Supreme Court New South Wales Medium Neutral Citation: Goo v Sim (No 2) [2022] NSWSC 651 Hearing dates: On the papers Date of orders: 23 May 2022 Decision date: 23 May 2022 Jurisdiction: Equity Before: Henry J Decision: Applications to vary costs order made on 8 April 2022 refused. Catchwords: COSTS – claims by successful defendant for indemnity costs and specified gross sum instead of assessed costs – whether walk-away offer of compromise made under r 20.26 of the UCPR involved real element of compromise – whether one business day for acceptance of a Calderbank offer was reasonable – whether defendant's failure to produce documents constituted disentitling conduct for a costs order – whether circumstances warranted gross sum costs – indemnity costs order and gross sum costs order refused – plaintiff ordered to pay the defendant's costs on ordinary basis as agreed or assessed Legislation Cited: Uniform Civil Procedure Rules 2005 (NSW) Civil Procedure Act 2005 (NSW) Cases Cited: Beach Petroleum NL v Johnson (1995) 57 FCR 119 Bennette v Cohen (No 2) [2009] NSWCA 162 Bobb v Wombat Securities Pty Ltd & Ors (No 2) [2013] NSWSC 863 Calderbank v Calderbank [1975] 3 All ER 333 Cellarit Pty Ltd v Cawarrah Holdings Pty Ltd (No 2) [2018] NSWCA 266 Clark v Commissioner of Taxation (2010) 222 FCR 102; [2010] FCA 415 Consolidated Lawyers Ltd v Abu-Mahmoud; Abu-Mahmoud v Consolidated Lawyers Ltd [2016] NSWCA 4 Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd (No 2) [2014] NSWCA 219 Elite Protective Personnel Pty Ltd v Salmon [2007] NSWCA 322 Evans Shire Council v Richardson (No 2) [2006] NSWCA 61 G R Vaughan (Holdings) Pty Ltd & Anor v Vogt & Anor [2006] NSWCA 263 Hamod v State of New South Wales and Anor [2011] NSWCA 375 Harrison v Schipp (2002) 52 NSWLR 738; [2002] NSWCA 213 Harvey v Barton (No 4) [2015] NSWSC 809 Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) (2005) 13 VR 435; [2005] VSCA 298 Kooee Communications Pty Ltd v Primus Telecommunications Pty Ltd (No 2) [2008] NSWCA 85 Leach v The Nominal Defendant (QBE Insurance (Australia) Ltd) (No 2) [2014] NSWCA 391 Leichhardt Municipal Council v Green [2004] NSWCA 341 Miwa Pty Ltd v Siantan Properties Pty Ltd (No 2) [2011] NSWCA 344 Oikos Constructions Pty Ltd t/as Lars Fischer Construction v Ostin & Anor (No 2) [2021] NSWCA 98 Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11 Penson v Titan National Pty Limited (No 3) [2015] NSWCA 121 Regency Media Pty Ltd v AAV Australia Pty Ltd [2009] NSWCA 368 Smooth Pool v Pickering [2001] SASC 131 Taheri v Vitek (No 2) [2014] NSWCA 344 Valmont Interiors Pty Ltd v Giorgio Armani Australia Pty Ltd (No 3) [2021] NSWCA 160 Category: Costs Parties: Seoung Jin Goo (First Plaintiff) Tokorea Pty Limited (Second Plaintiff) Oakwood Sydney Pty Limited (Third Plaintiff) Sun Sick Sim (Defendant) Representation: Counsel: D Eardley (Defendant) Solicitors: Rays Lawyer (Plaintiffs) Praxis Lawyers (Defendant) File Number(s): 2017/300411 Publication restriction: Nil Judgment 1. On 8 April 2022, I made orders and gave reasons for dismissing the plaintiffs' claims that sought to recover two amounts of money from the defendant: Goo v Sim [2022] NSWSC 420 (Judgment). These reasons assume familiarity with and adopt the same terms as those used in the Judgment. 2. In the Judgment, I found that the plaintiffs had not established an entitlement to recover all or part of the $110,000 based on their pleaded claims despite finding that Mr Sim had received the money in his capacity as a director of Tokorea, deposited the funds into a bank account of Global HR (with the plaintiffs' knowledge) and caused Global HR to pay some out for his own benefit. I also found that Mr Goo was not entitled to recover the $50,000 that he had given to Mr Sim (a fact that had been denied by Mr Sim), as that money was consideration for the return of Mr Sim's units in the KS Unit Trust and was not used by him contrary to the purpose for which the funds had been provided. 3. The orders made included a default costs order that provided for the plaintiffs to pay Mr Sim's costs of the proceedings subject to any party applying for a different order. 4. Mr Sim seeks an order for indemnity costs relying on two offers made prior to the hearing, as well as a gross sum costs order. The plaintiffs dispute Mr Sim's entitlement to indemnity costs and contend that each party should bear their own costs relying on what they say is disentitling conduct on the part of Mr Sim and a factual finding in their favour. 5. In accordance with directions made by the Court, the parties have provided written submissions and the issue of costs is to be dealt with on the papers. In addition to his written submissions, Mr Sim relies on an affidavit of his solicitor, Stefan Psaltis, sworn 27 April 2022 (Affidavit of S Psaltis). Legal principles 1. The principles applicable to the making of an order for costs are well established. The Court has a broad discretion as to costs under s 98 of the Civil Procedure Act 2005 (NSW) (CPA) and the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) to determine to what extent costs should be awarded and whether they are awarded on an ordinary or indemnity basis. 2. Although broad, the Court's discretion must be exercised judicially and consistently with the overriding mandate provided for in ss 56–60 of the CPA and have regard to the principle that the award of costs is compensatory in nature, not punitive: Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11 at [44] (Oshlack). 3. The usual rule is that costs follow the event unless it appears that some other order should be made as to part or all of the costs: UCPR, r 42.1. 4. The event to which r 42.1 of the UCPR refers may be characterised as the result of the proceedings (so that the party who succeeds on the claim before the court is awarded costs) or the result of a particular issue or group of issues that is clearly "dominant or separable" if that produces a result that is fairer than giving the successful party all of his or her costs: Oikos Constructions Pty Ltd t/as Lars Fischer Construction v Ostin & Anor (No 2) [2021] NSWCA 98 (Oikos) at [11] – [16]; Cellarit Pty Ltd v Cawarrah Holdings Pty Ltd (No 2) [2018] NSWCA 266 at [8] (Cellarit). 5. Where an offer of compromise has been made before the first day of trial that complies with the formal requirements of r 20.26 of the UCPR and a defendant obtains an order or judgment on the claim no less favourable than the terms of the defendant's offer, a presumptive entitlement arises for an order for indemnity costs in respect of the defendant's costs from the date after the offer was made, unless the Court orders otherwise: UCPR, rr 42.13 and 42.15A; Leach v The Nominal Defendant (QBE Insurance (Australia) Ltd) (No 2) [2014] NSWCA 391 at [40] (Leach). There must be some circumstances to justify departure from the prima facie position provided under the rules such that the Court's discretion to "order otherwise" might be exercised: Consolidated Lawyers Ltd v Abu-Mahmoud; Abu-Mahmoud v Consolidated Lawyers Ltd [2016] NSWCA 4 at [65]; Leach at [40] and [48]. 6. The rejection of a Calderbank offer in circumstances where the final outcome is less favourable to the offeree, enlivens the discretion to award indemnity costs but does not create any prima facie right to such an order: Miwa Pty Ltd v Siantan Properties Pty Ltd (No 2) [2011] NSWCA 344 at [8] and [12] – [19] (Miwa v Siantan). In order to warrant making an indemnity costs order, a Calderbank offer must embody a genuine compromise and be shown by the party seeking to rely on it that it was unreasonable for the unsuccessful party not to accept: Leichhardt Municipal Council v Green [2004] NSWCA 341 at [21], [40], [46] and [57]; Evans Shire Council v Richardson (No 2) [2006] NSWCA 61 at [26]. 7. The factors that are relevant to consider as to whether the non-acceptance was unreasonable include the stage of the proceedings at which the offer was received; the time allowed for acceptance, the extent of the compromise; the offeree's prospects of success assessed at the date of the offer, and whether the offer foreshadowed an application for indemnity costs in the event of its rejection: Valmont Interiors Pty Ltd v Giorgio Armani Australia Pty Ltd (No 3) [2021] NSWCA 160 at [25] citing Miwa v Siantan at [12] and Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) (2005) 13 VR 435; [2005] VSCA 298 at [25]. 8. Underlying both the general rule that costs follow the event and qualifications to that rule is the idea that costs should be awarded in a way that is fair, having regard to what the Court considers to be the responsibility of each party for the incurring of the costs: Cellarit at [9]. 9. A successful party should not be deprived of their costs or made to pay the costs of the other side unless there is a good reason for the presumption in the general rule to be displaced, such as because they are guilty of some sort of misconduct relating to or leading up to the circumstances in the litigation, which may include when the successful party unnecessarily protracts the proceedings, although any conduct calculated to occasion unnecessary expense may disentitle a successful party of costs: Oshlack at [44], [69] and [134]; Cellarit at [53]. The circumstances do not need to amount to a most exceptional case, or strong or exceptional case: G R Vaughan (Holdings) Pty Ltd & Anor v Vogt & Anor [2006] NSWCA 263 at [20]. Mr Sim's claim for indemnity costs 1. Mr Sim seeks an order that his costs be paid on an indemnity basis from 9 June 2020 or, alternatively, from 5 February 2021, based on offers made on 9 June 2020 under r 20.26 of the UCPR or, in the case of the later date, a Calderbank offer made on 4 February 2021. 9 June offer 1. Under cover of an email dated 9 June 2020, Mr Sim sent an offer of compromise to the plaintiffs of the same date (9 June offer). Attached to that email was a court document headed "Offer of Compromise" that was expressed to be an offer of compromise in respect of the claim made by the plaintiffs against Mr Sim in the proceedings on the following terms: (1) Judgment in favour of the Defendant. (2) No order as to costs. (3) The offer is open for acceptance for 35 days from the date of this correspondence; (4) This offer is made in accordance with Rule 20.26 of the Uniform Civil Procedure Rules 2005 (NSW). 1. There is no evidence of any response to the 9 June offer. 2. It is common ground that the 9 June offer was not accepted and that the Judgment received by Mr Sim was no less favourable than its terms. 3. In support of an indemnity costs order based on the 9 June offer, Mr Sim's submissions refer to the offer having been made approximately eight months before the hearing, the time provided for acceptance being 35 days, the intention to rely on the offer in support of an application for an indemnity costs order, the significant extent of the compromise and that the offer was equal to what the court ultimately ordered. 4. The plaintiffs take issue with Mr Sim's submissions that the compromise was significant. They contend that the 9 June offer was essentially a walk-away offer that asked the plaintiffs to capitulate, relying on Bennette v Cohen (No 2) [2009] NSWCA 162 at [38]. 5. They also submit that the 9 June offer was not valid under r 20.26(4) of the UCPR as Mr Sim's failure to produce documents in response to the plaintiffs' notice to produce meant that Mr Goo was not able to fully consider the offer and he was also prevented from giving any notice under r 20.26(4)(a) as Mr Sim incorrectly stated to Mr Goo that he had no relevant documents. 6. As to the plaintiffs' second submission, the Judgment records that no documents were produced by Mr Sim in response to the aspect of the notice to produce served on Mr Sim on 19 March 2020 which sought bank statements for accounts in the name of Global HR (at [119]). It also records that Mr Sim's solicitor advised the plaintiffs that Mr Sim had no documents within his custody or control that fell within the request; that Mr Sim did not have physical copies of bank statements and had been unable to access electronic copies; that Mr Sim's evidence in cross-examination indicated that he could access electronic records of Global HR bank statements and/or transaction records and that Mr Sim's evidence on this issue was inconsistent and reflected a lack of candour on his part; and that his failure to produce any bank records enabled an adverse Jones v Dunkel inference to be drawn against Mr Sim: Judgment at [120], [157] and [192]. 7. Based on those findings, there is some merit that Mr Sim withheld information regarding the $110,000 issue and could have been more forthcoming prior to the hearing. However, I do not accept the plaintiffs' submission that Mr Sim's non-production of documents and statements regarding in response to the 19 March 2020 notice to produce had the consequence that the 9 June offer was not valid under r 20.26(4). 8. Rule 20.26(4) provides: If the offeror makes an offer before the offeree has been given such particulars of the offeror's claim, and copies or originals of such documents available to the offeror, as are necessary to enable the offeree to fully consider the offer, the offeree may, within 14 days of receiving the offer, give notice to the offeror that— (a) the offeree is unable to assess the reasonableness of the offer because of the lack of particulars or documents, and (b) in the event that rule 42.14 applies to the proceedings, the offeree will seek an order of the court under rule 42.14(2). 1. In my view, UCPR, r 20.26(4) did not invalidate Mr Sim's 9 June offer as the rule only applies to offers of compromise made by a party to proceedings (the offeror) who has made a claim for relief in the proceedings. Consistent with the use of the term "claim" elsewhere in r 20.26, which denotes a claim for relief in the proceedings (see for example, UCPR 20.26(1) and (2)), the reference in r 20.26(4) to the "offeror's claim" is to be read as referring to the offeror's claim for relief in the proceedings, with the consequence that the particulars or documents that are lacking are those from the offeror who has made a claim for relief, rather than from an offeror who is making an offer to compromise in response to the claim made against them in the proceedings (and makes a claim in respect of a factual matter by way of defence). 2. In any event, and even r 20.26(4) was applicable to Mr Sim's offer of compromise, no notice was given by the plaintiffs to Mr Sim within 14 days to indicate they were unable to assess the reasonableness of the offer. I also do not accept the plaintiffs' submission that Mr Goo was unable to give such a notice in the context where the plaintiffs continued to agitate for the production of documents from Mr Sim after receipt of the 9 June offer. 3. As is apparent from r 20.26(3)(a)(i), a walk-away offer may be capable of triggering the indemnity costs provisions of the UCPR. However, to attract an indemnity costs order, the offer of compromise must involve some element of compromise and not merely be made so as to trigger the costs consequences under the UCPR: Leach at [41], citing Regency Media Pty Ltd v AAV Australia Pty Ltd [2009] NSWCA 368 at [16] (Regency Media). The degree of compromise is to be determined objectively according to the circumstances of the particular case at the time the offer was made: Taheri v Vitek (No 2) [2014] NSWCA 344 at [9] – [14] (Taheri); Leach at [42]. 4. I do not accept Mr Sim's submission that the 9 June offer represented a significant compromise. The only compromise made by Mr Sim in the 9 June offer was giving up the legal costs that he was likely to recover if the offer was not accepted and the plaintiffs were not successful. These costs were those he had incurred to the date of the offer which, calculated on an party-party basis would have been less than $15,000, based on the evidence which indicates that, at that time, Mr Sim had incurred costs and disbursements totalling $15,143.74 (Annexure C and D of Affidavit of S Psaltis affidavit at 21, 24 – 47 and 71 – 77). 5. In my view, an offer by Mr Sim to forgo legal costs in that amount could not be said to have constituted a real concession or commercial compromise on his part or was of any real benefit to the plaintiffs, even in the context where Mr Sim was an individual litigant who had to bear the costs he had incurred to date personally: Taheri at [9]-[14]; Leach at [43]; Clark v Commissioner of Taxation (2010) 222 FCR 102; [2010] FCA 415 at [90]–[92] (Clark). 6. As I am not satisfied that the 9 June offer involved any real element of compromise on the part of Mr Sim, I do not consider that it is appropriate for the plaintiffs' non-acceptance to lead to the consequences that r 42.15A of the UCPR provides. The lack of any real compromise by itself or together with the matters referred to at [22] and [23] above is sufficient reason to order otherwise under r 42.15A. Accordingly, I refuse to grant Mr Sim indemnity costs pursuant to the 9 June offer. 4 February offer 1. Mr Sim's alternative claim for indemnity costs is based on an offer contained in a letter dated 4 February 2021 sent to the plaintiffs' solicitor by email that day (4 February offer). 2. The 4 February offer was expressed as an offer of compromise in accordance with the principles in Calderbank v Calderbank [1975] 3 All ER 333 and was made on following terms: (1) Judgment is entered for the plaintiffs in the sum of $52,000 (the "Settlement Sum") within 28 days. (2) These proceedings are discontinued with each party to bear their own costs, and releasing each other from any costs orders already made in the proceedings. (3) The plaintiffs otherwise release the defendant from all claims that arise or may arise in relation to the subject matter of these proceedings. (4) The parties are to enter into a deed to formalise this agreement. (5) This offer is open for acceptance until 5:00pm on 5 February 2021. 1. The 4 February letter expressly reserved the right to tender the letter on the question of costs, including indemnity costs, and also provided detailed reasons (the letter was 13 pages long) for Mr Sim's view that the claims made by the plaintiffs in the statement of claim would not succeed, including the claims pressed at the hearing relating to the $110,000 (referred to in the letter as the Test Funds) and the $50,000 payment from Mr Goo to Mr Sim. 2. Amongst other things, it was asserted in the 4 February letter that the evidence adduced by the plaintiffs did not prove that Mr Sim used the $110,000 for his own personal needs, that Mr Sim was entitled to transfer the funds to Global HR, the funds were held by Global HR and, even if Mr Sim were found to have received a benefit, the refund could only ever be made payable to Oakwood or Global HR as Tokorea and Mr Goo has no interest in the funds. As for the $50,000, it was asserted that even if the Court accepts the plaintiffs' position that Mr Goo paid to $50,000 to Mr Sim for the construction of the website, the plaintiffs own evidence indicated that the payment was not conditional upon it being reinvested back into Tokorea. 3. It is common ground that the 4 February offer was not accepted. 4. Mr Sim referred to the following factors in support of an order for indemnity costs based on the 4 February offer: the offer was an improvement on the 9 June offer in so far as an amount of $52,000 was offered to be paid; it was made prior to the hearing commencing; the time provided for acceptance was reasonable given the improvement on the 9 June offer; the extent of the compromise was significant; there was an expressed intention to rely on the offer in an application for indemnity costs; and the offer was significantly better than the outcome of the judgment. 5. The plaintiffs do not take issue with those matters other than in respect of the time provided for acceptance, which they submit was unreasonable. 6. Both the time at which an offer is made during the course of proceedings and the time which the offeree is given to accept an offer are relevant factors as to the reasonableness or otherwise of accepting an offer: Elite Protective Personnel Pty Ltd v Salmon [2007] NSWCA 322 at [146] – [147]. The question of whether a period during which a Calderbank offer is open for acceptance is reasonable is to be judged objectively in the circumstances known, or which should reasonably have been anticipated, by both parties: Kooee Communications Pty Ltd v Primus Telecommunications Pty Ltd (No 2) [2008] NSWCA 85 at [22] (Kooee). 7. Judged objectively, I do not consider that that the period of time provided for the plaintiffs to accept the 4 February offer was reasonable in this case. 8. The 4 February offer was made on Thursday, 4 February at a time that is not identified on the evidence and was open for acceptance until 5:00pm the next day, which was a Friday and the last business day before the hearing was scheduled to start on the following Monday. While it might be expected that the plaintiffs would have had some indication of the strengths and weaknesses of their case by the time the 4 February offer was made, the timing of the offer provided only one business day to obtain advice, consider and respond to what was a detailed letter addressing the multiple claims that had been advanced. There is no evidence that the parties had been in recent settlement discussions or had been conferring which may have facilitated an immediate consideration of the offer and the timing of the offer could be seen as resulting in the distraction from the preparation for the trial: Kooee at [15], [16] and [20]. 9. In Kooee, Giles and Tobias JJA observed at [2] that the "court should not be ungenerous to an offeree in determining whether a time is reasonable." In my view, that observation is apt in this case considering that Mr Goo did not read English and would have required the details of the 4 February offer and the reasoning in the letter to be translated to him, presumably adding to the time that other litigants might take. 10. The fact that the 4 February offer improved on the 9 June offer does not, to my mind, make the period of time during which it was open for acceptance reasonable. 11. It follows that I am not satisfied that Mr Sim has demonstrated that it was unreasonable for the plaintiffs not to have accepted the 4 February offer and refuse to award him indemnity costs on and from 5 February 2022 based on that offer. 12. I should record that I was not persuaded by the plaintiffs' other submission that referred to Mr Sim continuing to withhold information as to the $110,000 issue and to deny the $50,000 issue by reference to statements made in the 4 February letter. The fact that the letter included contentions regarding the $110,000 and $50,000 that did not reflect some aspects of Mr Sim's evidence in cross-examination or some of the factual findings of the Court or does not, in my view, make it unreasonable for the plaintiffs to have rejected the offer. This is particularly as the ultimate findings of the court which led to the dismissal of the plaintiffs' claims reflected some of the contentions made in Mr Sim's letter, as referred to at [34] above. Plaintiffs' claim to vary the costs order 1. The plaintiffs contend that the Court should depart from the usual rule that costs follow the event and that the appropriate order is that the parties should bear their own costs of the proceedings for two reasons. 2. First, they say that Mr Sim withheld necessary information about what happened to the $110,000 until he was cross-examined, referring to the failure to produce documents in response to the notice to produce and the plaintiffs' efforts to obtain a copy of the bank statements for the bank accounts of Global HR. They submit that the provision of such documents and information prior to the hearing could have narrowed the issues for determination and shortened the time for evidence, thereby reducing the hearing length from three days to possibly one or two days, and Mr Goo could have pleaded or presented his case differently. They say that there was no justification for Mr Sim to refuse to comply with the plaintiffs' notice to produce and also refer to having issued subpoenas to KE Bank in relation to the $110,000 issue that wasted costs and time in the context where no documents were produced. 3. Second, they refer to their success on a "substantial issue" of fact, namely that Mr Goo gave the $50,000 in cash to Mr Sim. 4. As to the second matter, while some hearing time was spent on the evidence relating to the dispute as to whether Mr Goo gave $50,000 in cash to Mr Sim, it did not occupy the bulk of the time at trial: Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd (No 2) [2014] NSWCA 219 at [18] (Doppstadt). The issue of fact on which Mr Goo succeeded was also not dominant or separable from Mr Goo's claim to recover that amount, in respect of which Mr Goo failed for the reasons set out in the Judgment at [273] – [288]: Doppstadt at [17]. Based on the reasoning in the Judgment, I am also unpersuaded that Mr Goo could have pleaded or presented his case differently if he had known prior to trial that Mr Sim admitted to receiving that cash. 5. I am also not persuaded by the plaintiffs' submission that Mr Sim's conduct in respect of the notice to produce and the position he took at trial in relation to the $110,000 issue warrants a departure from the usual rule that costs should follow the event, whether taken by itself or together with Mr Goo's success on the factual dispute regarding the $50,000, as referred to above. 6. I have already referred to the findings of the court regarding Mr Sim's response to the notice to produce and his evidence about that matter (at [26] above). Nevertheless, as noted in the Judgment (at [157]), there was an arguable technical distinction between bank statements (the subject of the notice to produce) and electronic transaction records that were available to Mr Sim. It also seems to me that the plaintiffs had opportunities to ascertain information in relation to the $110,000 issue but made forensic decisions not to utilise them, such as by joining Global HR to the proceedings or issuing a subpoena to Global HR and/or the Woori Bank for relevant records. They also opened their case on the basis that it was common ground that the $110,000 had been transferred into the bank account of Global HR, presumably based on the evidence and instructions from Mr Goo (Judgment at [182]). 7. There is some force to the plaintiffs' submission that if Mr Sim had produced bank records relating to Global HR prior to the hearing, the time needed at trial for evidence may have reduced. However, having regard to the various separate and alternative claims advanced by the plaintiffs and the fact that there was not sufficient time for oral submissions, it is not apparent that the hearing time would have reduced to one or two days, as the plaintiffs contend. 8. Ultimately, the court concluded that the plaintiffs had not established that they were entitled to recover the $110,000 from Mr Sim despite making factual findings of the nature contended for by the plaintiffs and an absence of the bank statements sought by the notice to produce. The court was satisfied that Mr Sim did not cause Global HR to use all of the $110,000 to pay for legitimate business expenses in connection with establishing Global HR and Tokorea's online remittance business in Korea and caused it to pay out to him money for his own personal gain: Judgment at [194]. The issues with the plaintiffs' case were more about the way in which they characterised the capacity in which Mr Sim received the $110,000, the purpose of the funds, the manner in which they framed their case as imbuing a relationship of trust and imposing a personal obligation directly on Mr Sim to repay the plaintiffs, and their contentions that the purpose and intent behind the funds had failed completely, matters which were not necessarily informed by or dependent on the documents sought by the notice to produce. 9. While not determinative, another relevant factor in considering the plaintiffs' position is that, on the first day of the hearing, they abandoned their other pleaded claims which had asserted the formation of a partnership between certain parties, sought to recover losses arising from the failed business venture for which they said Mr Sim was liable based on a range of breaches of duties, obligations under the Australian Consumer Law and a tortious duty of care. As noted in the Judgment, the fact that the plaintiffs' evidence was directed to the abandoned claims did not assist in the presentation of their case and led to inconsistent assertions about certain matters: Judgment at [129] and [199]. 10. In those circumstances, I am not satisfied that it could be said that Mr Sim's failure to produce the bank statements for Global HR occasioned such unnecessary expense or delay or that the plaintiffs' success on aspects of the case to justify depriving Mr Sim of costs in accordance with the usual rule that costs follow the event, reflecting his overall success in defending the claims brought against him. 11. Accordingly, I refuse the plaintiffs' application for an order that the parties bear their own costs of the proceedings and will maintain the costs order made on 8 April 2022 that provides for Mr Sim's costs of these proceedings to be paid by the plaintiffs on an ordinary basis. Should the Court make a gross sum costs order? 1. As to Mr Sim's application for a gross sum costs order, the Court has the power under s 98(4)(c) of the CPA to make an order that a party to whom costs are to be paid is entitled to a specified gross sum rather than assessed costs. 2. The discretion to order gross sum costs may be exercised whenever the circumstances warrant its exercise, having regard to the scope and purpose of the provision: Hamod v State of New South Wales and Anor [2011] NSWCA 375 at [813]. 3. The factors that merit particular consideration include the complexity of the proceedings in relation to their cost; the degree of any disproportion between the issues litigated and the costs claimed; whether the assessment of costs would be protracted and expensive; whether a gross sum costs order would assist in bringing finality to the litigation; and whether it appears that the party obliged to pay the costs would not be able to meet a liability of the order likely to result from the assessment: Penson v Titan National Pty Limited (No 3) [2015] NSWCA 121 at [5] (Penson v Titan); Harrison v Schipp (2002) 52 NSWLR 738; [2002] NSWCA 213 at [21] – [22] (Harrison v Schipp); Beach Petroleum NL v Johnson (1995) 57 FCR 119 at 120 (Beach Petroleum). 4. Before making a gross sum costs order, the Court should have sufficient confidence that the material before it enables it to arrive at an appropriate sum for the costs order and that it can do so on a logical, fair and reasonable basis: Harrison v Schipp at [22]; Beach Petroleum at 123. In assessing the quantum of a gross sum costs order, the Court is not required to descend into the level of detail required on taxation or assessment but is entitled to take a broad-brush approach: Harrison v Schipp at [22]; Penson v Titan at [7]. 5. Two questions arise for consideration. First, is this an appropriate case for ordering a specified gross sum instead of assessed costs? Second, if it is, what is the appropriate specific gross sum? 6. As to the first question, although the plaintiffs' claims raised a multitude of issues and were hard fought, the proceedings did not involve a long and complex case with a chequered history or were so acrimonious as to conclude that a costs assessment would likely be unnecessarily and unduly protracted, lead to further litigation or add to the costs unnecessarily: cf Harvey v Barton (No 4) [2015] NSWSC 809; Smooth Pool v Pickering [2001] SASC 131. 7. In addition to complex cases, another common category in which lump costs will be awarded is the very short and relatively straightforward case where costs are expected to be modest. As observed by Beech-Jones J (as his Honour then was) in Bobb v Wombat Securities Pty Ltd & Ors (No 2) [2013] NSWSC 863 at [6], in such cases it can be expected that costs will be modest so that the pursuit of the costs assessment process might lead to unnecessary expense. This is particularly so where there is doubt about the payer's financial capacity. 8. However, in this case, the costs incurred by Mr Sim are not so modest to conclude that a costs assessment would be an unnecessary expense (the evidence from Mr Psaltis identifies that Mr Sim has incurred $85,295.63 in legal costs and disbursements). Nor is there any evidence to doubt the plaintiffs' capacity to pay costs. As Mr Sim's submissions acknowledge (at [27(a)]): "There is no suggestion in the evidence that the plaintiffs would not pay and therefore no foundation for the Court to find that the plaintiffs are unlikely to pay a costs order at the conclusion of a costs assessment. It therefore flows [sic] that the principle that the successful party, the defendant, should not be put to the expense of depleting irrevocable resources in a costs assessment should not be applied." 1. As to quantum, Mr Psaltis's evidence includes the invoices issued to Mr Sim, including from counsel and a statement produced by Mr Psaltis' law firm accounting software that identifies the total amount invoiced to Mr Sim. 2. However, Mr Psaltis's evidence does not identify the seniority and experience of solicitors and counsel involved in the case or any other benchmark from which the court might reach some view as to what the outcome of an assessment might be, such as what discount he would expect to be applied to the solicitor's costs when assessed on a party-party basis. This gap is also seemingly acknowledged in Mr Sim's submissions, which states (at [31]): "the approach taken by the Court to estimate the costs must be logical, fair and reasonable … The task that has been asked by the Court to make a gross sum order is for it to exercise a discretion in circumstances where there is no benchmark as to what is fair and reasonable or just and equitable in relation to the costs incurred by the defendant. The Court is not assisted by an expert report that would provide a benchmark against which an assessment of costs would be made pursuant to s. 98(4) of the CPA. What the Court is asked to do is to determine the appropriateness of the costs without a benchmark and in doing so the defendant also seek the application of a discount to the invoices." 1. The Court does not necessarily require evidence from a costs consultant and can take account of its own observations of the proceedings and experience in assessing the quantum for a gross sum costs order. But, in my view, it is to be expected that some evidence would be given of the matters referred to above, in particular, the applicable discount that is likely to be applied and the identification of the sum sought for the purposes of the gross sum costs order. 2. It follows that I am not satisfied that it is appropriate to make a gross sum costs order in this case and decline to make an order under s 98(4)(c) of the CPA in favour of Mr Sim. Conclusion and orders 1. For these reasons, I am not persuaded that I should exercise my discretion to vary the default costs order made on 8 April 2022. I am satisfied that this is a case where it is appropriate for the usual rule that costs follow the event to apply and for the plaintiffs to pay Mr Sim's costs of the proceedings on an ordinary basis as agreed or assessed. 2. Accordingly, I make the following order: 1. The defendant's costs of these proceedings be paid by the plaintiffs on an ordinary basis as agreed or assessed. ********** 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 May 2022