New South Wales District Court CITATION: Mills v Perpetual Trustees Limited (Costs) [2007] NSWDC 341 HEARING DATE(S): 3 October 2007 JUDGMENT DATE: 31 October 2007 JURISDICTION: District Court Civil Jurisdiction JUDGMENT OF: Johnstone DCJ at 1 DECISION: 1. The amount of costs payable by the plaintiff to the respondents is determined in gross sums of $33,000.00 and $23,000.00 respectively.; 2. The plaintiff's former solicitor is to forthwith pay those amounts to those parties.; 3. The plaintiff's former solicitor is to pay the costs of all parties in connection with this assessment, on the ordinary basis CATCHWORDS: COSTS - the plaintiff's former solicitor was ordered to indemnify her against her liability to the respondents for their costs of a motion filed against them that was struck out with costs - determination of a specified gross sum for those costs - amount of costs assessed by the court LEGISLATION CITED: Civil Procedure Act 2005: s 98(4)(c), s 99(1) CASES CITED: Janov v Morris [1981] 3 All ER 780 Sandra Ellen Mills (Plaintiff) PARTIES: Perpetual Trustees Limited (Defendant) Glad Cleaning Services Pty Ltd (First Respondent) Savills (NSW) Pty Ltd (Second Respondent) FILE NUMBER(S): 1078/05 Ms P Wall (For the Plaintiff) Mr G Grant (For the First Respondent) COUNSEL: Mr J Gruzman (For the Second Respondent) Mr B McManus (For the plaintiff's former solicitor) Mr Romaniuk (For the plaintiff's former barrister) Shanahan Tudhope (For the Plaintiff) Lee and Lyons (For the First Respondent) SOLICITORS: McCabe Terrill (For the Second Respondent) Colin Biggers & Paisley (For the plaintiff's former solicitor) Moray & Agnew (For the plaintiff's former barrister) JUDGMENT Introduction 1. I have taken the unusual step of determining in chambers, on the basis of written material submitted, the amount of costs payable by the plaintiff to Glad Cleaning Services Pty Ltd and Savills (NSW) Pty Ltd (the respondents) pursuant to orders made by the Judicial Registrar on 17 May 2007 and Judge Knox on 6 September 2007. On 3 October 2007 I ordered Mr Voros, the plaintiff's former solicitor, to pay to or indemnify the plaintiff in respect of those costs. 2. As I said in my Reasons for Judgment on 3 October 2007, this matter has an horrendous procedural history. That history is summarised in the interlocutory judgment of Judge Knox dated 6 September 2007. I will only refer to those aspects of the history as are relevant for present purposes. 3. The plaintiff, Ms Mills, was injured in a shopping mall at Ashfield. It is alleged that she slipped on ice-cream that had spilled onto the floor at or adjacent to an ice-cream shop. She commenced the substantive proceedings by filing a Statement of Claim on 24 March 2005 joining Perpetual Trustees Limited, alleging it was the occupier of the shopping mall. 4. Subsequently, on 6 September 2005, a Ms Chung was joined as second defendant, it being alleged she was the proprietor of the ice-cream shop. 5. At all times relevant to the matters to which these reasons relate, the plaintiff was legally represented; her solicitor was Mr Voros of Voros Lawyers, and her barrister was Dr Azzi. Shortly prior to the matter coming before me on 3 October 2007, Mr Voros and Dr Azzi ceased to represent the plaintiff, who has retained new solicitors and a new barrister, Ms Wall. 6. The problems to which this judgment relates began on 15 November 2006 when the plaintiff filed a notice of motion seeking to join two further additional defendants, Glad Cleaning Services Pty Ltd and Savills (NSW) Pty Ltd (the respondents), it being alleged they were the companies responsible for the cleaning and for the provision of the cleaners in respect of the area where the plaintiff fell. The problem was, however, that by that time the plaintiff was out of time and requires an extension of the limitation period under the Limitation Act. The plaintiff's motion was so incompetently and inadequately prosecuted (see my reasons for judgment dated 3 October 2007) such that the Judicial Registrar dismissed it on 17 May 2007, with the plaintiff being ordered to pay the costs of the respondents. The plaintiff appealed that decision, but the appeal was not pursued and has lapsed. 7. In addition to dismissing the original motion and ordering the plaintiff to pay the costs of the respondents, the Judicial Registrar ordered the plaintiff's solicitor, Mr Voros, to show cause why he should not be required to meet that liability for costs, by the making of an order under s 99(1) of the Civil Procedure Act 2005. 8. Things got worse. The solicitors then acting for the plaintiff filed a new motion, again seeking to join the two respondents as additional defendants. The respondents each filed motions seeking dismissal, or alternatively, a stay of the plaintiff's new motion unless and until the plaintiff paid their costs of the original motion: Janov v Morris [1981] 3 All ER 780. 9. The proceedings came before Judge Knox on 5 and 6 September 2007. For some reason, Dr Azzi did not appear on the first day, and the plaintiff's counsel was Ms Nolan, who applied for an adjournment because of her concerns that the plaintiff needed independent legal advice having regard to the show cause orders against her solicitors. The question of the conflict of interest between the plaintiff and her then lawyers had not previously been addressed. The plaintiff's case was also completely under-prepared, and there were further failures on the plaintiff's part to comply with various case management directions. 10. Things got worse still. When Dr Azzi returned on the second day to represent the plaintiff, there were arguments between him and Ms Nolan, and it seems that there was an issue as to who was actually representing the plaintiff. The displeasure of Judge Knox was made plain in his reasons for judgment dated 6 September 2007. He could find no justification for the delays and non-compliance with orders on the part of the plaintiff's legal team. He even went so far as to tell the lawyers they might need to consider notifying their respective professional liability insurers. 11. In the circumstances, Judge Knox had little choice but to grant an adjournment, and he did so, making a series of further orders for the further conduct of the matter. 12. In granting an adjournment, Judge Knox said: "I do not think it is in anyone's interest that the matter proceed today until all the parties have an opportunity to take instructions and calmly consider their respective positions." 13. The plaintiff, at least, heeded that advice, and she withdrew instructions from Mr Voros and Dr Azzi, and instructed new legal representatives. 14. Amongst the orders made by Judge Knox were orders that the plaintiff pay the respondents' costs of and incidental to the adjournment. But, in addition, he ordered Mr Voros and Dr Azzi to show cause why those costs orders against the plaintiff should not be met personally by them. 15. Such was the state of affairs when the show cause hearings came before me on 3 October 2007. It seemed to me that the legislators had this sort of case in mind when they enacted the Civil Procedure Act 2005, in particular such provisions as sections 56, 57, 58, 59, 60, 98 and 99. I proceeded to deal with the matters before me as justly, quickly and cheaply as the dictates of justice permitted. I ordered Mr Voros to indemnify the plaintiff in respect of the liability for costs imposed on her by the orders of the Judicial Registrar on 17 May 2007 and Judge Knox on 6 September 2007. I made a further order, under r 42.7(2), that those costs be quantified and paid forthwith. For reasons of procedural fairness I had to defer consideration of the extent to which I should require Dr Azzi to either indemnify Mr Voros or make a contribution to the costs he is required to pay. I had anticipated that with the assistance of new lawyers who have come into the matter to advise them, presumably instructed by their insurers, they might reach agreement on that, and I am still waiting to learn whether or not that hope was forlorn. If necessary, will hear that dispute in due course, and more costs will be incurred, but at least the continuing parties to the substantive proceedings and the new motion to join additional defendants will not have to be involved. 16. With a view to expeditiously progressing the plaintiff's application to join Glad Cleaning Services Pty Ltd and Savills (NSW) Pty Ltd as additional defendants to a hearing, I determined that if the parties were unable to agree on the quantification of the amount of costs payable, I would proceed, under s 98(4)(c) of the Civil Procedure Act 2005 to determine a specified gross sum for those costs, and do so on the papers, in chambers, on the basis of written material. I made certain orders by way of a timetable to enable that to occur, if needed. 17. Unfortunately the parties involved did not agree on the quantification of the costs to be paid to Cleaning Services Pty Ltd and Savills (NSW) Pty Ltd, and in accordance with the timetable I received the following letters (with enclosures): 1. Letters from Colin Biggers & Paisley dated 12, 15, 22 and 23 October 2007. 2. Letter from Lee & Lyons dated 19 October 2007. 3. Letter from McCabe Terrill to Colin Biggers & Paisley dated 19 October 2007. 18. In my view this correspondence appeared to contain a number of misconceptions or matters that might benefit from clarification and I brought the following to the attention of the parties: "1. My orders No 1 to 4 made on 3 October 2007 were intended to encompass the entirety of proceedings relating to the original motion (as amended) to join Glad Cleaning Services Pty Ltd and Savills (NSW) Pty Ltd, and the entirety of the proceedings relating to the new motion to join Glad Cleaning Services Pty Ltd and Savills (NSW) Pty Ltd up to the judgment and orders of Judge Knox on 6 September 2007. That includes all costs, whether or not there were orders, or the costs were reserved. Thus, all costs incurred in connection with the motions to that date are included in the wash. There is, therefore, a clean slate as from that date, at least so far as any costs in connection with the motions are concerned. The costs of the substantive proceedings remain unaffected. The costs of the new motion incurred after 6 September 2007 remain unaffected, except insofar as they are picked up by my order No 11 made on 3 October 2007. 2. I point out, secondly, that I am only proposing to quantify the costs covered by my orders No 1 to 4. I do not propose to quantify other costs, such as any costs payable pursuant to my order No 11 made on 3 October 2007, the substantive proceedings, or the new motion to join Glad Cleaning Services Pty Ltd and Savills (NSW) Pty Ltd (other than those covered by the orders of the Judicial Registrar on 17 May 2007 and Judge Knox on 6 September 2007). Indeed, none of those other costs are yet payable: r 42.7(2). I am, however, prepared to entertain an application under r 42.7(2) in respect of those costs ordered in my order No 11 ." 19. No party demurred from these matters, and I have proceeded to make the assessment under s 98(4)(c) of the Civil Procedure Act 2005 to determine specified gross sums, taking into account the documentary material enumerated above, which was in my view sufficient for the purpose. My reasons in respect of that assessment follow. 20. The original claim for party/party costs made on behalf of Glad Cleaning Services Pty Ltd amounted to $64,448.20, as itemised in the correspondence from Lee & Lyons. Having regard to the matters of clarification adverted to above, I calculate the claim at $45,280.00. A sum of $31,056.20 only is conceded on behalf of Mr Voros. Thus the parties are apart by some $14,000.00. 21. The original claim for party/party costs made on behalf of Savills (NSW) Pty Ltd amounted to $34,399.50, as itemised in the correspondence from McCabe Terrill. Having regard to the matters of clarification adverted to above, I calculate the claim at $27,221.50. A sum of $22,817.50 only is conceded on behalf of Mr Voros. These parties are therefore apart by some $5,000.00. 22. The major difference in the two claims relates to the fees claimed for counsel. The claims for solicitors' costs are quite similar in total. The differential in respect of counsel's fees required closer examination, to which I shall come. 23. The letter from Colin Biggers & Paisley dated 15 October 2007 sets out the objections of Mr Voros to the claims. A series of general objections was made to the claims in Item 4 commencing on page 4. My view in relation to each matter is as follows: (a) I disagree. (b) I disagree. (c) I disagree. (d) This assertion is conceded, and I take it into account. (e) I agree. (f) I disagree, at least up until 6 September 2007. (g) So have I. (h) I agree. 24. A series of general objections was then made to the claim made by McCabe Terrill on behalf of Savills (NSW) Pty Ltd. My view in relation to each matter is as follows: (a) I disagree. (b) I agree. (c) I disagree. (d) I agree. (e) I agree. (f) I agree. (g) I agree. (h) I disagree. (i) I disagree. (j) I disagree. (k) I agree. (l) Irrelevant to the current assessment. (m) Irrelevant to the current assessment. 25. A series of general objections was then made to the claim by Lee & Lyons on behalf of Glad Cleaning Services Pty Ltd. My view in relation to each matter is as follows: (a) I disagree. (b) I disagree. (c) Not necessarily, but I take the comparisons into account. (d) I agree. (e) I agree. (f) I agree. (g) I take this into account. (h) I agree. (i) I disagree. (j) I disagree. (k) I agree. (l) I agree. (m) I agree. (n) I disagree. (o) I disagree. (p) I disagree. (q) Irrelevant to the current assessment. 26. I turn to discuss my approach to the fees claimed for counsel. I preface these remarks by saying that from a practitioner/client perspective I have no problem with the claims, and indeed if I were assessing them on an indemnity basis, I would have allowed them substantially as claimed. However, viewed from a party/party perspective, the claims for counsels' fees are not fair and reasonable. In the case of Glad Cleaning Services Pty Ltd, in particular, there has been an undue reliance on counsel by the solicitors, and the daily rates claimed are too high having regard to the jurisdiction and complexity of the matters at issue. 27. On the other hand, it is clear that counsel for Glad Cleaning Services Pty Ltd has taken a lead role in the interlocutory matters. Indeed, he was most helpful to me on 3 October 2007 in summarising the history and isolating the issues for consideration and determination. 28. In my view, however, fees for counsel appearing at a Directions Hearing in this court for this type of matter should not be allowed at an amount in excess of $1,500 except in exceptional circumstances. Similarly, a daily fee for the hearing of a motion should be in the range of $2,000 - $2,500. Assessment 29. Having regard to all the above considerations, I assessed the claims for interlocutory costs for the period from 27.11.06 to 10.9.07 as follows: Table Claimed Allowed Glad Cleaning Services Solicitors costs $12,505.00 $11,000.00 Counsel's fees $32,775.00 $22,000.00 Total $45,280.00 $33,000.00 Savills (NSW) Pty Ltd Solicitors costs $15,066.50 $11,200.00 Counsel's fees $12,155.00 $11,800.00 Total $27,221.50 $23,000.00 Disposition 30. I determine the amount of the costs payable by the plaintiff to Glad Cleaning Services Pty Ltd as a result of the orders made by the Judicial Registrar on 17 May 2007 and Judge Knox on 6 September 2007 in a gross sum of $33,000.00. 31. I determine the amount of the costs payable by the plaintiff to Savills (NSW) Pty Ltd as a result of the orders made by the Judicial Registrar on 17 May 2007 and Judge Knox on 6 September 2007 in a gross sum of $23,000.00. 32. I therefore order Mr Voros to forthwith pay those amounts to those parties. 33. I also order Mr Voros to pay the costs of those parties in connection with this assessment, on the ordinary basis. 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.