Bendigo and Adelaide Bank Limited v Stamatis
[2015] NSWSC 1199
•26 August 2015
Supreme Court
New South Wales
Medium Neutral Citation: Bendigo and Adelaide Bank Limited v Stamatis [2015] NSWSC 1199 Hearing dates: 20 August 2015 Date of orders: 26 August 2015 Decision date: 26 August 2015 Jurisdiction: Common Law Before: R S Hulme AJ Decision: See paragarph 23
Catchwords: Practice – Civil Procedure Act s 99 – costs against solicitors – undue duplication and irrelevance Category: Costs Parties: Bendigo and Adelaide Bank Limited (Plaintiff)
Aristides Stamatis (First Defendant)
Maria Stamatis (Second Defendant)
Gadens Lawyers (Respondent)Representation: Ms V Magee
Solicitors:
Gadens Lawyers
File Number(s): 2011/156419 Publication restriction: No
Judgment
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In my principal Reasons for Judgment in this matter, delivered on 16 September 2014, I expressed disquiet at what seemed to me to be an unduly large quantity of paper, much consisting of unnecessary duplication, generated in the course of the litigation between the Plaintiff and Defendants.
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In Reasons delivered on 12 June 2015, I concluded that orders should be made calculated to make Gadens, the solicitors for the Plaintiff, liable for the consequential unnecessary costs. In paragraphs 116-119 of those Reasons I expressed a tentative form of the orders that seemed to me appropriate.
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On 18 June 2015, Gadens advanced for my consideration some Short Minutes of Order which, albeit with some changes, were suggested to reflect the relief I had foreshadowed. On that day, I made orders 1 and 3 in those Short Minutes and adjourned the proceedings until 20 August last.
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On 14 August 2015, Gadens forwarded to my Associate a Bill of Costs, a summary of the Bill and further draft Short Minutes of Order and during a hearing on 20 August 2015 which has led to these Reasons, copies of these became Exhibits F and G.
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Consideration of those further Short Minutes and the Bill of Costs has led me to the view that the Short Minutes are not appropriate and that my tentative form of orders was not sufficient to reflect the reasoning that inspired them. I should explain why.
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The principal sources of the unnecessary paper were three affidavits and documents exhibited to them, the affidavits being that of Vanessa Magee of 9 July 2013, that of Jane Gurney of 9 July 2013, and that of Candece Nicholls of 12 July 2013 (sometimes referred to as of 9 July 2013). I summarised my conclusions concerning these:-
97. In summary:
The vast bulk – I estimate at least 90% - of the 415 pages of documentation exhibited to the affidavit of Vanessa Magee was irrelevant, and this even if one takes the view that some of it was justified on the ground that it contained references to a “warranty”.
I make no criticism of the body of Ms Magee’s affidavit of 3 pages.
At least 75% of the body of the 9 July 2013 21 page affidavit of Ms Gurney contained nothing of use.
At least 60% of the 417 pages of documentation exhibited to the 9 July 2013 affidavit of Ms Gurney, Exhibit JG2, was duplication of documents in Exhibit JG1 and/or Exhibit LH1. More of that documentation was irrelevant or duplicated within Exhibit JG2 itself.
The documents exhibited to the affidavit of Ms Nicholls, some 53 pages, were almost wholly further duplication.
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My Reasons of 12 June 2015 also included the following:
99. The material I have criticised amounted to a substantial proportion of the paper in this case – about one-third of the 1998 pages in the Court Book and a greater proportion of the original affidavits reflected in that Book. The drafting of that material or its inclusion in exhibits meant that it had to be photocopied for consideration by others and then read and considered by all of those in the case. It was copied again for inclusion in the Court Book, and in that form, further copies no doubt provided for counsel and one suspects, solicitors.
111. … in this case the extent to which irrelevant or duplicated material was included in affidavits prepared on the Plaintiff’s side of the record went well beyond anything that was reasonable either in quantity or justification… I am satisfied that costs have been incurred without reasonable cause, in circumstances for which a legal practitioner is responsible.
112. … I am nevertheless of the view that an order should be made against Gadens and that the order should, subject to the avoidance of undue complexity in its implementation, extend to the whole of the unnecessary costs …
115. The conclusions at which I have arrived lead to the question of how to formulate and/or quantify an order that is fair both to Gadens and their client and to do so without forcing the incurring of yet more avoidable costs. It is a reasonable assumption that the costs and time involved in the preparation of the affidavits to which I have taken exception have been identified and quantified or that such steps can readily be effected. Significantly more difficult will be any attempt to value the time expended through the consideration by both the Plaintiff’s and the Defendants’ lawyers of duplicate or otherwise wasteful material and this even if one is accepts, as I do, that precision is not possible.
116. During the hearing on the question of the form of any orders was not canvassed. In these circumstances, I believe I should formulate the orders that presently appeal to me as best calculated to effect the result that Gadens pay or bear the costs incurred as a result of their unreasonable actions but provide to the parties the opportunity of making any submissions they wish as to the form of those orders…
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Apart from oral evidence, the proceedings between the Plaintiff and Defendants were conducted principally upon the contents of a 5 volume, 1998 page, Court Book which had been directed and in which were contained copies of the Affidavits filed in the proceedings including those to which I took exception. In part the orders I proposed were formulated by reference to the Court Book and not by reference to the Affidavits themselves. Included in the orders I suggested were:
118 …
(1) Order that Gadens Lawyers provide to the Court a bill of costs in assessable form covering the Plaintiff’s costs of the proceedings.
(2) Order that Messrs Hughes & Taylor provide to the Court a bill of costs in assessable form covering the Defendants’ costs of the proceedings.
(3) Refer to a costs assessor for inquiry and report the question of the extent to which:
(a) the costs of preparation and copying of the Court Book are likely to have been increased by reason of it being the size it is instead of two-thirds that size;
(b) the costs of the Plaintiff of and incidental to the hearing are likely to have been increased by reason of the Court Book being the size it is instead of two-thirds that size;
(c) the costs of the Defendants of and incidental to the hearing are likely to have been increased by reason of the Court Book being the size it is instead of two-thirds that size and the affidavits reflected in it also being in total 50% longer than they should have been.
119 Subject to any matter that may arise in the interim, the orders that seem to me appropriate to be made eventually will be to the following effect:
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(1) Disallow as between Gadens and the Plaintiff the following costs:
(a) 80% of the costs of and incidental to the preparation, drafting and settling (whether by Gadens or counsel), and copying by or on behalf of Gadens (otherwise than as an incident of the preparation or use of the Court Book) of the affidavit of Vanessa Magee;
(b) 60% of the costs of and incidental to the preparation, drafting and settling (whether by Gadens or counsel), and copying by or on behalf of Gadens (otherwise than as an incident of the preparation or use of the Court Book) of the affidavit of Jayne Gurney of 9 July 2013; and
(c) 25% of the costs of and incidental to the preparation, drafting and settling (whether by Gadens or counsel), and copying by or on behalf of Gadens (otherwise than as an incident of the preparation or use of the Court Book) of the affidavit of Candece Nicholls.
(d) $XX [the amount found by the costs assessor as the extent to which:
(i) the costs of preparation and copying of the Court Book are likely to have been increased by reason of it being the size it is instead of two-thirds that size; and
(ii) the costs of the Plaintiff of and incidental to the hearing are likely to have been increased by reason of the Court Book being the size it is instead of two-thirds that size.]
(2) Order Gadens to pay to the Plaintiff $XX [the amount found by the costs assessor as the extent to which the costs of the Defendants of and incidental to the hearing are likely to have been increased by reason of the Court Book being the size it is instead of two-thirds that size and the affidavits reflected in it also being in total 50% longer than they should have been].
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Paragraphs 1 and 3 of the Short Minutes of Order of 18 June 2015, directed Gadens to provide a Bill of Costs and included an order calculated to deal comprehensively with the situation of Messrs Hughes and Taylor, the solicitors for the Defendants. Otherwise the matter was adjourned until 20 August 2015. The draft Short Minutes of Order forwarded by Gadens on 14 August 2015 were directed to the balance of the matters referred to in the immediately preceding paragraph and was in terms:
The Court makes the following orders:
(1) Disallow as between Gadens and the plaintiff the following costs:
(a) $404.80 being 80% of the costs of and incidental to the preparation, drafting and settling (whether by Gadens or counsel), and copying by or on behalf of Gadens (otherwise than as an incident of the preparation or use of the court book) of the affidavit of Vanessa Magee dated 12 July 2013.(b) $2,473.68 being 60% of the costs of and incidental to the preparation, drafting and settling (whether by Gadens or counsel), and copying by or on behalf of Gadens (otherwise than as an incident of the preparation or use of the court book) of the affidavit of Jayne Gurney of 9 July 2013.(c) $555.78 being 25% of the costs of and incidental to the preparation, drafting and settling (whether by Gadens or counsel), and copying by or on behalf of Gadens (otherwise than as an incident of the preparation or use of the court book) of the affidavit of Candece Nicholls dated 10 July 2013.(d) $2,220.40 being the amount for:
(i) the costs of preparation and copying of the court book which are likely to have been increased by reason of the court book being the size it is instead of two-thirds that size, being $2,220.40; and
(ii) the costs of the plaintiff of and incidental to the hearing which are likely to have been increased by reason of the court book being the size it is instead of two-thirds that size, being $Nil.
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There are a number of problems with these proposed Short Minutes. The Summary of the Bill of Costs which is said to identify the costs of “preparation and copying of and incidental to the affidavits of Vanessa Magee, Jayne Gurney and Candece Nicholls” and by reference to which the figures in the proposed Short Minutes were calculated:-
Omits reference to an item in the Bill dated 11.07.13 “Preparing affidavit re Tresscox subpoena …” and which seems likely to relate to the affidavit of Ms Magee;
Omits reference to the following items in the Bill and which seem likely to relate to the affidavit of Ms Gurney:-
05.07.13 Collating exhibit JG2;
05.07.13 Collating exhibit of Jayne Gurney JG1;
05.07.13 Collating and copying exhibit to JG2.
Omits reference to items in the Bill which relate to charges made by Ms Latham of counsel-
09.07.13 Emails and telephone calls with Sam Schroeder re evidence in reply; settling affidavits of Vanessa Magee and …
10.07.13 Emails and telephone calls with Sam Schroeder re evidence in reply and orders extending time.
Omits reference to the following items in the Bill and which seem likely to relate to the affidavit of Ms Nicholls-
08.07.13 Settling affidavit of Ms Nicholls
Omits any reference to copying of those affidavits (which presumably would have occurred if counsel were to have copies for trial preparation prior to delivery to counsel of a copy of the Court Book).
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The above list is not intended to be exhaustive. It does however provide a reason why I am not prepared to accept the quantification advanced in the suggested Short Minutes. (I should add some explanation of the reference to “exhibit of Jayne Gurney JG1” in the immediately preceding paragraph. Exhibit JG1 was an exhibit to Ms Gurney’s affidavit filed on 1 February 2012. It seems unlikely that the exhibit was being collated in July 2013.)
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Furthermore, during the hearing on 20 August I expressed surprise that the figure in paragraph (d)(ii) of the Short Minutes of Order should be “Nil”. Ms Magee, appearing for Gadens responded, inter alia, as follows:
Counsel were each briefed with the totality of the documents at the start of proceedings, Senior Counsel some time later. Any costs that Counsel or Senior Counsel have spent in, whether it be preparation of those Affidavits or settling those Affidavits are incorporated in our summary in relation to the Court Book. We have consulted with Counsel, Counsel responded. As you would imagine, it is difficult to ascertain from Counsel’s fee the time spent in relation to the Court Book. Counsel have responded and said the inclusion of any material in the Court Book would have increased any preparation time. Certainly the time spent by Counsel to look at the Court Book would have been to review the index of documents to ascertain whether those documents were appropriate for inclusion. There would have been charges by Counsel in relation to that exercise. Senior Counsel fee notes also reflect there were no charges in relation to the Court Book.
Senior Counsel and Counsel would have to review each Affidavit, regardless whether the documents are included in the Court Book and regardless whether or not these documents were read, these documents have to be read in the natural course of the preparation for the trial and to that extent our Counsel has indicated there wouldn’t have been double charging indeed in terms of preparing the Court Book itself, none of those fees made it to Counsel’s fee note.
… When preparing the figures for paragraph 119 we certainly included Counsels’ fees to 119 to consider the Affidavits, to settle the Affidavits or prepare them.
… We have inserted nil because it is our view there are no additional costs for the hearing specifically setting aside the preparation of the Court Book itself.
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(The above passages are taken verbatim from the transcript. I am not conscious that any of them are inaccurate save that my impression is that the word “not” should have appeared in that part of the first passage quoted as reads: “Counsel have responded and said the inclusion of any material in the Court Book would have increased any preparation time.”)
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The Bill of Costs contains references to counsels’ fees. The hearing of the principal proceedings commenced on 24 March 2014. Senior Counsel for the Bank charged for 72.75 hours of preparation in the period 3 to 23 March. The Bill does not detail the hours spent by junior counsel but it is clear that he spend some days during this period engaged in preparation.
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The Court Book of 1998 pages contained copies of the pleadings, the affidavits filed by the parties, a joint report by handwriting experts, and some 40 pages of Notices to Admit, Notices disputing, objections to evidence and submissions. An item in the Bill of Costs says that the Court Book was delivered to counsel on 14 March 2014. When Senior Counsel for the Plaintiff opened the case and began to read affidavits, he did so by reference to copies in the Court Book. Thereafter all or virtually all references to affidavits or copies of affidavits were to those contained in the Court Book.
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Particularly when one has regard also to the state of orderliness inherent in the Court Book it is impossible to accept that no part of the time counsel spent in preparation was attributable to the Court Book even though it may well be that a deal of counsel’s preparation was effected by directing attention to copies, not contained in the Court Book, of the various affidavits or documents. Recognition of this possibility, combined with the suggestion inherent in the inclusion of “Nil” in paragraph 1(d)(ii) of the proposed Short Minutes, makes it apparent that my tentative suggestion as to the form of order calculated to impose on Gadens the costs wasted by the unnecessary paper was not adequate.
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Both consideration of the affidavits (and the documents exhibited to them) and reflection on the time I spent in the course of preparation of my principal reasons wading through the very substantial quantity of duplicated material leaves me in no doubt that that duplicated material – equivalent to about one third of the pages in the Court Book - must have added significantly to the costs of preparation of the case and, probably to a lesser extent, to the costs of the hearing. In the circumstances, and having regard to the suggestion that the Court Books added nothing to counsels’ costs of preparation, I propose to vary the form of order I had proposed in paragraph 1(d)(ii) to that set out below. The “three times” reference is derived as an approximation of the unnecessary length of those affidavits (including documents exhibited or annexed) and roughly reflects the contents of paragraph 97 of my Reasons of 12 June last.
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Given what seem to be errors in Gadens’ quantification of the “costs of and incidental to the preparation, drafting and settling (whether by Gadens or counsel), and copying by or on behalf of Gadens (otherwise than as an incident of the preparation or use of the Court Book) of the affidavits of” Vanessa Magee, Jayne Gurney and Candece Nicholls, I also propose to refer the issue of that quantification to a costs assessor. I have also, more fully than in the tentative version of the orders, identified those affidavits.
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I am not unconscious of Ms Magee’s submission that widening the scope of the orders I had proposed would be inherently unfair. I do not agree. Reasons delivered previously made it abundantly clear what I was seeking to achieve and why and so long as my orders do not have the effect of going beyond those considerations, there is no unfairness. A fortiori is this so when the tentative orders I suggested were prefaced by the words, “Subject to any matter that may arise in the interim”.
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Following the orders of 12 June 2015 I had my Associate contact a number of costs assessors whose name had been provided by the Costs Assessment Registrar. The names of all who were available were provided and Gadens indicated they had not objection to any of them. Some of the replies contained qualifications or possible complications and in the result I propose to appoint Mr John Bartos of 180 Phillip St, Sydney as the costs assessor.
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Against the possibility of further difficulties I have also decided to defer, until the report of the Assessor is received, final orders against Gadens. As presently advised and apart from specifying dollar amounts, I see no reason why, subject to some change incorporated in order (d)(ii) below, those orders should differ in their effect from those previously indicated, viz:-
Disallow as between Gadens and the Plaintiff the following costs:
80% of the costs of and incidental to the preparation, drafting and settling (whether by Gadens or counsel), and copying by or on behalf of Gadens (otherwise than as an incident of the preparation or use of the Court Book) of the affidavit of Vanessa Magee;
60% of the costs of and incidental to the preparation, drafting and settling (whether by Gadens or counsel), and copying by or on behalf of Gadens (otherwise than as an incident of the preparation or use of the Court Book) of the affidavit of Jayne Gurney of 9 July 2013; and
25% of the costs of and incidental to the preparation, drafting and settling (whether by Gadens or counsel), and copying by or on behalf of Gadens (otherwise than as an incident of the preparation or use of the Court Book) of the affidavit of Candece Nicholls.
$XX [the amount found by the costs assessor as the extent to which:
the costs of preparation and copying of the Court Book are likely to have been increased by reason of it being the size it is instead of two-thirds that size; and
the costs of the Plaintiff of and incidental to the hearing and preparation therefor (but not including any costs included in orders 1 or 2 (i)) are likely to have been increased by reason of the Court Book being the size it is instead of two-thirds that size and the affidavits (including documents exhibited or annexed) referred to in Order 1 and reproduced in the Court Book being about 3 times as long as they should have been.
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To achieve the result adverted to in the immediately preceding paragraph, and in order to ensure that the matter is not overlooked, I will stand the proceedings over until a date about 2 months hence in anticipation that the assessor’s report will be available prior to that time. Should complications occur in respect of dates, any interested parties should feel free to approach my Associate and I will feel free to have her contact them.
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Accordingly, the orders I make are:-
Refer to a costs assessor for inquiry and report the question of what were the costs of and incidental to the preparation, drafting and settling (whether by Gadens or counsel), and copying by or on behalf of Gadens (otherwise than as an incident of the preparation or use of the Court Book) of each of the affidavits (including documents exhibited or annexed) of:
Vanessa Magee of 12 July 2013, a copy of which commences at page 709 of the Court Book;
Jayne Gurney of 9 July 2013, a copy of which commences at page 194 of the Court Book
Candece Nicholls of 10 July 2013, a copy of which commences at page 633 of the Court Book.
Refer to a costs assessor for inquiry and report the question of the extent to which:
the costs of preparation and copying of the Court Book are likely to have been increased by reason of it being the size it is instead of two-thirds that size;
the costs of the Plaintiff of and incidental to the hearing and preparation therefor (but not including any costs included in orders 1 or 2 (a)) are likely to have been increased by reason of the Court Book being the size it is instead of two-thirds that size and the affidavits (including documents exhibited or annexed) referred to in Order 1 and reproduced in the Court Book being about 3 times as long as they should have been.
(3) Appoint Mr John Bartos of 180 Phillip St, Sydney to carry out the inquiries and report in accordance with Orders 1 and 2 above.
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Decision last updated: 17 November 2015
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