Edward Moses Obeid Snr v David Andrew Ipp (Costs)

[2020] NSWSC 1329

Supreme Court

New South Wales

Medium Neutral Citation:

Edward Moses Obeid Snr v David Andrew Ipp (Costs) [2020] NSWSC 1329

Hearing dates:

On the papers – written submissions received 21 September 2020

Decision date:

29 September 2020

Jurisdiction:

Common Law

Before:

Hammerschlag J

Decision:

Gross sum costs order totalling $5,071,475 – see paragraph [15]

Catchwords:

COSTS – Gross sum costs order – Civil Procedure Act 2005 (NSW) s 98(4)(c) – Complex multi-party proceedings – Appropriate to make gross sum costs order and determine amount

Legislation Cited:

Civil Procedure Act 2005 (NSW)

Cases Cited:

Baychek v Baychek [2010] NSWSC 987

Edward Moses Obeid Snr -v- David Andrew Ipp [2016] NSWSC 1376

Edward Moses Obeid Snr v David Andrew Ipp [2017] NSWSC 271

Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWSC 23

In the matter of Mosman & Co Pty Limited [2020] NSWSC 1245

Category:

Principal judgment

Parties:

Edward Moses Obeid Snr - First Plaintiff
Moses Edward Obeid - Second Plaintiff
Paul Edward Obeid - Third Plaintiff
Edward Joseph Obeid Jnr - Fourth Plaintiff
David Andrew Ipp - First Defendant
Geoffrey Maurice Watson - Second Defendant
Grant Lockley - Third Defendant
Paul Anthony Grainger - Fourth Defendant
The Independent Commission Against Corruption - Seventh Defendant

Representation:

Counsel:
Plaintiffs – W Chan
Defendants – M Castle and A Bailey

Solicitors:
Plaintiffs – Deutsch Partners
Defendants – Crown Solicitor’s Office

File Number(s):

2015/201089

JUDGMENT

1. HIS HONOUR:   This judgment follows upon the principal judgment delivered on 27 September 2016, Edward Moses Obeid Snr -v- David Andrew Ipp [2016] NSWSC 1376, and my judgment as to costs which determined that the plaintiffs were to pay the first defendant’s costs on the indemnity basis and the costs of the second, third, fourth, sixth, and seventh defendants on the ordinary basis: Edward Moses Obeid Snr v David Andrew Ipp [2017] NSWSC 271 (the Costs Judgment).

2. Section 98(4)(c) of the Civil Procedure Act 2005 (NSW) provides:

Courts powers as to costs

(4) In particular, 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 —

…

(c) a specified gross sum instead of assessed costs …

3. The parties agreed that the Court should make such an order, that the Court should fix the amount, and that this should be done on the papers.

4. Einstein J pointed out in Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWSC 23 at [9] that a gross sum assessment, by its very nature, does not envisage that a process similar to that involved in a traditional taxation or assessment of costs should take place, and the gross sum can only be fixed broadly having regard to the information before the Court.

5. A broad brush approach can be taken provided it is logical, fair, and reasonable: see Baychek v Baychek [2010] NSWSC 987 and, more recently, In the matter ofMosman & Co Pty Limited [2020] NSWSC 1245 and the authorities cited in those decisions.

6. A broad brush approach is particularly apt to be taken here where there are multiple parties and the proceedings are complex.

7. The Court had the benefit of extensive reports from two experienced professional costs assessors, Sharon Lea Drew for the plaintiffs and Ian Ramsey-Stewart for the defendants. On my request, the parties provided brief written submissions which highlighted the experts’ differences in approach.

8. Ms Drew’s assessment identified the following range of the costs likely recoverable by each defendant on assessment. Cents are omitted.

PARTY	RANGE
First Defendant:	$1,714,500	$1,789,500
Second Defendant:	$723,166	$723,166
Third Defendant:	$827,883	$897,883
Fourth, Fifth, Sixth Defendants:	$697,000	$745,000
Seventh Defendant:	$1,375,997	$1,475,997
Total:	$5,338,547	$5,631,547

9. Mr Ramsey-Stewart’s opinion is that the likely recoverable costs would total $3,800,830 plus GST (i.e. $4,180,913).

10. A significant difference between them is that, although they both examined costs on a line-by-line basis and then applied a percentage discount after examining factors which would cause a costs assessor to reduce costs, Mr Ramsay-Stewart then applied a further reduction to take account of what he considers would occur during the actual costs assessment process. He would also disallow certain specific items which he considered were unnecessary and unreasonable work caused by duplication and for some “incompletely described work.” Mr Ramsey-Stewart did not, however, directly review the specific invoices in question.

11. The defendants say that Mr Ramsey-Stewart’s methodology appears to be in accordance with the practice and taxation of costs in the Federal Court, where, they point out, there is a restricted fee schedule which may consideration of what would be awarded on taxation different to that which may be awarded on assessment.

12. Mr Ramsey-Stewart would disallow a certain amount of costs claimed in the solicitors’ invoices because they are administrative in nature or overheads which would be expected to be absorbed by the solicitor.

13. I prefer Ms Drew’s approach. I think her low range figure is closer to that which would be recoverable on assessment in this jurisdiction, especially given the complexity of the case. Her approach is logical, fair, and reasonable.

14. However, that having been said, the dispute was not only complex but multi-party and there is some room to think, from my own observation of the trial, that on assessment there might be a further reduction because of duplication. I think that the appropriate further reduction is 5%.

15. The Court orders that the defendants are entitled to the following specified gross sums instead of assessed costs (exclusive of interest). The figures have been rounded out.

PARTY	COSTS
First Defendant:	$1,628,775
Second Defendant:	$687,000
Third Defendant:	$786,500
Fourth, Fifth, Sixth Defendants:	$662,000
Seventh Defendant:	$1,307,200
Total:	$5,071,475

16. I have already determined that the defendants are entitled to interest on their costs and the basis upon which it is to be calculated: see Costs Judgment at [22]. Calculations will be required. The parties are to bring in Short Minutes reflecting this outcome.

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