Land and Environment Court New South Wales Medium Neutral Citation: Duarte v Ross (No 2) [2022] NSWLEC 95 Hearing dates: On the papers Date of orders: 5 August 2022 Decision date: 05 August 2022 Jurisdiction: Class 4 Before: Duggan J Decision: See paragraph 33 Catchwords: COSTS – application for lump sum costs order – s 98(4)(c) of Civil Procedure Act 2005 (NSW) – relative responsibility of parties – proportion between issues litigated and costs claimed – complexity of proceedings – gross sum costs order appropriate Legislation Cited: Civil Procedure Act 2005 (NSW) Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119 Duarte v Ross [2022] NSWLEC 66 Hamod v State of New South Wales [2011] NSWCA 375 Harrison v Schipp (2002) 54 NSWLR 738 Leary v Leary [1987] 1 WLR 72 at 76 Smoothpool v Pickering [2001] SASC 131 Young v Hones (No 3) [2014] NSWSC 499 Young v King (No 14) [2018] NSWLEC 162 Zepinic v Chateau Constructions (Aust) Ltd (No 2) [2014] NSWCA 99 Category: Costs Parties: Rodney Duarte (Applicant) Murray Ross (Second Respondent) Jacqueline Ross (Third Respondent) Representation: Counsel: R Duarte, in person (Applicant) N Craven, solicitor (Second and Third Respondents) Solicitors: R Duarte (in person) Cockburn and Co Lawyers (Second and Third Respondents) File Number(s): 2021/181825 and 2021/181839 Publication restriction: No Judgment Nature of proceedings 1. Judgment in the substantive proceedings in Duarte v Ross [2022] NSWLEC 66 (Duarte v Ross (No 1)) was delivered on 3 June 2022. I adopt the facts and circumstances as set out in that judgment without repeating them here. I adopt the same defined terms as were used in Duarte v Ross (No 1). 2. In Duarte v Ross (No 1), Mr Murray Ross and Ms Jacqueline Ross (the Respondents) were successful in that both sets of proceedings and notices of motion were dismissed. So that each party was provided an opportunity to address me as to costs, and to ensure no additional costs were incurred, I made the following order which adopted the usual presumption that costs follow the event pursuant to r 42.1 of the Uniform Civil Procedure Rules 2005 (NSW), whilst enabling the parties to submit that a different order should be made: [40] In both proceedings 2021/181825 and 2021/181839: (1) Order the Applicant to pay the Respondents' costs of those proceedings; (2) In the event that either party seeks to vary Order (1), direct: (a) The party seeking a variation to provide any affidavits and submissions (limited to three pages) within 14 days; (b) The other party to provide any affidavits and submissions in reply (limited to three pages) within 14 days of receipt of the material in Order 2(a); (3) Such application to be determined on the papers. 1. On 17 June 2022, the solicitor for the Respondents, Ms Nicola Craven made an application to vary order 1 by the filing of a supporting affidavit sworn 17 June 2022 so that a gross sum costs order in the amount of $16,887.64, or alternatively a lump sum the Court considers to be fair and reasonable, is made. Written submissions supporting that application were filed with the Court on 20 June 2022. 2. Following the receipt of the Respondents' costs application and supporting affidavit, an email was sent from the Court's registry to Mr Rodney Duarte (the Applicant) on 23 June 2022 extracting order (2)(b) at [40] of Duarte v Ross (No 1) and directing him to provide any affidavits or submissions in reply to such application (limited to three pages) within 14 days, by Monday 4 July 2022. 3. The Court received an email from Mr Duarte on 4 July 2022 totalling five pages, together with an affidavit filed 5 July 2022. A further email was received on 7 July 2022 and two further affidavits on 18 July 2022 and 27 July 2022. The material received reiterated his complaints in relation to the primary proceedings and their outcome and attached detailed diary entries, however made no reference to the relevant issue of costs. The substantive proceedings have been concluded by the making of orders in Duarte v Ross (No 1) and all that remains is the issue of costs. Accordingly, this material is not relevant to my determination of costs. 4. As I have already determined that the usual rule that costs follow the event applies so that the Applicant is responsible for the Respondents' costs and no application was made to alter this aspect of the order, this judgment deals solely with the question of whether a gross sum costs order is appropriate in the circumstances. Evidence 1. In their application, the Respondents relied upon the affidavit of Ms Nicola Craven sworn 17 June 2022. The annexure to that affidavit marked Exhibit NC-1 consisted of a copy of the Amended Summons for proceedings 2021/181839 and the documents attached, copies of the Court's online court directory showing listings and orders made in the course of the proceedings and a bank cheque addressed to the Respondents, as well as an itemised bill of costs and disbursements accrued by the Respondents in relation to the proceedings. 2. The Applicant has filed no evidence and made no submissions as to costs. Respondents' submissions 1. The Court is empowered to make a gross sum costs order pursuant to s 98(1) and 98(4)(c) of the Civil Procedure Act 2005 (NSW) (Civil Procedure Act) which relevantly state: 98 Courts powers as to costs (1) Subject to rules of court and to this or any other Act— (a) costs are in the discretion of the court, and (b) the court has full power to determine by whom, to whom and to what extent costs are to be paid, and (c) the court may order that costs are to be awarded on the ordinary basis or on an indemnity basis. … (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— … (c) a specified gross sum instead of assessed costs… 1. This power must only be exercised where it would be fair and equitable in the circumstances of the parties: Young v King (No 14) [2018] NSWLEC 162 at [8], citing Harrison v Schipp (2002) 54 NSWLR 738 at [21]-[22] (Harrison v Schipp). 2. The Court must also give effect to s 56(1) of the Civil Procedure Act, being the just, quick and cheap resolution of the real issues in the proceedings. 3. The Court will make lump sum costs orders in circumstances where the costs assessment process would likely be "protractive and expensive": Young v Hones (No 3) [2014] NSWSC 499 at [25] (Young v Hones). Additionally, the Court will make a lump sum costs order when it is desirable to avoid the expense, delay and aggravation of a contested costs assessment: Hamod v State of New South Wales [2011] NSWCA 375 at [817] (Hamod). 4. If order 1 was not varied in accordance with the Respondents' application, there is little scope for the parties to reach agreement as to costs and it would likely be necessary for the Respondents to have their costs assessed. 5. Costs incurred in the proceedings were higher than those that would have been incurred had the Applicant been represented by a solicitor for the following reasons: 1. The Applicant's Amended Summons failed to clearly outline the issues in dispute, the elements of the cause of action, nor the relief sought; 2. No admissible evidence was filed by Mr Duarte to support the relief sought; 3. As evidenced by the invoice contained in the affidavit of Nicola Craven, considerable time was spent in defending the proceedings; and 4. There were instances during the course of the proceedings where Mr Duarte, as a self-represented litigant would raise matters in directions hearings that were not relevant to issues in dispute in the proceedings, and make unsubstantiated claims, meaning some directions hearing went in excess of one hour. 1. Noting Mr Duarte's conduct in running these proceedings, a lump sum costs order is appropriate in these circumstances given that it would alleviate additional costs to be incurred by the Respondents as a successful party in a formal assessment: Hamod at [27] (per Beazley JA). 2. As per Beazley JA (Giles and Whealy JJA agreeing) in Hamod at [816], the following matters merit particular consideration with regard to s 98(4) of the Civil Procedure Act: 1. The relative responsibility of the parties for the costs incurred; 2. The degree of disproportion between the issues litigated and the costs claimed; 3. The complexity of the proceedings in relation to the costs; and 4. The capacity of the unsuccessful party to satisfy any costs liability. 1. A detailed costs assessment is not required by the Court when awarding a lump sum costs order. However, as stated in Young v Hones at [29], citing Hamod at [820], the process is to be: logical, fair and reasonable, and 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. 1. Some form of failsafe discount on the estimated costs order is to be applied by the Court so as to prevent prejudice to the non-successful party and circumvent over-estimating costs: Young v Hones at [11], citing Hamod at [794]. 2. As outlined in the affidavit of Nicola Craven sworn 17 June 2022, the Respondents' legal costs totalled $24,125.20. The Respondents accept that, on assessment, they will not recover the full amount of these costs, particularly given that costs were ordered to be paid on the ordinary basis. The Respondents submit that a reduction in the vicinity of 30 per cent would be applied by an assessor on assessment. The Respondents submit that a lump sum costs order applying a discount of 35 per cent, being a lump sum costs order in the sum of $16,887.64, represents a claim of an amount on a reasonable and fair basis and less that what would be claimed on a formal assessment. Alternatively, the Respondents are content to defer to the Court if it determines the reduction of 35 per cent is not fair and reasonable. 3. The Court can have confidence based on the material provided that the appropriate gross sum can be arrived at: Young v Hones at [25]. Findings 1. For the reasons that follow, I find that it is appropriate in the circumstances for the Respondents to be awarded their costs in a lump sum in the amount proposed. 2. In exercising my discretion pursuant to s 98(4) of the Civil Procedure Act, I consider that the following factors, as identified in Hamod at [816], warrant particular consideration in these proceedings: the relative responsibility of the parties; any disproportion between the issues litigated and the costs claimed; and the complexity of the proceedings as they relate to costs. 3. I accept the Respondents' submission that the Applicant's Amended Summonses did not clearly outline the issues in dispute, the elements of the cause of action, nor the relief sought, and considerable time was spent at directions hearings and on the day of the hearing clarifying the issues and how they related to the two Notices of Motion also listed. 4. Whilst I was able to clarify the issues in dispute on the day of the hearing, I ultimately found that Mr Duarte had not established a jurisdictional foundation for his claims relating to compensation for: loss of sleep; cancellation of the costs order of the Local Court; and the claim in relation to a stormwater line. Further, the evidence he tendered did not substantiate his key claims nor the relief sought in relation to the installation of the indoor component of the air conditioning unit and the alleged noise emanating from it. Both the Amended Summonses and Notices of Motion were dismissed in their entirety. 5. Noting the above, I accept the Respondents' submissions that the Applicant's formulation of his case required the Respondents to spend significantly more time in defending the proceedings than would otherwise have been necessary considering the substance of the claims. 6. Based on the unclear nature of the Applicant's court documents, the lack of admissible evidence provided, and the time taken by the interlocutory matters and directions hearings that arose in the course of the proceedings, I accept that the costs claimed are proportionate to the complexity of the proceedings and the issues litigated as they could be identified by the Respondents. 7. The Respondents also made submissions in relation to the capacity of the unsuccessful party to satisfy any costs liability and the difficulties faced recovering a separate costs order against the Applicant made by the Local Court. As I have no evidence before me as to the Applicant's financial capacity, and can only consider proceedings in this Court, I do not consider that these factors are relevant to my determination. 8. In coming to the conclusion that a gross sum costs order is appropriate, I have also considered whether such order is fair and reasonable in these circumstances: Hamod at [820]. Whilst the Applicant filed no material in reply, sufficient opportunity was provided to the Applicant to provide submissions as to why such an order was not appropriate and no such submissions were made: Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119 (Beach Petroleum), as cited in Hamod at [793]. Such order will further alleviate the additional costs to be incurred by the Respondents as the successful party in any formal assessment. 9. Further, considering the length of these proceedings to date and in circumstances where the Applicant is self-represented, it is particularly desirable to avoid the further expense, delay and aggravation of a contested costs assessment and provide some finality to these proceedings by making a gross sum costs order: see Hamod at [817]. Such order also facilitates the just, quick and cheap resolution of the proceedings pursuant to s 56(1) of the Civil Procedure Act. 10. In reference to exercising my discretion in relation to determining an appropriate amount for the gross sum, I am not required to undertake a detailed examination of the kind involved in a formal costs assessment: Harrison v Schipp at [743]. Rather, the costs ordered should be logical, fair and reasonable and 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, as cited in Hamod at [820]. 11. Applying a broad brush approach as per Zepinic v Chateau Constructions (Aust) Ltd (No 2) [2014] NSWCA 99 at [31] and [38], I am satisfied that the invoice of costs and disbursements provided by the Respondents represents an accurate picture of their costs, particularly considering the pleadings, the interlocutory processes, the preparation for final hearing and the final hearing: Smoothpool v Pickering [2001] SASC 131, as cited in Hamod at [819]. 12. I also accept that an impressionistic discount of the costs actually incurred or estimated is appropriate in order to take into account the contingencies that would be relevant in any formal costs assessment: Hamod at [820]. I consider that the 35 per cent discount proposed by the Respondents strikes the appropriate balance between preventing prejudice to the Applicant by overestimating costs, and not causing injustice to the successful party by applying an arbitrary discount on the costs estimate: Leary v Leary [1987] 1 WLR 72 at 76, as cited in Hamod at [793]. For those reasons, I accept the sum proposed by the Respondent. Orders 1. For the reasons outlined above: 1. In proceedings 2021/181825 and 2021/181839, the Court orders that pursuant to s 98(4) of the Civil Procedure Act 2005 (NSW), the Applicant, Mr Rodney Duarte, is to pay the Respondents' costs in the gross sum of $16,887.64. ********** 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: 05 August 2022