Buyer Central Pty Ltd v Sodhi (Costs)
[2021] VMC 22
•3 August 2021
IN THE MAGISTRATES’ COURT OF VICTORIA
AT MELBOURNE
CIVIL DIVISION
Case No. L12833334
| BUYER CENTRAL PTY LTD (ACN 166 004 904) | Plaintiff |
| v | |
| PREET INDER SODHI | Defendant |
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| MAGISTRATE: | J GRAINGER |
| WHERE HELD: | Melbourne |
| DATE OF HEARING: | 1 June 2021 |
| DATE OF DECISION: | 3 August 2021 |
| CASE MAY BE CITED AS: | Buyer Central Pty Ltd v Sodhi (Costs) |
| MEDIUM NEUTRAL CITATION: | [2021] VMC 22 |
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CATCHWORDS – Motor vehicle accident dispute – Plaintiff’s application for costs – Costs order by consent – Whether costs order should be made under ss 28 and 29 of the Civil Procedure Act 2010 (CPA) - Magistrates Court Act 1989, s131 – Not all costs allowed but no costs order made under ss 28 and 29 of the CPA.
APPEARANCES: | Counsel | Solicitors |
| For Plaintiff | Mr E Richards, counsel | Yassine Lawyers & Associates |
| For Defendant | Mr D Ross, counsel | Ligeti Partners |
HER HONOUR:
Buyer Central’s claim for costs
On 1 June 2021, I informed counsel for Buyer Central and Mr Sodhi that I had decided to dismiss Buyer Central’s claim for the cost of renting a replacement car for Mr Ali but that I had allowed its claim for the costs of repairing the damaged car at $6,043.87, excluding GST and for Mr McGrath’s fee of $400, excluding GST for reasons which I subsequently provided the parties in writing. The total amount awarded to Buyer Central was $6,443.87.
I also informed the parties’ counsel of my concerns in relation to the possibility that the parties, their legal representatives (excluding counsel) or their respective expert witnesses may have contravened their overarching obligations under the Civil Procedure Act 2010 (Vic) (CPA) and the parties’ respective expert witnesses may have contravened their obligations under the Expert Witness Code of Conduct for the reasons set out in paragraphs 21 to 32 and 50 to 55 of my written reasons for my decision dated 1 June 2021.
I then invited counsel for the parties to make any application for cost orders and submissions in relation to whether I should make any orders under ss28 and 29 of the CPA.
Ultimately, both counsel submitted that no order for costs should be made other than the standard order arising from my decision dated 1 June 2021, which is that Mr Sodhi pay Buyer Central’s costs on the relevant scale.
Both counsel also submitted that if I intended to make an order of my own motion under s29 of the CPA, before doing so, the expert witnesses ought to be given an opportunity to seek independent legal advice.
As I observed in my reasons dated 1 June 2021, it goes without saying that an order under s 29 of the CPA would not be made before the parties, their legal representatives and the expert witnesses had been given an opportunity to give evidence to the court about their compliance with the overarching obligations and to make submissions about what orders, if any, should be made.
Buyer Central subsequently sought an order that Mr Sodhi pay it the following costs,[1] which were agreed to by him:
[1] As set out in Buyer Central’s counsel’s email to the court registry dated 3 June 2021.
Professional costs
Cap $1,986.00
Extra 2 hours $993.00
Extra 2 hours $993.00
To hear judgment $361.00
Sub-total $4,333.00
Disbursements
Issue fee $334.18
Service and attempts $125.00
Subpoena fee $50.40
Service and conduct money $84.00
Witness costs for assessor - 2 days $1692.00
Witness costs for Mr Ali $250.00
Witness costs for Mr Habachi $100.00
Sub-total $2,635.58
Total $6968.58
Accordingly, Buyer Central’s claim for costs exceeds the amount awarded to it, and in my view, such costs are arguably unreasonable and disproportionate, taking into account that the dispute in relation to the repair costs was neither complex nor particularly important, and that the amount in dispute was only $2,136.50.
However, for the reasons that follow, I do not intend to allow all of the costs claimed by Buyer Central despite Mr Sodhi having agreed to pay the costs.
10. As no offer of compromise had been made by either party, Appendix AA of the Magistrates' Court (Miscellaneous Civil Proceedings) Rules 2020 applies.
11. Because the amount awarded to Buyer Central was $6,443.87 and the arbitration exceeded two hours, the applicable arbitration costs cap in relation to all professional costs incurred in the proceeding (including Australian lawyers' costs and fees to counsel) is $2980 under item 3 of Appendix AA (awards of between $5,000 and $9,999). Accordingly, I intend to allow $2980 for the plaintiff’s professional costs rather than $4,333.00 as claimed.
12. Buyer Central is also entitled to payment of its disbursements.
13. According to the Court’s ‘Ready Reckoner effective 1 July 2020’, Buyer Central is entitled to $315.50 for the filing fee, not $334.18 as claimed. Accordingly, I only intend to allow $315.50 for the filing fee rather than $334.18.
14. Buyer Central has also claimed $50.40 for a subpoena fee in relation to Jason Harris, who it intended to call to give evidence in relation to liability, and $84.00 for service of the subpoena. Whilst Mr Harris did not ultimately have to give evidence at the hearing, it was reasonable to subpoena him to give evidence and these disbursements are also allowed.
15. Buyer Central also claimed $125 for service of the complaint and three service attempts. This disbursement is also allowed.
16. In relation to the witness costs claimed by Buyer Central, Mr McGrath gave evidence for over two hours over two days. I am prepared to allow the costs of a full day in relation to the first day of the arbitration, as Mr McGrath needed to be available to give evidence at
any time throughout the day and as a result, may not have been able to conduct any offsite appointments that day. This is despite the fact that Mr McGrath gave evidence over WebEx from his office and presumably was able to do some administrative work such as preparing reports or answering emails whilst he was waiting to be called as a witness and after he had finished giving evidence. However, I am only prepared to allow the costs of giving evidence for one hour on the second day, as I consider it unreasonable to claim costs for a full day in circumstances where the arbitration was not listed to start until 2pm that day and Mr McGrath gave evidence over WebEx from his office for less than an hour. Accordingly, I am allowing a total of $1001 for Mr McGrath’s witness costs ($846 and $155 in accordance with Item 82A of Appendix A of the Magistrates' Court General Civil Procedure Rules 2020).
17. I am also prepared to allow the witness costs of $250 for Mr Ali and $100 for Mr Habachi, as these costs appear reasonable in all of the circumstances.
18. Accordingly, subject to receiving any further written submissions from Buyer Central in relation to costs, which must be made within seven days of receiving this decision, I will order Mr Sodhi to pay Buyer Central’s costs fixed at $4905.90.
19. The parties also agreed that there should be a stay of one month in relation to the payment of the costs, which I will also order, and counsel for Buyer Central told the court that it was not claiming any interest.
20. In addition, despite my concerns about the way this arbitration was conducted in relation to the claim for repair costs, I have decided not to make any order of my own motion under s29 of the CPA. This is because the cost cap for Buyer Central’s professional costs for the arbitration ensures that the costs paid to it are more reasonable and proportionate to the complexity and importance of the issues in dispute and the amount in dispute than would have been the case had the proceeding not been referred to arbitration.
21. I have also decided not to make any order of my own motion because whilst the arbitration ran longer than it arguably should have as a result of the expert witnesses being unable to reach any agreement about the disputed repair costs, I have no concerns in relation to the conduct of the parties or their legal representatives in respect of the dispute relating to Buyer Central’s claim for the cost of renting a replacement car, albeit that claim was ultimately unsuccessful.
22. However, I wish to reiterate that it is crucial that parties and their legal representatives comply with their obligations under the CPA at all times, particularly when the issues in dispute are uncomplicated and the amounts in dispute are small. It is also crucial that parties and their legal representatives not only bear in mind their obligations at all time, but that they also act accordingly to ensure that the CPA’s overarching purpose in relation to the conduct of civil proceedings, which is facilitating the just, efficient, timely and cost-effective resolution of the real issues in dispute, is being fulfilled.
23. Similarly, it is crucial that expert witnesses at all times bear in mind their obligations under the CPA and the Expert Witness Code of Conduct, particularly their paramount
duty to assist the court impartially on matters relevant to their area of expertise, which overrides any duty to the parties to the proceedings or any other person retaining the expert witness such as an insurance company.
24. It is also crucial that expert witnesses ensure that they are fulfilling their duty to the court as a matter of practice and that they are not just giving ‘lip service’ to the Expert Witness Code of Conduct in their written reports.
25. Parties, legal representatives and expert witnesses should also bear in mind that under s65I of the CPA, the court may direct the experts to hold a conference and prepare a joint expert report that specifies the matters agreed and not agreed by the experts and the reasons for any agreement or disagreement and that such orders may be made by the court if it appears that a joint expert report is likely to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute by restricting expert evidence to that evidence which is reasonably required to resolve a proceeding.
26. Finally, whilst the parties may agree on what costs are to be paid by one party to the other, as was the case in this proceeding, the Court will not simply ‘rubber stamp’ consent costs orders, as ‘the costs of, and incidental to, all proceedings in the Court are in the discretion of the Court and the Court has full power to determine by whom, to whom and to what extent the costs are to be paid’.[2]
[2] Section 131, Magistrates Court Act 1989.
27. The Court must ensure, amongst other things, that the costs and disbursements claimed are accurate, such as where the costs are referrable to a particular scale of costs or a fee paid by a party, and that the costs claimed are reasonable and proportionate to the complexity and importance of the issues in dispute. It is not appropriate for the legal representatives of a party to inform that Court that the parties have reached an agreement in relation to costs ‘in accordance with Section 19 of the Civil Procedure Act’ and that the legal representatives ‘consider the matter now at an end’.[3]
[3] As set out in Yassine Lawyers & Associates’ email to the Court dated 30 June 2021.
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