Woolf v Brandt

The plaintiff seeks an adjournment

1. On 20 June 2023, the plaintiff wrote to the Court seeking an adjournment of the costs application to "a future date" (unspecified), on the basis that he was without representation, the costs issue was complex and he had work commitments on 22 June 2023. He asked for the costs argument to be moved "into the future" for these reasons. The solicitor for the defendant replied: "We do not consent to an adjournment of the hearing on Thursday. The plaintiff has had notice of the application since 8 June and was provided with the invoice setting out the costs that day. Given the total costs the subject of that bill are a small amount of $16,940, we submit it would be unfairly onerous on the defendant to prolong these proceedings for any longer. That being said, we can assure the plaintiff that if an application for leave to appeal or appeal is filed in time, then we will not seek to enforce any costs order until the final determination of that application/appeal."
2. On 20 June 2023, the plaintiff replied as follows: "Dear Ms Richardson, Thank you for your consent to delay enforcement of the costs order until the final determination of the appeal or application for an appeal. Would you please consent to an adjournment for one week? As you are aware, your 'notice' on 8 June was served to me late on Thursday 8th June, was met by me with a request for more time, I was still reviewing the judgement [sic] and considering an appeal which had a direct bearing on your upcoming application, and you gave me a particularly onerous deadline (to consent to the amount in the invoice) of approximately 34 hours in circumstances where I was without proper legal representation. The application itself was only initiated on Tuesday 13th June when you wrote to Her Honour's Associate. Thus I have had less than a week. Another reason to ask for a delay is I am still awaiting a transcript of the last motion. An audio transcript was requested on 8th June, and Her Honour's office advised the transcript people that I should order a written transcript. A request for a written transcript was requested on 9th June, with urgency. To date, the transcript has not yet been completed. The transcript is relevant to a couple of elements, for example the Defendant's alleged impecuniosity, which was not written in submissions or your affidavit, but was mentioned during oral submissions, which goes to the Defendant's ability to pay costs should he lose an appeal, or should we re-commence proceedings for the struck-out Second Matter Complained Of, and be successful. On that point, should we recommence proceedings for the struck-out Second Matter Complained Of, the Defendant may be willing to make a settlement offer to quash any costs order. Thus another reason for postponement is further time in which to try and settle this dispute out of court. These are some of the reasons for a postponement that I can give as a layperson. Upon engaging legal representation on the matter there may well be more. As you can see, there are judicious reasons why a postponement is best in the interests of justice. Finally, if I were to attend on Thursday as a self-represented litigant, it would be my intention to request a postponement, for at least the reasons I have provided, possibly more. I once again implore you to consent to a postponement for one week."
3. The plaintiff appeared for himself in the hearing before me, and provided written submissions in support of his application for an adjournment. After reading those submissions and hearing further oral submissions, it became clear that what the plaintiff wished to do was to go behind both costs orders and to seek that they be either reduced or set aside in their entirety on the basis of his asserted success in the applications before the court. I confirmed to the plaintiff that, having heard these additional submissions, that I proposed to refuse his application, and that I would give reasons for this in my judgment.
4. Those reasons are as follows. First, the plaintiff has been on notice of the costs issues arising from the orders I made on 14 December 2022 and 7 June 2023 for sufficient time to be able to retain legal representation on these straightforward issues. Second, if he proposes to seek leave to appeal, it is to everyone's benefit that the costs orders for the proceedings be in place, because this judgment can be included in the application for leave. Third, the plaintiff's position can be protected, while he is lodging his appeal, by stay orders for the necessary duration of time. Fourth, the sums of money involved in these costs are very small and would be outweighed by the costs of further adjournments. Fifth, a delay of at least six weeks would be required, in part because of my absence from the court on leave from 23 June 2023, and in part because the transcripts the plaintiff has ordered will take about six weeks to prepare. Sixth, and perhaps most importantly, finality in litigation is an essential part of fairness in the implementation of justice; that is particularly the case in these proceedings, given their history and the degree of emotional distress under which both parties have been labouring.
5. I next consider the application for a gross sum costs order for the sum of $13,917.75.

The relevant statutory provisions and principles of law

1. Section 98(4) of the Civil Procedure Act 2005 (NSW) provides: "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."
2. The factors to take into account are set out in Pirovic v Barbieri [2021] NSWSC 1460 at [22]: "The relevant principles are as follows: (1) that the discretion may be exercised "where the assessment of costs would be protracted and expensive and, in particular, if it appeared that a party obliged to pay the costs would not be able to meet a liability of the cost order likely to result from that assessment" (Hamod at [813]); (2) that the Court should exercise the discretion when "it considers it can do so fairly between the parties and has significant confidence in arriving at an appropriate sum on the material available" (Hamod at [813]); (3) that the discretion should be exercised judicially and only after giving the parties an opportunity to make submissions and that the Court needs to be confident that the approach taken in respect to the estimation of costs is "fair, logical and reasonable" (Hamod at [815]); (4) that in exercising the discretion under s.98(4), the Court should take into account "more general considerations", being those reflected in s.56(1), 57(1)(d) and 60 of the CPA, which include: (a) the relevant responsibility of the parties for the costs incurred; (b) the degree of any disproportion between the issues litigated and the costs claimed; and (c) the complexity of proceedings in relation to the costs incurred; and (d) the capacity of the unsuccessful party to satisfy any costs liability (Hamod at [816]); (5) that it is appropriate to exercise the discretion in s.98(4) where the costs have been incurred in a lengthy or complex case and it is desirable to avoid the expense, delay and aggravation likely to be involved in costs assessment by the course of the "likely length and complexity of the assessment process" or from the "likelihood that additional costs of formal assessment would disadvantage the successful party because of the likely inability of the unsuccessful party to discharge the costs liability" (Hamod at [817]); (6) that the power may be exercised where a party's conduct has "unnecessarily contributed to the costs of proceedings, especially where the costs incurred have been disproportional to the result of the proceedings" (Hamod at [818]); (7) that the assessment in support of a lump sum order 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 process, the preparation for final hearing and the final hearing (Hamod at [819]); (8) that the Court is not required to undertake a detailed examination of the kind that would be appropriate to taxation or formal costs assessment (Hamod at [819]); (9) that the costs order should be based upon "an informed assessment of the actual costs having regard to the information before the Court (for example by relying on cost estimates or bills)" (Hamod at [820]); (10) that the assessment of a lump sum cost order 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 an informal costs assessment" (Hamod at [820]); (11) that the Courts have typically applied a discount in respect to legal costs on a gross sum basis (Hamod at [814])."
3. The need for justice to be "just, quick and cheap" (s 56 of the Civil Procedure Act 2005 (NSW)) and for costs to be proportionate (s 60) was noted in Hamod v State of New South Wales (No 13) [2009] NSWSC 756 as a paramount factor. Harrison J stated at [18]: "The first defendant submitted that the making of a specified gross sum costs order in all of the circumstances would be in accordance with the overriding purpose expressed in s 56 of Act. For example, Palmer J in Hall v Poolman [2007] NSWSC 1330 at par [392] said the following: "[392] In applying the wide discretion conferred by CPA s.98 the Court must have regard to the principle that the purpose of the Act and the Rules is to promote the just, quick and cheap resolution of the real issues in proceedings in such a way that the cost to the parties is in proportion to the importance and complexity of the matter in dispute: CPA s.56 (1), (2), s.60…"
4. These observations are of particular relevance where the costs sum in question is as small as the sum sought here.
5. An additional for avoiding the costs assessment process in the present case is the level of emotional turmoil between the parties, which make it more likely than not that "expense, delay and aggravation" will occur, as Fullerton J noted in Pritchard v Fryer (No 2) [2018] NSWSC 261 at [13]: "Having considered the material and the submissions of the parties, I am satisfied that an order should be made pursuant to s 98(4)(c) requiring the plaintiff pay the defendant's costs on a gross sum basis. I am satisfied that Mr Pritchard's conduct in bringing these proceedings gives rise to a real risk that "satellite litigation" may occur in respect of costs, and that the costs assessment process could for that reason prove to be protracted and expensive. I am also satisfied the amount of the costs order fairly represents the defendant's costs incurred in defending proceedings in this Court."
6. In the circumstances, these are appropriate proceedings and circumstances for the making of a gross sum costs order.

Indemnity costs?

1. The defendant seeks costs on the ordinary basis for the whole of the litigation up to 11 March 2023 but thereafter on the indemnity basis from 12 March 2023. The reason for this is that the proceedings are asserted to have become an abuse of process from the date the Notice of Intention to Appeal lapsed.
2. The relevant principles are set out by Black J in In the matter of Indoor Climate Technologies Pty Ltd [2019] NSWSC 356 at [8]: "The principles on which an order for indemnity costs may be made are also well established. Section 98(1)(c) of the Civil Procedure Act 2005 (NSW) permits the Court to order costs on an ordinary or indemnity basis. Rule 42.2 of the Uniform Civil Procedure Rules 2005 (NSW) provides that, unless the Court otherwise orders or the rules otherwise provide, costs payable are to be assessed on an ordinary basis. Rule 42.5 of the Uniform Civil Procedure Rules deals with an order for costs on an indemnity basis. Costs are awarded on the ordinary basis unless there are exceptional circumstances: Leichhardt Municipal Council v Green [2004] NSWCA 341. An order for indemnity costs is not made to punish an unsuccessful party for persisting with a case that fails, but to compensate a successful party fully for costs incurred, when the Court takes the view that it was unreasonable for the other party to have subjected the successful party to the expenditure of costs: Hamod v New South Wales [2002] FCAFC 97; (2002) 188 ALR 659 at [20]. Whether an indemnity costs order should be made depends, at least in part, on whether there was a relevant delinquency on the part of the unsuccessful party: Ingot Capital Investments Pty Ltd v Macquarie Equity Capital Markets Ltd (No 7) [2008] NSWSC 199; (2008) 65 ACSR 324 at [24]; Cabport Pty Ltd v Marinchek (No 2) [2013] NSWCA 131 at [6]. That is to be determined by reference to the conduct of the proceedings, not the conduct that is the subject of the substantive dispute."
3. Mr Smartt draws my attention to the following: 1. The findings concerning abuse of process (as referred to in my second judgment at [62]). 2. The plaintiff's delay in relation to both matters (as referred to in my second judgment at [86]). 3. In addition to delay, the combative approach taken by the plaintiff during the litigation.
4. The defendant has had this litigation hanging over him for over a year. His solicitors' inquiry about whether there would be an appeal went unanswered and the fresh concerns notice about the second publication was not followed up by an amended statement of claim. I have found that the plaintiff's conduct over this period, as well as during and after the hearing of this application, demonstrates that this litigation is an abuse of process. Accordingly, for the period from 12 March 2023, the costs should be assessed on an indemnity basis.

Should my costs orders of 14 December 2022 and 7 June 2023 be revisited?

1. The plaintiff sought to go behind both costs orders, to argue that he successfully opposed some of the submissions put by the defendant. That is indeed the case; in relation to the first application for summary dismissal of the first publication, he was successful, but on the basis of being permitted a late amendment.
2. The plaintiff sought to demonstrate the strength of his arguments by drawing my attention to the costs principles set out in Beoco Ltd v Alfa Laval Co Ltd [1995] QB 137 ("Beoco"), where Stuart-Smith LJ stated at 154: ""As a general rule, where a plaintiff makes a late amendment as here, which substantially alters the case the defendant has to meet and without which the action will fail, the defendant is entitled to the costs of the action down to the date of the amendment. There may, of course, be special reasons why this general rule should not be applied."
3. The plaintiff also referred to Murrihy v Radio 2UE Sydney Pty Ltd [2000] NSWSC 318. That costs order related to a s 7A jury finding, where the plaintiff had only been successful in relation to amended pleadings containing imputations. The costs order which followed the event took into account the lateness of the amendment.
4. Late amendments to pleadings are generally followed by orders that the costs "thrown away" by the amendment should be paid by the amending party, whether those amendments are permitted or not. This pre-existing variation of the general rule is limited to pleadings, and would be inappropriate to apply to alternative submissions or defences that have failed where others have succeeded (a common occurrence in defamation), or witnesses whose evidence is not acceptable. The application of the amendment principles set out in Beoco may have been appropriate for a s 7A jury trial where the imputations had been totally repleaded, but that is not the case here. The defendant was entitled to refine and change the basis upon which he sought the dismissal of both sets of proceedings, not least because of the changing position of the plaintiff (who amended the pleading for the first publication in the light of the defendant's challenge, in an amendment caught by the very principle that he seeks to espouse now).
5. The basic rule for costs is that, unless varied for other reasons (of which the costs order in Beoco is one), must "follow the event": r 42.1 of the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR"). The "event" is that his entire proceedings have now been struck out.
6. In Young v Lalic [2006] NSWSC 379, Brereton J refused to make an order of the kind sought by the plaintiff, stating at [6] - [10]: "6 The starting point is that the plaintiff, Ms Young, having been successful, she is entitled to her costs, and it is for the defendants to establish a basis for departing from that rule. It is true that a successful plaintiff who has failed on certain issues may be deprived of costs on those issues, or even ordered to pay the defendant's costs of them [Hughes v Western Australian Cricket Association (1986) ATPR 40-748, 48136], but this course is one on which the Court embarks with hesitancy [Mobile Innovations Limited v Vodaphone Pacific Limited [2002] NSWSC 423,[4]; Cretazzo v Lombardi (1975) 13 SASR 4, 16; Trade Practices Commission v Nicholas Enterprises Pty Limited (No 3) (1979) 28 ALR 201; Waters v P C Henderson (Australia) Pty Limited, NSWCA 6 July 1994, unreported; NRMA Limited v Morgan (1999) NSWSC 768]. From these cases emerge consistent themes, first, that justice may not be served if parties are dissuaded by the risk of costs from canvassing all issues which might be material to the case, but secondly that it may be appropriate to award costs of a separate issue where a clearly definable and separate issue on which the otherwise successful party failed has occupied a significant part of the trial. 7 Although the claim for a transfer of land represented the plaintiff's claim at its highest, and although the plaintiff succeeded to a significantly lesser extent than that, this is not a case in which it can possibly be said that the defendants were the true victor, with the plaintiff only salvaging a modicum of success from a late amendment [cf Beoco Limited v Alpha Laval Co Limited (1995) QB 137, 154 and the cases there cited; see also Waterman v Gerling Insurance Company Pty Limited (2005) NSWSC 1111]. 8 Ultimately, the principal basis upon which I granted relief was one which, though related to that which had been pleaded, differed in some respects from it, in that it depended essentially on a trust resulting from the advance of the $50,000 unaccompanied by any intention of conveying beneficial title to it. This, in itself, illustrates that given the difficulties involved in the true legal characterisation of the unusual factual circumstances surrounding that advance, there was importance in propounding as diverse a range of legal bases for recovery as were reasonably arguable. This case was therefore, if not peculiarly, at least one in which it may fairly be said that the first theme to which I have referred above, namely that justice may not be served if parties are dissuaded by the risk of costs from canvassing all issues which might be material to the decision in the case, is applicable. 9 Moreover, the correspondence and the course of argument has established that while there are some aspects of the case, namely the cross-claim and the submissions on the cross-claim, which might be referrable only to the part of the plaintiff's claim which was abandoned, it cannot be said that there was a clearly definable and severable issue which "has occupied a significant part of the trial". None of the evidence related to the cross-claim alone. Moreover, to the extent that discretionary considerations arise, the circumstance that the cross-claim came as late as it did and in the circumstances in which it did weighs slightly at least in the balance against making costs incurred in respect of it the subject of a separate and special costs order.

10 Finally, I would add that the circumstance that the plaintiff's claim was not ultimately pressed at its highest, and that the contract claim was "abandoned", is not to be taken as a concession that it was unarguable. Counsel and parties should not be discouraged by the risk of an adverse costs order from making responsible judgments, as Mr Rollinson did here, not to press every ground, argument and claim once the evidence has emerged and been tested."

1. The costs order I made in the 14 December 2022 judgment took into account the principles in Beoco and the costs orders in both judgments took into account the principles enunciated by Brereton J as set out in paragraph 29.
2. The plaintiff's application to go behind these costs orders is so obviously without legal merit that he should not be permitted to argue it further. Any application to vary those orders must take into account that the entire cause of action has now been struck out. While costs of interlocutory applications may be more likely to be adjusted for success or failure, costs arising from the dismissal of the whole proceedings must take into account other costs principles, such as which party, in reality, has won. For the reasons explained by Brereton J as set out above, to hold otherwise would burden the legal system with discursive and nit-picking (to use Mr Smartt's term) argument on satellite litigation costs issues and discourage robust and/or innovative pleadings.

The quantum of costs sought

1. These costs are supported by Mr Smartt's memorandum of fees. The fees are very moderate, for the following reasons: 1. The defendant is only claiming counsel's fees (no solicitor's fees) at the modest rate of $280 ex GST per hour and $2800 ex GST per day. 2. Mr Smartt's memorandum includes a costs agreement note to the effect that he is entitled to interest, but he waives this. 3. There are no charges for disbursements, either from Mr Smartt or his instructing solicitor.
2. The task of assessing costs for a gross sum costs order is "impressionistic": Quach v Horvarth [2022] NSWSC 694 at [14].
3. As part of the assessment process, a "rule of thumb" deduction is generally made, in order to take into account the contingencies that would be taken into account by a costs assessor in a formal assessment.
4. As to the costs on the ordinary basis until 11 March 2023, the defendant submits that the Court should apply a discount to these fees of 25%, as the "figure of 25% is an orthodox figure to apply to a bill of costs to come to a figure appropriate for fixing costs in a gross sum under 98(4) of the Civil Procedure Act": Employers Mutual Ltd v Heise (No 3) [2022] NSWSC 1364 at [35]. The total of the costs incurred by the defendant until 11 March 2023 is $8,855 ($8,050 in fees plus $805 in GST). Applying a discount of 25% to that figure, this sum is $6,641.25.
5. As costs from 11 March 2023 are payable on an indemnity basis, the defendant submits that the Court should apply a discount of 10%. That is the conventional discount when indemnity costs are awarded. The total costs of the incurred by the defendant from 12 March 2023 is $8,085 ($7,350 in fees plus $735 in GST). Applying a discount of 10% to that figure results in the sum of $7,276.50.
6. Should Mr Smartt produce his costs agreement? The answer is no, for the following reasons: 1. The terms of his costs agreement are set out in part in the memorandum of costs which is Exhibit A. 2. These are ordered costs. A party bringing a challenge on the indemnity principle needs to establish that under no circumstances does the client have any liability to pay costs to his or her solicitors: Cappello v HomeBuilding Pty Ltd [2023] NSWCA 109; Cappello v Homebuilding Pty Ltd (No.2) [2023] NSWDC 54; Wentworth v Rogers (2006) 66 NSWLR 474; Shaw v Yarranova Pty Ltd [2011] VSCA 55. 3. It is not necessary to have a valid costs agreement when claiming legal costs in a gross sum costs order as the court may proceed on a quantum meruit: see the decisions referred to in Cappello v Homebuilding Pty Ltd (No.2) at [29].
7. I am accordingly satisfied that the defendant has established entitlement to the quantum of the costs claimed.

Conclusions and orders

1. The defendant is willing to consent to a stay of enforcement of the costs order for 28 days, and has confirmed in writing that if an application for leave to appeal is made, no attempt will be made to enforce the judgment.
2. I also propose to extend time for the purposes of UCPR r 36.16 for 28 days from today, to assist the plaintiff's new legal representatives in determining if relief of any kind (such as preservation of the filing fee if the second publication is to be added to the claim) is required.

Orders: 1. Pursuant to s 98(4) of the Civil Procedure Act 2005 (NSW), the plaintiff is to pay the defendant's costs of these proceedings in the form of a gross sum costs order in the sum of $13,917.75. 2. Enforcement of order (1) stayed for 28 days from the date of this judgment. 3. Time for any application under UCPR r 36.16 extended to 28 days from the date of this judgment.

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: 23 June 2023