Benkath Nominees Pty Ltd v The Bah Company Pty Ltd (No 2) [2019] NSWSC 1091

Supreme Court New South Wales

Medium Neutral Citation: Benkath Nominees Pty Ltd v The Bah Company Pty Ltd (No 2) [2019] NSWSC 1091 Hearing dates: On the papers Decision date: 23 August 2019 Jurisdiction: Common Law Before: Adamson J Decision: (1) Fix the amount of the costs which the second defendant is obliged to pay the plaintiff pursuant to order (2) made on 7 May 2019 at $18,000 plus GST.

(2) I note that such costs are to be paid at the conclusion of the proceedings. Catchwords: COSTS – application for gross sum costs order – order not opposed – issue as to quantum – quantification of appropriate gross sum – relevance of principal and agent having been retained – whether costs payable forthwith or at the conclusion of the proceedings Legislation Cited: Civil Procedure Act 2005 (NSW), s 98 Cases Cited: Dale v Clayton Utz (No 3) [2013] VSC 593 Category: Costs Parties: Benkath Nominees Pty Ltd (Plaintiff) The Bah Company Pty Ltd (First Defendant) John Joseph Harkins (Second Defendant) Nikola Coric (Third Defendant) Michelle Anne Coric (Fourth Defendant) Representation: Counsel: B Le Plastrier (Plaintiff) K Fraser, solicitor (Second Defendant)

Solicitors: MacGregor O'Reilly Nash Solicitors (Plaintiff) BHM Lawyers (Second Defendant) File Number(s): 2018/265568

Judgment

Introduction 1. Benkath Nominees Pty Ltd (the plaintiff) seeks an order that its costs of the application by John Harkins (the second defendant) to set aside a default judgment entered against him be paid in a gross sum pursuant to s 98(4)(c) of the Civil Procedure Act 2005 (NSW) (the Act). 2. When the matter came before me on 7 May 2019, the parties indicated that they agreed that an order ought be made by consent to set aside the default judgment. The only outstanding issue was the costs of the application. After hearing argument, I ordered the second defendant to pay the plaintiff's costs of the default judgment and the application to set it aside and gave reasons ex tempore. In its submissions handed up in court on 7 May 2019 the plaintiff proposed that such an order be made and nominated the sum of $17,500. However, as the plaintiff did not adduce adequate evidence in support of this sum, I granted leave to the plaintiff to apply for an order pursuant to s 98(4)(c) of the Act and made directions about the filing of such evidence. The plaintiff has revised its claim (to take account of costs incurred in the interim) to $22,826.51, including GST (or $21,061.60 plus GST). These amounts take account of the discounts referred to below. 3. The plaintiff relies on an affidavit of Matthew Wells sworn 14 May 2019 in support of its application. The plaintiff is registered in Queensland and instructed solicitors in Queensland to commence the proceedings. This brought about the need for the appointment of an agent in Sydney to appear in this Court as required. There has inevitably been an increase in costs by reason of the agency arrangement. Mr Wells is a solicitor with Makinson d'Apice, the firm which acts as agent (the Sydney agents). Mr Wells has annexed a time sheet from the Queensland solicitors (the Queensland principals) together with the invoice rendered by the Sydney agents to the principal firm and the invoice from counsel. 4. The time sheets of the Queensland principals total an amount of $13,843.50, including GST (being $12,585 excluding GST). The invoice rendered by the Sydney agents to the Queensland principals is $13,890.80, including GST. The invoice for counsel's fees is in the amount of $5,362.50 including GST. The plaintiff proposes that the solicitors' fees be discounted by 30% (to give a percentage on assessment of 70%) and that the barrister's fees not be discounted at all. 5. The plaintiff seeks an order that the second defendant pay the costs forthwith. It relies on Dale v Clayton Utz (No 3) [2013] VSC 593 and submitted that this case falls into categories (a) and (c) of those considered at [65] of that decision as follows: "Courts have recognised that the demands of justice may require a departure from the ordinary rule [that costs not be payable until the conclusion of the proceedings] for one or more of three broad reasons: (a) Because of the conduct of the unsuccessful party; (b) Because of the likely delay before the final completion of the proceeding; and (c) Because the interlocutory application involves a separate or discrete issue." 1. The second defendant does not oppose the making of an order under s 98(4)(c) of the Act but has submitted that as the plaintiff has not tendered an actual invoice from the Queensland principals in support of its application, there ought be a discount applied to reflect the costs which would actually be charged to the client as distinct from those recorded in the time sheets. The second defendant has also submitted that there ought be a further discount applied because of the use of the Sydney firm as agent in circumstances where the matter involved a mortgage and possession application relating to real property and defendants in New South Wales. The second defendant also submitted that counsel's fees were excessive as the only issue in dispute on 7 May 2019 was costs. The second defendant submitted that it would be appropriate to discount by 50% the fees sought, by reason of the matters referred to above and that the appropriate amount would be, accordingly, $12,606.50 (excluding GST), not including counsel's invoice dated 14 May 2019. 2. The second defendant submits that it is appropriate that the costs not be payable until the conclusion of the proceedings. 3. In response, the plaintiff submitted that the second defendant's objections to the amount claimed are general and that the second defendant has not identified any particular item or items which ought not be recoverable. The plaintiff submitted that the second defendant failed to identify any item which constituted "double-counting" between principal and agent and that, accordingly, the generally accepted discount of 30% should be applied by this Court. The plaintiff also submitted that the time sheets gave as much detail of amounts that would be charged as any invoice would give and that the amounts on the Queensland principals' time sheet should not be discounted by more than 30%.