Supreme Court New South Wales Medium Neutral Citation: Rahme v Benjamin & Khoury Pty Ltd (Costs) [2023] NSWSC 521 Hearing dates: On the papers Date of orders: 18 May 2023 Decision date: 18 May 2023 Jurisdiction: Common Law Before: McNaughton J Decision: Costs of the appeal should be awarded in the same terms as order 3 in the 23 March 2023 judgment. Catchwords: CIVIL – costs – costs variation – application for indemnity costs – orders sought that parties bear their own costs, or alternatively costs be a specified gross sum amount – whether costs should be apportioned to reflect the degree of success on distinct issues – costs awarded in the same terms as the original order – costs follow the event Legislation Cited: Civil Procedure Act 2005 (NSW), s 98 Uniform Civil Procedure Rules 2005 (NSW), r 42.1 Cases Cited: Calvo v Ellimark Pty Ltd (No 2) [2016] NSWCA 197 Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd (No 2) [2014] NSWCA 219 Firebird Global Master Fund II Ltd v Republic of Nauru (No 2) [2015] HCA 53; (2015) 327 ALR 192 Kumaran v Employsure Pty Ltd (No 2) [2022] NSWCA 247 Rahme v Benjamin & Khoury Pty Ltd [2023] NSWSC 244 Category: Costs Parties: Dana Rahme (Applicant) Benjamin & Khoury Pty Ltd (Respondent) Representation: Counsel: C Bevan (Applicant) D Smith (Respondent) Solicitors: Solon Lawyers (Applicant) Daniel Judge Lawyers (Respondent) File Number(s): 2014/262387 JUDGMENT 1. On 23 March 2023, I gave judgment on a Notice of Motion ("the appeal motion") brought by Mrs Dana Rahme ("Mrs Rahme") against Benjamin & Khoury Pty Ltd ("B&K") (Rahme v Benjamin & Khoury Pty Ltd [2023] NSWSC 244 ("the 23 March 2023 judgment")), and made the following orders: "(1) The appeal is allowed. (2) The orders made by Associate Justice Harrison on 16 March 2022 so far as they concern Dana Rahme are set aside. In lieu, the following orders are made: (a) In relation to costs up to and including 5 August 2021: (i) Subject to (ii), order that Gabriel Rahme pay Benjamin & Khoury Pty Ltd's costs of the application on the ordinary basis up to and including 5 August 2021; (ii) Order that Dana Rahme pay the costs thrown away as a result of the amendment of the original motion which had the effect of removing her as an applicant, as agreed or assessed. (b) Order that Gabriel Rahme pay Benjamin & Khoury Pty Ltd's costs of the application on the ordinary basis after 5 August 2021. (3) Benjamin & Khoury Pty Ltd is to pay Dana Rahme's costs of these proceedings on the ordinary basis. (4) In the event that either party seeks to vary Order 3, I direct: (a) The party seeking a variation to provide any affidavits and submissions (limited to three pages) within 28 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 (4)(a); (c) Such an application be determined on the papers." 1. This judgment should be read with the 23 March 2023 judgment. 2. In the 23 March 2023 judgment, I stated at [104] as follows: "Accordingly, in all the circumstances, and noting especially the relatively short length of the hearing, my current view is that costs should follow the event and should be awarded on the ordinary basis. However, I am prepared to hear further from the parties, in writing, if required." 1. Both parties took up the opportunity to make further submissions in relation to Order 3 above, as well as submissions in reply (together with the provision of an affidavit each: affidavit of Mr Werrdan Khoury sworn 24 April 2023 served in support of written submissions, and affidavit of Mr Michael Soulos sworn 8 May 2023 served in support of submissions in reply), which I have considered carefully. 2. In short, Mrs Rahme seeks indemnity costs (which were notified in her submissions for the hearing on the appeal motion). 3. On the other hand, B&K seek orders that the parties bear their own costs, or in the alternative that Mrs Rahme's costs be in a specified gross sum amount pursuant to s 98(4)(c) of the Civil Procedure Act 2005 (NSW). Further, B&K state: "If the Court makes either of these Orders, B&K will submit to the existing costs orders in its favour in these proceedings being vacated (or will undertake not to pursue them). This is intended to bring finality to these ongoing disputes which concern only costs." Indemnity costs 1. Mrs Rahme contends that indemnity costs should be awarded because there was "never" any legitimate basis for requiring Mrs Rahme to pay costs (other than costs thrown way by reason of the amendment) of an amended motion to which she was first, an inactive respondent, second, entered no appearance and third, took no part in. 2. Mrs Rahme alleges the motivation of B&K for seeking a costs order against her in respect of the amended motion, filed 5 August 2021, "had nothing whatsoever to do with a legitimate application to require a co-applicant on the Amended Motion to pay the costs of its failure." Further, Mrs Rahme claims B&K were: "far more concerned with deploying the possible costs order it sought against Mrs Rahme for the Amended Motion in B&K's Federal Court corporate insolvency proceedings. B&K brought it against Mrs Rahme to stave off the crystallisation of 3 statutory demands which deem the corporate insolvency of B&K." (Emphasis in original.) 1. Mrs Rahme claims: "Absence of a legitimate forensic purpose in seeking relief and incurring costs in doing so constitutes relevant misconduct for the purposes of the discretion as to costs." 1. B&K contend in response that these issues were resolved against Mrs Rahme in the 23 March 2023 judgment at paragraphs [64], [65], [73]-[75], and it is not open to Mrs Rahme to dispute the Court's findings in submissions on costs. B&K point to direct allegations of misconduct in four points in the submissions filed for Mrs Rahme. B&K submit that the allegation that B&K was acting for ulterior purposes in seeking a costs order against Mrs Rahme was the "Fourth Appeal Issue" which was rejected by the Court (at [93] of the 23 March 2023 judgment). 2. In light of the findings that I made in the 23 March 2023 judgment, as correctly referred to by B&K, no basis for indemnity costs has been shown. I decline to order indemnity costs. Each party bearing their own costs 1. B&K submit that the parties should bear their own costs for two reasons: 1. Neither party was successful in obtaining the relief they sought; 2. The Court should not otherwise exercise its discretion under Uniform Civil Procedure Rules 2005 (NSW) r 42.1 to order costs in Mrs Rahme's favour. 1. Under a heading "Success and 'the event'", B&K submit that the "event" is the practical result of the application, requiring consideration of the matters over which the parties joined issue and who succeeded on them: John Conrad Hansen trading as Derrawee Pastrol Company v Monterey (Coolah) Pty Limited [2012] NSWSC 1383 at [29] (Schmidt J). B&K contend that it is essential to "compare the outcomes each party sought in these proceedings". 2. B&K note that they have always agreed that Mrs Rahme was not afforded an opportunity to be heard, but this was not the issue. Rather, the issue was the appropriate costs order. B&K's position was that the appropriate costs order was that Mrs Rahme be jointly liable for costs with her husband to 5 August 2021. Mrs Rahme's position was that no costs order be made against her at all as any costs incurred would have been de minimis if anything. 3. The order made by this Court was that Mrs Rahme pay B&K's costs thrown away by reason of the amendment to the Notice of Motion on 5 August 2021. B&K contend that this is a case of mixed success. B&K contend: "On no view has Ms Rahme succeeded on this appeal where her position, very forcefully put, was that no costs order could be made against her, and the Court has made such an order." (Footnote omitted) 1. B&K concede (albeit in a footnote) that the order made by the Court was "slightly more limited" than the order sought by them. It is contended by B&K that Mrs Rahme succeeded on part of Ground 2 but failed on the balance of Ground 2 and the remaining four appeal grounds. B&K submit "[Mrs] Rahme has not achieved the relief at which she was aiming". 2. B&K point not only to Mrs Rahme's "lack of success" but point to her conduct of the proceedings which it contends would disentitle her to costs. B&K claim that it did what it could to resolve the costs dispute in the "most efficient manner possible. This was no more than a dispute about an interlocutory costs order." B&K noted that it emanated from a 1.5 page written submission, which B&K was content to rely on in relation to a redetermination. Instead, "an enormously wide dispute" was embarked upon with 14 appeal grounds and 20 pages of written submissions about a "mere interlocutory costs order". 3. B&K contend that the Court found Ground 1 "regrettable"; Ground 2 succeeded only in part; Ground 3 raised an entirely wasteful submission that the submissions were received after 5:00pm; Ground 4 "should not have been made" and Ground 5 was not an appellable matter. 4. B&K propose that as an alternative to the Court ordering each party to bear their own costs, a gross sum costs order in the amount of $15,000 should be made on the basis set out in Mr Khoury's affidavit. 5. In reply, Mrs Rahme takes issue with much of what B&K submit. She contests that it is a case of mixed success and contends that she did not dispute her responsibility for the costs thrown away by reason of the amendment to the motion because she contended that was the limit of what Harrison AsJ could order. Rather, her complaint was whether those costs were de minimis. Mrs Rahme points to the orders made by the Court compared to the orders sought on appeal and notes the extent of success achieved. 6. Mrs Rahme also contests the appropriateness of the fixed costs figure proposed by B&K. Consideration 1. As I noted in the 23 March 2023 judgment, the hearing resulting in the 23 March 2023 judgment was relatively short. It took just over half a day. 2. Whilst in some cases it is appropriate for a costs order to be moulded to reflect the degree of success on distinct issues, [1] in most ordinary cases, the real practical outcome of a particular claim will provide sufficient guidance. [2] The High Court in Firebird Global Master Fund II Ltd v Republic of Nauru (No 2) [2015] HCA 53; (2015) 327 ALR 192 at [6] has stated there are "good reasons not to encourage applications regarding costs on an issue-by-issue basis, involving apportionments based on degrees of difficulty of issues, time taken to argue them and the like." 3. I have considered the competing submissions of the parties. Whilst Mrs Rahme should have streamlined and confined the manner in which the matter was pleaded and argued, the matter was ultimately able to be heard reasonably efficiently. As to the proposition that B&K did what it could to resolve the costs dispute "in the most efficient way possible" that submission does not entirely accord with the offer made by B&K to resolve the matter as it did not reflect the clear words of Cavanagh J's order circumscribing the order available to be made by Harrison AsJ. As to the fixed costs submission, it is clear from Mrs Rahme's submissions in reply that this would not be accepted without additional contest and would likely lead to more regrettable use of this Court's time. Given the nature of the matter, and the comparative brevity of the hearing, it is not appropriate for the Court to spend further time on an exercise apportioning costs on an issue per issue basis. 4. In all of the circumstances I am of the view that costs of the appeal should be awarded in the same terms as my original order (that is, order 3 of the 23 March 2023 judgment). ********** Endnotes 1. Calvo v Ellimark Pty Ltd (No 2) [2016] NSWCA 197 at [8]-[10]; Kumaran v Employsure Pty Ltd (No 2) [2022] NSWCA 247 at [12]-[14]. 2. Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd (No 2) [2014] NSWCA 219 at [15]. 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: 18 May 2023