Coshott v Barry & Board

[2017] NSWSC 1435

Supreme Court

New South Wales

Medium Neutral Citation:	Coshott v Barry & Board [2017] NSWSC 1435
Hearing dates:	On the papers
Date of orders:	20 October 2017
Decision date:	20 October 2017
Jurisdiction:	Common Law
Before:	Fagan J
Decision:	The applicant is to pay the first and second respondents’ costs, assessed as a gross sum on the indemnity basis, in the amount of $30,223.30.
Catchwords:	COSTS – indemnity costs – no reasonably arguable case – gross sum assessment – desirability of preventing further satellite litigation concerning costs and costs assessment
Legislation Cited:	Civil Procedure Act 2005 (NSW)
Cases Cited:	Bookarelli Pty Ltd v Katanga Developments Pty Ltd (No 2) [2017] NSWCA 94 Cachia v Hanes (1994) 179 CLR 403; [1994] HCA 14 Coshott v Barry [2017] NSWSC 1220 Coshott v Spencer [2017] NSWCA 118 Hancock v Rinehart (Lump sum costs) [2015] NSWSC 1640 Harrison v Schipp (2002) 54 NSWLR 738; [2002] NSWCA 213 Lawrence v Nikolaidis (2003) 57 NSWLR 355; [2003] NSWCA 129
Category:	Costs
Parties:	Ljiljana Coshott (applicant) Stephen Michael Barry (first respondent) Martin Pearce Board (second respondent)
Representation:	Counsel: Mr Oliver Jones (applicant) Ms Michelle Castle (first and second respondents)   Solicitors: Mr John Comino, Comino Prassas Solicitors (applicant) Mr Stephen Barry, CKB Partners (first and second respondents)
File Number(s):	2016/239683

Judgment

1. On 5 September 2017 the Court dismissed the applicant’s further amended summons for reasons published as Coshott v Barry [2017] NSWSC 1220 (hereafter referred to as “Reasons”). It was then ordered that the applicant pay the costs of the first and second respondents, Messrs Barry and Board. Directions were made on that day for the filing of evidence and submissions with respect to the application of the first and second respondents that their costs should be assessed on an indemnity basis and that the Court should assess those costs in a gross sum pursuant to s 98(4)(c) of the Civil Procedure Act 2005 (NSW).

Affidavit evidence

2. Pursuant to these directions the respondents filed an affidavit of Mr Barry sworn 8 September 2017. In submissions filed on 15 September 2017 the applicant has taken objection to unspecified parts of Mr Barry’s affidavit, which it is alleged “go beyond the quantification of the costs they claim”. Paragraphs 1 to 5 of the affidavit are in my view admissible and I will have regard to them. They explain that Messrs Barry and Board were partners in a law practice at the time of events which underlie the costs dispute which is the subject of the present proceedings. They have since terminated their partnership and each of them practices separately as a sole practitioner.

3. I find from the evidence in paragraphs 1 to 5 of the affidavit that Mr Barry has done the solicitors’ work in relation to these proceedings on behalf of himself and Mr Board. That is the substance of what Mr Barry has deposed to, albeit that he expresses this awkwardly by speaking of himself and Mr Board by the name “CKB Partners”, as if the two of them together under that partnership name were a distinct legal entity. Of course they are not, they are two individuals, but what he describes amounts to an arrangement with Mr Board whereby Mr Barry’s time is accounted for at $360 per hour, calculated in 6 minute units, and Mr Board and himself together are liable to pay him the fees thus calculated and counsel’s fees and other disbursements. In substance this comes to an agreement that Mr Barry will do the work on the basis with half its value being borne by himself and the other half being payable to him by Mr Board.

4. Paragraphs 6 to 9 of Mr Barry’s affidavit describe some of the interlocutory steps in the proceedings. These steps are in any event apparent from the Court file and from JusticeLink. I will not read paragraphs 6 to 9 as evidence on the application for costs to be assessed on the indemnity basis and in a gross sum.

5. Paragraphs 10 to 19 of the affidavit concern email correspondence issued by Mr Barry and his dealings with the Registry regarding access to certain subpoenaed records. That evidence does not appear to me to be relevant to the decision I am now required to make and I will not take into account.

6. Paragraphs 20 to 24 directly concern quantification of the costs of the first and second respondents and I will read and take into account that evidence.

Indemnity basis

7. The applicant’s claim for judicial review in this case on the sole ground which was ultimately pressed (see Reasons at [3] – [5]) was entirely without merit. It was unarguably hopeless. I dismissed it on the basis set out at Reasons [31] – [34], which is a basis that should have been self-evident to the applicant and her legal representatives before the matter was argued.

8. In Bookarelli Pty Ltd v Katanga Developments Pty Ltd (No 2) [2017] NSWCA 94 at [19] the Court of Appeal’s grounds for ordering that costs awarded against an unsuccessful applicant should be assessed on the indemnity basis included that (a) the applicant did not advance a reasonably arguable case and (b) the weakness of the applicant’s case should have been apparent to its legal advisors before the proceedings were commenced.

9. The position of the applicant in the present case is, if anything, more deserving of indemnity costs against her. The proceedings were commenced before the applicant had the assessor’s certificate and reasons. The summons as originally filed and in both the amended and further amended forms specified five grounds, none of which attacked the assessor’s reasons and none of which was pursued at the hearing. The evidence shows that the applicant had the assessor’s reasons from some time before the hearing but did not change her case until counsel commenced to open at 10:00 am on the day. When she did then change her case it was turned from something which her advisors evidently considered not capable of being pursued into something which, as I have said, was untenable.

10. A further reason for ordering costs on the indemnity basis is that the controversy upon which the applicant’s single ground for judicial review was argued is one which could have been entirely avoided if the applicant had simply proceeded to have the assessor carry out his work in relation to order (6) of the Court of Appeal’s orders. This is referred to at Reasons [38]. Delay in securing an assessment with respect to order (6) has been due to the commencement of these proceedings. Even if there was any substantive or arguable point to be pursued regarding apportionment of individual items of cost between orders (11) and (6), that would sensibly have been resolved by one of the alternative available means of review of the assessor’s decision, as referred to at Reasons [36] – [38].

11. The matter argued by the applicant in this Court under the further amended summons was not only manifestly unarguable but concerned a subject which, if it were to be raised at all, should not have been raised on a summons for judicial review and would have attracted the Court’s discretion to refuse relief, leaving the parties to take the issue to a costs assessment review panel or on appeal to the District Court: Reasons at [38].

12. A further consideration justifying the indemnity basis is the very small sum at issue. The amount of costs which has been assessed is only $44,328.06. Even if that was in error by a factor of 100%, the additional amount which the applicant might be hoping to gain through success in these proceedings and return of the assessment for reconsideration could only be the same again. The bringing of proceedings in this Court with so little in issue, where there was no clear perception of any ground at the date of filing and only an unarguable ground at the date of hearing, has been wasteful in the extreme. The first and second respondents should not be out of pocket to any extent as a result.

Gross sum assessment

13. I accept the submissions of the first and second respondents that I should exercise the Court’s discretion under s 98(4)(c) of the Civil Procedure Act to assess their indemnity costs against the applicant in a gross sum. The original proceedings in the Court of Appeal in which the subject costs orders, numbers (6) and (11), were made themselves concerned assessment of costs. Now the assessment of those costs has given rise to this derivative or satellite litigation.

14. The applicant has generated confusion in the assessment process as to which costs order is the subject of which of her assessment applications (see Reasons [15] – [18]). On her behalf, rancorous and contentious correspondence has been entered into regarding alleged bias and misconduct. Her insistence that one assessment go ahead independently of the other appears to have caused delay and loss of efficiency. It does not seem to have given rise to any legitimate benefit for the applicant herself and so far as I can see it has been pursued disruptively and irrationally.

15. In these circumstances the exercise of the Court’s discretion to make a gross sum costs order is justified in part by the desirability of breaking the seemingly endless chain of costs disputes leading to litigation about those costs disputes leading to further costs orders and yet further disputes about the assessment of them – and so on.

Costs of a solicitor doing his own work

16. In Coshott v Spencer [2017] NSWCA 118 Beazley ACJ (with whom McColl and Simpson JJA agreed said:

[64] It is well established that a self-represented litigant is not entitled to professional costs for acting for herself or himself in proceedings: Cachia v Hanes (1994) 179 CLR 403; [1994] HCA 14. There is a recognised exception to this rule where a solicitor is self-represented in proceedings brought by or against her or him: London Scottish Benefit Society v Chorley (1884) 13 QBD 87 (the Chorley exception). The Chorley exception was applied in Australia in Guss v Veenhuizen (No 2) (1976) 136 CLR 47; [1976] HCA 57.

17. At [79] her Honour recognized that in Cachia v Hanes (1994) 179 CLR 403; [1994] HCA 14 the High Court had expressed doubt as to the Chorley principle. Her Honour stated the position in New South Wales as follows:

[86] Chorley has been consistently applied in New South Wales and Guss v Veenhuizen (No 2) has been accepted as binding authority to the effect that a solicitor who acted in proceedings as a litigant in person was entitled to his or her professional costs.

[87] In Atlas Corporation Pty Ltd v Kalyk [2001] NSWCA 10, this Court (Handley, Meagher and Sheller JJA agreeing), considered itself bound by Guss v Veenhuizen (No 2). The Court referred to the doubt expressed by the majority in Cachia v Hanes but added, at [9], that it was nonetheless clear that the majority did not overrule Guss v Veenhuizen (No 2) and that the doubts expressed by the majority in relation to the rule were dicta. The Court also expressed, as a justification for the application of the indemnity principle in favour of a solicitor litigant, that the solicitor had lost the opportunity of using her or his time to do professional work for others and of being remunerated accordingly.

18. After considering decisions of the Supreme Courts of other states and the provisions of the Civil Procedure Act, her Honour concluded:

[107] In the result, I am of the opinion that s 98, by reference to the definition of “costs” in s 3 does not, by its express terms, render the Chorley exception inapplicable. Rather, I consider that this Court is bound by the decision in Guss v Veenhuizen (No 2). This was the view taken in Atlas Corporation v Kalyk and Khera v Jones [2006] NSWCA 85, albeit that the terms of the relevant costs rules were not discussed in those cases. For that reason, I have not found it necessary to consider other jurisdictions in which the Chorley exception has been discussed, other than to observe that, with the limited exceptions to which I have referred, it has been accepted that Guss v Veenhuizen (No 2) is binding precedent on the question.

19. In accordance with this authority I should assess as part of the costs of the first and second respondents not only the half of Mr Barry’s fees which Mr Board is obliged to pay him but also the half for which Mr Barry will not be remunerated by any other person and which represents legal work which he has done for himself as a party to the proceedings. In making the assessment I will have regard to the decision in Lawrence v Nikolaidis (2003) 57 NSWLR 355; [2003] NSWCA 129. That requires that in assessing the costs of a solicitor who has acted for himself the court must take care not to allow items which would be irrecoverable if the solicitor and the client were separate, such as time which is in reality spent on the function of giving evidence as witness.

Quantification of the gross sum

20. I consider the rates at which Mr Barry has calculated his costs and the rates paid to junior counsel retained by him are reasonable for the work done and for the type of proceedings. The amounts itemised by Mr Barry come to $20,667.55 for solicitor’s professional costs, $87 for sundry disbursements and $9,468.75 for counsel’s fees. The total is $30,223.30.

21. I am not required to review Mr Barry’s schedules of itemised costs and disbursements as a costs assessor would do. Rather, a broad brush approach is required: Harrison v Schipp (2002) 54 NSWLR 738; [2002] NSWCA 213. That was a decision of the Court of Appeal made under predecessor legislation to s 98(4)(c) but it has been treated ever since as authoritative with respect to the current section. The total amount quantified by Mr Barry does not appear disproportionate having regard to:

1. the large number of heads of relief claimed in all versions of the summons but not pursued at the hearing;

2. the large number of grounds which were developed in the applicant’s written submissions filed 9 December 2016 and which had to be responded to in the respondents’ submissions filed 21 August 2017, although these grounds and submissions were not in the event pursued and

3. the significant volume of documents subpoenaed, produced under notices and incorporated into court books.

22. I found it necessary to read the exchanged written submissions, the various forms of the summons and the extensive correspondence in two Court books in order to prepare for the hearing. This proved entirely unnecessary when the case was dramatically narrowed in opening by counsel for the applicant but it provided an insight into the volume and detail of the matter, which in my view justifies costs of the order claimed by the first and second respondents.

23. The applicant has submitted that “Mr Barry’s itemised bill discloses many items which clearly do not relate to these proceedings”. A few examples are given but they do not establish the point. The applicant refers to some items which refer to a costs assessment concerning a Mr Vardas and says that these are unrelated to the present case. However the summons as filed and the amended summons both sought relief in relation to a costs assessment under application number 2016/128929. That concerned the applicant, her husband and Mr Vardas. The items of solicitors work objected to by the applicant appear to have involved enquiries concerning that separate assessment. Having regard to the reference to it in the summons and amended summons I do not see that these items of work were collateral to the present proceedings.

24. As the costs are to be assessed as a gross sum on the indemnity basis it is not appropriate to deduct a percentage to represent an approximation of what might be deducted on item by item assessment: Hancock v Rinehart (Lump sum costs) [2015] NSWSC 1640 at [56] – [58]. Here, I consider there is little risk that the sum particularised by Mr Barry includes costs that might be disallowed on assessment. I see no evidence of unreasonableness, either in rates or in types of work performed or in duration of individual items. It does not appear to me that Mr Barry has erred on the side of excessiveness in the provision of his legal services or in charging for them.

25. Mr Barry’s quantification includes $1,692 in items of work related to the preparation of his affidavit and written submissions to support the assessment. I see no reason why that work should not be allowed on the indemnity basis. Accordingly, I assess the gross sum for costs in the amount substantiated by Mr Barry’s affidavit of 8 September 2017, without deduction.

Orders

26. The orders of the Court are:

1. The costs payable by the applicant to the first and second respondents pursuant to order 2 made 5 September 2017 are to be paid on the indemnity basis.

2. Pursuant to s 98(4)(c) of the Civil Procedure Act 2005 (NSW) the amount of costs payable by the applicant to the first and second respondents pursuant to order 2 made 5 September 2017 is assessed in the gross sum of $30,223.30.

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Decision last updated: 20 October 2017