Supreme Court New South Wales Medium Neutral Citation: Attorney General in and for the State of NSW v Bar-Mordecai [2013] NSWSC 1307 Hearing dates: 2 August 2013 Decision date: 12 September 2013 Jurisdiction: Common Law Before: Schmidt J Decision: 1. Mr Bar-Mordecai pay costs of the proceedings incurred by: a) The Attorney General in the sum of $17,491.70; and b) Dr XY in the sum of $76,165.50. Catchwords: PROCEDURE - costs - notices of motion - orders sought under s 98 of the Civil Procedure Act 2005 - costs in relation to application for leave under Vexatious Proceedings Act 2008 to institute proceedings against medical practitioner - order for gross costs orders - costs orders made Legislation Cited: Civil Procedure Act 2005 Legal Profession Act 2004 Vexatious Proceedings Act 2008 Cases Cited: Attorney General in and for the State of NSW v Bar-Mordecai [2013] NSWSC 129 Starr-Diamond v Diamond (No. 4) [2013] NSWSC 811 Category: Costs Parties: Attorney General in and for the State of NSW (Plaintiff) Michael Jacob Bar-Mordecai (Defendant) Representation: Counsel: Mr K Oliver (Plaintiff) Mr M Lynch (Dr XY) Solicitors: IV Knight (Plaintiff) Mr Bar-Mordecai (unrepresented) (Defendant) Mr P Tsaousidis, Avant Legal (Dr XY) File Number(s): 2004/180898 Publication restriction: None Judgment 1The principal judgment was given in this matter on 27 February 2013 (see Attorney General in and for the State of NSW v Bar-Mordecai [2013] NSWSC 129). I concluded that Mr Bar-Mordecai's application for leave under s 14 of the Vexatious Proceedings Act 2008 to bring proceedings in negligence against his former treating psychiatrist Dr XY had to be refused. 2By motions filed by the Attorney General on 26 June 2013 and by Dr XY on 28 June 2013, orders were sought under s 98(4)(c) of the Civil Procedure Act 2005, for a specified gross sum of costs. The Attorney General pressed orders in an amount of $2,700 for defence of an application to Davies J and $16,000 for other costs. Dr XY sought an order for some $76,165.50 or, in the alternative, a sum which to the Court seemed fair and reasonable. 3It was not in issue that the principles to be applied when such an application is considered are those recently discussed by Slattery J in Starr-Diamond v Diamond (No. 4) [2013] NSWSC 811: "Applicable Legal Principles 8 The applicable principles in relation to the making of specified gross sum costs orders under Civil Procedure Act s 98(4)(c) may be shortly stated. Although the Civil Procedure Act s 98(4)(c) power has been described as particularly suited to complex litigation, the rule is expressed in general terms and is not limited to cases of that type: Australasian Performing Rights Assoc Ltd v Marlin [1999] FCA 1006 (Burchett J). The power to award a Civil Procedure Act s 98(4)(c) specified gross sum instead of assessed costs is exercised whenever the circumstances warrant its exercise; the purpose of the rule is to avoid the expense, delay and aggravation arising out of taxation: Beach Petroleum NL v Johnson (1995) 57 FCR 119 (von Doussa J). 9 Probable inability to pay a costs order will usually provide a proper basis for the making of a s 98(4)(c) order. If the unsuccessful party ordered to pay costs is unlikely to be able to pay the amount of costs ordered then the successful party is further aggravated by having to fund the additional costs of taxation, those costs also being unrecoverable: Harrison v Schipp [2002] NSWCA 213 ("Schipp") at [21] (Giles JA) and Hadid v Lenfest Communications Inc [2000] FCA 628 ("Hadid") (Lehane J). 10 There is no procedural obstacle to the Civil Procedure Act s 98(4) discretion being exercised now. Civil Procedure Act s 98(4) provides as follows: 98. Courts powers as to costs (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: (a) costs up to, or from, a specified stage of the proceedings, or (b) a specified proportion of the assessed costs, or (c) a specified gross sum instead of assessed costs, or (d) such proportion of the assessed costs as does not exceed a specified amount. 11 The Court may make such an order "at any time before costs are referred for assessment". The existing costs order has not been referred for assessment. 12 How does the lump sum assessment take place? The specified gross sum under s 98(4)(c) can be fixed broadly, having regard to all the information available to the Court: Schipp at [22] and Hadid at [27]. The approach taken to the estimation of costs must be "logical, fair and reasonable" and the powers should only be exercised when the Court considers it can do so "fairly between the parties, and that includes sufficient confidence in arriving at an appropriate sum on the materials available": Schipp at [22] per Giles JA." 4While initially opposing the orders sought, after cross-examining Ms Hartman, called to give evidence by the Attorney General, and Mr Tsaousidis, called to give evidence for Dr XY, Mr Bar-Mordecai finally conceded in submissions that the Court should exercise its discretion to make orders for a fixed sum in both cases. 5The amount of the orders remained in issue. 6In the circumstances I am satisfied that the common view which the parties reached should be accommodated. There was no issue as to Mr Bar-Mordecai 's impecuniosity and his failure to pay costs ordered against him in other proceedings. On the evidence, any assessment of the costs in issue in this case would itself be a time consuming and expensive exercise, for which Mr Bar-Mordecai would ultimately be responsible, but unable to pay. 7Making the usual order as to costs would plainly not adhere to the overriding purpose specified in s 56 of the Civil Procedure Act 2005, the just quick and cheap resolution of the real issues in the proceedings, or in the circumstances of this case, with the requirements of s 60. The latter section requires that the practice and procedure of the Court be implemented in such a way, that the cost to the parties is proportionate to the importance and complexity of the subject matter in dispute. The Attorney General's application 8The Attorney General sought to recover only part of the costs of the proceedings, not seeking costs in relation to an earlier hearing before Davies J, of certain questions as to the construction and operation of the Vexatious Proceedings Act. Mr Bar-Mordecai successfully appealed from his Honour's decision on those questions. In the result, the Attorney General's position was that some $2,818.85 costs had been incurred and an order of a fixed sum of $2,700 was sought in respect of a recusal application, which Mr Bar-Mordecai finally did not press before Davies J, as well as other costs of the proceedings. 9Despite his earlier written submissions, Mr Bar-Mordecai accepted at the hearing that the Court should order costs on the basis sought by the Attorney, except for the costs thrown away in respect of an application which he finally did not press, that Davies J recuse himself from hearing an earlier aspect of his application. The evidence 10The Attorney General relied on various documents: affidavits sworn by Mr Cantrell, Ms Hartman and Ms Sato, solicitors employed in the Crown Solicitor's Office; an affidavit which Mr Bar-Mordecai had sworn; correspondence which he had sent; and an affidavit sworn by Ms Solomon, a costs consultant. 11Ms Hartman explained that the costs which the Attorney General pursued in respect of the recusal application made to Davies J, related to the costs of preparation of an affidavit and submissions. They were not ultimately relied on, because Mr Bar-Mordecai announced that he did not wish to pursue the recusal application. 12The evidence shows that the matter came before Davies J on 11 November 2011. There were then a number of motions to be dealt with. When his Honour called on Mr Bar-Mordecai, he submitted that his Honour should recuse himself. His Honour declined to deal with that application forthwith, but turned to deal with a question of whether Mr Bar-Mordecai required leave to appeal a decision his Honour had given. The Attorney General advised that the leave sought to appeal would not be opposed and the leave sought was granted. His Honour then stood the outstanding motions over and listed the matter for directions in 6 February, observing: "[A]nd if Mr Bar-Mordecai wishes to pursue his application that I recuse myself that can be determined either on that day or shortly thereafter with any submissions that any other party wants to make." 13On 3 February, the Attorney General served the submissions on which it proposed to rely on the recusal application. There was no evidence that the affidavit which provided the evidence on which these submissions were to be advanced, was served. 14The submissions outlined a history of complaints made by Mr Bar-Mordecai against Davies J and numerous other judges of this and other courts, to the Judicial Commission of NSW and the International Criminal Court, as well as complaints by other people against judicial officers, which it was submitted he had clearly instigated, approved and adopted. It was submitted that such complaints were scandalous, bizarre and wholly unsupported by evidence; that there was no evidence that any such complaints had ever been upheld and that there was, in the circumstances, no basis upon which his Honour could recuse himself. 15On Ms Hartman's evidence, Mr Bar-Mordecai gave no notice that he would not be pursuing his recusal application. It was on 6 February that he informed his Honour that he did not press the recusal application. 16Ms Solomon's evidence, which Mr Bar-Mordecai accepted, he said 'totally', was that it was likely that counsel's fees for this work would be recovered in full; that the hourly rates charged were extremely low, given the nature of the work involved; that on assessment there were good prospects that 95% of solicitor client costs would be recovered; and that there would be no more than a 10% reduction. Less than that amount is sought to be recovered. Mr Bar-Mordecai's case 17Mr Bar-Mordecai submitted that he should not be ordered to bear the costs sought in relation to the recusal application, because the work undertaken had been unnecessary, his Honour not requiring the assistance provided, given that the principles which had to apply were well known and there had been no date fixed for hearing of his application. It had not been listed for hearing. It was when the matter came on before Davies J for directions, that he advised that he did not propose to press his application. In the result, the costs claimed had been incurred unnecessarily and he should not be ordered to bear them. The orders sought must be made 18It seems to me that a lump sum order for costs should be made in favour of the Attorney, including as to the disputed work, it having been work reasonable for the Attorney General to have undertaken, in the circumstances which had arisen. 19It may not to be overlooked that his Honour had invited the submissions which were provided and indicated that the application would be heard on 6 February, or shortly afterwards. The submissions were served on 3 February. Given this sequence of events, it seems to me that it may be inferred that it was the submissions advanced, which dissuaded Mr Bar-Mordecai from the pursuit of the recusal application. Mr Bar-Mordecai had certainly not earlier advised that he had decided not to pursue that application. 20Mr Bar-Mordecai did not challenge Ms Solomon's evidence. In the circumstances it seems to me that the disputed amount must be awarded, as reflecting a logical, fair and reasonable assessment of the costs in question. 21For those reasons Mr Bar-Mordecai must be ordered to pay the Attorney General the costs claimed of $17,491.70. Dr XY's application 22Dr XY sought his costs of the proceedings. In written submissions Mr Bar-Mordecai identified costs which he accepted and those which he opposed, but finally in oral submissions he accepted that a costs order should be made, on a broad-brush approach. The evidence 23Dr XY relied on various documents, including affidavits sworn by Mr Tsaousidis; Mr Cantrell's affidavit; the letter from Mr Bar-Mordecai; and a report of Ms Deborah Vine-Hall of 12 June 2013. While Mr Tsaousidis was cross-examined, Ms Vine-Hall was not required. 24Mr Tsaousidis explained that Dr XY's professional medical indemnity insurer had instructed him, to represent Dr XY in relation to Mr Bar-Mordecai 's novel and complex application for leave under the Vexatious Proceedings Act, to bring proceedings in negligence against Dr XY. He deposed that he had to consider a considerable number of documents, in order that Dr XY could respond to the application, including the decisions of the Medical Tribunal concerning Mr Bar-Mordecai in 2000, 2006 and 2009; its file in the 2008-09 proceedings, including exhibits and transcripts; and voluminous files of correspondence and legal documents. 25Mr Tsaousidis explained the work he, paralegals and solicitors under his supervision had undertaken, including briefing and conferring with counsel and Dr XY; replying to Mr Bar-Mordecai's correspondence and motions; pursuing applications on behalf of Dr XY; and considering applications, affidavits and submissions advanced for the Attorney General and Mr Bar-Mordecai; issuing subpoenas and considering documents produced; preparing affidavits; and attending hearings. Mr Tsaousidis explained the work involved and the basis upon which it had been charged, as well as the disbursements which had been incurred. 26In cross-examination of Mr Tsaousidis Mr Bar-Mordecai sought to raise his knowledge of his former memberships of medical indemnity insurer's, which he said was relevant to his impecuniosity. Given that this was not relevant to what was in issue, I did not allow this line of questioning. Mr Tsaousidis was asked about the instructions which he had given Ms Vine-Hall as to the novelty of the litigation and as to Dr XY's medical negligence. He was also asked why he had served certain documents on Mr Bar-Mordecai, including an affidavit he had sworn, which, it was suggested, had been unnecessary, a proposition with which Mr Tsaousidis disagreed. The affidavit in question had been tendered in the proceedings. Mr Tsaousidis was also asked why some affidavits had been settled with counsel and as to the contents of various conversations which he had had with Mr Bar-Mordecai. 27In her report Ms Vine-Hall explained how she had conducted her assessment, by reference to the provisions of s 364 of the Legal Profession Act 2004, by considering whether particular work represented time reasonably undertaken, or reflecting a luxurious or overcautious approach; who was used in the proceedings to undertake such work; and whether there was anything in the nature of the work or in the way in which it was undertaken, which would disentitle the claimant from recovery. She identified the various factors which she had considered in reaching her conclusions, including how work had been carried out, by whom and how long was involved. She had also considered the nature of the proceedings and the rates charged, and how disbursements were incurred. 28Ms Vine-Hall also explained how she had assessed what might be recovered on a party/party assessment of the costs so incurred and what reduction might be made to the rates charged for particular work. 29Ms Vine-Hall explained she had come to the view that the costs incurred by Dr XY were reasonable and in fact conservative, for reasons which she explained, including by reference to the lawyers who had undertaken particular work. They were principally Mr Tsaousidis and a lawyer he had supervised. She had also considered the time spent and the rates charged, given the range of rates charged by litigation practitioners in the relevant period. Ms Vine-Hall concluded that the total amount claimed for solicitors' fees was a conservative sum, in her experience. 30Ms Vine-Hall also explained the basis for her view that what had been charged by counsel was at the lower end of market rates allowed by most assessors and that she considered that in view of the novelty of the issues in these proceedings, the volume of material, and the number of interlocutory hearings involved, that counsel's fees were also reasonable. 31In the result Ms Vine-Hall concluded that an assessor would allow the fees charged by both solicitors and counsel, without reduction. She concluded that total reasonable costs were: Solicitors' fees $39,690.40 Counsel's Fees $68,692.00 Other disbursements $5,867.00 Total $114,249.40 32Ms Vine-Hall also explained why she considered that in this case, in awarding a gross sum, there should be no reduction, given that in her view, what had been charged was conservative for the work undertaken. The parties' cases 33In Mr Bar-Mordecai's written submissions, he identified costs which he accepted should be awarded against him. He there also analysed other costs which Ms Vine-Hall had dealt with, in extensive detail, advancing submissions, for example, as to paragraphs of various affidavits which he considered unnecessary and particular sentences in submissions advanced, which he considered irrelevant or puerile. He also objected to disbursements, such as the cost of the transcript of proceedings and subpoenas and made detailed submissions as to costs incurred when Mr Lynch prepared for and attended directions hearings, which he considered unnecessary, or unreasonable as being irrelevant to Dr XY. 34Mr Bar-Mordecai there submitted that Ms Vine-Hall had not been properly instructed as to the unusual, if not novel nature of these proceedings; that she had not sought information from him; and had not been briefed with his written submissions on costs. He also submitted that Ms Vine-Hall should have been briefed as to other complaints which he was pursuing elsewhere against Dr XY. 35By these submissions Mr Bar-Mordecai also again sought to attack the evidence which Dr XY gave before the Medical Tribunal and the decision which it had reached. 36Mr Bar-Mordecai explained in his oral submissions that these written submissions were "a sort of taxation of each item to show that he made unnecessary claims all through the proceedings and even made charges through the appeal proceedings that Mr Oliver on behalf of the Attorney General did not make". 37In his oral submissions Mr Bar-Mordecai argued that he should not have to bear much of the costs which Dr XY claimed he had incurred, because they related to matters which his counsel, Mr Lynch, had not agitated for Dr XY at the hearing and in which he had not been involved, because those matters had been advanced by Mr Oliver for the Attorney. He also complained about duplicated and unnecessary subpoenas and that Dr XY should be paid only for submissions which Mr Lynch had advanced which were mentioned in the judgement, as being his case. 38Mr Bar-Mordecai also submitted that Dr XY's solicitors and counsel had not carried out their work reasonably, because some submissions which had been advanced at the hearing were spurious, unnecessary and had no force; that there had been excessive supervision by counsel of work undertaken by solicitors, so as to amount to overservicing; that work performed had been inadequately documented and that there had been a high turnover of solicitors, which had increased costs; and that there had been suppression of bona fide evidence as to Dr XY's negligence. 39Mr Bar-Mordecai identified certain costs he did not object to, but he objected to the cost of decisions, transcripts, reports and records annexed to affidavits Mr Tsaousidis had sworn. He attacked the submissions which Dr XY had advanced, which he variously described as unnecessary, puerile and incompetent. 40Despite this, Mr Bar-Mordecai finally urged that a broad-brush approach should be adopted to the assessment of the costs, with the result that the costs Dr XY claimed should be reduced by about one third. 41For Dr XY it was submitted that the approach adopted by Mr Bar-Mordecai in his written submissions was flawed in a number of fundamental ways, particularly given his reliance on irrelevant matters. His submissions that Dr XY had incurred costs in the pursuit of irrelevant matters, could also not be accepted, given that matters which he relied on included matters which Dr XY had successfully pursued. He relied on Ms Vine-Hall's assessment and pressed for the order sought as reflecting a fair and logical estimate of the costs incurred, for which Mr Bar-Mordecai should be made responsible. Conclusion 42The approach Mr Bar-Mordecai urged in his written submissions to the assessment of the order to be made in favour of Dr XY, was properly abandoned as inconsistent with the applicable principles earlier referred to. 43There Mr Bar-Mordecai plainly sought to rely on a range of irrelevant matters, such as, for example, his belief that he has been the victim of a judicial criminal conspiracy and that Dr XY had given false evidence in other proceedings. He also there undertook a detailed analysis of parts of affidavits and submissions, which he complained, amongst other things, were unwarranted, for reasons which it is unnecessary to explore and in respect of which it is sufficient to observe that I do not accept. 44His approach also failed to pay necessary regard to the fact that Dr XY not only succeeded in the case he advanced, but that he adopted an approach to the litigation consistent with the requirements of s 56 of the Civil Procedure Act. That meant that even when his case had been prepared so that particular relevant matters could be advanced on his behalf, when such matters were pressed for the Attorney, Dr XY adopted the case so advanced, rather than himself pressing those matters again. That is not an approach which could justly result in Dr XY not recovering the cost of work undertaken beforehand. To the contrary, it shortened the hearing and reduced the overall costs of the litigation. 45In the result, I cannot accept the submissions that work undertaken by Dr XY's solicitors or counsel was unnecessary or irrelevant, or that the cost of disbursements such as obtaining transcripts may not properly be recovered and that this should be reflected in the broad-brush approach to assessment of the costs, which Mr Bar-Mordecai finally submitted should be adopted. 46Ms Vine-Hall was finally not required for cross-examination. In the result, there is simply no basis on which her conclusions as to the reasonableness of the costs incurred and charges made, could be rejected. I am satisfied that the order which Dr XY seeks, should be made as reflecting a logical, fair and reasonable estimation of the costs which Mr Bar-Mordecai must be ordered to bear. 47For those reasons Mr Bar-Mordecai must be ordered to pay Dr XY the costs claimed of $76,165.50. Orders 48For the reasons given I order that: 1. Mr Bar-Mordecai pay costs of the proceedings incurred by: a) The Attorney General in the sum of $17,491.70; and b) Dr XY in the sum of $76,165.50. ********** Amendments 13 September 2013 - corrected paragraph numbering Amended paragraphs: 34 - 48 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: 13 September 2013