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Elias v Smidt (No 3)

Elias v Smidt (No 3)

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Case Copied 17 September 2025 81 min read

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Supreme Court

New South Wales

Medium Neutral Citation: Elias v Smidt (No 3) [2025] NSWSC 1062
Hearing dates: 1 September 2025, written submissions 4, 16, 17 September 2025
Decision date: 17 September 2025
Jurisdiction: Equity
Before: Leeming JA
Decision:
1. The first and second defendants pay the plaintiff’s costs in the gross sum of $28,220 (inclusive of GST).
2. The exhibits may be returned.

Catchwords:
COSTS – gross sum costs order – plaintiff retained firm of which he was sole director and shareholder to act for him – whether plaintiff entitled to costs for his own time – quantum of order – many claimed professional costs and disbursements not fair and reasonable – fair and reasonable amount for ex parte interlocutory applications and default judgment a fraction of amount claimed
PRECEDENT – conflicting decisions of High Court and Court of Appeal – position of judge at first instance

Legislation Cited:
Civil Procedure Act 2005 (NSW) s 98
Legal Profession Act 2004 (NSW) Part 2.6, ss 140, 141, 143, 145
Legal Profession Uniform Law Application Act 2014 (NSW) ss 63, 76
Legal Profession Uniform Law, Part 3.7
Uniform Civil Procedure Rules 2005 (NSW) rr 42.1, 42.34

Cases Cited:
Anderson v Canaccord Genuity Financial Ltd (2023) 113 NSWLR 151; [2023] NSWCA 294
Bell Lawyers Pty Ltd v Pentelow (2019) 269 CLR 333; [2019] HCA 29
Birketu Pty Ltd v Atanaskovic [2025] HCA 2; 99 ALJR 321
Boensch v Pascoe (2019) 268 CLR 593; [2019] HCA 49
Burrows v Macpherson & Kelley Lawyers (Sydney) Pty Ltd [2021] NSWCA 148
Cachia v Hanes (1994) 179 CLR 403; [1994] HCA 14
Commissioner of the Australian Federal Police v Razzi (No 2) (1991) 30 FCR 64
Commonwealth Bank of Australia v Kojic (2016) 249 FCR 421; [2016] FCAFC 186
Commonwealth of Australia v Bank of New South Wales (1949) 79 CLR 497; [1950] AC 235
Elias v Smidt [2025] NSWSC 762
Elias v Smidt (No 2) [2025] NSWSC 1008
Ha v State of NSW (1997) 189 CLR 465; [1997] HCA 34
Hamod v State of New South Wales [2011] NSWCA 375
Harrison v Schipp (2002) 54 NSWLR 738; [2002] NSWCA 213
Hasler v Singtel Optus Pty Ltd; Curtis v Singtel Optus Pty Ltd; Singtel Optus Pty Ltd v Almad Pty Ltd (2014) 87 NSWLR 609; [2014] NSWCA 266
Helmbright v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (No 2) (2021) 287 FCR 109; [2021] FCA 647
Hoho Property Pty Ltd v Bass Finance No 37 Pty Ltd [2022] NSWSC 1062
Jones v Director of Public Prosecutions [1962] AC 635
Kronenberg v Macaulay [2025] NSWCA 195
Litigation Fund WCX Pty Ltd v Mitchell (No 5) [2025] NSWCA 149
Manariti Plumbing Pty Ltd v Universal Property Group Pty Ltd (No 2) [2025] NSWCA 185
Mutual Life & Citizens’ Assurance Company Ltd v Evatt (1970) 122 CLR 628; [1971] AC 793
Resort Hotels Management Pty Ltd v Resort Hotels of Australia Pty Ltd (1991) 22…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2025] NSWSC 1062
Decision Date: 17 September 2025

CaseChat Overview and Summary

Elias v Smidt (No 3) involved a complex dispute where the plaintiff, Elias, sought a gross sum costs order following a series of legal proceedings against Smidt. Elias, who was the sole director and shareholder of the firm retained to represent him, questioned whether he was entitled to costs for his own time. The court had to determine the quantum of the order and address whether the many claimed professional costs and disbursements were fair and reasonable. Elias argued for a significant sum, but the court found that the fair and reasonable amount for ex parte interlocutory applications and default judgment was a fraction of the amount claimed.

The legal issues the court needed to resolve included the entitlement of a party to costs for their own time when they retained a firm of which they were the sole director and shareholder. Additionally, the court had to assess the reasonableness of the costs claimed by the firm, considering the specific circumstances of the case. The court had to balance the need for adequate compensation for professional services rendered against the principle that costs should be fair and reasonable, not excessive.

In its decision, the court acknowledged the conflicting precedents from the High Court and the Court of Appeal regarding the position of a judge at first instance. The court concluded that Elias was not entitled to costs for his own time as he had retained a firm in which he held a controlling interest. The court further found that many of the claimed professional costs and disbursements were not fair and reasonable. As a result, the court ordered a fraction of the amount claimed for the ex parte interlocutory applications and default judgment, ensuring that the costs awarded were commensurate with the services provided.

The final orders of the court reflected the detailed assessment of the costs. Elias was not awarded costs for his own time, and the total amount granted for the ex parte interlocutory applications and default judgment was significantly reduced from the amount initially claimed. The court's decision emphasised the need for proportionality in costs awards and highlighted the importance of ensuring that costs are both fair and reasonable.

Orders