District Court New South Wales Medium Neutral Citation: Nijati by her tutor Akhberzada v Barbir; Nijati by his tutor Akhberzada v Barbir [2017] NSWDC 295 Hearing dates: 27 October 2017 Date of orders: 31 October 2017 Decision date: 31 October 2017 Jurisdiction: Civil Before: Gibson DCJ Decision: (1) Pursuant to s 98 Civil Procedure Act 2005 (NSW), I assess the plaintiffs' costs by way of gross sum costs order of $5,000 inclusive of disbursements. (2) The defendant (or the registrar of the court at the defendant's direction) is to pay the said sum as follows: (a) The sum of $33 is to be paid to Dr Shakila; (b) The sum of $1,375 is to be paid to Dr Davis; (c) The balance of the sum of $5,000 is to be paid to the trust account of Dehsabzi Lawyers; and (d) The remaining amount of the $10,000 paid into court by the defendant is to be refunded to them by the court. Catchwords: COSTS – infant approval – application for gross sum costs order Legislation Cited: Civil Procedure Act 2005 (NSW), ss 75-77 and 98 Cases Cited: Bobb v Wombat Securities Pty Ltd and Ors (No 2) [2013] NSWSC 863 In the matter of Aquaqueen International Pty Ltd [2015] NSWSC 500 Plassas v Person (No 2) [2016] NSWSC 1515 Category: Costs Parties: Plaintiff in 2017/179243: Zahra Nijati by her tutor Roya Akhberzada Plaintiff in 2017/179270: Mohammad Nijati by his tutor Roya Akhberzada Defendant: Mile Barbir Representation: Counsel: Plaintiff: Mr S Dehsabzi (solicitor) Defendant: Ms Z Celik (solicitor) Solicitors: Plaintiff: Dehsabzi Lawyers Defendant: Sparke Helmore File Number(s): 2017/179243; 2017/179270 Publication restriction: None Judgment The application before the court 1. The parties in these proceedings each bring applications for gross sum costs orders pursuant to s 98 Civil Procedure Act 2005 (NSW). 2. Each of the plaintiffs brings proceedings in the District Court of New South Wales by way of Summons for approval of a settlement in relation to damages for a motor vehicle accident which occurred on 5 December 2012. The plaintiffs were both minors at the time and according approval of the court of the settlement is necessary pursuant to ss 75-77 Civil Procedure Act 2005 (NSW). 3. The procedure for approval of such a settlement is designed to be a speedy and inexpensive procedure. Unfortunately, that is not what occurred, and that is what has led to the dispute about costs which is before the court today. The parties settle the matter, but the plaintiff starts proceedings in the wrong court 1. After the matters settled in principle in February 2017, the plaintiffs' solicitors incorrectly filed the Summons in the Supreme Court of New South Wales where the matters were listed for directions on 9 May 2017. Not only were they in the wrong court, but the Summons were infelicitously drafted, in that it requested an approval with "the defendant's insurer QBE Insurance" when the defendant's insurer was Zurich Insurance. 2. Ms Celik, the solicitor at Sparke Helmore Lawyers with conduct of the matter, notified a paralegal employed by the plaintiffs' solicitors, a Ms Indac, of these problems on or about 10 April 2017. The plaintiffs' solicitors' response was to file an Amended Summons correcting the name of the insurer on 8 May 2017, the day before the first return date of the Summons. On 9 May 2017, Registrar Brown made the following orders: (1) Plaintiff to file Notice of Discontinuance in current proceedings. (2) Plaintiff to pay defendant's costs of attending directions at Supreme Court of New South Wales on 9 May 2017. 1. Ms Celik spoke to Ms Indac on or about 9 May 2017 inquiring what would happen to the Notice of Discontinuance and whether a Summons would be filed in the District Court. When nothing happened, she sent the following letter on 14 June 2017: "We refer to the costs order made in favour of our client in the Supreme Court proceedings before Registrar Brown on 9 May 2017. An order was made, which you agreed to, that your office pay our costs of the Supreme Court proceedings which were incorrectly filed by your office. Our client seeks recovery of its costs of the proceedings for the Supreme Court proceedings in the sum of $907.50 We look forward to receiving a cheque for payment of costs drawn in favour of our client, Zurich Financial Services Australia Limited. Furthermore, we note that we are yet to receive an update as to whether or not you have filed a Notice of Discontinuance in the Supreme Court and following this, filed a Summons in the District Court of New South Wales for the relevant settlement approval. We note that this matter settled on 17 February 2017. Despite our numerous attempts at assisting your office to have the matter listed for infant approval, your office has shown minimal interest in completing settlement. We kindly request that you attend to arranging the infant approval in order to complete the settlement process, and advise us in relation to same." 1. Once again, nothing happened. On 4 July 2017, Ms Celik sent a reminder asking for what she called "an urgent update" and another on 31 July 2017. On the same day, the defendant's solicitors finally received the Notice of Discontinuance. The plaintiff starts proceedings in the right court, but files the wrong documents 1. The plaintiffs did commence proceedings in the right court on the second occasion. Unfortunately, the document prepared on their behalf in relation to the District Court proceedings was not a Summons for approval but a Statement of Claim, with the result that the file was treated by the court as a hearing file and not fast-tracked for settlement approval. Additionally, a Consent to Act as Tutor was not filed. 2. The proceedings came before Judicial Registrar Howard on 2 August 2017 for a pre-trial conference. Judicial Registrar Howard noted that the plaintiff had not yet filed a Consent to Act as Tutor form and made the following orders: (1) Note the matter is settled. (2) Stood over to Approval list 18/8/2017 at 9.00am. (3) All documents to be filed in accordance with PN7. (4) Any amended SOC to correct name of plaintiff and consent to act as tutor to be filed and served by 11/8/2017. 1. After the plaintiffs' solicitors failed to comply with order (4) by filing an Amended Statement of Claim by 11 August 2017, the defendant's solicitors wrote sending a reminder on 14 August 2017. The Consent to Act as Tutor was received on 16 August 2017. Problems with the affidavit in support of the application 1. Accompanying the application for approval was an affidavit of Mr Sayer Dehsabzi sworn 16 August 2017 indicating that the claim had settled for "$20,000 inclusive of costs". This is impermissible, but the judgment sum was able to be corrected to the correct amount, by reason of the form of the Consent Judgment prepared by the defendant, which correctly delineated the amount of the settlement. 2. However, given the history of the matter, the defendant objected to the payment of $10,000 sought by the plaintiff by way of a gross sum costs order. The defendant argued that the costs were excessive, given the history of problems caused by the solicitors for the plaintiffs' dilatory and incompetent conduct of the proceedings to date. The defendant also pointed out that all their transactions had been with a paralegal and not a solicitor, and that the sum sought for costs did not reflect this. 3. I made the following orders on 18 August 2017: Pursuant to ss 75-77 Civil Procedure Act 2005 (NSW), approve the settlement set out in the Consent Judgment filed in court today and make orders as follows: (1) Judgment for the plaintiff for the sum in paragraph 2. (2) Defendant pay plaintiff's costs in accordance with paragraph 2 (subject to the order (6) below). (3) Note the provisions of paragraphs 3-10. (4) The net judgment sum (but not the costs referred to) after the deductions referred to in paragraph 5 is to be paid direct to the NSW Trustee & Guardian for investment until the plaintiff's 18th birthday. (5) Request the NSW Trustee & Guardian to invest the following settlement sums in the same account and charge only one set of fees, notwithstanding each of the plaintiffs turns 18 years on different dates: (a) Zahra Nijati (2017/179243); (b) Mohammad Nijati (2017/179270). (6) The costs component of this claim, namely the sum of $10,000, is to be paid into court pending a determination of all costs claims between the parties for these proceedings and the Supreme Court proceedings (Exhibit A), which will be heard by Gibson DCJ. (7) Defendant's outline of costs issues in 14 days. (8) Plaintiff's reply 14 days thereafter. (9) Matter stood over for further directions on Friday 27 October 2017 in the Infant Approval List. 1. Ms Indac, a paralegal, was noted as appearing for the plaintiffs, with the leave of the court being granted for her to appear on the settlement. She frankly acknowledged that she was not able to deal with the costs issue, which is one of the reasons why it was specially fixed for Friday 27 October 2017 for argument in relation to the costs issue. The plaintiff fails to provide submissions in reply 1. The plaintiffs failed to comply with the orders I made in court on 18 August 2017. Although the defendant's submissions were filed on 1 September 2017 and forwarded to the plaintiffs' solicitors at the same time, the plaintiffs failed to provide submissions in reply 14 days thereafter, or indeed at all, until the morning of 27 October 2017, when Mr Dehsabzi provided what he called "written submissions" as well as an affidavit. 2. The written submissions only addressed two issues in detail. The first of these relate to the absence of the plaintiff and the tutor on 18 August 2017, in that they were absent overseas. That was not an issue relevant to costs, as Ms Indac contacted the court to seek permission for the tutor and the plaintiffs not to be present, which was granted. The second matter the subject of submissions is the statement that on 19 October 2017 the outstanding costs for the Supreme Court proceedings ($956.44) had been paid on 19 October 2017. Although this cheque had yet to arrive in the office of the defendant's solicitors, Ms Celik had seen a photocopy of it and was satisfied that the cheque would be provided. 3. The only explanation proffered in relation to the conduct of the matter by Mr Dehsabzi was that he "vehemently denies" (paragraph 4 of his reply to the defendant's submissions) the contents of paragraph 20 of the defendant's submissions and that all Ms Indac had been doing was assisting the plaintiffs' solicitor, Mr Dehsabzi who "is seeking costs of $10,000". 4. Mr Dehsabzi's affidavit states that he takes "complete responsibility" for all matters conducted by the firm and that his role is to mentor and supervise his legal staff and give them the opportunity to "develop and enhance their core skills in [sic] legal profession [sic]". He described what had happened as being "all inadvertent mistakes" which had been "addressed and dealt with thoroughly" in his office (written submissions, paragraph 7). He also complained that the defendant had only entered their appearance onto the record on 6 October 2017. 5. Mr Dehsabzi has provided a breakdown of his claim for $10,000, in the form of a claim for costs going back to 22 February 2013. It raises more questions than it answers. For example, I was only able to find one entry for the past year (from the end of September 2016 until this hearing), namely the preparation of a letter to the client on 15 February 2017. Additionally, some of the entries are hard to understand. For example, the sum of $1,280 is charged for "preparation letter to TO [sic] particulars" on 1 March 2014, which predates the obtaining of the Auburn Hospital discharge summary (which has been charged for twice) and of Dr Shakila's notes or, more importantly, any conference with the clients. A sum of $800 is charged in relation to preparation CARS submission on 5 December 2015, although the plaintiffs were exempt from CARS. There is also a reference of a "brief to Dr Davis" for which $1,300 is charged on 14 February 2015. However, all that Dr Davis received was the plaintiff's claim forms and medical certificate, clinical records and the NSW Police report. It is hard to see how such a figure could have been arrived at for what was clearly a form letter with a few attachments. The defendant's submissions 1. Ms Celik, in her helpful written and oral submissions, argues that the plaintiffs' claim for a gross sum costs order of $10,000 represents a sum which is excessive in the circumstances, given the simplicity of the work done. 2. Ms Celik also draws my attention to the additional costs and expenses the defendant been put to as a result of Mr Dehsabzi's failure to act in a diligent and proactive way to list the infant matter for an approval in the correct jurisdiction and his subsequent delays. These additional costs are assessed in the very modest sum of $450 for the attendance at the pre-trial conference before Judicial Registrar Howard and the reminder letters that were sent to the plaintiffs' solicitors. 3. The defendant's solicitor also submit that as they only had dealings with Ms Indac and had no dealing with Mr Dehsabzi at any time (in particular, in the numerous failed attempts to list the matter for infant approval), the costs sought by Mr Dehsabzi should only be payable in relation to an appropriate rate for a paralegal, and that the costs would be assessed in this fashion if the costs were to be determined by an assessor. Application for gross sum costs orders 1. The parties' respective applications for gross sum costs orders are made pursuant to s 98 Civil Procedure Act 2005 (NSW). Applications of this kind are well-suited to very small costs claims. In Bobb v Wombat Securities Pty Ltd and Ors (No 2) [2013] NSWSC 863 at [6], Beech-Jones J noted: "[6] Thus, 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." 1. A copy of this judgment was provided to Ms Celik and to Mr Dehsabzi and each of them was invited to make further submissions as to the matters raised by Beech-Jones J concerning the making of such orders as part of a two-stage process, where the court must first be satisfied that the circumstances of the case warrant the making of a gross sum costs order, and then, and only then, make such an order as to the quantum of costs as is available on the evidence. 2. As to the first stage of this process, I note the statements of Beech-Jones J about the desirability of such orders in circumstances such as the present. As to the second, the inadequacy of the costs material supplied by Mr Dehsabzi was such that I consider it would be appropriate for the proceedings to be referred for assessment, particularly since these were provided on the morning of the hearing and Ms Celik has had no opportunity to consider them. However, Ms Celik submitted that the costs of the assessment process would only add to the burden of the unsatisfactory conduct of the proceedings by the plaintiff's solicitors to date, and asks me to consider the defendant's objections in the light of the material available to me from the history of the proceedings and her written submissions. 3. As I pointed out to Mr Dehsabzi, there are two significant gaps in his written submissions and affidavit. First, it is clear, from the content of the memorandum of costs, that these have not been made the subject of any deduction from being ordered costs, as opposed to indemnity costs. Second, there is no deduction allowed for the possibility of some of the ordered costs sought being refused on assessment. Judgments in the Supreme Court have often put this figure at being approximately 30%; this was the case in Bobb v Wombat Securities Pty Ltd and Ors (No 2) and see also Plassas v Person (No 2) [2016] NSWSC 1515 and In the matter of Aquaqueen International Pty Ltd [2015] NSWSC 500 at [30]. This is not a general rule; in the present case, given the unsatisfactory and dilatory conduct of the proceedings by the plaintiff's solicitors, I consider this percentage discount figure could well be higher. 4. Mr Dehsabzi told me that his costs added up to a figure in excess of $14,000. He submitted that this amounted to the taking into account the nature of these two adjustments. 5. I do not accept Mr Dehsabzi's submissions. It is clear to me from the history of the matter that these problems arose because Mr Dehsabzi left his paralegal to conduct these proceedings without any or any adequate supervision or support. As a result, his paralegal, Ms Indac, although an able and articulate young law student who did her best, was left without any proper direct as to the course to take. In those circumstances, a proper adjustment must be made. 6. This brings me to the issue of quantum of costs. I accept that disbursements have been incurred in relation to medical reports and notes for Dr Shakila and Dr Davis of $33 and $1,375 respectively. I was not told what costs are owing to "Australian Incident Investigation Services", or why, although these expenses are $1,386.50. There are also filing fees. 7. As to professional costs, I consider, in the circumstances that only a nominal sum should be awarded. From that sum the amount of $450 should be deducted by reason of the additional legal costs incurred by the defendant in relation to the plaintiffs' solicitors' delays. 8. In addition, what would otherwise have been a short hearing before me today was unnecessarily protracted by Mr Dehsabzi's failure to comply with the timetable for providing submissions, a failure which he acknowledged only as being an oversight on his behalf. The result was that the parties had to provide further information to me later in the day. 9. Taking all of the above into account, I consider the plaintiffs' costs should be assessed at $5,000 including the $33 for Dr Shakila's medical notes and the report fees for Dr Davis of $1,375, which I direct the defendant to pay directly. As I directed the sum of $10,000 to be paid into court, I have set out orders permitting the defendant to request the registrar to take such steps as are necessary to effect the orders I have made. Orders 1. Pursuant to s 98 Civil Procedure Act 2005 (NSW), I assess the plaintiffs' costs by way of gross sum costs order of $5,000 inclusive of disbursements. 2. The defendant (or the registrar of the court at the defendant's direction) is to pay the said sum as follows: 1. The sum of $33 is to be paid to Dr Shakila; 2. The sum of $1,375 is to be paid to Dr Davis; 3. The balance of the sum of $5,000 is to be paid to the trust account of Dehsabzi Lawyers; and 4. The remaining amount of the $10,000 paid into court by the defendant is to be refunded to them by the court. ********** 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: 31 October 2017