Eliezer v Sydney Water Corporation (No. 2)

[2021] NSWDC 111

District Court

New South Wales

Medium Neutral Citation:

Eliezer v Sydney Water Corporation (No. 2) [2021] NSWDC 111

Hearing dates:

On the papers

Date of orders:

7 April 2021

Decision date:

07 April 2021

Jurisdiction:

Civil

Before:

Abadee DCJ

Decision:

See paragraph 44

Catchwords:

COSTS – whether any disentitling conduct by successful party to usual entitlement to costs – application by successful defendant – lump sum costs order

Legislation Cited:

Civil Procedure Act 2005 (NSW) ss 29, 59, 60, 98

Evidence Act 1995 (NSW) s 48, 69

Uniform Civil Procedure Rules 2005 (NSW) r 42.1

Cases Cited:

Bahamad v Wong [2020] NSWSC 991

Eliezer v Sydney Water Corporation [2020] NSWDC 66

Harrison v Schipp (2002) 54 NSWLR 738

Northern Territory v Sangare (2019) 93 ALJR 959; [2019] HCA 25

Texts Cited:

Nil

Category:

Costs

Parties:

Sydney Water Corporation (applicant)
Ms S Eliezer (respondent)

Representation:

Solicitors:
Plaintiff appeared in person
Manion McCosker Solicitors and Attorneys for the defendant

File Number(s):

2020/212141

Publication restriction:

Nil

REASONS FOR Judgment

Background

1. On 16 March 2021, I published reasons for my dismissing a summons, through which the plaintiff appealed against a decision of the Local Court of Sutherland^[1] . I gave the parties opportunity to make submissions on costs.

   1. Eliezer v Sydney Water Corporation [2020] NSWDC 66

2. By notice of motion filed on 18 March 2021, the successful defendant applied for an order, pursuant to s 98(4)(c) of the Civil Procedure Act 2005 (NSW) (‘the Act’), for a specified gross sum, being in the amount of $5,382, with such amount incorporating also the costs of the motion.

3. The plaintiff, the respondent to that motion, opposes that application and indeed, submits that there should be no order as to costs. This course was originally foreshadowed in her written submissions filed on 15 March 2021 and was confirmed in her written submissions dated 29 March 2021.

4. Since the plaintiff’s submission that the defendant is not entitled to any costs would, if accepted, obviate any need to consider the defendant’s application, I will consider it first.

The defendant’s entitlement to a costs order

5. By s 98(1) of the Act, costs are in the discretion of the Court. Nevertheless, by r 42.1 of the Uniform Civil Procedure Rules 2005 (NSW), unless it appears to the court that some other order should be made (wholly or partly), the general rule is that costs follow the event. The ‘event’, here, was the determination of the appeal. The result of that event was that the plaintiff failed in her appeal. The general rule would see the plaintiff paying the defendant’s costs.

6. The plaintiff contends that some other order should be made in circumstances where:

1. the defendant commenced the proceeding of the Local Court at the height of the Covid-19 lockdowns, at a time when other companies were suspending payment requirements;

2. the plaintiff requested a discontinuance on terms that the dispute be resolved through alternative dispute resolution, but the defendant refused that request;

3. given the small amount, several Calderbank offers were made which would have ended the litigation;

4. the plaintiff was in a vulnerable position due to prolonged litigation, being away from her property;

5. the defendant sent disconnection notices, but failed to disconnect and allowed charges to continue to incur;

6. the defendant has been obsessively following other cases involving the plaintiff. That litigation concerns a Local Court claim commenced in 2013.

7. The plaintiff submits, with reference to certain authorities, that in the circumstances there has been ‘disentitling conduct’ on the part of the defendant which should displace the general rule.

8. I do not accept the plaintiff’s submission that there has been any conduct by the defendant which disentitles it from the operation of the general rule.

9. Taking each of the matters raised by the plaintiff in turn.

1. the timing for the defendant to commence the proceeding, and the circumstances that other companies were suspending payment requirements, is irrelevant. There was no suggestion, for example, that suspension of payment requirements by other companies was extended to a moratorium on enforcement action in relation to existing debts; or that the defendant was subject to such legislative or regulatory requirement.

2. there was no obligation and it was not unreasonable for the defendant to reject a term, or terms, of the notice of discontinuance offered by the plaintiff. The result that the defendant has procured vindicates its position.

10. It was not unreasonable for the defendant to reject ‘Calderbank’ offers made by the plaintiff. Mr Roset says that no offer, informal or otherwise, was made in relation to the disposal of this litigation. It is unnecessary to determine any factual dispute about this. It suffices to say that it is not been demonstrated that the defendant obtained a no more favourable outcome than that which the plaintiff had offered to it.

11. Whatever the plaintiff means by being in a ‘vulnerable’ position, this is irrelevant to the exercise of the discretion. Whatever the personal circumstances of the plaintiff were, they did not confer any immunity upon her from the ordinary operation of court rules relating to liability to costs should her appeal be determined to be unsuccessful: Northern Territory v Sangare (2019) 93 ALJR 959; [2019] HCA 25; at [27].

12. The defendant’s alleged sending of disconnection notices appears to relate to the merits of the plaintiff’s case run in the Local Court, but that is irrelevant to the costs outcome of her unsuccessful appeal.

13. It was not illegitimate, or improper, for the defendant to refer to other litigation in which the plaintiff was involved. As I noted in my reasons dismissing the appeal, the matter was relevant to the question of a potential waiver to the plaintiff’s allegation of bias against the Assessor in the Local Court. The outcome of that other litigation is also irrelevant.

14. The defendant, as the successful party, is entitled to its costs of the appeal to this Court.

Lump sum order

15. The defendant, as applicant, relied upon the affidavit of Michael Donald Roset, sworn on 17 March 2021. Mr Roset was the solicitor advocate who appeared for the applicant in the Local Court and who authored the applicant’s written submissions in this Court.

16. In his affidavit, Mr Roset annexed his firm’s costs agreement with the entity, AMBA Commercial Collections Pty Ltd, who Mr Roset described as being a licensed commercial agent of the applicant, dated 7 September 2017. Mr Roset noted that, by the terms of the Legal Profession Uniform Law, the applicant is to be characterised as a ‘sophisticated client’.

17. Mr Roset indicated that his hourly charge out rate is $400, plus GST. This hourly rate has remained unchanged since the costs agreement was entered into in September 2017, prior to the commencement of the money claim against the plaintiff (the respondent) in the Local Court.

18. Mr Roset then set out, in detail, the time that he has spent working on this appeal, beginning from his perusal of the plaintiff’s summons through to drafting the current motion. This included certain attendances at directions hearings (although not including costs of the directions hearing on 12 October 2020) and the preparation of the single set of written submissions, as well as consideration of the (two) sets of written submissions prepared by the plaintiff. From this, he derived that the costs charged on the hourly basis was $6,500.

19. Necessarily, Mr Roset’s calculations did not include time spent by him considering the respondent’s submissions of 29 March 2021 or his preparation of his short written submissions of 31 March 2021. Had the time spent by him perusing the respondent’s extensive written submissions (which exceeded the page limit granted to the respondent) been factored in, I would have expected that this would have added not insubstantially to the cost.

The Applicant’s submissions

20. Mr Roset submits that the discretion to order costs in s 98(4)(c) of the Act, including, specifically, the power to order a gross specified sum in lieu of an assessment, is exercisable having regard to general case management principles. This includes, in particular, ss 59 and 60 of the Act, concerning the elimination of delay and the proportionality of costs, generally. He submits that the costs of an assessment would be disproportionate to the small amount claimed.

21. Mr Roset referred the Court to the decision of Slattery J in Bahamad v Wong [2020] NSWSC 991 where his Honour emphasised (at [15]-[16]) two considerations which might incline the court to exercise its power, being:

1. the avoidance of the expense, delay and aggravation of an assessment;

2. the probable inability of the party (upon whom the obligation to pay costs is imposed) to pay the costs order.

22. Other considerations are relevant, such as the relative responsibility of the parties for the costs incurred, the complexity of the proceeding in relation to costs, and the capacity of the unsuccessful capacity to satisfy any costs liability: Harrison v Schipp (2002) 54 NSWLR 738 at [21]-[22].

23. As to the latter consideration, Mr Roset referred the Court to the circumstance that the plaintiff is currently involved in bankruptcy proceedings, in which, to put the matter specifically, she is applying to set aside a bankruptcy notice.

24. Mr Roset submits that the amount claimed is reasonable. He acknowledges the usual practice, for applications of this kind, that a discount be given and argues that the amount claimed could be viewed as two components: a figure of $5,200 (which represents a 20% discount), plus an additional sum ($182) representing the filing fee on this motion.

The respondent’s submissions

25. Contrary to an express direction that her submissions be confined to 3 pages, the respondent supplied written submissions running to 6 pages. In the circumstances, it is unnecessary for the Court to take the course of ignoring that part of the submissions exceeding the grant to the parties to file submissions (ie not reading pages 4-6), or remitting them back to her for her consolidation or refinement, not because the respondent represents herself – as I indicated in my main reasons for judgment, unrepresented litigants should not receive privileges not available to parties who are represented – but because in the circumstances, the process and time delay in getting the respondent to prepare submissions complying with the Court’s direction are not consequences which are proportionate to the case management objectives. I will therefore address them on their merits.

26. To a not insubstantial degree, some of the respondents’ written submissions of 29 March 2021 reprise arguments she made in her written submissions of 15 March 2021 arguing against an entitlement in the applicant to any order for costs. For example, I refer to paragraphs 14, 16-22. Some of her submissions on costs in her latter document are additional arguments for why the applicant should not be entitled to any costs at all.

27. At about 9am on 1 April 2021, the respondent sent to my Associate an order made by the Federal Circuit Court, dated 31 March 2021, in which the bankruptcy notice against her was set aside.

28. The respondent’s first point is that simply by annexing his firm’s costs agreement with AMBA Commercial Collections Pty Ltd did not prove that Mr Roset was authorised to act on the applicant’s behalf; nor did it prove that AMBA Commercial Collections Pty Ltd was the applicant’s agent. She demanded proof that further documentation be supplied lest she take steps to issue a subpoena to produce documents to establish these points.

29. Her second point is that Mr Roset commenced a Local Court proceeding so his firm could charge for it; and so that he could “notch up a debt”, when added to the existing bankruptcy proceeding against her. This was established by the applicant’s rejection of a notice of discontinuance on terms that the proceeding be resolved through Alternative Dispute Resolution and not “refiled”. The offer of discontinuance was only rejected because Mr Roset would not have the opportunity to claim costs. Further, Mr Roset does not really know what he is talking about when he referred to bankruptcy proceedings, as the issues presented by those proceedings are complex. Indeed, his evidence is now outdated, as a result of the bankruptcy notice against the respondent having been set aside by the Federal Circuit Court.

30. Her third point is that the costs claimed by Mr Roset are disproportionate to the amount in dispute.

31. Her fourth point is that Mr Roset did not engage in many of her submissions in her unsuccessful appeal from the Local Court judgment. Associated with this was this Court making certain findings which, she asserts, had not been raised by Mr Roset. That means that the applicant should not get the benefit of a costs order for failing to raise points which the Court relied upon in the final result. That would be to ‘encourage conduct that does not meet professional standards’. Mr Roset was, at any rate, only a debt collector.

32. The applicant in reply effectively indicated that it did not wish to be further heard, other than to decry the respondent’s submissions as raising irrelevant allegations.

Consideration

33. I will address the points raised by the respondent in turn. Because of the circumstances I have referred to, where there was overlap between the two sets of written submissions dealing, respectively, with the entitlement in the applicant for costs and the issue of the lump sum order, to some extent, regrettably, there is some repetition.

34. As to the respondent’s first point, Mr Roset annexed to his affidavit the costs disclosure and costs agreement between the firm and AMBA Commercial Collections Pty Ltd. The costs agreement is a copy of a business record and is admissible under s 48(1)(b) of the Evidence Act 1995 (NSW). Further, the cost agreement contains a representation that AMBA Commercial Collections was appointed as agent for the applicant. That representation is admissible for the truth of its contents under s 69(2) of the Evidence Act. Further, the Court can and does infer that the nature of the defendant is such that is may wish to use an agent to collect its debts and to instruct lawyers to do so on its behalf. I find, therefore, that Mr Roset’s firm, Manion McCosker entered into a costs disclosure and costs agreement with ABA Commercial Collections Pty Ltd with the latter being the agent for the applicant. There is no suggestion that the charge out rates and work performed by Mr Roset, as details in the latter’s affidavit of 17 March 2021 were not in accordance with the terms of that agreement.

35. As to the respondent’s second point, if there was any merit in the point, it could have been advanced as a defence in the Local Court proceedings for being an abuse of process. It was not. Had such defence been raised, it would, thereafter, have been subject to scrutiny in accordance with the standard of proof that such serious accusation would require. It is too late for the respondent to raise it now. As to the respondent’s complaint about the rejection of the terms of a notice of discontinuance, I allude to this in my main reasons and have also addressed it above (paragraph 9(b)). I need not repeat myself. As to the respondent’s complaint of Mr Roset charting the progress of bankruptcy proceedings, the submission misses the point about the way that Mr Roset referred to and relied upon that proceeding in the hearing of the respondent’s appeal, bearing as it does upon the improbability of the applicant recovering its costs as being a factor militating in favour of a lump sum order, rather than an assessment.

36. As to the respondent’s third point, that plainly does relate to the issue of whether a lump sum order is appropriate, but not in a way in which it assists the respondent. First, her submission is no more than a bare assertion without articulating in what way the costs were disproportionate. She did not adduce evidence of how the applicant, as defendant to an appeal which the respondent had commenced in this Court, could have proceeded any more cheaply than it did. She did not try to suggest, for example, that the work performed, as set out in Mr Roset’s supporting affidavit was unnecessary. She did not suggest that Mr Roset’s charge out rate was excessive for the work involved. It is true that the costs recoverable are significant in proportion to the underlying debt, but that was inevitable, once the respondent invoked this Court’s jurisdiction to appeal from a decision from the Small Claims Division of the Local Court in respect to a money claim which was small, even by the standards of money claims in the Small Claims division of the Local Court. Having invoked the Court’s jurisdiction, plainly the applicant was entitled to seek representation and then to seek the costs of representation should it succeed.

37. As to the respondent’s fourth point, the contribution, or lack thereof, of Mr Roset, as solicitor-advocate, towards his client’s ultimate success is irrelevant. It is not the function of the Court, when considering an application for a lump sum costs order, to engage in a refined process of identifying which parts of a party’s lawyer’s contribution produced the successful result, or try to place a ‘value’ upon a party’s assistance in getting to the ultimate result, even if that was possible.

38. Associated with the last point was the submission, not previously raised, about a collateral agreement between the applicant and respondent about her paying a debt in instalments. That, too, rests upon no more than bare assertion. It was not raised in the Local Court.

39. Further, notwithstanding her success in having the bankruptcy notice against her set aside, the Court has no understanding of the reasons for that result and no evidence otherwise to indicate what the respondent’s financial capacity to meet a costs order actually is, should the assessment process proceed.

Consideration

40. In my opinion, the conduct of the parties in relation to what, with all respect to them, involves a small commercial debt, is a very vivid demonstration of the aptness of the Court making a lump sum order; particularly to bring an end to the parties’ apparently boundless dispute without further delay and cost (to the successful party) being incurred and the probability that the applicant may have some difficulty obtaining a costs order against the respondent; notwithstanding the setting aside of the bankruptcy notice.

41. Specifically, the contest about this application for costs has been much more complex and protracted than it needed to be. This is the responsibility of the respondent in large measure who, in the course of two extensive sets of written submissions, made many unmeritorious points. Making full allowances, given her unrepresented status, many of the submissions raised by the respondent, particularly in her supplementary submissions dated 18 March 2021, were needlessly personal against Mr Roset; if not offensive; and would not have been tolerated had they been made by an admitted practitioner.

42. Adopting the broad brush approach appropriate to applications of this type, I am satisfied that Mr Roset’s evidence supplies the Court with sufficient confidence to determine find that the amount claimed is reasonable and appropriate. I find that it does not place the respondent in any worse position than would be the case if the matter proceeded through to an assessment.

43. I therefore accede to the applicant’s application in its notice of motion.

44. Pursuant to s 98(4)(c) of the Civil Procedure Act 2005 (NSW), the defendant is entitled to the plaintiff paying it a specified gross sum for its costs in the amount of $5,382, which amount includes the costs of its notice of motion filed on 18 March 2021.

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Endnote

Decision last updated: 07 April 2021