Supreme Court New South Wales Medium Neutral Citation: Bobb v Wombat Securities Pty Ltd & Ors (No 2) [2013] NSWSC 863 Hearing dates: 27 June 2013 Decision date: 27 June 2013 Jurisdiction: Common Law Before: Beech-Jones J Decision: Order that the plaintiff pay the first defendant's costs of the proceedings in the sum of $15,400. Catchwords: LUMP SUM COSTS ORDER - costs claimed relatively modest - doubts about payer's capacity - parties already in dispute about costs assessment. Legislation Cited: - Civil Procedure Act 2005 Cases Cited: - Bobb v Wombat Securities Pty Ltd & Ors 2013 NSWSC 757 - In the matterr of Palladium Consulting Pty Ltd 2013 NSWSC 92 Category: Costs Parties: Richard Bobb (Plaintiff) Wombat Securities Pty Ltd (First Defendant) Michael Eagle (Second Defendant) Stephen John Lancken (Third Defendant) Rosemary Workman (Fourth Defendant) Representation: Counsel: D.K.L. Raphael (Plaintiff) Ms M. Castle (First Defendant) Submitting appearances (Second, Third and Fourth Defendants) Solicitors: Gells Lawyers (Plaintiff) In Curia Lawyers (First Defendant) I.V. Knight, Crown Solicitor (Second, Third and Fourth Defendants) File Number(s): 2012/386562 ex tempore Judgment on costs 1On 7 June 2013 I gave judgment dismissing the plaintiff's summons in these proceedings (Bobb v Wombat Securities Pty Ltd & Ors 2013 NSWSC 757 ("Bobb No 1")). At [47] of Bobb No 1, I stated that I was minded to order the plaintiff to pay the first defendant's costs, but I granted the parties seven days to file any submissions on that issue. Within that time the first defendant advised that it sought a lump sum costs order pursuant to s 98 of the Civil Procedure Act 2005. It filed a notice of motion to that effect which was returnable today. Both counsel addressed orally concerning that application. 2In support of its notice of motion the first defendant read an affidavit from its solicitor in the proceedings, John Patrick Fleming, sworn 18 June 2013. He was retained in December 2012 after the plaintiff's appeal had been listed before Knox DCJ (see Bobb No 1 at [9]). Mr Fleming's affidavit annexes various accounts including counsel's fees. As at the date of his affidavit over $16,000 in professional fees and counsel's fees had been incurred. Mr Fleming estimates that by the time of the completion of this application that figure will have increased to just over $22,000. 3Mr Fleming's affidavit also annexes material from which it can be concluded that there is a justifiable basis for concern about the plaintiff's financial position. It appears that he has a number of substantial judgments outstanding against him and that he has applied to pay at least some of them by instalments. Earlier this year a request was made on behalf of the first defendant that the plaintiff provide some financial information concerning his means, but it was not provided. 4In his judgment, In the matter of Palladium Consulting Pty Ltd 2013 NSWSC 92, Black J noted that the power to make a lump sum costs order has been most commonly exercised when costs have been incurred in lengthy or complex cases (at [11]). His Honour also noted that it is not a power routinely exercised in place of the costs assessment process. His Honour stated: "The power to make a gross sum costs order should only be exercised where the Court considers it can do so fairly between the parties, including achieving an appropriate sum on the materials available to it, and the Courts have typically applied a discount in assessing costs on a gross sum basis: Ritchie's Uniform Civil Procedure NSW [s 98.65]; Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWSC 23." 5Ultimately in Palladium Black J made a lump sum costs order having regard to the following factors (at [14]): "On balance, it seems to me that I should nonetheless make a gross sum costs order having regard to the relatively modest amount of the costs claimed; the delay which is likely to occur on a further assessment; the history of existing disputes between the parties as to the previous assessment; the uncertainty as to whether Palladium will ultimately meet a costs order, given that it has not met the previous costs order from the original proceedings; and the Court's experience as to the level of costs likely to be allowed in more complex applications of this kind." 6Thus, in addition to complex cases, another common category in which lump costs will be awarded is the very short and relatively straightforward case. 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. Further, in such cases the court will often be in a good position to make a reasonably well-informed assessment as to how much of the costs were reasonably incurred, because in a straightforward case it may often be apparent what out of court work was necessary for the case as presented. 7Against the above is, of course, the broad proposition that the detailed scheme for costs assessment which affords protections to the parties should not be undermined by too quick a resort to the power conferred by s 98. Counsel for Mr Bobb, Mr Raphael, urges that consideration upon me. He also submits the amount claimed in this case is such that it cannot be characterised as a small matter. 8I disagree. I consider that the circumstances of this case clearly warrant the making of a lump sum costs order. In the scheme of cases in this Court, the costs claimed are relatively modest. There are significant doubts about the plaintiff's capacity to pay such that there is a real risk that the costs of any assessment process undertaken by the first defendant may be thrown away. The issues in the case were straightforward and the Court is in a position to make a reasonably well-informed assessment as to the appropriate level of costs. Further, it must be borne in mind that the substantive issue of the proceedings was a dispute over the costs assessment process. A further order requiring the re-engagement of that process has the risk that the substantive dispute between the parties will become wider rather than narrower. 9In terms of the amount of the assessment, there is nothing in the material which would warrant an assessment on anything other than a party/party basis. There was nothing unreasonable in the conduct of the plaintiff in bringing the proceedings or in its conduct of the proceedings. 10I have perused the accounts annexed to Mr Fleming's affidavit. I have some familiarity with the level of time and costs involved for a straightforward judicial review application of this kind. In my view the amount of work and the level of the charges were generally reasonable, although I regard the estimate of the further costs required beyond the date of Mr Fleming's affidavit as a little high. 11Bearing in mind the nature of the evaluation that is to be undertaken, I propose to allow 70% of the amount estimated, which is just over $22,000. In the end result the figure I determine is $15,400. 12In his oral submissions Mr Raphael sought an order that there be a stay of any costs order pending the outcome of his client's appeal to the District Court. I can see considerable force in that submission. The background to the matter is that the plaintiff invoked his right to appeal to the District Court, but was confronted with a difficulty in understanding the reasons of both the review panel and the costs assessor. This presented an impediment to his pursuit to appeal on a question of law (see Bobb No 1 at [20] to [22]). However, bearing in mind that Mr Bobb did not succeed in his complaint about the inadequacy of those reasons, I am not satisfied that there is a proper basis for denying the defendant its entitlement to receive the costs it has incurred in its successful defence of these proceedings. I will not grant a stay. 13Accordingly, I order that the plaintiff pay the first defendant's costs of the proceedings in the sum of $15,400. ********** 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: 27 June 2013