Wakim v State of New South Wales

Supreme Court of NSW|2017-10-03|Before: Fagan J

Solicitors: Rebecca Whittle, Henry Davis York Lawyers (defendant/applicant) File Number(s): 2013/262708

Judgment

On 29 May 2017 judgment was entered for the defendant in these proceedings and it was ordered that the plaintiff pay the defendant's costs. It was further directed on that day that any notice of motion for a special costs order should be served by 5 June 2017. On the latter date the defendant filed a notice of motion seeking an order pursuant to s 98(4)(c) of the Civil Procedure Act 2005 (NSW) that the plaintiff pay the defendant's costs in a specified gross sum. That application was heard on 3 October 2017, when affidavits of the defendant's solicitors deposing to the quantum of costs were read. Counsel supplied written submissions dated 6 July 2017 in support of a gross sum order and these were supplemented in oral argument.
Written submissions in opposition to the making of a gross sum costs order were provided to the court by Mr George of counsel, as amicus curiae in the interests of the plaintiff. He appeared at the hearing of the defendant's notice of motion on 3 October 2017 as amicus and made additional oral submissions. No evidence was tendered or led on behalf of the plaintiff.

The history and nature of the proceedings

The plaintiff commenced the proceedings by a statement of claim filed 29 August 2013, in respect of events said to have occurred on and after 29 August 2010. He alleged that six New South Wales police officers had committed a series of torts against him including battery, false imprisonment, negligence and malicious prosecution. He claimed damages for physical and psychiatric injury. By its defence the defendant denied the tortious conduct and pleaded lawful justification for the plaintiff's imprisonment. Statutory powers were relied upon. The defendant denied that the plaintiff was entitled to any damages.
In accordance with the Court's directions the defendant prepared witness statements to answer the plaintiff's allegations. Although the plaintiff himself never complied with the Court's directions to provide his own statement, the defendant had sufficient particulars of the allegations to be able to have its witnesses respond. The defendant also obtained reports from a psychiatrist, a neuropsychologist, an orthopaedic surgeon, a specialist in occupational medicine and an occupational therapist. Expert opinions in these disciplines were necessary by way of response to the particulars of injury alleged by the plaintiff and to medical experts' reports which the plaintiff served.
The plaintiff's claim was dismissed without a hearing on the merits. He failed to attend the hearing on 29 May 2017 and no evidence was tendered to support his claim: Wakim v Kolotouros; Wakim v State of New South Wales [2017] NSWSC 697. Throughout their life the proceedings were characterised by repeated, protracted and unjustifiable delays on the part of the plaintiff including many breaches of the Court's interlocutory orders. Parts of this history are summarised in the judgment cited and in two other unreported decisions of 5 April 2017. The plaintiff's defaults attracted twelve interlocutory costs orders against him, made between 20 August 2014 and 4 May 2017.

Principles governing when a gross sum costs order should be made

In Harrison v Schipp (2002) 54 NSWLR 738; [2002] NSWCA 213 Giles JA at [21] - [22] held that the discretion to award a gross sum under s 98(4)(c) of the Civil Procedure Act may be exercised where the assessment of costs would be protracted and expensive and, in particular, if it should appear that the party obliged to pay the costs would not be able to meet the liability likely to result from the assessment. His Honour stated the following limitation at [22]: 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.
Giles JA's statements of principle were made with respect to predecessor legislation to the Civil Procedure Act. On a number of subsequent occasions the principles have been held equally applicable to s 98(4)(c). See for example Hamod v State of New South Wales and Anor [2011] NSWCA 375 at [813]. In that case the court said (citations omitted): [817] The exercise of the power … 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 … 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 … . [818] The power may also be exercised where a party's conduct has unnecessarily contributed to the costs of the proceedings, especially where the costs incurred have been disproportionate to the result of the proceedings…
It has been said that there will be a further consideration tending to favour the award of a gross sum if the party against whom costs are to be awarded is self represented: Chaina v Presbyterian Church (NSW) Property Trust (No. 26) [2014] NSWSC 1009. In that case Davies J found (at 50): The difficulties that attended the hearing of the substantive proceedings when the plaintiffs were unrepresented was significant. The position would be magnified in any costs assessment process, not the least reason for which would be that the plaintiffs are unlikely to be able to engage any form of advisor to assist them through the process.
All of these considerations apply to the present proceedings, with the exception that up until judgment was entered against him the plaintiff was represented, although that is no longer the case. The proceedings were complex in substance from the outset because multiple factual allegations were made by the plaintiff and he pleaded multiple causes of action. The matter was made still more complex, procedurally, by the inefficient, non-compliant and uncooperative manner in which the plaintiff conducted it. His history in that regard foretells that the process of costs assessment, if it were to be embarked upon in the usual way, would be similarly inefficient and unnecessarily protracted.
For the purposes of the defendant's notice of motion the course of the proceedings through interlocutory stages has been described in detail in affidavits of Ms Prudence Egan and Ms Maria Panos. I have previously been made aware of much of that information in connection with the application of the defendant for the proceedings to be dismissed for want of prosecution, which I heard on 4 April 2017 and decided on 5 April 2017. I have been involved in events in the litigation subsequent to 5 April 2017 as I managed the case up to the listed hearing date on 29 May 2017, and have dealt with it since.
Some responsibility for the shambolic fashion in which the plaintiff's case was conducted in interlocutory stages may lie with his solicitor at the time, who is no longer retained. However, having had occasion to examine the whole course of the interlocutory record for the purpose of determining the defendant's application for dismissal for want of prosecution, I am satisfied that the plaintiff himself is substantially to blame for the drawn out, dysfunctional and wasteful course the case has taken.
At the hearing of the defendant's notice of motion on 3 October 2017 an indefinite adjournment was sought on the basis that the plaintiff needed representation by a solicitor but could not afford one. This is a fair indication the plaintiff will probably not be able to pay whatever costs are awarded now, either gross sum or assessed. If the defendant should be put through a process, which would likely be extended and convoluted, of having its costs assessed it will suffer not only delay and diversion of resources but further irrecoverable expense.

Principles upon which the gross sum is quantified

The defendant's quantification of its costs is supported by an affidavit of Rebecca Whittle sworn 6 June 2017. Annexed to that affidavit are the invoices rendered to and paid by the defendant. These provide a great deal of detail regarding the work carried out by the defendant's solicitors, counsel and experts.
I am not required to review the invoices and schedules of itemised costs and disbursements as a costs assessor would do. Rather, a broad brush approach is required: Harrison v Schipp. The approach must be logical, fair and reasonable; it may involve an impressionistic discount of the costs actually incurred or estimated, in order to take into account the contingencies that would be relevant in any formal costs assessment: Hamod v State of New South Wales at [819] - [820].

Analysis of the evidence of quantum

The defendant's total costs have been analysed, in Ms Whittle's affidavit and in submissions, in dissections which enable the Court to make a logical and fair assessment of a reasonable gross sum. When broken down between the various professional service providers, the costs up to 6 June 2017 exclusive of GST and before any discount is applied, have been proved in the following amounts (references "RW" are to paragraphs of Ms Whittle's affidavit): Solicitors professional costs (RW 4 - 7) 241,834.00 Counsel's fees (RW 8 - 12) 80,216.33 Disbursements (RW 13 and 25) 34,629.15 Total 356,679.48
Ms Whittle arrived at a total which differs from this by $4,500 but it is not necessary to identify the source of the discrepancy in view of the broad approach which is required to be taken and the discounting to be applied. The rates for solicitors and counsel from which these amounts are derived appear reasonable. It is acknowledged by Ms Whittle, herself an experienced litigation solicitor, that the overall total is far higher than normal for a case of this type. The inefficient course of the proceedings due to fault of the plaintiff in my view explains that.
A dissection of most of the solicitors professional costs has been provided in the defendant's submissions, by category of work. It is as follows: Pleadings: Reviewing pleadings, request for further and better particulars, considering response, defence, cross-claim against Mr Kolotouros $7,020.00 Advice: Providing advice to our client $33,874.50 Plaintiff's evidence: Tasks in relation to medical evidence served by the Plaintiff $10,048.50 Directions and motions: Time and cost spent in relation to all directions hearings and hearings of notices of motion $84,026.00 Preparing lay witnesses evidence for defendant: Time and cost spent in relation to conferring with all Police witnesses and non-Police lay witnesses $25,113.50 Documentary evidence: Time and cost spent obtaining and reviewing documentary evidence relevant to the proceedings $14,973.50 Final hearing: Time and cost spent preparing for final hearing $32,239.00 Conclaves: Time and cost spent arranging expert conclaves (court-ordered) $2,094.00 Expert evidence: Time and cost spent in obtaining medical evidence on behalf of defendant $15,802.00 Pursuing plaintiff's solicitor generally: Time and cost spent in relation to generally pursuing Mr Ardino for responses to correspondence $3,075.50 Allegations in Statement of Claim : Time and cost spent in relation to the plaintiff's unsubstantiated allegation that Senior Constable Schirmer and the plaintiff had an intimate relationship $1,092.00 Other: Time and cost spent considering strategy, research, attempting settlement negotiations, liaising with parties and witnesses generally $6,236.00 TOTAL $235,594.50

In broad terms these figures appear reasonable for the respective categories of work, taking into account the complexity of the case the defendant had to meet and the procedural inefficiency imposed by the plaintiff.

Plaintiff's objections to the defendant's quantification

Junior counsel of appropriate seniority for the brief was engaged by the defendant from September 2014 to February 2017. From the latter date he became unavailable, having accepted an appointment to a State commission. A replacement junior, of somewhat less seniority, was briefed to conduct the application to dismiss the proceedings which had been listed for April 2017. Mr George on behalf of the plaintiff challenged the reasonableness of the defendant having included solicitors costs and counsel's fees of the rebriefing. That is an ordinary incident in the cost of litigation which continues over three years.
When the defendant's notice of motion for dismissal of the proceedings was resolved on 5 April 2017 by the Court fixing the case for final hearing seven weeks later, the defendant considered it necessary to engage for that hearing a junior of greater standing at the bar and, in view of the shortness of time for preparation, to retain counsel who had appeared on the motion for dismissal. Mr George submits that this involved duplication for which the plaintiff should not be responsible. I disagree. The course taken by the defendant was reasonable. There was a need to deal with a further series of defaults and delays by the plaintiff in the period between 5 April and 29 May 2017. It was reasonable to engage a more senior barrister to concentrate on the preparation of the matter substantially for hearing whilst other counsel and the solicitors dealt with the plaintiff's ongoing non-compliance regarding the convening of expert conclaves and the like.
Mr George submits that the amount claimed by the defendant is very much greater than the total of costs which has been quantified by the solicitors for Mr Kolotouros, against whom the plaintiff brought another claim for damages which has been dealt with through interlocutory stages in conjunction with the present case and which was listed for hearing conjointly. He submits that this difference should cause the Court to doubt that the defendant's total figure is justified. I do not place any weight on this consideration because the cases are markedly different. As already mentioned, the plaintiff's case against the defendant involved multiple causes of action and a significant number of witnesses. A significant forensic inquiry into police records would have been required in order to defend the case law against the State, whereas the case against Mr Kolotouros involved a single cause of action, only a small number of eyewitnesses and no official records.

Assessed gross sum

The defendant submits that it is reasonable to apply a discount of 15% to the solicitors costs but no discount to counsel's fees or to the other disbursements. The 15% reduction would produce a figure for solicitors' costs of $202,550 and a total, taken together with undiscounted counsel's fees and disbursements, of $320,400.
I consider that the discount should be nearer to 20% to allow for the inherent uncertainty of estimation of such a substantial sum of costs incurred in the conduct of the case over three years, with the unusual feature that most of the work was interlocutory in nature. I will allow slightly over $195,000 for solicitors costs and assess the gross sum at $310,000.
This does not include the costs of the defendant's notice of motion filed 5 June 2017, including costs of the affidavits in support of a gross sum costs award being made and the affidavits deposing to the quantum. In the figures substantiated by Ms Whittle's affidavit which have resulted in my assessment of $310,000 no fees or disbursements connected with the application for a gross sum costs order were included.

Order

The orders of the Court are: 1. Pursuant to s 98(4)(c) of the Civil Procedure Act 2005 (NSW) the costs payable by the plaintiff to the defendant under order 2 made 29 May 2017 are to be paid in the gross sum of $310,000. 2. The plaintiff is to pay the defendant's costs of the defendant's notice of motion filed 5 June 2017.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 02 November 2017

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Judgment (11 paragraphs)

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