EB v GB (No 3)

[2023] NSWSC 514

Supreme Court

New South Wales

Medium Neutral Citation:

EB v GB (No 3) [2023] NSWSC 514

Hearing dates:

On the papers

Date of orders:

18 May 2023

Decision date:

18 May 2023

Jurisdiction:

Equity

Before:

Robb J

Decision:

The Court orders the respondents to pay to the applicant her costs of the notice of motion filed on 24 June 2022 on the ordinary basis.

Catchwords:

COSTS — no issue of principle

Legislation Cited:

Civil Procedure Act 2005 (NSW), s 98(4)(c)

NSW Trustee and Guardian Act 2009 (NSW), ss 41(1)(b), 66, 67, 71

Uniform Civil Procedure Rules 2005 (NSW), rr 42.1, 42.2

Cases Cited:

Ahern v Aon Risk Services Australia Ltd (No 2) [2022] NSWCA 39

Calderbank v Calderbank [1975] 3 All ER 333

Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd (No 2) [2014] NSWCA 219

EB v GB (No 2) [2022] NSWSC 1011Hunter v Roberts (No 2) [2019] NSWCA 235

SMEC Testing Services Pty Ltd v Campbelltown City Council [2000] NSWCA 323

Valmont Interiors Pty Ltd v Giorgio Armani Australia Pty Ltd (No 3) [2021] NSWCA 160

Category:

Costs

Parties:

EB (Plaintiff/Applicant)
GB (First Defendant/Respondent)
SB (Second Defendant/Respondent)
RB (Third Defendant/Respondent)

Representation:

Counsel:
MJ Connor (Plaintiff/Applicant)
M Condon SC (Defendants/Respondents)

Solicitors:
Macpherson Kelley (Plaintiff/Applicant)
Bartier Perry (Defendants/Respondents)

File Number(s):

2018/213582

Publication restriction:

Nil

Judgment

1. On 27 July 2022, I delivered judgment in EB v GB (No 2) [2022] NSWSC 1011 (“the primary judgment” or “J”). The primary judgment determined an application by a daughter to have access to her father for a visit in his aged care home in anticipation of his relatively imminent death. The application was opposed by her mother and brothers. The purpose of these reasons is to determine the costs of the notice of motion the subject of the primary judgment, so familiarity with the primary judgment and its terms is assumed.

2. As the primary judgment dealt with private family matters, I anonymized the references to interested parties by describing them in terms of their family relationships. I will do the same in these reasons.

3. The daughter filed the notice of motion on 24 June 2022. I heard the notice of motion on 21 July 2022 and delivered judgment on 27 July 2022. Expedition in the delivery of the judgment was necessary because of the extreme infirmity of the father.

4. On 30 August 2022, the solicitor for the daughter filed an affidavit setting out evidence on the daughter’s costs. The affidavit also contained evidence of the matters which occurred in the immediate aftermath of the primary judgment. On 24 October 2022, the daughter’s counsel filed written submissions on the costs issue, and the respondents’ counsel filed written submissions on 15 November 2022.

5. The respondents oppose the daughter’s application for an order for costs in her favour and submit that the daughter should be ordered to pay their costs of the motion.

The event that costs are to follow

6. Costs will follow the event unless it appears to the Court that some other order should be made as to the whole or any part of the costs: Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”), r 42.1. The parties dispute what ‘the event’ is in this case.

7. The relief sought by the daughter on her notice of motion changed during the application. It began as two prayers, the first of which was a prohibitory injunction restraining the respondents from precluding access by the daughter to visit the father at the aged care home, and the second sought an order to review decisions of the respondents pursuant to an enduring power of guardianship or otherwise having the effect of not permitting or precluding access by the daughter to visit the father: J [4].

8. By the time the Court reserved judgment, the first order had been amended to a series of directions and orders aimed at constructing a regime whereby the daughter could visit the father in a controlled manner: J [8]. This amendment was made in response to my suggestion that the injunction sought in prayer 1 may not have been appropriate for the exercise of the parens patriae jurisdiction of the Court: J [7].

9. The daughter elected not to pursue prayer 2 at the hearing because her solicitor advised the respondents, at the initial hearing of the notice of motion on 24 June 2022 and in correspondence with the respondents’ legal representatives, that the daughter would only be seeking relief on the basis of the parens patriae jurisdiction: J [6].

10. The dispositive finding of the primary judgment was my determination, as a matter of law, that the mother did not have legal authority to control access to the father: J [80]-[113]. As I remarked at J [113], the outcome was that “the issue of whether the daughter should be given access in person to the father is a matter to be decided by the aged care provider under the Resident Agreement and any provisions of the general law that may be applicable.”

11. After reaching that conclusion, I proceeded to address the issue of whether I would have made an order, in the exercise of the Court’s parens patriae jurisdiction, countermanding the (in this hypothetical case, lawful) prohibition on the daughter’s access to the father by the mother. I determined that the Court would have been empowered to make such an order on appropriate conditions: J [123].

12. Though I was satisfied that the Court would have had the power to make such an order, and though I would have formulated those orders in principle, I determined that I “would not have made final orders until the aged care provider had been given an opportunity to consider the proposed orders and to make any representations to the Court that were thought by the aged care provider to be appropriate concerning any possible unsatisfactory consequences of the orders”: J [126]. The daughter had not joined the aged care provider to the notice of motion or the proceedings: J [78].

13. I summarised the final position accordingly, at J [130]-[131]:

[130] A consequence of my conclusion that the appointment of enduring guardian did not authorise the mother to control access to the father is that any prohibition that she has conveyed to the aged care provider was outside her authority and does not bind the aged care provider. The Court cannot sensibly order that the respondents be restrained from precluding access by the daughter to the father, or alternatively direct the mother to provide written consent for the daughter to visit the father at the aged care home, if none of the respondents have any authority to control access to the father.

[131] As it has happened, the decision whether or not the daughter's request to visit her father in person should be approved is a matter to be decided by the aged care provider. There may be legal constraints on the basis upon which the aged care provider should exercise its right to approve or deny the daughter's request, but that is not a matter that should be addressed in the absence of the aged care provider.

14. The primary judgment did not result in final orders. I remarked at J [135] that the only course then available was for the Court to publish the primary judgment without making any orders at that stage. Accordingly, I did not make orders in terms of the relief sought by the daughter that was current at the end of the hearing.

15. Up to the time of the filing of her notice of motion and beyond, the aged care provider did not permit the daughter access to the father. That was, in law and in fact, the problem that her notice of motion sought to resolve. That was, as a matter of fact, because of what I stated at [77]:

[77] … It appears that the respondents and the aged care provider have taken the view that the authority to determine who has access to the father resided in the mother under the appointment of enduring guardian. In conformity with that view, the aged care provider became subject to a prohibition, made by the mother, of the daughter having access in person to the father. The relaxation of that prohibition was thought to require the approval of the mother. … A consequence of the understanding that the entitlement of the daughter to visit her father depends upon the mother's permission is that visits have not been able to be arranged in a way that would avoid the mother suffering stress and disappointment as a result of learning that visits had taken place.

16. The substantive, dispositive finding of the primary judgment, as I have referenced above, was to the effect that the mother did not have lawful authority to determine who had access to the father, and that it was rather the aged care provider whose general property rights in respect of the land on which the aged care facility stands in whose remit it was to allow or disallow access to the facility: J [113].

17. Hence, before the primary judgment was delivered, the problem facing the daughter consisted of two barriers to achieving access to her father: the first was the purported prohibition by the mother of the daughter’s access to the father, and the second was the general right of the aged care provider to decide who may or may not enter its premises. That said, the second barrier was materially influenced by the aged care provider’s understanding that the mother’s imposition of the first barrier was lawful, and it cannot be said that the two barriers were wholly independent of one another.

18. After the primary judgment was delivered, the first barrier was dissolved by my determination of a question of law as to the effect of an appointment of enduring guardian and an enduring power of attorney in respect of the mother. As a matter of law, the primary judgment did not dissolve the second ‘barrier’ because I did not determine the rights of the aged care provider or make orders affecting it in its absence and without it being joined to the proceedings.

19. The affidavit of the daughter’s solicitor, made and filed after delivery of the primary judgment for the purposes of the costs application, contained evidence of the following:

1. On 27 July 2022 (the date of the primary judgment) at 5:12pm, the daughter’s solicitor caused an email to be sent to the Chief Operating Officer of the aged care facility attaching a copy of the primary judgment and a letter expressing the daughter’s desire to be allowed to visit the father.

2. On 28 July 2022, one of the brothers sent a letter to the Chief Operating Officer. The letter referred to the primary judgment at [134], where I had remarked that “[t]here could be no legal impediment to the respondents expressing opinions to the aged care provider to persuade it not to approve the daughter’s request, or to do so on particular conditions.” The letter set out the respondent’s position that the daughter’s request to visit the father should be denied.

3. On 1 August 2022 at 7:33am, the daughter’s solicitor caused a further email to be sent to the Chief Operating Officer attaching a second letter. This second letter noted that no response to the letter of 27 July had been received and notified the recipient that the daughter’s solicitors would have the proceedings listed before me if no response was received before 5:00pm that day.

4. On 1 August 2022 at 8:02am, the respondents’ solicitor sent to the daughter’s solicitor by email the 28 July letter of the brother to Chief Operating Officer.

5. On 1 August 2022 at 10:23, the Chief Operating Officer replied by email to the daughter’s solicitor in brief terms but did not respond in substance to the request of the daughter to visit the father.

6. On 1 August 2022 at 10:39am, the daughter’s solicitor replied by email to the Chief Operating Officer requesting a positive response to the daughter’s request for visitation, and explaining that, unless such response was received by 5:00pm that day, the daughter’s solicitors would apply to the Court to have the aged care provider joined to the proceedings.

7. On 1 August 2022 at 4:26pm, the respondents’ solicitor sent an email to the daughter’s solicitor advising that the father had been placed in palliative care that day, and that, “[f]or compassionate reasons, our clients are agreeable to a visit by [the daughter] with [the father] and have conveyed this position to [the aged care provider]. We expect you will hear from [the aged care provider] in the near future to arrange the visit.”

8. On 1 August 2022 at 4:42pm, the daughter’s solicitor sent an email to the Chief Operating Officer seeking confirmation of the father’s palliative status and requesting that the daughter be allowed to visit the father on the afternoon of 2 August or 3 August.

9. On 1 August 2022 at 7:14pm, the Chief Operating Officer sent an email to the daughter’s solicitor, copying the respondents’ solicitor, approving a visit by the daughter and setting out the conditions upon which the visit would take place. The Chief Operating Officer wrote:

The visit cannot occur at the same time that other members of [the father’s] family are present. That I [sic] to ensure that [the father] is not exposed to situations that may impact upon him, or his wife who resides in our apartments and to whom we have a duty of care.

The process will be as follows;

• [The daughter] may visit the facility on any day for 1 hour between 10am-12pm or 1pm-3pm. This will allow her to fit the visit in on a day that suits her.

• [The daughter] or her representative is to email me the day before she intends to visit. That will allow me to confirm we do not have an Outbreak at the time.

• [The daughter] is to attend the facility and go through the health screening and visiting process for all visitors.

• The Concierge staff will call [the relevant named team].

• As [sic] staff member will escort [the daughter] to [the father’s] room where their interaction will take place.

• [The daughter] is to keep her mask and face shield in place. She may remove the mask when speaking with [the father] but not the face shield.

• She is to maintain social distancing from [the father].

• Our staff member will stay during the visit.

• If at any time during the visit [the father] becomes upset, agitated or unwell the visit will terminate.

10. On 2 August 2022, the daughter’s solicitor and the Chief Operating Officer corresponded and confirmed the arrangements for the daughter’s visit. In one email of this date, the Chief Operating Officer remarked that the father’s condition was terminal.

11. On 3 August 2022, the daughter visited the father at the aged care facility. The daughter was accompanied by her carer, who filmed the visit.

12. On 4 August 2022, the daughter’s solicitor sent an email to the Chief Operating Officer to relay that the daughter found the visit “both poignant and satisfying”. The solicitor proposed that the daughter visit again on 7 August 2022. More correspondence followed on 5 August 2022 whereby a further visit was arranged for 8 August 2022 because of certain staffing requirements.

13. On 5 August 2022, the daughter’s solicitor advised the respondents’ solicitors of the daughter’s visit to the father and the proposed second visit. The daughter’s solicitor also enquired as to the daughter’s ability to attend the father’s funeral after his death.

14. On 6 August 2022, the daughter’s solicitor received an email from an organisation associated with the father advising of the father’s passing overnight. Later that afternoon, the solicitor advised the daughter of this news.

15. On 7 August 2022, the respondents’ solicitor advised the daughter’s solicitor by email that the father had passed away, that the daughter was not to approach the mother or attempt to make contact with her, that the daughter was not welcome at the funeral, and that the daughter would be provided with a link to watch the funeral by live stream. The link was provided to the daughter’s solicitor on 8 August 2022.

20. The respondents submitted that this evidence should be disregarded by the Court because it is irrelevant to the costs determination, because the daughter has made no application for leave to adduce fresh evidence, and because she did not refer to the post-hearing matters in support of her application for an order for costs. In my view the matters just set out are relevant as a matter of fact to whether the daughter achieved practical success in her notice of motion. The respondents offered no authority as to why the discretion as to costs is to be determined solely by reference to the matter as it stood at the time of the hearing. In any case, as I will now explain, the post-hearing narrative contains elements supporting the respondents’ opposition of the daughter’s costs order.

21. The daughter submitted that the final practical outcome of the primary judgment was that, as a result of the Court finding that the mother did not have power under the appointment of enduring guardian or enduring power of attorney to restrict access to the father, the daughter was able to visit him. At one level that submission is true because the effect of the primary judgment was to remove a barrier that had been an absolute impediment to the daughter succeeding in her desire to visit her father. That impediment was the belief by the respondents and the aged care provider that the mother had the legal right to deny the daughter access to the father. It may be that if the father had lived longer and the consequences of the primary judgment had been given time to emerge naturally, the aged care provider would have exercised its own right to permit the daughter access to her father on compassionate grounds. I say that because I am satisfied that there was no good or proper reason for the aged care provider to deny the daughter the opportunity to visit her father while he was in extremis. However, the deterioration in the father’s condition intervened and the respondents removed their objection so that the father’s imminent death did not determine the outcome in a way that would have denied the daughter the fruits of her success in the primary judgment. There is no evidence that enables the Court to decide whether the aged care provider only permitted the daughter to visit her father because the respondents had countermanded their objection, or whether the aged care provider would in due course have made its own decision to permit the visit whether or not the respondents maintained their objection. Nonetheless, it is true that the objective of the daughter in filing the notice of motion was to be able to visit her father and that is what happened.

22. The daughter also submitted that the contest of the notice of motion should not have been required in order to facilitate the daughter’s visit. The daughter invoked my reasons at J [77], where I stated:

[77] Given that, on the evidence, the mother rarely visits the father these days, it should have been possible by arrangements with the aged care provider made between the solicitor for the daughter and the solicitor for the respondents to let the daughter see her father in person occasionally, subject to appropriate practical arrangements to ensure that the visits were not unduly burdensome on the father. …

23. The outcome of the primary judgment, and the facts as they have occurred in the wake of the primary judgment, have, with respect, proved me right in that observation. The effect of the primary judgment was to determine a legal issue which, until resolved, had inhibited what should have sensibly occurred, and what in fact did occur. The respondents maintained that the legal effect of the appointment of enduring guardian and the enduring power of attorney was to override the aged care provider’s discretion to allow the daughter to enter its premises, and that position failed in the primary judgment.

24. I accept the daughter’s submission that the applicable principle in this case is that stated by Ward, Emmett and Gleeson JJA in Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd (No 2) [2014] NSWCA 219 at [15]:

[15] Depending on the nature of the litigation the "event" may be characterised in more than one way. The authorities were reviewed by Ward J in Australian Receivables Ltd v Tekitu Pty Ltd [2011] NSWSC 1425 at [24]-[26], [54]-[60]. Generally the "event" refers to the event of the claim or counterclaim, as the case may be, and may be understood as referring to the practical result of a particular claim: Windsurfing International Inc v Petit [1987] AIPC 90-441 at 37,861-37,862 (Waddell J).

25. I am satisfied that the most appropriate way to characterise the “event” in this case is that it is the dissolution of the basis upon which the respondents purported to preclude access to the father by reference to the appointment of enduring guardian and enduring power of attorney appointing the mother. The daughter was successful in that respect.

26. The respondents submitted that the daughter was not successful in the event because she made the forensic decision not to seek to bind the aged care provider with any order of the Court, and the application was therefore never framed in such a way that it could resolve all the real issues that had to be decided before the applicant could secure a right to see her father. That submission is ostensibly bolstered by the fact that the daughter’s solicitor’s evidence reveals that the daughter had provided instructions to join the aged care provider as a respondent to seek orders against it, but only after delivery of the primary judgment. The respondents submit that the daughter’s application was therefore futile.

27. I reject this submission for the reason that, as I have explained above, there did not appear to be any reason in fact why the daughter would be prevented by the aged care provider from accessing the father save for the purported exercise by the mother of what was wrongly understood to be lawful authority preventing the aged care provider from allowing the daughter access. The post-judgment factual narrative does nothing to cast doubt on that conclusion.

28. On the basis that costs follow the event, the daughter is entitled to the payment of her costs of the notice of motion by the respondents: UCPR, r 42.1. Those costs are, prima facie, to be assessed on the ordinary basis: UCPR, r 42.2. I turn now to whether the Court ought to order otherwise in respect of either of those rules.

Calderbank offer

29. The daughter’s solicitors sent a letter dated 20 July 2022 to the respondents’ solicitors making an offer in accordance with the principle applied in Calderbank v Calderbank [1975] 3 All ER 333. The offer remained open for acceptance until 1:00pm on 20 July 2022, the day before the hearing. It was evidently not accepted. The daughter relies upon the letter to seek the costs of her application on the indemnity basis from the date after that of the letter.

30. The effect of a rejected Calderbank offer is to raise the question of “whether the offeree’s failure to accept the offer, in all the circumstances, warrants departure from the ordinary rule” as to costs: SMEC Testing Services Pty Ltd v Campbelltown City Council [2000] NSWCA 323 at [37] (Giles JA); Hunter v Roberts (No 2) [2019] NSWCA 235 at [6] (Meagher and Brereton JJA, and Simpson AJA); Valmont Interiors Pty Ltd v Giorgio Armani Australia Pty Ltd (No 3) [2021] NSWCA 160 (“Valmont”) at [21] (Bell P, as his Honour then was, Macfarlan and Leeming JJA).

31. As the Court of Appeal stated in Valmont at [25], the considerations “relevant to the determination of whether the refusal to accept a Calderbank offer was unreasonable” include:

(a)   the stage of the proceeding at which the offer was received;

(b)   the time allowed to the offeree to consider the offer;

(c)   the extent of the compromise offered;

(d)   the offeree’s prospects of success, assessed as at the date of the offer;

(e)   the clarity with which the terms of the offer were expressed; and

(f)    whether the offer foreshadowed an application for indemnity costs in the event of the offeree’s rejecting it.

32. The daughter’s offer was expressed to be “along the following lines”:

1.   The Notice of Motion filed on 24 June 2022 is dismissed.

2.   No order as to costs.

3.   The Court notes that the Defendant’s [sic] will allow the Plaintiff to physically visit her father, [father’s name], once for two hours accompanied by her carer at [the aged care facility], subject to complying with Public Health Orders and giving 24 hours written notice to [Chief Operating Officer of the aged care facility], such access to be between the hours of 9.00am and 5.00pm, Monday to Friday.

4.   The Court notes that the Defendants will allow the Plaintiff access to have Zoom meetings with her father thereafter by arrangement with [the Chief Operating Officer of the aged care facility].

5.   Liberty to apply on three’s [sic] days’ notice.

33. The daughter submitted that, in a practical sense, the outcome occasioned by the primary judgment was a better result for the daughter than the outcome that would have resulted from the acceptance of the offer because the final practical result of the judgment was that the daughter could arrange in-person visits with the father on an ongoing basis.

34. The father’s death shortly after the delivery of judgment had the effect that the daughter was only practically able to see him once before he died. On the facts as they have happened, the Calderbank offer would have effected in substance the same outcome as occurred in the wake of the primary judgment. Of course, there is evidence that, once the respondents advised the aged care provider of their changed position which assented to the daughter’s request to visit the father, the aged care provider told the daughter that she would be able to visit the father more than once, so long as the conditions imposed by the aged care provider were satisfied.

35. As I have noted above, however, the evidence does not satisfy me either way as to whether the delivery of the primary judgment alone would have sufficed to convince the aged care provider to grant the daughter access to the father, or whether it was the respondents’ change of position that persuaded the aged care provider to allow the daughter to see the father.

36. It is primarily for the foregoing reason that I consider, as at the date of the Calderbank offer, it was not unreasonable for the respondents to reject the offer: (1) given that it was reasonable for the respondents to expect that, if they continued to object to the visit by the daughter, the aged care provider would abide by their objection, and (2) given that the mother’s views would likely be given weighty consideration by the aged care provider as she herself was a resident of the aged care facility.

37. On that basis the Court will not order otherwise than that the respondents pay the daughter’s costs on the ordinary basis.

The daughter’s liability to her legal representatives

38. It is now convenient to consider the respondents’ submission that the daughter in fact has no liability to pay her solicitors’ costs and therefore that the costs sought by the daughter are not costs capable of being the subject of a costs order against the respondents.

39. The costs agreement entered into by the daughter and her solicitors dated 15 January 2020 is in evidence. Clause B of the costs agreement states that: “The work we have been instructed to do is to assume carriage of Protective List proceedings number 2018/00213582 and prosecute these proceedings to final hearing on 17, 18 and 19 March 2020.” The apparently defined term “Work” appears throughout the costs agreement but there is no express definition of that term. The sensible construction is that clause B defines “Work”.

40. I made an order in these proceedings on 7 May 2020, pursuant to s 41(1)(b) of the NSW Trustee and Guardian Act 2009 (NSW), that a financial management company (which I will refer to as “the manager”) be appointed as manager of the daughter’s estate, in place of the NSW Trustee and Guardian, but subject to the orders and direction of the NSW Trustee.

41. There is evidence of an email from the daughter’s solicitor to the daughter dated 10 June 2022, copying a person whose email address implies they are an employee of the manager, and to whom I will refer as “GW”. Much of the email is redacted but I infer, at least from the date of the email, that it concerned the prosecution of the notice of motion. The email relevantly stated: “We estimate the costs will be between $10,000 and $15,000 but could be less. We understand you will pay the invoices from your own resources and not [the manager], but we’ll enquire of [G]. We do not intend to brief a barrister.”

42. There is evidence of a further email from the daughter’s solicitor to the daughter dated 12 July 2022. This email was not copied to GW. This email relevantly stated: “Costs: [GW] agreed to fund the access application to the amount of $5,000 against my original estimate of $15,000. The balance has to be paid by you. Fees already exceed the estimate and by the end of the hearing could be $25,000.”

43. There is evidence of a letter from the daughter’s solicitor to the daughter dated 25 July 2022. The letter commences by referring to “our original fee agreement dated 15 January 2020 and to the costs estimates provided to you on 10 June and 12 July 2022.” It then sets out an explanation, in a summary way, of the costs incurred in prosecuting the notice of motion. The letter concludes:

On your instructions, approved by your Financial Manager, [the manager], we commenced these access proceedings on your behalf. [The manager] has underwritten your costs to the extent of $10,000. The balance of the fees are to your account. In the event that your Application succeeds an application for costs will be made, but there is usually a shortfall between the recoverable costs and the actual payment due and owing. The fees not underwritten by [the manager] will be to your account.

44. In his affidavit of 18 August 2022, the daughter’s solicitor deposed (at 43(d)):

I am instructed by the applicant that she is currently funding the NOM personally except to the extent that her financial guardian ([manager] who consented to the NOM proceedings) has contributed the sum of $10,000.00 towards the prosecution of the NOM and that this represents a significant financial burden on her personal finances.

45. The daughter’s solicitor also deposed that he communicates on a regular basis with the manager of the daughter’s estate.

46. Finally, there is evidence of correspondence between the daughter’s solicitor and the respondents’ solicitors concerning the respondents’ assertion that the provisions of the NSW Trustee and Guardian Act have the effect that the daughter has no costs liability to her solicitors. By letter dated 14 October 2022, the daughter’s solicitor wrote:

On 7 September 2020 [typo for 2022], we sent you a copy of our costs agreement with our client dated 15 January 2020 (Our Costs Agreement). Our client agreed to pay our costs as set out in Our Costs Agreement well before the appointment of [the manager] and, as our client was not a ‘managed person’ for the purposes of the Act as at 15 January 2020, your assertion regarding the operation of s 71 of the Act and the indemnity principle is incorrect.

47. The respondents submit that ss 66, 67 and 71 of the NSW Trustee and Guardian Act create a legislative scheme whereby the daughter, a managed person, was prohibited from dealing with her estate such that she could not pledge her estate by, for example, agreeing to bear a liability, and the daughter’s solicitor was not permitted to contract on that basis. The costs agreement dated 15 January 2020 did not, by its terms, extend to the present application because it was concerned with the trial to be heard in March of that year, and it could not authorise payments prohibited by statute under s 71 of the Act.

48. The sections relied upon by the respondents relevantly provide:

66   NSW Trustee may authorise and direct functions of other managers

(1)   The NSW Trustee may, by order—

(a)   authorise a manager to have all, or any specified, functions necessary and incidental to the management and care of an estate and such other functions as the NSW Trustee may direct or authorise the manager to have or exercise, and

(b)   give the manager such directions in respect of the orders, authorities and directions authorised by this subsection as the NSW Trustee thinks fit.

…

67   Managers may execute documents

(1)   A manager may, in accordance with an order or direction of the Supreme Court, the NSW Trustee or the Civil and Administrative Tribunal (in the case of a person under guardianship), execute and sign any document and do any other thing in the name of and on behalf of the managed person.

(2)   An exercise of a function by a manager under this section—

(a)   is as effective as if it were exercised by the managed person, and

(b)   to the extent to which that person lacks capacity to exercise the function, is as effective as if the person did not lack capacity.

(3)   A person acting on a document executed or signed by a manager under this section is not bound to inquire as to the manager’s power to execute or sign the document or as to the application of any money paid pursuant to any dealing with the manager as a consequence of the document.

71   Managed person cannot deal with estate

(1)   The power of a managed person to deal with his or her estate is suspended in respect of so much of that estate as is subject to management under this Act.

(2)   However, the manager may, by instrument in writing, authorise the managed person to deal with so much of the estate as the manager considers appropriate and specifies in the instrument.

…

49. The respondents’ submission relies on two propositions of fact, one stated and one unstated. The stated proposition is that the costs agreement dated 15 January 2020 between the daughter and the daughter’s solicitors did not extend to the prosecution of the notice of motion the subject of the primary judgment, a proposition which the daughter’s solicitor opposed in his letter of 14 October 2022. I accept the proposition. The words of clause B of the retainer are most sensibly construed as pertaining to the prosecution of the substantive hearing in these proceedings occurring in March 2020. The scope of the retainer would have sensibly extended to matters directly relevant to that hearing arising in its wake, but I am not satisfied that the notice of motion, totally collateral and essentially irrelevant as it was to the original proceedings, was a matter directly relevant to the substantive hearing. That is the case even though the respondents took no issue with the daughter pursuing her relief as a notice of motion within these proceedings: J [3].

50. The unstated proposition, however, is that the daughter’s manager has never authorised the daughter to deal with her estate in a way whereby she could and can continue to instruct her solicitors to prosecute the notice of motion and this costs application. That is a matter of fact which I consider to be incumbent upon the respondents to prove on the balance of probabilities. It is not enough for the respondents to present evidence of their questioning the daughter’s solicitor on the nature of his and the daughter’s professional arrangement, such that the onus shifts to the daughter or her solicitor to prove that the daughter’s manager has approved the arrangement under s 67(1) or authorised the daughter to enter into the arrangement under s 71(2) of the NSW Trustee and Guardian Act. There is plain evidence, in the correspondence between the daughter and her solicitor, and in the solicitor’s affidavit, supporting the conclusion that the daughter’s manager in fact approved the daughter’s representation by her solicitor and her prosecution of the notice of motion. I do not consider the daughter’s solicitor’s letter of 14 October 2022 to be some admission by implication that the 15 January 2020 costs agreement constituted the sole basis upon which he represented the daughter, and it is irrelevant whether the daughter or her solicitor believed that to be the case. There is ample evidence to suggest that the daughter, her manager, and her solicitor were acting in concert in a manner contemplated by the provisions of the NSW Trustee and Guardian Act to allow the daughter to be appropriately represented.

51. In those circumstances, I am not satisfied that the respondents have discharged their burden to prove, on the balance of probabilities, that the daughter has not accrued a liability to her solicitors on the basis that she was not authorised to instruct them in respect of the notice of motion. I find that that the daughter has accrued a liability to her solicitors in the ordinary way by which clients accrue a liability to pay costs to their lawyers.

Gross sum costs order

52. The daughter seeks an order pursuant to s 98(4)(c) of the Civil Procedure Act 2005 (NSW) that the respondents pay to the daughter a specified gross sum in respect of the notice of motion. That provision provides that, “…at any time before costs are referred for assessment, the court may make an order to the effect that the party to whom costs are to be paid is to be entitled to a specified gross sum instead of assessed costs”.

53. The provision was recently considered by Meagher, White and Brereton JJA in Ahern v Aon Risk Services Australia Ltd (No 2) [2022] NSWCA 39 at [14]-[18]:

[14] The principles relevant to the Court’s exercise of discretion under s 98 were set out in Hamod v New South Wales [2011] NSWCA 375 at [813]-[820] (Beazley JA) (Hamod). Her Honour noted at [813]:

[813] The discretion thereby conferred upon the court is not confined and may be exercised whenever the circumstances warrant its exercise, having regard to the scope and purpose of the provision: Harrison & Anor v Schipp [2002] NSWCA 213; 54 NSWLR 738 per Giles JA at [21]-[22]. In Harrison v Schipp, Giles JA considered that the discretion in s 98(4) may be exercised where the assessment of costs would be protracted and expensive and, in particular, if it appeared that a party obliged to pay the costs would not be able to meet a liability of the order likely to result from the assessment. However, his Honour stated, at [22]:

"The power should only be exercised when the Court considers that it can do so fairly between the parties, and that includes sufficient confidence in arriving at an appropriate sum on the materials available."

[15] The principal purpose of a specified gross sum costs order under s 98(4)(c) is to avoid the expense, delay and aggravation likely to be involved in a contested costs assessment process: Hamod at [816]-[817]. As Basten JA noted in James v Australia and New Zealand Banking Group Ltd [2017] NSWCA 84 at [3]:

The power to make such an order is governed by the obligation of the court to give effect to the overriding purpose of the Act, as identified in Pt 6 of the Civil Procedure Act. The court is to ensure that the issues between the parties are resolved “in such a way that the cost to the parties is proportionate to the importance and complexity of the subject-matter in dispute” (Civil Procedure Act, s 60); that obligation extends to the disposal of disputes as to costs. Although questions of costs undoubtedly play an important practical role in commercial litigation, disputes as to quantification are ancillary to the primary issues in dispute and consequential upon the resolution of the primary issues. Costs provide an opportunity for ongoing litigation about “non-essential issues” which should be resolved with as little technicality and expense as reasonably practicable. [footnotes omitted]

[16] Primary considerations relevant to the exercise of the s 98(4)(c) discretion include “the relative responsibility of the parties for the costs incurred; the degree of any disproportion between the issue litigated and the costs claimed; the complexity of proceedings in relation to their cost; and the capacity of the unsuccessful party to satisfy any costs liability”: Hamod at [816]; see also Kostov v Zhang (No 2) [2016] NSWCA 279 at [22]; eInduct Systems Pty Ltd v 3D Safety Services Pty Ltd (No 2) [2015] NSWCA 422 at [30].

[17] The power to award a gross sum should only be exercised when the Court considers that it can do so fairly between the parties and where an appropriate sum can be determined from the available materials: Harrison v Schipp (2002) 54 NSWLR 734 at 743; [2002] NSWCA 213 at [22]. The power may be exercised where a party's conduct has unnecessarily contributed to the costs of the proceedings, especially where the costs incurred have been disproportionate to the result of the proceedings: Hamod at [818].

[18] If it considers it appropriate to make the order, the Court may adopt a “broad brush” approach to quantification, as to require the Court to undertake a detailed examination of the kind carried out in a formal costs assessment would defeat the purpose of the order: Harrison v Schipp at 743; Penson v Titan National Pty Ltd (No 3) [2015] NSWCA 121 at [7]. The costs ordered should be “based on an informed assessment of the actual costs having regard to the information before the court (for example, by relying on costs estimates or bills)”: Hamod at [820]. Courts have typically applied a discount when assessing costs on a gross sum basis, though the aptness of a discount primarily depends on the accuracy and reliability of the costs evidence available to the Court: Hamod at [814].

54. The respondents oppose the Court determining the daughter’s costs of the notice of motion on a gross sum basis.

55. The daughter has explained how she submits that the Court should assess her costs on a gross sum basis at pars 32 to 37 of her written outline of submissions. In essence, the daughter submitted that the Court should assess her costs in respect of her solicitor’s fees up to 20 July 2022 by discounting the fees rendered by 35% and by discounting the fees rendered from 21 July 2022 by 10%. The total discount would be $15,501.36. The daughter submitted that the Court should allow the whole of counsel’s fees of $19,342.75 (which included $5,500 (inclusive of GST) for the costs of preparing the daughter’s written costs submissions). The daughter also submitted that the Court should allow all other disbursements having a total of $1,192.31. The result would be that in respect of the total costs and disbursements incurred by the daughter of $81,215.36, the Court would make a gross sum costs order in the amount of $65,714.

56. Although I acknowledge the convenience to the daughter of receiving the benefit of a gross sum costs order, and I also accept that there is a demonstrated level of antagonism between the daughter and the respondents and the normal costs assessment exercise may cause the daughter anxiety given her psychological condition, I am not satisfied that this is a proper case for the Court to make a gross sum costs order.

57. I do not accept that the respondents have conducted their response to the daughter’s notice of motion in a way that would justify the Court in concluding that they will not act responsibly in the ordinary costs assessment process.

58. I am not in a position to comment on the reasonableness of the costs and disbursements incurred by the daughter, but an amount over $80,000 superficially appears to be high, and in any event is high enough in my view that it would be wrong for the Court to deprive the respondents of their ordinary right to challenge aspects of the daughter’s costs and disbursements in the costs assessment process. It is not for the Court to prejudge the issue, but it may reasonably be available to the respondents to argue that the daughter’s entitlement to her costs and disbursements should be adjusted to allow for changes in the way she presented her case at the hearing, and there is also a real question as to how much of the daughter’s costs and disbursements incurred after the delivery of the primary judgment should be allowed.

59. This is not a case where I, as the presiding judge at the hearing, feel sufficiently confident that I can make a fair broad-brush assessment of the appropriate amount of costs and disbursements that should be awarded to the daughter on a gross sum basis to justify the deprivation of the respondents of their ordinary entitlement to submit the daughter’s claim to cost assessment.

Order

60. In these circumstances the only order as to costs that the Court will make is the following:

1. The Court orders the respondents to pay to the applicant her costs of the notice of motion filed on 24 June 2022 on the ordinary basis.

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Decision last updated: 18 May 2023