2010 is dismissed with costs.