Bell v Eldridge & Anor (No 2) [2007] NSWSC 1443

New South Wales Supreme Court

CITATION : Bell v Eldridge & Anor (No 2) [2007] NSWSC 1443

HEARING DATE(S) : Submissions in writing on costs.

JUDGMENT DATE : 12 December 2007

JURISDICTION : Equity Division

JUDGMENT OF : Palmer J

DECISION : Plaintiff to pay Defendants' costs on party/party basis, subject to any further order after costs assessor's report and enquiry.

CATCHWORDS : COSTS – INDEMNITY – LEGAL PRACTITIONERS – Prima facie case that legal practitioners representing unsuccessful plaintiff have caused Defendants to incur unnecessary costs – application for indemnity costs order against legal practitioners – costs assessor's report required – Court's power to make costs orders in stages.

LEGISLATION CITED : Civil Procedure Act 2005 (NSW) – s 98, s 99

Kathleen Ann Bell – Plaintiff PARTIES : Raymond Eldridge – First Defendant Florenville Pty Ltd – Second Defendant

FILE NUMBER(S) : SC 3718/04

COUNSEL : D.A. Hassall (Plaintiff) G.A. Sirtes (Defendants)

SOLICITORS : Jeanine Lloyd & Assoc (Plaintiff) Baker Deane & Nutt (Defendants)

3718/04 Bell v Eldridge & Anor (No 2)

JUDGMENT ON COSTS 12 December, 2007

1 I delivered judgment in this matter on 18 October 2007. The parties wished to make submissions on costs. I directed that those submissions be in writing and I said that I would give a decision without further oral argument. 2 The Plaintiff failed in the proceedings and concedes that costs should follow the event. The Plaintiff says that she should be ordered to pay the Defendant's costs, as assessed, on the party/party basis. 3 The Defendants say that the Plaintiff, by her legal representatives, has caused expenditure on costs in these proceedings which is extremely excessive. They say that they should have an indemnity costs order against the Plaintiff but that the Court should, in exercise of its powers under Civil Procedure Act 2005 (NSW) s 99(2) ("CPA"), make one of the special orders there provided so that the burden of the indemnity costs order does not fall unfairly on the Plaintiff (who is the First Defendant's daughter) but rather on her legal advisers. 4 In paragraph 5 of my judgment I said: "The pleading of Mrs Bell's case has been unnecessarily prolix and confusing. The Defendants have made several successful strike-out applications. Many parts of the Statement of Claim have been struck out, only to reappear in subsequent versions. The final pleading, a Second Further Amended Statement of Claim, remains prolix – it is some 37 pages and 114 paragraphs in length, and it is not easy to understand. What should have been a straightforward factual case has become unnecessarily complicated and expensive for the parties through want of clarity and precision in pleading." 5 My perusal of the Court file makes it plain that this case has had a tortured progress to trial. There were an unusually large number of interlocutory applications, including applications to strike out parts of the Plaintiff's Statement of Claim, most of which succeeded. My prima facie impression is that this essentially straightforward factual case has been inflated beyond all reasonable need on the Plaintiff's side. If this is so, it must be primarily the responsibility of the Plaintiff's legal representatives. In short, there appears to be a prima facie case falling within CPA s 99(1)(b), i.e. that costs have been incurred improperly, or without reasonable cause, in circumstances for which a legal practitioner is responsible. 6 I cannot now form a concluded view as to whether this impression is correct. The whole history of the matter must be examined, not merely the conduct of the trial. Accordingly, I could not, as the Defendants seek, now make a costs order against the Plaintiff on an indemnity basis. I would first need the report of a costs assessor under CPA s 99(3). 7 However, I do not think that the Defendants should be kept out of recovering any costs at all while the machinery of CPA s 99 is in motion. It will probably be some time before a costs assessor's report in this matter could be obtained and argument as to its consequences can be heard. 8 CPA s 98(1)(b) gives the Court "full power to determine … to what extent costs are to be paid" . I think that this power enables the Court to make a costs order in stages. 9 In the first stage, the Plaintiff should pay the Defendants' costs on the party/party basis, and the Defendants should be entitled to enforce such an order without delay. If it is found, after enquiry by a costs assessor, that the Plaintiff's legal representatives have not caused improper or unreasonable expenditure, then there will be no occasion for any further costs order to be made. 10 On the other hand, if the Court, after seeing the costs assessor's report and hearing the parties' submissions, concludes that the Plaintiff's legal representatives have indeed caused improper and unreasonable expense, it can go on to make a second stage costs order that the Plaintiff pay the whole, or part, of the Defendants' costs not already satisfied by the first order on the indemnity basis and it can order the Plaintiff's legal representatives to indemnify the Plaintiff in respect of the whole or part of that second stage costs order. 11 The orders I make are as follows: