COSTS - assessment of costs - gross sum costs order - whether appropriate

James v Australian and New Zealand Banking Group Limited [2016] NSWSC 833 (23 June 2016)

By way of notice of motion filed on 17 February 2016, the plaintiff sought leave to bring and prosecute in the name of a number of now liquidated companies alleging that the value of wine owned by the companies at the time the Receivers were appointed was greater than the amount the Receivers have realised, and the Receivers were guilty of trespass and conversion. The motion was listed for 4 days commencing on 14 November 2016. An adjournment was given on that day. The Associate was informed on the evening of 15 June 2016 that Mr James no longer pressed his motion, so on 16 June 2016 the motion was dismissed.

The defendants made an application for a gross sum costs order pursuant to s 98(4) of the Civil Procedure Act 2005 (NSW). The solicitors for the defendants relied on an affidavit providing a breakdown of solicitors’ professional fees, as well as amounts paid for disbursements and counsels’ fees. The total amount claimed was based on recovering 100% of Counsels’ fees and two-thirds of actually incurred solicitors’ professional fees and disbursements.

Ball J noted the principles in relation to the circumstances in which the court will make a gross sum costs order: Hamod v State of New South Wales [2011] NSWCA 375 at [813]. The judge found that two matters pointed strongly in favour of making a gross sum costs order:

1. Mr James would not be able to discharge the costs liability in any event and it would be expected

that he would contest any assessment; and

2. Mr James unnecessarily contributed to the costs of the proceedings.

It was the judge’s view that it was reasonable for the defendants to rely on evidence from their solicitors and the affidavit gave sufficient information to allow the court to make a reasonable assessment of the amount to be allowed. The only adjustments the judge made to the claimed professional fees was limited work done by unidentified lawyers, law graduates or paralegals and concluded that it would be appropriate to apply a 40% discount to the actual costs claimed. It was found that the failure to provide a breakdown of the time spent by senior and junior counsel was not fatal to an assessment of costs on a gross sum basis.

It was ordered by Ball J that the first plaintiff pay the defendants the sum of $210,000 in relation to the defendants’ costs of the notice of motion filed on 17 February 2016, being $135,000 for solicitor fees and $75,000 in respect of Counsels’ fees.