Supreme Court New South Wales Medium Neutral Citation: Norfeld v Jones (No 2) [2014] NSWSC 199 Hearing dates: 25 February 2014 Decision date: 25 February 2014 Jurisdiction: Common Law Before: Campbell J Decision: (1)Pursuant to order 1(b) made on 7 February 2014 the plaintiff pay the defendants' costs in the sum of $6,416.36 within 28 days of today. (2)If order 1 is not complied with, the defendant has liberty to apply to have the matter listed for the plaintiff to show cause as to why the proceedings should not be dismissed or stayed until the costs order is satisfied. (3)The costs of today and of preparation of the lump sum costs application are the defendants' costs in the appeal Catchwords: COSTS - indemnity costs - wasted costs - award of lump sum costs Legislation Cited: Civil Procedure Act 2005 (NSW) s 98 Beach Petroleum NL & Claremont Petroleum NL v Johnson (1995) 135 ALR 160 Cases Cited: Civil Procedure Act 2005 (NSW) s 98 Beach Petroleum NL & Claremont Petroleum NL v Johnson (1995) 135 ALR 160 Category: Costs Parties: Norfeld Pty Ltd (plaintiff) Amanda Lee Jones trading as Watermark Patent & Trademark Attorneys (defendant) Representation: Solicitors: Lewis Holdway (defendant) Lewis Holdway (defendant) File Number(s): 2013/00071259 Decision under appeal Date of Decision: 2013-02-12 00:00:00 Before: Barko LCM and others File Number(s): 2011/325041 Ex tempore judgment 1On 7 February 2014 I adjourned this appeal on the application of the plaintiff for reasons expressed in Norfeld v Jones [2014] NSWSC 54. At the time I ordered the plaintiff to pay the defendants' costs thrown away by the adjournment on an indemnity basis forthwith after they had been agreed or assessed and I reserved liberty to the plaintiff to apply for a lump sum assessment of costs. That liberty was exercised on 10 February 2014 and in support of that application Mr Ahmed of counsel has read the affidavit of his instructing solicitor, Mr Foster, sworn on that day. The total claim for costs is in the sum of $6,416.36. Mr Foster annexed a copy of his costs agreement, as I will call it, with the defendants in the appeal. 2Mr Preston, who is a director of, and appears for, Norfeld, points out that the costs agreement has not been signed by the client. However, the agreement itself provides as follows: Even if you do not sign and return a copy of this agreement, we will treat the terms as having been accepted by you if you continue to use our services after the date we sign this form. This is a perfectly usual and routine provision in costs agreements between solicitors and clients. 3Mr Preston also says that it has not been shown that the defendant is a legal entity. He has sued nine individuals in this Court by way of appeal from the Local Court. He says those nine are carrying on business as a firm of Patent Attorneys. On the last occasion the matter was before me there was mention of a unit trust as the business vehicle for the practice. Now he points out that unit trust is not a legal entity, but it seems to me that the persons he has brought before this Court are individuals and that there is no question that the defendants to the appeal are capable of being sued as individuals and, accordingly, there is no issue about the identity of those people who are entitled to a costs order. 4He also makes the point that the solicitor is charging for the attendance at court in Sydney on 7 February as well as some travelling expenses. It would seem that the travel expenses inolve a fairly modest amount of $516. He also objects that the chronology that was settled by counsel can be used in the appeal and that counsel should not have his full brief on hearing for the day of 7 February 2014 because he could have gone back to chambers and performed other professional work. I will deal with those issues in a moment. 5The power to award costs on a lump sum basis is conferred on the Court by s 98 of the Civil Procedure Act 2005 (NSW). So far as it is material it is in the following terms: (4) ....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: ................. (c) a specified gross sum instead of assessed costs, .................................. 6The defendants say that in the circumstances of this case, as explained in my previous judgment, it is appropriate that they should receive payment of the costs thrown away by the adjournment obtained by the plaintiff now rather than await the outcome of the appeal. Given the long and chequered history of this matter, I accept that submission and it seems to me that were I to require the defendants to go through the assessment process, further expense, delay and aggravation would accrue, by those defendants being involved in what would obviously be a contested costs assessment over part only of the costs of the appeal. 7Where a Court orders costs on a lump sum basis it should do its best to accurately assess the cost actually incurred. That is to say it is not appropriate to pluck a figure out of the air, nor is it appropriate to visit punitive costs upon the party ordered to pay them. In Beach Petroleum NL & Claremont Petroleum NL v Johnson (1995) 135 ALR 160 the following statement appears at 161: Even though there is no statutory obligation on a judge to discount figures provided by the successful party on a 'fail-safe' basis, there may be occasions on which a judge will make such a discount. This will occur when an applicant errs on the side of excessiveness. 8The power to award costs as a lump sum obviously should only be exercised when the Court considers that it can do so fairly between the parties and when it has sufficient confidence it can assess an appropriate sum on the materials available. 9These costs were awarded on an indemnity basis. It seems to me that in those circumstances there is no occasion to apply any so-called fail-safe discount of the costs which otherwise might seem proper. Nor do I think, having reviewed the material in Mr Foster's affidavit, that there is any suggestion here, at least any suggestion that I would accept, that the defendants have erred on the side of excessiveness. 10Where a party is entitled to costs on an indemnity basis the onus is upon the paying party to show that the costs are unreasonable or unjust and, with respect, Mr Preston has not persuaded me that that is the case here. I refused the adjournment on 6 February and had expected that the appeal could proceed before me on the 7th. In those circumstances, it was entirely proper and, indeed, necessary for the solicitor for the defendants to travel from Melbourne to Sydney to instruct counsel on the hearing of the appeal. In my view, the amount charged by the solicitor in all respects, including attending court, in the sum of $2,125 seems entirely reasonable and I am not persuaded that it is not. 11Mr Ahmed's fees for preparing and settling the chronology were fees thrown away because the chronology related to the application for an adjournment I heard on 6 February 2014. So far as his brief fee is concerned, the amount claimed is $2,500. Mr Ahmed tells me that he was called to the Bar in 2008. It seems to me that counsel of his standing, briefed on an appeal in the Supreme Court of New South Wales is entitled to charge a fee of that magnitude and I would not think that there should be any discount on any fail-safe basis. 12So far as the argument goes that counsel could, and may have, attended to other work in chambers on 7 February, that is not to the point. He was briefed to appear on the hearing of the appeal. I note that he has not charged anything for what undoubtedly would have been extensive preparation for hearing, I infer on the basis that the preparation will be put to good use when the appeal comes on for hearing in April. It is entirely proper as between solicitor and client, and that is what we are talking about when fees are payable on an indemnity basis, for counsel to charge for the day that was effectively wasted on the hearing by way of a fee for time set aside to attend to the client's case in Court. 13In my judgment, the costs claimed by the defendants are in all the circumstances reasonable and proper and represent a fair estimate of the amount actually recoverable on an assessment of indemnity costs. 14In those circumstances I make the following orders: (1)Pursuant to order 1(b) made on 7 February 2014 the plaintiff pay the defendants' costs in the sum of $6,416.36 within 28 days of today. (2)If order 1 is not complied with, the defendant has liberty to apply to have the matter listed for the plaintiff to show cause as to why the proceedings should not be dismissed or stayed until the costs order is satisfied. (3)The costs of today and of preparation of the lump sum costs application are the defendants' costs in the appeal. ********** 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: 10 March 2014