Yang v American International Assurance Company

FINDINGS 8 The Rules do not specify any criteria to be followed by a Court in determining whether to make an order under O 62 r 4(2)(c). In Dunstan v Human Rights and Equal Opportunity Commission (No 3) [2006] FCA 916 Mansfield J at [23] observed as follows: There is no particular characteristic of a case which must exist before a gross sum costs order can be made: Australasian Performing Rights Association Ltd v Marlin [1999] FCA 1006. It is a power which may be exercised whenever the particular circumstances of the case warrant it: Beach Petroleum NL v Johnson (1995) 57 FCR 119 (Beach); Harrison v Schipp [2002] NSWCA 213; (2002) 54 NSWLR 738.

9 At [24] his Honour considered the relevant factors for a Court in considering whether to make an order pursuant to O 62 r 4(2)(c) of the Rules. His Honour said: Factors which have been considered when exercising the discretion to make such an order include -

s where the delay, expense and inconvenience of taxing costs in the normal manner would be unduly protracted or unduly expensive: Beach at 120; Charlick Trading Pty Ltd v Australian National Railways Commission [2001] FCA 629…; Foyster v Foyster Holdings (2003) 44 ACSR 705; and

s where the financial capacity of the party liable to pay costs is such that the additional cost for taxation will impose a significant burden on the party in whose favour costs are ordered without real prospects of recovering those costs: Hadid v Lenfest Communications Inc [2000] FCA 628; Sparnon v Apand Pty Ltd (unreported, von Doussa J, 4 March 1998); Sony Entertainment (Australia) Ltd v Smith (2005) [215] ALR 788.

There are other considerations to which the Court has had regard, but they are not said by any party to arise in the present matter.

10 The Court has been provided with details of the costs and disbursements relied upon by AIA in support of its application for a gross sum order. However, the Court is concerned that it lacks any independent means of assessment to enable it to determine whether the amounts claimed and the hours charged for various aspects of the work are correct. In consequence, although the Court does acknowledge that it has been provided with a scale of counsels' fees applicable in this Court, the Court is unable to be satisfied that the costs sought are fair and reasonable. 11 In McDonald v Parnell Laboratories (Aust) and Another (No 2) (2007) 164 FCR 591 Buchanan J was requested to make a gross sum costs order but declined to do so. At 600 his Honour observed there was no reason why the assessment of costs should not receive the attention of a taxing officer who is accustomed to, and experienced in, dealing with such matters. The Court finds that the same considerations apply in this instance. 12 The Court is mindful of the evidence of Mr Foglia which indicates that AIA's costs greatly exceed the amount claimed under O 62 r 4(2)(c) of the Rules, and that substantial discounts have been allowed by AIA in its claim for costs. However, the sum claimed by AIA remains substantial. In the absence of any independent mechanism for assessment, the Court is reluctant to make a costs order of such magnitude against unrepresented litigants. The Court finds that transparency requires that a Registrar of the Court be ordered to review and assess the claim of AIA for an award of costs in a gross sum. 13 The Court is aware that the preparation of a bill of costs may incur further expense. However, since AIA's legal advisers have already prepared detailed costs as itemised in the affidavits in support of this application, the preparation of a bill suitable for taxation should not be onerous. 14 Accordingly the Court orders that the claim of AIA for an award of costs in a gross sum be referred to the Registrar for assessment. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Cowdroy.

Associate: Dated: 10 December 2008 Counsel for the Applicants: The Applicant appeared in person.