Supreme Court New South Wales Medium Neutral Citation: Wallis v Rudek [2020] NSWSC 1618 Hearing dates: 12 November 2020 Decision date: 12 November 2020 Jurisdiction: Equity Before: Kunc J Decision: Plaintiffs to withdraw caveat; Defendant's costs assessed as a gross sum; Funds in Court to be paid to defendant subject to no claim being made by Commonwealth Catchwords: COSTS – Party/party – Bases of quantification – Whether costs orders to be partly satisfied by funds held in Court Legislation Cited: Civil Procedure Act 2005 (NSW) Real Property Act 1900 (NSW) Cases Cited: Wallis v Rudek [2020] NSWSC 162 Wallis v Rudek (No 2) [2020] NSWSC 215 Wallis v Rudek (No 3) [2020] NSWSC 338 Wallis v Rudek [2020] NSWCA 61 Wallis v Rudek (No 2) [2020] NSWCA 175 Wallis v Rudek [2020] NSWCA 207 WLD Practice Holdings v Sara Stockham [2020] NSWSC 1354 Category: Procedural and other rulings Parties: Yuri Wallis (First Plaintiff) Olga Wallis (Second Plaintiff) Suzanne Rudek (Defendant) Representation: Counsel: J R Bennett (Defendant) Solicitors: Y and O Wallis (In person) Optic Lawyers (Defendant) File Number(s): 2018/191080 Publication restriction: No EX TEMPORE Judgment (REVISED) 1. The Court has before it today two notices of motion listed for a hearing of not more than three hours. The first notice of motion was filed by the plaintiffs (to whom I shall refer as "the Wallises") on 8 September 2020 and seeks: "1. That pursuant to Order 2 made on 5 March 2020 in these proceedings that: - (a) the sum of $ 9,045.45 be paid from the Judgment Sum paid into Court to the "Department of Human Services"; (b) That the sum of $115,235.30 be paid from the Judgment Sum paid into Court to "P Dobrich & Co solicitors Law Practice Trust Account" forthwith. 2. The mater matter be dealt with in Chambers. 3. That the orders be entered forthwith." 1. The second notice of motion was filed on 28 September 2020 for the defendant (to whom I shall refer as "Ms Rudek" and for whom Mr J R Bennett of Counsel appeared) and seeks: "1. The Plaintiffs' motion filed 15 September 2020 be dismissed. 2. That the Caveat XXXXXXXX lodged in respect of the property at XXX Pennant Hills, NSW 2120 being the land comprise in folio identifier X/XXXXXX by the Plaintiffs, be withdrawn. 3. In the alternative, that the Plaintiffs are to do all things necessary to effect a withdrawal of the Caveat XXXXXXXX referred to in Order 2. 4. That to the extent it is necessary, service of this application for the purpose of the above orders is dispensed with under s 74MA(2) of the Real Property Act 1900. 5. Declaration that all belongings and chattels remaining on the property at the date of this Order are property of the Defendant and that the Defendant is at liberty to dispose of these belongings and chattels as she sees fit. 6. Declaration that to the extent that any belongings and chattel referred to in the above order are or were previously the property of the Plaintiffs, these have been abandoned by the Plaintiffs and are the property of the Defendant. 7. On the undertakings noted at 1 (b) and (c) of the Orders made by White JA on 7 April 2020, the judgment sum paid into Court by the Defendant not be released to the Plaintiffs until the payments to the Defendant contemplated in the orders 8, 9, 10, 11, 12 and 13 below are made, 8. On the undertaking noted at 1 (b) in the Orders made by White JA on 7 April 2020. the Defendant is to have released to her the sum of $7,800,00 being the sum payable to her under that undertaking, from the judgment sum paid into Court by the Defendant. The funds are to be paid into "Optic Lawyers Law Practice Trust Account''. 9 The Plaintiffs are to pay the Defendant's costs of these proceedings and the Appeal proceedings No 2020/95805, including costs of the motions filed 15 and 28 September 2020 on a gross sum basis in the amount of $168,221,86, Such payment is to be made by way of release of the balance of funds from the judgment sum paid into Court by the Defendant and paid into "Optic Lawyers Law Practice Trust Account', with the balance to be payable by the Plaintiffs forthwith. 10. In the alternative to Order 9, if the Court does not order the payment of costs on a gross sum basis, that: a. the Court notes that the Defendant is at liberty to apply to the manager, costs assessment for assessment of the costs contemplated by order 9; b. the balance of the judgment sum paid into Court by the Defendant, after payment of the amount contemplated by order 8 above, continue to be held m Court as security for costs and payable to the Defendant after assessment and filing with the Court of a certificate of costs issued by a costs assessor in respect of those costs. 11 That the Plaintiffs pay the Defendant the sum of $723.46 for the costs the Defendant will incur in removing the caveat as noted at order 2. 12, That the Plaintiffs pay the Defendant the sum of $3,539.43 which is increasing by $26,29 per day in interest on the Defendant's legal costs. 13. That the Plaintiffs pay the costs of the Defendant on this motion on the indemnify basis. 14 In the alternative to order 13. Plaintiffs pay the costs of the Defendant on this motion on the ordinary basis." 1. Stepping back for a moment from the detail of the motions, what is really being decided by the Court today are the final consequences of an unhappy dispute between the Wallises and their daughter Ms Rudek, which has already been the subject of several judgments at first instance and on appeal: Wallis v Rudek [2020] NSWSC 162; Wallis v Rudek (No 2) [2020] NSWSC 215; Wallis v Rudek (No 3) [2020] NSWSC 338; Wallis v Rudek [2020] NSWCA 61; Wallis v Rudek (No 2) [2020] NSWCA 175; Wallis v Rudek [2020] NSWCA 207. 2. In summary, the Wallises claimed that they sold their property in Pennant Hills in which they lived (the "Property") to Ms Rudek on terms that would allow the Wallises to continue to reside indefinitely in part of the Property. The effect of the decision at first instance of Parker J, and then of the Court of Appeal upholding his Honour's decision, is that the Wallises failed in the substantive part of their claim. However, they had limited success in one respect. As a condition of the relief which Parker J gave to Ms Rudek (possession of the Property), Ms Rudek was required to do equity by paying into Court a sum of $124,287.75 (the "Judgment Sum"). That has been done. One issue before the Court today was whether, rather than being paid to the Wallises, that money should be applied, in particular, to Ms Rudek's costs. 3. After setting out the reasons why I refused a last minute adjournment application by the Wallises, I will deal issue by issue with the matters that were raised by the two motions. Adjournment 1. The first matter which I had to consider was an application by the Wallises to adjourn today's hearing. At the hearings before Parker J and in the Court of Appeal, the Wallises were represented by a solicitor and counsel. For the purposes of the hearing of the current motions they continued to be represented by the same solicitor, Mr P Dobrich. Yesterday my staff were informed by Mr Dobrich that he had filed a notice of intention of ceasing to act and that he would appear this morning as a courtesy to the Court to seek leave to withdraw. He did so, and I granted him that leave. 2. This left the Wallises unrepresented. They applied for today's hearing to be adjourned to enable them to get legal representation. I declined their application. 3. There was no evidence before me one way or another about why Mr Dobrich ceased to act for the Wallises. However, the matter had been fixed on 12 October 2020 for hearing today and Mr Dobrich had been on the record up to and including this morning. Despite that, the Wallises had not complied with the pre-trial directions for the hearing of this application. Ms Rudek's legal representatives had prepared a Court Book and provided submissions. In circumstances where there had been unexplained non-compliance while Mr Dobrich was on the record, and where it was clear from the evidence that the amount of the Wallises' costs liability pursuant to various costs orders made at first instance and in the Court of Appeal exceeded the Judgment Sum, I considered that nothing would be achieved by allowing the adjournment. Furthermore, an adjournment would only bring additional delay and costs for Ms Rudek in a matter which is crying out for finalisation, and where the apparent impecuniosity (by their own admission) of the Wallises means that there is a very real doubt that Ms Rudek will be able to recover all of the costs to which she is entitled. 4. The hearing then continued and I gave the Wallises every opportunity to put before me whatever they wanted to say. I do not think I am doing them an injustice by reducing their submissions to the proposition that as impecunious pensioners who had been ordered to vacate what had been their home, they very much needed the Judgment Sum to which Parker J had found they were entitled. But the fact remains that this Court has made a number of costs orders against them which appear to exceed the Judgment Sum. Ultimately, the Wallises accepted that the Court should make a decision today that would finalise the dispute. Caveat 1. Early in the history of the proceedings the Wallises lodged a caveat over the Property. That caveat was extended until further order by Parker J. It claimed this interest: "THE CAVEATORS CLAIM AN EQUITABLE INTEREST IN THE LAND, BEING AN INDEFINITE LEASE ON PART OF THE LAND, IN CONSIDERATION OF WHICH THE CAVEATORS DID NOT RECEIVE THE SUM OF $212,907.84 ON SETTLEMENT OF THE SALE OF THE PROPERTY,; ALTERNATIVELY, BEING THE SUM OF $212,907.84 NOT RECEIVED BY THE CAVEATORS FROM THE REGISTERED PROPRIETOR." 1. The short point is that the interests asserted, even assuming that they gave rise on their face to an interest in land, have not been vindicated by the outcome of the litigation. On any view, the result of the litigation is that the Wallises do not have an interest in the Property as claimed in their caveat or at all. 2. The disposition of the proceedings is the further order that would, in the ordinary course, bring to an end what was in its nature an interlocutory order made by Parker J extending the caveat. However, it may be accepted that the Land Titles Office will require something more than a confirmation that the order has come to an end to allow for the removal of the caveat. 3. Ms Rudek's notice of motion seeks orders pursuant to s 74MA of the Real Property Act 1900 (NSW) for an order that the caveat be withdrawn. That section provides: "74MA Application to Court for withdrawal of caveat (1) Any person who is or claims to be entitled to an estate or interest in the land described in a caveat lodged under section 74B or 74F may apply to the Supreme Court for an order that the caveat be withdrawn by the caveator or another person who by virtue of section 74M is authorised to withdraw the caveat. (2) After being satisfied that a copy of the application has been served on the person who would be required to withdraw the caveat if the order sought were made or after having made an order dispensing with service, the Supreme Court may: (a) order the caveator or another person, who by virtue of section 74M is authorised to withdraw the caveat to which the proceedings relate, to withdraw the caveat within a specified time, and (b) make such other or further orders as it thinks fit. (3) If an order for the withdrawal of a caveat is made under subsection (2) and a withdrawal of the caveat is not, within the time limited by the order, lodged with the Registrar-General, the caveat lapses when an office copy of the order is lodged with the Registrar-General after that time expires." 1. Because the current notice of motion was served on the Wallises' then solicitor, the requirement for service under s 74MA(2) has been met. However, for more abundant caution, and given that the Wallises are now unrepresented, I will make an order dispensing with the requirement for service of the application for the withdrawal of the caveat. I will make an order that the Wallises must withdraw the caveat on or before next Wednesday, 18 November 2020. That order is made on the assumption that they will not in fact have withdrawn the caveat by that time, so that an office copy of the Court's order can then be filed on behalf of Ms Rudek to lapse the caveat. Chattels 1. There remains an ongoing dispute between the parties about chattels left on the Property which are said to belong to the Wallises. A suite of orders made by Parker J, and then in more detail by White JA, was designed to give the parties an opportunity to identify the Wallises' chattels and for them to be removed in a peaceable and orderly way from the Property. It is not necessary for me to set out those orders. 2. Unfortunately, the regime prescribed by those orders broke down. Nor is it necessary for me to attribute blame in relation to that. The Wallises have since commenced proceedings in NCAT designed to recover what they say are their chattels. The present motions were fixed for a hearing time of three hours. It would be quite disproportionate on any basis, having regard to s 56 of the Civil Procedure Act 2005 (NSW), for the Court to attempt to untangle the rights and wrongs of what has happened in relation to those chattels in determining this application. 3. Ms Rudek, through her counsel, has, with respect, entirely sensibly agreed to my suggestion that I should, by my own order, in effect "refresh" the dates in the regime provided for by White JA to give the parties one more chance to resolve the question of the chattels consensually and peacefully. That should be done on the basis that the process must be completed by Christmas. I can only urge the parties to cooperate and be sensible about this because it is quite clear that, notwithstanding relations having broken down between them, it is something which it is in their interests to resolve without further proceedings. However, if they are unable to complete the process by the application of the renewed regime, the dispute over chattels will have to be resolved in NCAT against the background of White JA's orders and the orders that I will make. Those orders provide for chattels to be deemed to have been abandoned as part of the working out of the process. Accommodation fee 1. On 7 April 2020 White JA made these orders: "The Court: 1 NOTES that the First and Second Appellants (collectively, the "Appellants") give to the Court the following undertakings (the "Undertakings"): (a) the usual undertaking as to damages; (b) an undertaking that, if the Appellants are unsuccessful in the Appeal, they will pay to the Respondent an amount for lodging (to be characterised as a domestic arrangement) in the sum of $300 per week for the number of weeks that they remain in possession of the property the subject of the Appeal from 2 April 2020, such amount to be secured by the judgment sum of $124,287.75 (the "Judgment Sum") that has been paid into the Court by the Respondent; (c) an undertaking that the Judgment Sum will not be uplifted by the Appellants and will be provided as security for the Respondent's costs; (d) an undertaking that, within seven (7) days from the date of these orders, the Appellants will remove (or cause to be removed) their belongings from the pool area and the carport of the property located at XXX Pennant Hills 2120 (the "Property"); (e) an undertaking that the Appellants will not go to any part of the Property beyond the ground floor unit in which they currently reside other than as required for them to access the ground floor unit; (f) an undertaking that the Appellants will provide the Respondent with access to the laundry area of the ground floor unit on 24 hours' notice; and (g) an undertaking that the Appellants will prosecute their Appeal with all due expedition. 2 NOTES that for purposes of the Undertaking set out in 1(d) above, the Appellants intend to have their belongings removed and transported from Sydney to Orange NSW. 3 ORDERS that, on the basis of the Undertakings, Order 4 of the orders made by Parker J on 5 March 2020 be stayed pending the determination of the Appeal or until further order of the Court of Appeal. 4 ORDERS that the Appeal be expedited. 5 DIRECTS that the matter be stood over to 15 April 2020 before the Registrar of the Court of Appeal in order to set a timetable for the progression of the Appeal and to list the matter for hearing at a time and date during the week of 25 May 2020. 6 ORDERS that the costs of the Notice of Motion filed on 2 April 2020 be costs in the Appeal. 7 Liberty to apply on three (3) days' notice." 1. There can be no doubt that pursuant to undertaking 1(b), Ms Rudek is entitled to payment of the amount for lodging referred to in that undertaking. There is no dispute that amount is $7,800 and there will be an order that it is to be paid to Ms Rudek out of the Judgment Sum, subject to a reservation I will discuss later in these reasons. Ms Rudek's costs 1. It will be noted that undertaking 1(c) set out in paragraph [18] above refers to the Judgment Sum standing as security for Ms Rudek's costs. On any view that must refer to her costs of the appeal. She was successful on the appeal and orders were made that she should have her costs of the appeal on the ordinary basis. The evidence before me is that on a solicitor/client basis those costs are $64,025. 2. However, there is some ambiguity as to whether the Judgment Sum also secures Ms Rudek's costs at first instance. There is nothing in the surrounding material, including White JA's judgment, in relation to the orders and undertakings set out in paragraph [18] above that casts any light on that question. On their face, and with great respect, it seems to me that the terms of the undertaking are perfectly ambiguous. 3. However, Mr Bennett has drawn my attention to some correspondence between the parties' solicitors when Mr Dobrich was on the record. The gravamen of that correspondence was an assertion by Ms Rudek's solicitor, Mr N Buckley, to Mr Dobrich of the former's understanding, upon which he proposed to act, that unless Mr Dobrich told him otherwise, the security of the Judgment Sum extended to the costs at first instance. 4. By email of 9 April 2020 Mr Buckley had sent Ms Rudek's application for a costs assessment to Mr Dobrich. On 14 April 2020, Mr Dobrich sent an email to Mr Buckley: "We note that our clients have lodged an Appeal in relation to the judgement (sic) underlying your Application below. It is expected that the Appeal will be expedited and heard by late May 2020. This is a very short timeframe. In the event that our clients are successful, your clients Application below will no longer be tenable. Given that there is a prospect of our clients succeeding in their Appeal, it would be a waste of time and money on both parties to pursue this Application matter at this stage. We propose to wait until after the outcome of the Appeal ( late May 2020) is known before addressing the issues raised in your Application. This will not unduly cause any prejudice to your client, as Cost Applications can take several months to be reviewed and processed. Should any Costs Assessor seek details as to our clients present position as to your clients Costs Application below, we will rely upon the contents hereof." 1. On 11 May 2020, Mr Buckley responded to Mr Dobrich with this email, to which Mr Dobrich never replied: "21 days has lapsed and our client is now able to proceed with submitting her application for cost assessment. The only objection received from you is that the assessment should take place following the determination of the Appeal. With respect, we do not share your view particularly in light of the fact that the subject orders have not been stayed by the Court. Despite the above, our client is aware of the Undertaking provided by your clients in April 2020 to the Court of Appeal that the judgment sum will not be uplifted by your clients and is provided as security for our client's costs. It is our understanding that this Undertaking proffered by your clients extends to providing security for our client's costs of the Supreme Court proceedings. If our understanding is incorrect, please let us know by close of business, Wednesday 13 May 2020 and at that time, provide any other response you wish to make to our clients cost assessment application as the application will be submitted forthwith. On the basis the Undertaking extends to security as to our client's costs of the Supreme Court proceedings, we are instructed that our client is prepared to hold off sending the documents to the cost assessor for assessment until the determination of the Appeal." 1. I accept Mr Bennett's submission that on the basis Mr Dobrich's non-response, I should conclude that the reference to costs in the undertaking extends to security for Ms Rudek's costs at first instance. However, even if I am wrong about this, it makes no practical difference because, as will appear below, I have come to the view that the costs which I will shortly fix by a gross sum costs order, should in any event be met, to the extent they can be, out of the Judgment Sum. The Wallises' financial circumstances mean that the Judgment Sum is likely to be the only fruitful source of funds for Ms Rudek to recover at least some of the costs to which the Court has determined she is entitled. Costs as a gross sum 1. The next issue is Ms Rudek's application for gross sum costs orders. The legal principles in relation to such orders are familiar. For present purposes, I gratefully adopt as a convenient summary of those principles what was said by Sackar J in the recent decision of WLD Practice Holdings v Sara Stockham [2020] NSWSC 1354: "8. The Court has a discretion to order costs in a lump or gross sum pursuant to s 98(4)(c) of the Civil Procedure Act 2005 (NSW). Beazley P set out the principles relevant to the exercise of that discretion in Hamod v New South Wales [2011] NSWCA 375 at [813]-[820] (and again in Wilkie v Brown [2016] NSWCA 128 at [50]-[51]): 9 I have already set out the relevant provisions of s 98. The discretion thereby conferred upon the court is not confined and may be exercised whenever the circumstances warrant its exercise, having regard to the scope and purpose of the provision: Harrison & Anor v Schipp [2002] NSWCA 213; 54 NSWLR 738 per Giles JA at [21]-[22]. In Harrison v Schipp, Giles JA considered that the discretion in s 98(4) 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 order likely to result from the assessment. However, his Honour stated, 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." See also Wentworth v Wentworth (Court of Appeal, 21 February 1996, unreported). The courts have typically applied a discount in assessing costs on a gross sum basis: Ritchie's Uniform Civil Procedure NSW , LexisNexis, Sydney, 2005 to date, " Civil Procedure Act ", at [s 98.65]; Charlick Trading Pty Ltd v Australian National Railways Commission [2001] FCA 629; Sony Entertainment (Aust) Ltd v Smith (2005) 215 ALR 788; Idoport Pty Ltd v National Australia Bank Ltd; Lorenzato v Lorenzato & Anor (No 2) [2011] NSWSC 790 per Black J. In Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119; 135 ALR 160, von Doussa J noted that the specified gross sum costs procedure was particularly useful in complex cases, that the power must be exercised judicially and only after giving the parties an adequate opportunity to make submissions, and that before exercising the power the court should be confident that the approach taken to estimate costs is fair, logical and reasonable. 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 ); 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. 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: Leary v Leary [1987] 1 WLR 72; [1987] 1 All ER 261; Sony Entertainment (Aust) Ltd v Smith; Microsoft v Jiang (2003) 58 IPR 445; [2003] FCA 101; Ritchie's Uniform Civil Procedure NSW at [s 98.60]). 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: Smoothpool v Pickering [2001] SASC 131. In the exercise of its discretion the court is not required to undertake a detailed examination of the kind that would be appropriate to taxation or formal costs assessment: Harrison v Schipp at 743; Hadid v Lenfest Communications Inc at [35]; Auspine Ltd v Australian Newsprint Mills Ltd (1999) 93 FCR 1 at 5; [1999] FCA 673. The costs ordered should be based on an informed assessment of the actual costs having regard to the information before the court (for example, by relying on costs estimates or bills): Beach Petroleum NL v Johnson (No 2); Leary v Leary; Harrison v Schipp at 743; Sparnon v Apand Pty Ltd (FCA, 4 March 1998, unreported). The approach taken to estimate the costs to be ordered must be logical, fair and reasonable: Beach Petroleum NL v Johnson at 164-165; Hadid v Lenfest Communications Inc at [27]; Harrison v Schipp at 743. This 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: Leary v Leary at WLR 76 per Purchas LJ; Beach Petroleum NL v Johnson (No 2) at 123; Auspine Ltd v Australian Newsprint Mills Ltd at 164-165." 9. I have said previously that finality to litigation is essential in everyone's interest, and that in many cases that factor alone will weigh heavily on whether a Court should exercise discretion to order a lump sum costs order (see Edward Ted Lakis and Anor v Michael Victor Lardis and Anor (No 3) [2018] NSWSC 1296 at [57]; Lawcover Insurance Pty Ltd v Muriniti and Newell [2018] NSWSC 558 at [10]). 10. In cases where a lump sum costs order is appropriate, the Court takes a "broad brush" approach to determining the lump sum (Harrison v Schipp (2002) 54 NSWLR 738 at [22] (Giles JA)). As the Court of Appeal (Beazley P, Meagher and Payne JJA) said in Bechara (T/as Bechara and Co) v Bates [2016] NSWCA 294 at [14], "[t]o require the same or similar level of detail as in a formal costs assessment would defeat the purpose of the lump sum order." 11. I have commented previously that experience, I think, has shown that a discount of 10-30% is typically appropriate (see Ross v Padget [2016] NSWSC 1851 at [16] and [21]; Fisher-Pollard by her tutor Fisher-Pollard v Fisher-Pollard [2018] NSWSC 807 at [38]). Stevenson J adopted this approach in Berry Rural Co Operative Society Ltd v Sepak Industries Pty Ltd (No 4) [2018] NSWSC 1902 at [6]. However, the appropriate order in each case will turn upon the evidence (Hamod at [819]-[820])." 1. I have already observed that this is a case which cries out to be finalised. There has been a complete breakdown of the relationship between the parties, and there is a real risk that whatever order the Court makes in relation to costs will not be able to be fully satisfied by the Wallises. The Court has before it detailed invoices and summaries of Ms Rudek's costs sworn to by her solicitor, Mr Buckley. In all of those circumstances I am satisfied that it is both appropriate for a gross sum costs order to be made and that the Court is in a position, on the material before it, to do so in a fair and just manner. It is, however, necessary to split those costs up into components. 2. Before turning to those components, I should make a general observation about the way in which Ms Rudek's costs have been worked out. What is apparent from Mr Buckley's evidence is that in a time-honoured tradition of solicitors Mr Buckley has, in effect, been providing some degree of legal aid to his client by writing off significant amounts of his time for work done in the conduct of the litigation. That is a matter which reflects very well on Mr Buckley and he is to be commended for it. 3. However, it also gives rise to a point of principle of which I have not lost sight. While the fact that there has already been significant discounting is a matter that I can ultimately take into account in my discretion as to the final costs figures I determine, I do so mindful of the indemnity principle. The fact is that Ms Rudek has no obligation to pay Mr Buckley's firm those costs that have been written off. It would not be correct for me to do anything other than to start with the amounts on a solicitor/client basis which Mr Buckley's affidavit demonstrates have in fact been invoiced to Ms Rudek which she is liable to pay. That is how I propose to proceed. 4. Turning to the various components of the amounts claimed, the first is the costs of the proceedings before Parker J. On 5 March 2020, his Honour ordered the Wallises to pay Ms Rudek's costs of the proceedings, including their cross-claim, on the indemnity basis. The solicitor/client costs set out in Mr Buckley's affidavit in respect of those proceedings total $80,720.86. An order for indemnity costs means that a client is entitled to recover all of the costs that they have expended except for those that have been unreasonably incurred. I have looked at the material that has been presented and, taking into account both that material and the significant amounts written off to which I have already made reference, the Court is satisfied that there should be no reduction in the amount of $80,720.86 that is the subject of the claim. That conclusion extends to not making a discount of the kind to which Sackar J refers in paragraph [11] of his reasons (as set out in paragraph [26] above) because the Court has ordered Ms Rudek to have her costs of the first instance proceedings on the indemnity basis. 5. The next component derives from an order made by Parker J on 30 March 2020 that the Wallises should pay Ms Rudek's costs of a notice of motion filed on 27 March 2020. The costs incurred in relation to that on a solicitor/client basis are $9,275.50. That order was made on the ordinary basis and the Court determines that there should be a 10 per cent reduction in that figure to allow for the discount to which I have referred in the preceding paragraph. I have selected a discount at the lower end of the range identified by Sackar J to take into account the already discounted effect of the invoices that have been presented in the evidence because of the amounts written off (which I have also taken into account as obviating the need to make a reduction of the figure from solicitor/client to party/party costs). 6. The next component is Ms Rudek's costs incurred in the appeal. Those costs on a solicitor/client basis are $64,025. They have been ordered on the ordinary basis, and conformably with the approach that I have taken in the previous paragraph, that figure should be discounted by 10 per cent. 7. The last component is that on 18 September 2020 a registrar of the Court ordered the Wallises to pay Ms Rudek $1,043 together with the reasonable costs of the execution of a writ of possession. As that sum of $1,043 has already been ordered to be paid, it should be paid out of the Judgment Sum, subject again to the reservation that I will discuss below. 8. Finally, I record that Ms Rudek sought an order for interest on costs. As Mr Bennett properly conceded, there was no evidence that Ms Rudek had in fact paid the various invoices that had been put before the Court, so I did not accept that there was any reason to make an order for interest. 9. The orders which I propose to make in the nature of a gross sum costs order cover the entirety of the proceedings up to the filing of Ms Rudek's motion that is the subject of these reasons. There will be an order that the Wallises pay Ms Rudek's costs of that motion. Directions will be given for any application by Ms Rudek for those costs to be quantified on a gross sum costs basis to be made in a timely fashion and dealt with by me on the papers. A final reservation 1. A feature of the orders made by Parker J was that before the Wallises could have access to the Judgment Sum it would be necessary for them to reimburse the Commonwealth for rental assistance which they had claimed, to which his Honour had come to the view that they were not entitled (Wallis v Rudek [2020] NSWSC 162): "131. Finally, I return to the Wallises' claim for rental assistance from Centrelink. The fact that the Wallises have obtained public benefits to which they are not entitled does not prevent the grant of equitable relief entirely, but the Wallises should "do equity" by making restitution of those benefits. I will therefore make the grant of relief conditional, as in Nelson v Nelson (1995) 184 CLR 538. 132. Mrs Wallis has given an undertaking to repay the amount received from Centrelink by way of rental assistance, together with any interest and penalties associated with such payment. That undertaking is satisfactory in form. But I will provide in the final orders that the amount to be paid by Mrs Rudek will be paid into Court. When the Court is provided with evidence that the amount due to Centrelink has in fact been quantified, and, if not paid, will be paid out of the moneys held in Court, the balance will then be released to the Wallises." 1. His Honour's conclusion means that, at least prima facie, the Commonwealth has an interest in the Judgment Sum. As is usual in these kinds of applications for orders for payment out of a sum held in Court, it is necessary for the applicant to satisfy the Court that there are no other parties entitled to that fund. Parties who may have an interest must be notified and given an opportunity to appear if they wish on the application for payment out. 2. It is no criticism of Ms Rudek or her legal advisors to note that in this case the Commonwealth has not been given notice of her application. However, it seems to me that before the Court can make a final order allowing the Judgment Sum to be paid out to Ms Rudek for her costs and the accommodation payment, it will be necessary for the Commonwealth to be given notice and an opportunity to determine whether it wishes to be heard. 3. The final orders that I will make will put the responsibility for notifying the Commonwealth of that possibility on Ms Rudek's legal advisors. An appropriate timetable can be ordered so that either that opportunity is taken up and determined by me (which I would intend to do on the papers, if at all possible, in the interests of minimising costs). Alternatively, the Court can be informed that the Commonwealth does not wish to assert a claim for part of the Judgment Sum, in which case the orders that I will otherwise make for Ms Rudek to be paid the Judgment Sum can become final. Conclusion 1. Finally, it follows from what I have concluded that there will be orders dismissing the Wallises' notice of motion filed on 8 September 2020 with costs. The only direction I make today is that Ms Rudek is to provide by email to my Associate a proposed form of orders giving effect to these reasons on or before 16 November 2020. ********** 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: 13 November 2020