Supreme Court New South Wales Medium Neutral Citation: Antova v Bokan (No 2) [2017] NSWSC 556 Hearing dates: 4 April 2017 Decision date: 08 May 2017 Jurisdiction: Equity - Family Provision List Before: Kunc J Decision: Gross sum costs order made Catchwords: COSTS – Whether gross sum costs order should be made – Whether should be payable forthwith and proceedings stayed pending payment – No issue of principle Legislation Cited: Civil Procedure Act 2005 (NSW) s 101 Uniform Civil Procedure Rules 2005 (NSW) Pt 42, r 42.7 Cases Cited: Hamod v State of New South Wales [2011] NSWCA 375 Fiduciary Ltd v Morningstar Research Pty Ltd (2002) 55 NSWLR 1; [2002] NSWSC 432 Category: Costs Parties: Radmila Antova (Plaintiff) Vase Antov (Second Plaintiff) Lidija Bokan (Defendant) Representation: Counsel: M Sahade (Plaintiffs) M J Heath (Defendant) Solicitors: Oliveri Lawyers (Second Plaintiff) Matthews Folbigg Pty Ltd (Defendant) File Number(s): 2015/331929 Publication restriction: No Judgment Summary 1. This judgment resolves further costs consequences arising from the Court's judgment in Antova v Bokan [2016] NSWSC 115 (the "First Judgment"). These reasons should be read with the First Judgment. The defined terms in the First Judgment have the same meaning in this judgment. The appearances on the costs argument were the same as the earlier hearing before me: Mr M Sahade of Counsel appeared for Radmila and Vase. Lidija was represented by Mr M J Heath of Counsel. 2. The orders giving effect to the First Judgment included: "2. Order that pursuant to s 98(1)(b) of the Civil Procedure Act 2005 (NSW), that the Plaintiffs pay the Defendant's costs of the Second Plaintiff's Motion filed 24 January 2017 on an indemnity basis. … 5. Order that the Plaintiffs pay the Defendant's costs of the Notice of Motion filed 29 June 2016 on the: a. Ordinary basis up to and including 7 December 2016; and b. Indemnity basis on and from 8 December 2016. … 7. The Court notes that at 9.30 on 24 February 2017, the Defendant will make application (the Costs Motion Application): i. That the Motion Costs Orders be paid in a specified gross sum to be assessed by the Court pursuant to s 98(4)(c) of the Civil Procedure Act 2005 (NSW); ii. That following any order that the Motion Costs orders be paid in a specified gross sum, that the Plaintiffs pay those costs forthwith. iii. That the Second Plaintiff's Statement of Claim filed 16 September 2016 be stayed pending payment of any specified gross sum of the Motion Costs orders. iv. That to the extent that the Second Plaintiff does not pay any part of any specified gross sum assessed by the Court, the Defendant is authorised to deduct from the provision to the First Plaintiff set out the Family Provision Orders the amount of any shortfall not paid by the Second Plaintiff. v. That the Plaintiffs pay the Defendant's costs of the Costs Motion Application." 1. In these reasons, I shall refer to the costs in orders 2 and 5 just quoted as "Lidija's costs". Lidija's Costs Motion Application (see order 7 just quoted) raised four questions which, with the Court's answers, are: Question 1: Should a gross sum costs order be made in relation to Lidija's costs? Answer: Yes, in the sum of $91,180.02 (inclusive of GST). Question 2: Should Lidija's costs be payable forthwith? Answer: Yes by Radmila, but not by Vase. Question 3: Should Vase's statement of claim be stayed pending his payment of Lidija's costs? Answer: Does not arise. Question 4: How should the costs of the Costs Motion Application be resolved? Answer: Radmila and Vase should pay Lidija's costs of the Costs Motion Application assessed in the sum of $10,570 (inclusive of GST) and payable in the case of Radmila, but not Vase, forthwith. 1. In so far as he appeared for Radmila, Mr Sahade's resistance to the orders sought against her was, with no disrespect intended, not strenuous. It could not have been otherwise. Radmila's position in this litigation is now quite different to Vase's. By reason of the First Judgment, her involvement in the case is, for all intents and purposes, at an end. There is no reason why Radmila's obligation to pay Lidija's costs and her costs of the Costs Motion Application should not now be assessed on a gross sum basis and be payable forthwith. Furthermore, while Lidija should be free to enforce her costs orders against Radmila in whatever way she chooses, the Court is also satisfied that Lidija should have the benefit of a charge and an order for payment of her costs (including of the Costs Motion Application) out of Radmila's share of the deceased's estate. This last entitlement will only be of any real value if Vase's statement of claim is dismissed so that the deceased's house is part of the estate. 2. In relation to Vase, the Court is satisfied that his liability to pay Lidija's costs and the costs of the present Costs Motion Application should also be crystallised by a gross sum costs order. However, consistent with the Court's decision in paragraph [75] of the First Judgment that Vase should be given the opportunity to prosecute his statement of claim, in the exercise of its discretion the Court declines to order that Vase pay Lidija's costs forthwith or that his statement of claim be stayed pending payment of those costs by him. Procedural history 1. I heard the Costs Motion Application on 4 April 2017. An important part of Lidija's evidence was a bill of costs and expert report quantifying Lidija's costs prepared by Mr Michael Dudman, an experienced costs lawyer. For reasons which I did not find at all persuasive, Vase did not take the opportunity provided by the timetable which the Court had ordered for the preparation of evidence to file any response to Mr Dudman's report. 2. When, over Mr Sahade's objection, Mr Dudman's report was admitted into evidence, Mr Sahade then applied for an adjournment to enable Vase to file expert evidence in response to Mr Dudman. The Court refused that application and proceeded to hear the Costs Motion Application, but on the basis that Vase would be given an opportunity to file expert evidence that could then be the subject of brief written submissions between the parties. 3. At the conclusion of the hearing, directions were made to give effect to this arrangement. However, by email dated 11 April 2017, Vase's lawyers informed Lidija and the Court: "We refer to his Honour's directions of 4 April 2017 in this matter. Due to a lack of funds, we wish to advise that the plaintiff does not propose to serve any further evidence in respect of the defendant's costs application. We therefore invite his Honour to vacate the directions relating to further evidence and submissions in respect of the defendant's costs application and proceed to judgment on that matter without any further delay. We thank his Honour for the opportunity afforded to the plaintiff." 1. As a result of that email, the Court has proceeded to determine the Costs Motion Application on the basis of the evidence and submissions as they stood at the conclusion of the hearing on 4 April 2017. Gross sum costs order — legal principles 1. The Court's power to make a gross sum costs order is conferred by s 98(4) of the Civil Procedure Act 2005 (NSW) ("CP Act"): "(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." 1. In accordance with ss 56(1) and 56(2) of the CP Act, the Court's discretion to make a gross sum costs order is to be exercised having regard to the overriding purpose of the CP Act in civil proceedings to "facilitate the just, quick and cheap resolution of the real issues in the proceedings". 2. The principles governing the application of s 98(4)(c) of the CP Act were summarised by Beazley JA (as her Honour then was) in Hamod v State of New South Wales [2011] NSWCA 375 (with whom Giles and Whealy JJA agreed): "813 I have already set out the relevant provisions of s 98. The discretion thereby conferred upon the court is not confined and may be exercised whenever the circumstances warrant its exercise, having regard to the scope and purpose of the provision: Harrison & Anor v Schipp [2002] NSWCA 213; 54 NSWLR 738 per Giles JA at [21]–[22]. In Harrison v Schipp, Giles JA considered that the discretion in s 98(4) may be exercised where the assessment of costs would be protracted and expensive and, in particular, if it appeared that a party obliged to pay the costs would not be able to meet a liability of the order likely to result from the assessment. However, his Honour stated, at [22]: "The power should only be exercised when the Court considers that it can do so fairly between the parties, and that includes sufficient confidence in arriving at an appropriate sum on the materials available." 814 See also Wentworth v Wentworth (Court of Appeal, 21 February 1996, unreported). The courts have typically applied a discount in assessing costs on a gross sum basis: Ritchie's Uniform Civil Procedure NSW, LexisNexis, Sydney, 2005 to date, "Civil Procedure Act", at [s 98.65]; Charlick Tradmilaing Pty Ltd v Australian National Railways Commission [2001] FCA 629; Sony Entertainment (Aust) Ltd v Smith (2005) 215 ALR 788; Idoport Pty Ltd v National Australia Bank Ltd; Lorenzato v Lorenzato & Anor (No 2) [2011] NSWSC 790 per Black J. 815 In Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119; 135 ALR 160, von Doussa J noted that the specified gross sum costs procedure was particularly useful in complex cases, that the power must be exercised judicially and only after giving the parties an adequate opportunity to make submissions, and that before exercising the power the court should be confident that the approach taken to estimate costs is fair, logical and reasonable. 816 The terms of s 98(4), together with the more general considerations reflected in the Civil Procedure Act, ss 56(1), 57(1)(d) and 60, suggest the factors that merit particular consideration include: the relative responsibility of the parties for the costs incurred (for example, Harrison v Schipp ); the degree of any disproportion between the issue litigated and the costs claimed; the complexity of proceedings in relation to their cost; and the capacity of the unsuccessful party to satisfy any costs liability: Ritchie's Uniform Civil Procedure NSW at [s 98.45]. 817 The exercise of the power conferred by s 98(4) is particularly appropriate where the costs have been incurred in lengthy or complex cases and it is desirable to avoid the expense, delay and aggravation likely to be involved in contested costs assessment. This may arise either from the likely length and complexity of the assessment process: Beach Petroleum NL v Johnson (No 2) at 120; Charlick Tradmilaing Pty Ltd v Australian National Railways Commission; Australasian Performing Rights Association Ltd v Marlin [1999] FCA 1006; or from the likelihood that the additional costs of formal assessment would disadvantage the successful party because of the likely inability of the unsuccessful party to discharge the costs liability in any event: Harrison v Schipp; Sony Entertainment (Aust) Ltd v Smith (2005) 215 ALR 788 at [90], [194]–[195]; Hadid v Lenfest Communications Inc [2000] FCA 628. 818 The power may also be exercised where a party's conduct has unnecessarily contributed to the costs of the proceedings, especially where the costs incurred have been disproportionate to the result of the proceedings: Leary v Leary [1987] 1 WLR 72; [1987] 1 All ER 261; Sony Entertainment (Aust) Ltd v Smith; Microsoft v Jiang (2003) 58 IPR 445; [2003] FCA 101; Ritchie's Uniform Civil Procedure NSW at [s 98.60]). 819 The assessment of any lump sum to be awarded must represent a review of the successful party's costs by reference to the pleadings and complexity of the issues raised on the pleadings; the interlocutory processes; the preparation for final hearing and the final hearing: Smoothpool v Pickering [2001] SASC 131. In the exercise of its discretion the court is not required to undertake a detailed examination of the kind that would be appropriate to taxation or formal costs assessment: Harrison v Schipp at 743; Hadid v Lenfest Communications Inc at [35]; Auspine Ltd v Australian Newsprint Mills Ltd (1999) 93 FCR 1 at 5; [1999] FCA 673. 820 The costs ordered should be based on an informed assessment of the actual costs having regard to the information before the court (for example, by relying on costs estimates or bills): Beach Petroleum NL v Johnson (No 2); Leary v Leary; Harrison v Schipp at 743; Sparnon v Apand Pty Ltd (FCA, 4 March 1998, unreported). The approach taken to estimate the costs to be ordered must be logical, fair and reasonable: Beach Petroleum NL v Johnson at 164–165; Hadid v Lenfest Communications Inc at [27]; Harrison v Schipp at 743. This may involve an impressionistic discount of the costs actually incurred or estimated, in order to take into account the contingencies that would be relevant in any formal costs assessment: Leary v Leary at WLR 76 per Purchas LJ; Beach Petroleum NL v Johnson (No 2) at 123; Auspine Ltd v Australian Newsprint Mills Ltd at 164–165." 1. In relation to the possibility of a discount, Mr Heath drew my attention to the observations of Brereton J in Hancock v Rinehart (Lump sum costs) [2015] NSWSC 1640, with which I respectfully agree (citations omitted): "56 The first defendant submits that there should be a further global percentage reduction of 15%, for two main reasons: first, because on assessment, even on the indemnity basis, a successful party invariably recovers something less than its actual costs, typically 15% where the assessment is on an indemnity basis; and secondly, the necessarily broad-brush approach of the court to assessment on a lump sum basis — involving some risk that the sum includes costs that would not be recovered on assessment — coupled with the savings to the costs creditor in time and costs through avoiding a detailed assessment, and the loss to the costs debtor of the opportunity to scrutinise and object to a detailed bill, has resulted in a practice of applying a discount on lump sum assessments. 57 While it is undoubtedly the usual practice of the court when making a lump sum costs order to apply a discount for the reasons mentioned, that does not mean that the Court must apply a percentage discount to the sum sought by the successful party, and the Court "must be astute not to cause an injustice to the successful party" by applying "an arbitrary 'fail safe' discount on the costs estimate submitted to the court". Thus if the court can be confident that there is little risk that the sum includes costs that might be disallowed on assessment, the case for a discount is seriously undermined. 58 Where a gross sum is assessed on an indemnity basis, and there is no evidence of unreasonableness, it may be inappropriate to apply any discount, although one may nevertheless be appropriate if there is evidence that the successful party "errs on the side of excessiveness [as in excessive use of legal services]". … 61 Because this is an indemnity order, the first defendant bears the onus of proving unreasonableness, and any doubt about the reasonableness of the amount charged for a particular item is to be resolved in favour of the plaintiffs. Notwithstanding the availability of a detailed itemised bill, the first defendant has not identified any element of unreasonableness: there is no suggestion by the first defendant that the plaintiffs have been excessive in their use of legal services, or that the rates charged by the solicitors and barristers retained by the plaintiffs were excessive, or that it was unreasonable for the plaintiffs to have retained any of those advisors. That no assertion of unreasonableness has been made, where the first defendant bears the onus, is significant. It is also unsurprising — given that, in the context of this litigation and the resources with which the plaintiffs were confronted, they have adopted a relatively economical approach to the litigation. 62 In my judgment, in the context of this case, involving as it does an indemnity order where the defendant bears the onus of establishing unreasonableness, where the defendant has not been deprived of the opportunity of objecting to a detailed and itemised claim but to the contrary has had and taken advantage of ample opportunity to scrutinise it both for "out-of-scope" and for unreasonableness; where "out-of-scope" issues have been resolved or addressed above; where there has been not a single suggestion of unreasonableness; where the result of this application includes the disallowance of the higher YPOL rates; and where the plaintiffs' conduct of the case was self-evidently relatively economical in the circumstances; the possibility that the claim includes further items which might be disallowed on assessment is sufficiently remote as not to warrant a further general discount." Gross sum costs order — the evidence 1. The evidence was in narrow compass. 2. Lidija relied on Mr Dudman's expert report. He had prepared a bill of Lidija's costs and gave his opinion as to how it would be assessed. Mr Dudman applied a 20% reduction to professional fees, including Counsel's fees, to arrive at what he considered to be a reasonable estimate of those costs likely to be allowed on assessment in relation to that part of her costs which the Court has ordered to be paid on the ordinary basis. Mr Dudman took what the Court accepts to be a conservative approach by applying a 5% reduction to professional fees, including Counsel's fees, to arrive at what he considered to be a reasonable estimate of those costs likely to be allowed on assessment on the indemnity basis in relation to that part of her costs which the Court has ordered to be paid on the indemnity basis. 3. While, as the Court has already noted, Vase and Radmila did not file any evidence to answer Mr Dudman's report, on their behalf Mr Sahade took objection to certain items in Mr Dudman's bill of costs. With one minor exception, these were accepted by Mr Heath. All of those items were in relation to the period when costs were to be assessed on the ordinary basis and, after allowing for the 20% reduction, meant an abandonment by Lidija of $928 of the amount determined by Mr Dudman. Taking that reduction into account, Mr Dudman's evidence was that the amount likely to be allowed on assessment for Lidija's costs was $91,180.02. The Court accepts that evidence. 4. Vase filed an affidavit dated 21 March 2017 which, on its face, demonstrated that he and Radmila had few assets and were dependent upon his income of about $850 per week. His evidence was that after all of his and his mother's expenses were deducted, he was left with little or no money from wages and had to rely on his savings. His current assets — including some superannuation and savings, and an apartment in Macedonia — amounted to approximately $100,000. Vase's affidavit also referred to him owing outstanding legal fees of $80,000 and having received an estimate from his lawyers of $40,000 for the future costs and disbursements in relation to his statement of claim. 5. Vase's evidence was criticised by Mr Heath, who drew attention to an affidavit of assets that Vase had sworn in November 2015 that disclosed savings of $142,000 in a Commonwealth Bank account. Vase's most recent affidavit referred to there only being approximately $29,000 in his Commonwealth Bank account. It was not clear, so Mr Heath submitted, from Vase's evidence, how he had spent approximately $110,000 in between swearing the two affidavits. In particular, Mr Heath submitted that it was not clear whether Vase had applied any of those funds to meet the legal fees which he listed as a current liability. 6. I declined Mr Sahade's application for leave to adduce further oral evidence from Vase to meet Mr Heath's criticisms. I did so because whatever doubt there was about how Vase may have spent his savings, it did not change the current position. If Vase had in fact paid the outstanding solicitors' fees, then while that may have reduced his liabilities, it did not increase the asset position disclosed in his March 2017 affidavit. If he had not paid those fees, then it simply meant that he still had significant liabilities to meet out of those same, limited assets. On any view, the Court was left in no doubt that Vase would not be able to meet a costs order of approximately $90,000 determined by reference to Mr Dudman's evidence. Gross sum costs order — resolution 1. Mr Sahade opposed the making of a gross sum costs order for three basic reasons: 1. The proper forum to calculate the costs was a costs assessment; 2. His clients had objections to certain items in the bill; 3. The sum claimed was manifestly excessive. 1. For the reasons which follow, I do not accept that Lidija's costs should be determined by a costs assessment. Insofar as objection was taken to particular items on the bill, Mr Heath either conceded these or explained them to the Court's satisfaction. Nor do I consider the amount claimed to be excessive. The hearing of the two motions took up three days. The motions became a "case within a case" with substantial evidence being prepared and supported by extensive argument relating to four legal bases upon which the Agreement was challenged (of which three were abandoned at the hearing). There had been numerous directions hearings before Hallen J. Taking all those matters into account, the Court is not satisfied that it could be said that the amount claimed for Lidija's costs is manifestly excessive. 2. Having regard to the principles set out in paragraphs [10] to [13] above, there are four reasons why the Court considers a gross sum costs order should be made in an amount based upon Mr Dudman's evidence. 3. First, this aspect of the proceedings relates to the enforcement of a settlement. In other words, the Court has accepted that the parties resolved the main proceedings between them by agreement including in relation to the costs of those proceedings. This circumstance is a powerful reason in both policy and practice to avoid the possibility that the parties remain locked in litigation through the medium of a costs assessment. Where the parties agree that the main proceedings between them should come to an end, the Court should, where possible, use its power in relation to costs to conform with the parties' agreement for finality by preventing further litigation over costs. 4. Second, it is clear that Radmila and Vase are unlikely to be able to meet the costs orders from their own resources as opposed to having recourse to their interest in the deceased's house (depending on the outcome of Vase's statement of claim). 5. Third, each side has had an adequate opportunity to make submissions about the quantum of those costs. 6. Fourth, Mr Dudman's report provides a fair, logical and reasonable basis to determine the amount of Lidija's costs. 7. The Court accepts Mr Dudman's figure of $91,180.02 and assesses Lidija's costs accordingly. Applying the observations of Brereton J in Hancock v Rinehart (Lump sum costs) [2015] NSWSC 1640 (see paragraph [13] above), I am not satisfied that this is a case where any further discount is required. Mr Dudman's deductions in relation to both ordinary and indemnity costs are fair, reasonable and appropriately conservative. There is no reason which I can identify that would warrant a further discount. Costs forthwith — legal principles 1. Lidija's costs are "costs of any application or other step" in these proceedings for the purposes of Pt 42, r 42.7 of the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR"), which provides: "(1) Unless the court orders otherwise, the costs of any application or other step in any proceedings, including: (a) costs that are reserved, and (b) costs in respect of any such application or step in respect of which no order as to costs is made, are to be paid and otherwise dealt with in the same way as the general costs of the proceedings. (2) Unless the court orders otherwise, costs referred to in subrule (1) do not become payable until the conclusion of the proceedings." 1. Lidija submitted that the Court should "order otherwise" for the purposes of UCPR Pt 42, r 42.7(2) with the result that her costs should be payable forthwith. The principles governing such an application where summarised by Barrett J (as his Honour then was) in Fiduciary Ltd v Morningstar Research Pty Ltd (2002) 55 NSWLR 1; [2002] NSWSC 432 ("Morningstar"): "10 It becomes necessary now to consider the factors which have caused courts to depart from the normal rule in Part 52A rule 9(1) that costs are payable at the conclusion of the proceedings. A convenient and useful starting point is the following passage in the judgment of Priestley JA in Horrobin v Australia & New Zealand Banking Group Ltd (unreported, NSWCA, 6 June 1997): "None of the cases is on all fours with the present one; indeed, a reading of them emphasises the need for cases to be considered by reference to their own particular facts. Nevertheless, those relied on by counsel for H and S show there is a tendency for costs orders to be made payable forthwith and without waiting for the conclusion of further proceedings when the proceedings in respect of which the costs orders have been made are regarded as sufficiently self-contained and detached or detachable from proceedings yet to be heard, whether between the same or associated parties, as to make it seem just for an actual payment to be made in the meantime." 11 This identifies the first recognisable category of case, namely, where the application or aspect in respect of which the particular costs order is made before conclusion of the proceedings represents the determination of a separately identifiable matter or may be viewed as the completion of a discrete aspect. Examples of this may be found in Charlie Brown Pty Ltd v Green (unreported, NSWSC, McLelland CJ in Eq, 3 July 1995) and Bagley v Pinebelt Pty Ltd [2000] NSWSC 830. 12 A second factor which may incline the court to order that costs be payable forthwith is some unreasonable conduct on the part of the party against whom costs have been ordered. That was a factor taken into account by Simpson J in Gattellari v Meagher [1999] NSWSC 1279, although, in the end, her Honour did not think that the particular conduct warranted such an order. 13 A third factor is, as it was put by Giles J in Doran Constructions Pty Ltd v University of Newcastle (unreported, NSWSC, 16 December 1994), that "there is much to come in the proceedings" and "one can see a fairly long time before the proceedings are disposed of". In Horrobin (above), the decision of Priestley JA to order that costs be payable forthwith was influenced to some extent by the fact that the controversy between the parties would run for at least a further year. In Allstate Life Insurance Co v Australia and New Zealand Banking Group Ltd (unreported, FCA, 18 August 1995), Lindgren J said that it may be appropriate for greater use to be made of the analogous provision in the Federal Court Rules, "particularly in cases such as this one where the final determination of the proceedings is so far away"." Costs forthwith — resolution 1. The effect of the First Judgment in upholding the Agreement means that, for all intents and purposes, the proceedings as between Lidija and Radmila are at an end. The only question, to be determined by the hearing of Vase's statement of claim, is whether the deceased's house is part of the estate. So understood, at least in relation to Radmila, the present case is a paradigmatic example of the first category identified by Barrett J in Morningstar. 2. Mr Sahade, correctly, acknowledged that little could be said against Radmila being required to pay Lidija's costs forthwith other than to draw to attention that it might be useful to wait until it was known whether Radmila would materially benefit from the estate under the Agreement because Vase was unsuccessful in his statement of claim. I do not regard that as a sufficient reason to prevent Lidija taking such steps as she now may wish to recover Lidija's costs from Radmila. However, against the possibility that Radmila receives a significant benefit from the estate because Vase's statement of claim fails, Radmila's share in the estate should be charged with the amount of costs which the Court will order Radmila to pay Lidija. 3. Insofar as Vase was concerned, Mr Heath submitted by reference to Barrett J's judgment in Morningstar, that there were three reasons why Vase should also be ordered to pay Lidija's costs forthwith: 1. It was clear that the resolution of the question of the enforceability of the Agreement was a discreet and separately identifiable matter within the proceedings which depended upon evidence and issues that would never be revisited in the determination of Vase's statement of claim. 2. Vase and Radmila had acted unreasonably in resisting the enforceability of the Agreement by resiling from the Agreement; by seeking to adduce large amounts of evidence that was ultimately rejected or not allowed; on the last day of the hearing, by abandoning three of the four contentions upon which Vase relied; and by failing to have accepted Lidija's offer which would have obviated the need for the hearing about the Agreement completely. 3. There was still much to come in relation to Vase's statement of claim. 1. While accepting that there is considerable force in Mr Heath's submissions, the Court has concluded that, in the exercise of its discretion, it would not be in the interests of the just, quick and cheap resolution of the real issues in the proceedings, now being Vase's statement of claim, to require Vase to pay Lidija's costs forthwith. There are three reasons for this conclusion. 2. First, it would be inconsistent with and undermine the Court's conclusion in the First Judgment that Vase should be entitled to have his statement of claim determined. Given the bitter relationship between the parties, I have no doubt that if, as the Court is satisfied is the case, Vase does not have the resources to pay Lidija's costs immediately, Lidija would move to enforce those orders against Vase. All that would be achieved is that a new litigious battlefront would be opened as Vase sought to resist enforcement of the orders by reference to the statement of claim. I express no view as to what might happen in those circumstances. However, it is clear that to permit even the possibly of that occurring is inimical to what, in the interests of all the parties, really needs to be focused upon now: the prompt and cost effective determination of Vase's statement of claim. 3. Second, the Court is satisfied on the evidence that, given Vase's and Radmila's (to the extent it might be thought that she could assist Vase) financial position, the making of such an order would give rise to a real risk of Vase's statement of claim being stultified. That, again, is inimical to the fundamental conclusion reached in the First Judgment that Vase should be allowed to prosecute his statement of claim. 4. Third, if Vase is successful in his statement of claim (a matter about which I express no view), it is reasonable to hypothesise that he may also obtain an order for his costs of the statement of claim against Lidija in the same proceedings. This would give him the benefit of a set off against Lidija's (and any other) costs. No submission was put (nor do I think it could have been), that Vase's statement of claim is hopeless. 5. The result in relation to Vase is therefore that while he will be liable to pay Lidija's costs (and the costs of the Costs Motion Application — see paragraph [42] below) as assessed by the Court, in accordance with UCPR Pt 42, r 42.7(2), they will not be payable until the proceedings are concluded by the determination of the statement of claim. A stay of the statement of claim 1. This part of Lidija's application did not concern Radmila. Because the Court has concluded that Vase should not be required to pay Lidija's costs forthwith, then the question of whether his statement of claim should be stayed pending those costs being paid does not arise. However, in any event, the Court would have refused this part of Lidija's application against Vase for the same discretionary reasons set out in paragraphs [34] to [36] above. Costs of the Costs Motion Application 1. Lidija has succeeded completely against Radmila on the Costs Motion Application. There is no reason why costs should not follow the event, such costs to be assessed on the ordinary basis. I accept Mr Dudman's evidence that Lidija's reasonable costs of the Costs Motion Application on the ordinary basis are $10,570 (inclusive of GST) and assess them accordingly. There is no reason why, for the avoidance of doubt, the Court should not also order those costs to be payable forthwith, for the same reasons set out in paragraphs [23] to [26] above. 2. There is also no reason why Vase should not pay Lidija's costs of the Costs Motion Application. In reaching this conclusion, I have not overlooked the fact that Lidija has not had complete success against Vase. Nevertheless, the decisive factor to my mind is that, insofar as the Court has ordered Lidija's costs to be paid on the indemnity basis, it was because of Vase's failure to accept a settlement offer in relation to the two motions that were decided by the First Judgment. That order was made because the Court considered Vase's refusal of that offer to be unreasonable. 3. Another consequence of that unreasonable refusal is that Lidija has been required to make the present application in relation to her costs. She would not have had to do so if Vase had accepted the offer. That circumstance is sufficient, in my view, to justify Vase also having to pay Lidija's costs of the Costs Motion Application (albeit on the ordinary basis), notwithstanding that she did not enjoy complete success against Vase in relation to it. Orders 1. The orders of the Court are: 1. The plaintiffs are to pay the defendant's costs pursuant to orders 2 and 5 made on 24 February 2017 assessed in the sum of $91,180.02 (inclusive of GST). 2. The plaintiffs are to pay the defendant's costs of the defendant's Costs Motion Application referred to in order 7 made on 24 February 2017 assessed on the ordinary basis in the sum of $10,570 (inclusive of GST). 3. The first plaintiff is to pay forthwith the defendant's costs referred to in orders 1 and 2 above. 4. Without prejudice to the defendant's right to enforce orders 1 and 2 against the first plaintiff or any of her assets, the first plaintiff's liability to pay the costs referred to in orders 1 and 2 above is charged in the sum of $101,750.02 (together with any interest payable thereon pursuant to s 101 of the Civil Procedure Act 2005 (NSW)) on, and is to be paid from, the first plaintiff's share of the provision ordered for her pursuant to order 4(i) made on 24 February 2017. 5. The defendant is entitled to indemnity out of the estate of the late Ljubica Dimitrovska in respect of the costs referred to in orders 1 and 2 above on the indemnity basis. 6. The exhibits are to be returned to the parties and held by them in accordance with paragraph 28 of Practice Note SC Gen 18. 7. The proceedings are transferred from the Family Provision List to the General List. 8. Vacate order 3 made by Kunc J on 11 April 2017. 9. The proceedings are listed for directions before Kunc J on 25 May 2017 at 9.30am. 10. There be liberty to any party to apply on three days' notice by email to the Associate to Kunc J. Amendments 08 May 2017 - 42(7) Court changed to List 11 May 2017 - 42(4) "defendant's share" changed to "first plaintiff's share" 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: 11 May 2017