Meadowlands BFT Pty Ltd v Shoalhaven City Council [2021] NSWSC 1383

Supreme Court New South Wales

Medium Neutral Citation: Meadowlands BFT Pty Ltd v Shoalhaven City Council [2021] NSWSC 1383 Hearing dates: On the papers Date of orders: 29 October 2021 Decision date: 29 October 2021 Jurisdiction: Common Law Before: Beech-Jones CJ at CL Decision: (1) The plaintiff pay the defendant's costs of the proceedings in the gross sum of $180,000.00; (2) The proceedings be otherwise dismissed. Catchwords: COSTS – gross sum costs order – no question of principle Legislation Cited: Civil Procedure Act 2005 Impounding Act 1993 Legal Profession Uniform Law Application Act 2015 Uniform Civil Procedure Rule 42.1 Cases Cited: Bahamad v Wong [2020] NSWSC 991 Harrison v Schipp [2002] NSWCA 213 Meadowlands BFT Pty Ltd v Shoalhaven City Council [2021] NSWSC 1139 Smartway Logistics Holdings Pty Ltd v O'Sullivan [2020] NSWSC 189 Zugic v Vesuvius Australia Pty Ltd (No 2) [2020] NSWSC 1738 Category: Costs Parties: Meadowlands BFT Pty Ltd (Plaintiff/Cross-Defendant) Shoalhaven City Council (Defendant/Cross-Claimant) Representation: Counsel: P Bowden (Director of Plaintiff) R Parsons (Defendant)

Solicitors: P Bowden (for the Plaintiff) Kells (Defendant) File Number(s): 2018/356855

Judgment 1. On 9 September 2021, I ordered that the Statement of Claim in these proceedings be dismissed and granted relief on the cross-claim brought by Shoalhaven City Council (the "Council"): Meadowlands BFT Pty Ltd v Shoalhaven City Council [2021] NSWSC 1139. I made orders requiring that, on or before 23 September 2021, each party file and serve their proposed orders as to costs and any submissions in support. 2. On or about 23 September 2021, the Council filed submissions in which they sought an order for costs in the gross amount of $182,289.87. They also filed an affidavit of their solicitor, Mario Quintiliani, dated 23 September 2021 in support. By 15 October 2021, I had not received any material on behalf of the plaintiff, Meadowlands BFT Pty Ltd ("Meadowlands"). Accordingly, I directed the Council to file an affidavit of service, proving that it had served its material on Meadowlands. On 20 October 2021, the Council filed an affidavit of David Thomas Addinall demonstrating that, at the time it filed its submissions and the affidavit of Mr Quintiliani, copies of the material were sent to email addresses associated with the directors of Meadowlands, namely, Phillip Bowden and Kevin Bowden. Mr Addinall also swore that on 14 October 2021, a letter was sent by express post to the address of service of Meadowlands in Warrigee, enclosing a further copy of those documents. According to Mr Addinall's searches, that material was delivered on 18 October 2021. 3. Given that it is over a month since Meadowlands had been required to serve material in relation to costs and since its directors had received the Council's material, I determined to proceed to consider the Council's application. 4. The first aspect of the Council's application is that it seeks an order for costs. The Council contend that, as Meadowlands' claim had failed and its cross‑claim succeeded, costs should follow the event. I cannot discern any reason not to accept that submission (see Uniform Civil Procedure Rule 42.1). 5. Next, the Council seeks an order pursuant to s 98(4)(c) of the Civil Procedure Act 2005 (NSW) ("CPA") for a "specified gross sum instead of assessed costs". It is appropriate to make an order. For the reasons that follow, I am satisfied that the proposed method of determining costs is "fair, logical and reasonable" (see Bahamad v Wong [2020] NSWSC 991 at [19]), that there are significant reasons to doubt that Meadowlands would be able to meet any liability for the costs order (see Harrison v Schipp [2002] NSWCA 213 at [21]), that the process of assessment may involve a financial burden on the Council, and if the costs assessment is contested, Meadowlands is unlikely to participate cooperatively in that assessment (see, for example Zugic v Vesuvius Australia Pty Ltd (No 2) [2020] NSWSC 1738 at [24]); Smartways Logistics Holdings Pty Ltd v O'Sullivan [2020] NSWSC 189 at [207] to [213]). 6. In relation to Meadowlands' financial position, prior to the time of the final hearing it had two sets of solicitors all of whom had ceased to act. One of its directors conducted the case on its behalf (see [2021] NSWSC 1139 at [3]). In December 2020, Registrar Jones had made a gross costs order against Meadowlands in favour of the Council in the amount of $7,014. In February 2021, the Council obtained a garnishee order in respect of that order. It only received $31.45. At the hearing of the proceedings, there was no evidence to suggest that Meadowlands had any assets other than the cattle which were the subject of the proceedings, and even then, its ownership of that cattle was uncertain (see [2021] NSWSC 1139 at [78]). 7. In relation to Meadowlands' possible attitude to the assessment process, its non-participation in the orders of the Court concerning the formulation of the appropriate costs orders suggests that it would probably not participate in that assessment process. This would leave the Council to incur the cost and delay of the assessment. However, if it did participate, then, given that Phillip Bowden, who had conducted the proceedings on behalf of Meadowlands, made serious allegations against the Council, with little or no evidence to support them, it seems likely that the assessment process would be unduly expensive ([2021] NSWSC 1139 at [88]). Either way, this tends against requiring the Council to embark upon the assessment process . 8. Further, if the Council is forced to pursue costs assessment, then it is likely to incur a filing fee of some $10,000 which, in light of the findings I have made, is unlikely to be recovered. 9. Accordingly, I consider it appropriate to exercise the power conferred by s 98(4)(c) of the CPA. 10. In relation to the quantum of the Council's costs, in his affidavit, Mr Quintiliani states that he has nearly 30 years post-admission experience. His affidavit annexes the invoices for legal costs and disbursements rendered to the Council. His affidavit outlines the basis upon which costs were charged. 11. The proceedings were commenced by urgent interlocutory proceedings in late 2019. Thereafter they involved a number of interlocutory applications, mostly instigated by Meadowlands. This included applications arising out of their failure to comply with various timetables and to seek to amend their pleadings (see Meadowlands BFT Pty Ltd v Shoalhaven City Council [2021] NSWSC 773). 12. The proceedings were set down for hearing on 16 August 2021 with an estimate of five days, although they were completed within three days. The evidence required to be marshalled by the Council, both in defence of Meadowlands' substantive claim and in support of its cross-claim, was substantial. As adverted to earlier, although it is debatable whether it arose on the existing pleadings, Meadowlands made a number of serious allegations against the Council. They warranted a response. 13. Leaving aside the costs the subject of the gross sum costs order made by Registrar Jones, the total costs that were charged to the Council up to and including 24 August 2021, consisted of $182,595.20 in solicitor's fees, $55,725 in counsel's fees, and disbursements of $7,877.41. So far as solicitor's fees are concerned, Mr Quintiliani's affidavit identifies the persons within his firm who worked on the matter. He notes that his firm was providing work to the Council following their success on a competitive tender process. The result of that tender process was that the amounts that were charged by his firm to the Council were significantly lower than the guideline range proffered by the Costs Assessment Rules Committee ("CARC") created under s 92 of the Legal Profession Uniform Law Application Act 2015. As for counsel, Mr Quintiliani's affidavit demonstrates that an experienced junior counsel was retained. His fees were charged at a rate that was commensurate with his experience and within the CARC guidelines for junior counsel. Mr Quintiliani's affidavit, identifies the disbursements as being costs for the uplifting and copying of subpoenaed documents, search fees, court fees and service fees, transcript, courier fees and postage costs. 14. In his affidavit, Mr Quintiliani states that, based upon his experience with costs assessments, the amount of costs that are usually recovered by a party awarded costs on an ordinary basis is in the range 60% to 80% of the actual solicitor's costs incurred, and 100% recovery of disbursements, including counsel's fees. Save that sometimes counsel fees can be reduced on assessment, I accept that evidence. Consistent with that approach, Mr Quintiliani says that the amount sought by Council's gross sum costs order involved a discount of 35% to the solicitor's fees noted above, with no reduction for disbursements including counsel's fees. 15. Subject to one matter, when regard is had to the fact that the hourly rates charged for the solicitor's costs were lower than the CARC guideline and otherwise appeared relatively modest, then Mr Quintiliani's methodology seems appropriate. The one matter that caused me some hesitation was so much of the work undertaken by the Council that involved proof of the costs incurred by the Council in maintaining the cattle in circumstances where I ultimately determined that the Council's rights of recovery were to be calculated in accordance with the fees and charges fixed by the Council under sub section 26(1) of the Impounding Act (see [2021] NSWSC 1139 at [83] to [86]). Nevertheless, where it was at least arguable that the Council was required to demonstrate the actual cost of maintaining cattle, then I do not consider that the Council's costs should be discounted. Otherwise, I consider that Mr Quintiliani's methodology is appropriate. However, instead of allowing $182,289.87, I will allow an even sum of $180,000. 16. Accordingly, the Court orders that: (1) The plaintiff pay the defendant's costs of the proceedings in the gross sum of $180,000.00; (2) The proceedings be otherwise dismissed.