Fisher-Pollard by her tutor Fisher-Pollard v Fisher-Pollard

[2018] NSWSC 807

Supreme Court

New South Wales

Medium Neutral Citation:	Gillian Fisher-Pollard by her tutor Miles Fisher-Pollard v Piers Fisher-Pollard [2018] NSWSC 807
Hearing dates:	28 May 2018
Decision date:	06 June 2018
Jurisdiction:	Equity - Expedition List
Before:	Sackar J
Decision:	See paras [49] and [50]
Catchwords:	COSTS – party / party – indemnity costs – offers of compromise or Calderbank Offers – whether a genuine offer of compromise – whether unreasonable not to accept offer   COSTS – appropriate principles and considerations –lump sum or gross costs order – appropriate discount to lump sum or gross costs order
Legislation Cited:	Civil Procedure Act 2005 (NSW) Uniform Civil Procedure Rules 2005 (NSW)
Cases Cited:	Ann Ross v John William Padget [2016] NSWSC 1851 Cultus Petroleum v OMV Australia [1999] NSWSC 435 Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397; [1988] FCA 202 Hamod v The State of New South Wales [2011] NSWCA 375 Harrison v Schipp (2002) 54 NSWLR 738; [2002] NSWCA 213 Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344 Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11 Seller v Jones [2014] NSWCA 19
Texts Cited:	n/a
Category:	Costs
Parties:	Gillian Fisher-Pollard by her tutor Miles Fisher-Pollard (Plaintiff) Piers Fisher-Pollard (Defendant)
Representation:	Counsel: J Knackstredt (Plaintiff) P Fisher-Pollard (Defendant, self represented)   Solicitors: Schweizer Kobras (Plaintiff) P Fisher-Pollard (Defendant, self represented)
File Number(s):	2016/292885
Publication restriction:	n/a

Judgment

1. In this matter I handed down my reasons for judgment on 24 April 2018: Gillian Fisher-Pollard by her tutor Miles Fisher-Pollard v Piers Fisher-Pollard [2018] NSWSC 500 (principal judgment).

2. The principal judgment arose out of a claim by the Plaintiff that a property at 31 Prestons Lane, Tyagarah NSW 2481 (follow identifier 2/631878) (Tyagarah Property) was held on trust by the Defendant for the Plaintiff. The claim was one of unconscionability and undue influence, such that relevant property transactions that vested the property into the Defendant’s name ought to be set aside as between the Plaintiff and the Defendant.

3. I found that the Defendant had engaged in unconscionable conduct and also exerted undue influence on the Plaintiff such that the property transactions should be set aside as between the Plaintiff and the Defendant (principal judgment [551] and [552]).

4. This judgment concerns the Plaintiff’s application for indemnity costs and costs assessed on a lump sum or fixed basis. The Plaintiff seeks $419,099.67 lump sum on an indemnity basis (Submissions [22]) and did not make submissions on costs for the hearing on costs (Transcript for 28 May 2018: T3/22-8).

Background facts

5. On 18 December 2015 the Plaintiff lodged a caveat on the Tyagarah Property (Affidavit of Ms Henderson [7]).

6. On 8 September 2016 the Plaintiff received a lapsing notice on the caveat prepared by the Defendant’s then solicitors (Affidavit of Ms Henderson [9]).

7. Proceedings were commenced by the Plaintiff against the Defendant by Summons filed on 30 September 2016 by way of urgent application to extend the caveat (Affidavit of Ms Henderson [11]).

8. On 14 October 2016 approximately two weeks after the commencement of proceedings the Plaintiff provided a Calderbank offer to the Defendant (the Offer). The Offer provided for the Tyagarah Property to be transferred to the Plaintiff and $350,000 to be paid to the Defendant and for each party to bear their own costs (Exhibit FH2 Tab 4). The offer was open for 28 days. The Defendant did not respond to the offer (Affidavit of Ms Henderson [12]).

9. I heard the principal proceedings on 12, 13, 14, 15, 16, 21 and 23 March 2018.

10. Upon handing down the principal judgment on 24 April 2018 I made it clear that I would hear submissions if necessary on the precise declarations or orders sought by the Plaintiff in light of my findings of unconscionability and undue influence (at [554]). I would also hear submissions on the issue of costs if necessary (at [555]).

11. On 4 May 2018, Rickard Lawyers informed the Court that their retainer with the Defendant was in the process of being terminated and that the Defendant was in the process of putting together a new team of legal advisors (Affidavit of Ms Henderson [15]).

12. On 4 May 2018 I made a declaration that the Plaintiff is, and always had been, the sole beneficial owner of the Tyagarah Property (Order 1) and that the Defendant holds the Tyagarah Property on constructive trust for the Plaintiff (Order 2). I also made the order that the Defendant, within 14 days of the date of these orders, deliver the Certificate of Title of the Tyagarah Property to the Plaintiff, deliver up to the Plaintiff an executed Transfer of the property, providing for the transfer of the registered interest in the property from the Defendant to the Plaintiff and give up vacant possession of the Tyagarah Property to the Plaintiff (Order 3). However I stayed Orders 1, 2 and 3 for 9 days.

13. On 11 May 2018 Ms Fiona Henderson solicitor for the Plaintiff swore an affidavit in support of the Plaintiff’s application on costs. Ms Henderson provided detailed invoices on the Plaintiff’s costs including $49,479.88 fees for Dr Nadeem Bhanji’s expert fees (Tab 8 of Exhibit FH2), $16,187.19 being fees for court filing fees and costs of video link evidence (at [19] of Ms Henderson’s Affidavit).

14. On 14 May 2018 the Defendant appeared in person although he indicated that he was in the process of obtaining legal representation of some sort which would take approximately one week (T3/19-20; T5/23-6). Counsel for the Plaintiff indicated that the Plaintiff would seek indemnity costs and lump sum costs on the proceedings. I fixed the costs matter for hearing on 28 May 2018 in order to afford the Defendant time to provide any submissions in writing if desired and consider his position as to the issue of costs. I provided a further stay of Orders 1, 2 and 3 for 7 days until 5:00pm 21 May 2018.

15. On 18 May 2018 the Defendant filed a Notice of Intention of Appeal from my principal judgment.

16. On 21 May 2018 the matter came before the Court for directions. The Defendant appeared in person on the telephone but informed the Court that he had engaged solicitors although these solicitors only wished to act in respect of proceedings in the Court of Appeal and for some reason wanted their identity to remain private (T2/17-21; T3/1-7). Despite the Plaintiff’s submissions to the contrary I provided a further stay of Orders 1, 2 and 3 for 4 days until 5:00pm 25 May 2018.

17. On 22 May 2018 Mr Rickard of Rickard Lawyers filed a Notice of Ceasing to Act for the Plaintiff.

18. On 28 May 2018 the matter came before the Court for hearing on the question of indemnity costs and lump sum costs. The Defendant appeared in person by telephone although he did indicate he had instructed a Mr Tom Glynn solicitor who did not appear in Court or provide submissions (T6/20-5). This costs judgment concerns that issue.

19. On 28 May 2018 I indicated I was not prepared to make any further stay on my orders and despite the Defendant’s application (T7/31; T7/50-T8/1) I also ordered that the Registrar of the Supreme Court of New South Wales be empowered and directed to execute all documents and do all things necessary to give effect to Order 3 made on 4 May 2018.

Parties’ submissions

Plaintiff

20. The Plaintiff submits that the Defendant should pay the costs of the entirety of the proceedings including the caveat extension application on an indemnity basis and as a lump sum amount of $419,099.67 (Submissions [22]).

21. The Plaintiff further submits the Offer was a genuine offer of compromise and in the circumstances the Defendant’s failure to accept the Offer was unreasonable (Submissions [4]).

22. The Plaintiff also submits that there was no substantial change to the Plaintiff’s case between the time of making the Offer and the final hearing and that the Defendant at the time of receiving the Offer was (or ought to have been) well aware that acceptance of that Offer would have led to a better outcome than proceeding (Submissions [7]-[9]). It is also alleged the Defendant defended these proceedings without any real prospect of success (Submissions [10]). In these circumstances the Plaintiff submits it is appropriate to order indemnity costs of the entire proceedings including the caveat extension application (Submissions [9]).

23. In support for gross sum fixed costs the Plaintiff submits:

1. The Defendant is impecunious and it would be unfair to require the Plaintiff to seek a costs assessment (Submissions [14]).

2. The Defendant’s conduct has been wrongful, unconscionable and fuelled by self-interest (Submissions [15]).

3. Gross sum costs will avoid considerable expense, delay and aggravation (Submissions [16]).

4. A costs assessment process will be complex and lengthy which it is desirable to avoid (Submissions [17]-[18]).

5. The Plaintiff has provided the Court with sufficient evidence to provide the Court with confidence that the gross sum costs proposed are appropriate (Submissions [19]).

6. The making of a gross sum fixed costs order is consistent with the just, cheap and quick resolution of the dispute as to costs (Submissions [20]).

Defendant

24. As noted the Defendant appeared in person on the costs issue and did not provide any written materials.

25. Although making quite general statements the Defendant did appear to oppose an order for indemnity costs. He asserted he never entered into the original proceedings “willy-nilly or knowing that I was going to fail or lose” (T4/50). The Defendant alleged his legal team had failed him in preparing for the hearing (T6/34-40).

26. The Defendant took issue with the fee for the expert witness Dr Nadeem Bhanji amounting to almost $50,000 and fees for the video link evidence that amounted to (including court filing fees) approximately $16,000 (T5/16-21; T6/2-12).

27. The Defendant however did not oppose costs being made on a lump sum or fixed basis and acknowledged he did not wish to add extra costs and time in having an independent costs assessment (T5/10-14; T5/50-T6/2). He said he was happy for the Court to “take a broad brush” approach in the assessment of costs (T6/42).

Legal principles

Indemnity Costs

28. The Court has jurisdiction to order that costs be awarded on an indemnity basis pursuant to section 98(1)(c) of the Civil Procedure Act 2005 (NSW).

29. Costs usually follow the event unless the Court determines that some other order should be made: Uniform Civil Procedure Rules 2005 (NSW) r 42.1. Costs are to be assessed on the ordinary basis, unless the Court orders otherwise: Uniform Civil Procedure Rules 2005 (NSW) r 42.2.

30. The Court has a wide discretion in relation to an award of costs: Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11 at [22] (Gaudron and Gummow JJ).

31. An award for indemnity costs may be made in a variety of circumstances. Usually the applicant for such an order has to identify some relevant delinquency on the part of an unsuccessful party such as unreasonably pursuing or defending proceedings, maintaining them for some ulterior purpose or some wilful disregard of known facts or the clearly established law, as examples: Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 at 401 (Woodward J); [1988] FCA 202; Cultus Petroleum v OMV Australia [1999] NSWSC 435 at [15] (Santow J); Seller v Jones [2014] NSWCA 19 at [58] (McColl JA).

Calderbank offers

32. The principles concerning an award of indemnity costs where a final judgment is no more favourable than a previous settlement offer include a consideration of whether there was a genuine offer of compromise and whether it was unreasonable for the offeree not to accept it: Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344 at [8] (Basten JA).

33. In determining whether it was unreasonable for the offeree to accept it or not, there are a number of relevant factors that the Court may consider (Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344 at [12] (Basten JA):

1. The stage of the proceeding at which the offer was received;

2. The time allowed to the offeree to consider the offer;

3. The extent of the compromise offered;

4. The offeree’s prospects of success, assessed as at the date of the offer;

5. The clarity with which the terms of the offer were expressed; and

6. Whether the offer foreshadowed an application for indemnity costs in the event of the offeree’s rejecting it.

Lump Sum Costs Order

34. A Court may order payment of costs in a specified lump sum instead of assessed costs pursuant to section 98(4)(c) of the Civil Procedure Act 2005 (NSW). Again the discretion is wide and it may be made whenever the circumstances warrant it: Harrison v Schipp (2002) 54 NSWLR 738; [2002] NSWCA 213 at [21] (Giles JA).

35. Beazley JA (as her Honour then was) in Hamod v The State of New South Wales [2011] NSWCA 375, commented that an important reason in any particular case why the discretion in section 98(4) may be exercised is where the assessment of costs would be protracted and expensive (at [813]). A further fact to be taken into account is if it appears that a party obliged to pay the costs would not be able to meet the liability of the order likely to result from the assessment (at [813]).

36. The length and/or complexity of a case are also factors (at [817]).

37. Beazley JA also pointed out the costs ordered should be based on an informed assessment of the actual costs having regard to the information before the Court. The approach to be taken in arriving at the estimate must be logical, fair and reasonable. The exercise will necessarily be impressionistic (at [820]).

38. Importantly finality to the litigation is essential in everyone’s interest including the Court. In many cases that factor alone will weigh heavily on whether a Court should exercise a discretion to order a lump sum assessment. If it assesses a lump sum the Court has routinely applied a discount to the lump sum figure so as to allow for contingencies and this can typically be in a range of a discount of 10-30%: Hamodv The State of New South Wales [2011] NSWCA 375 at [820]; Ann Ross v John William Padget [2016] NSWSC 1851 at [16] and [21].

Consideration

39. In my view it is appropriate that the entirety of the original proceedings including the caveat extension application should be paid on an indemnity basis.

40. I am satisfied that the Offer made by the Plaintiff on 14 October 2016, although made early in the proceedings, was a genuine offer of compromise. It was left open for a reasonable period, was expressed in clear terms and offered a generous compromise that if accepted it would have left the Defendant in a significantly better position than the Defendant is now in. In these circumstances I am of the view it was unreasonable for the Defendant not to have accepted the Offer at the time of its making. The case against him was powerful and he must have appreciated what he had done was quite unconscionable and difficult if not impossible to defend given his mother’s mental state. The Defendant in an entirely misconceived way saw the litigation as some struggle with his brothers and in my view never grappled with the reality of the issues in dispute.

41. The Defendant did not propose an alternative expert medical witness and required Dr Bhanji for cross-examination. In the original proceedings no objection was taken to this cross-examination being made via video link.

42. I am therefore not satisfied there was a practical alternative to the report given by Dr Bhanji or the video link evidence.

43. I acknowledge the Defendant did not oppose a lump sum or fixed basis and in light of the Plaintiff’s submissions including the apparent impecuniosity of the Defendant, the benefits of certainty, and the detailed evidence provided by Ms Henderson in her affidavit of 11 May 2018, I am satisfied that the costs of the proceedings should be assessed on a lump sum or fixed basis.

44. As the assessment in the lump sum context is a global assessment albeit here with the benefit of a comprehensive and thorough account from Ms Henderson, Courts have nonetheless in such circumstances applied a discount. There is no particular formula to be applied but it may be said that in general terms a discount of somewhere around 10 to 30% is frequently applied on an impressionistic basis to allow for contingencies and in recognition of the very nature of the assessment: Hamod v The State of New South Wales [2011] NSWCA 375 at [820].

45. I have reviewed the invoices and supporting documentation attached to Ms Henderson’s 11 May 2018 affidavit. As one would expect of an experienced practitioner there is considerable detail provided as to the activities undertaken and time allotted giving rise to the Plaintiff’s costs. I am satisfied those activities were clearly necessary given the complexity of the case including the Plaintiff’s cognitive impairment, the witnesses living in country New South Wales and the number of overseas participants.

46. I note the Defendant’s concern at the appropriateness of the fees of the expert Dr Nadeem Bhanji and the amount of money spent on video link evidence. These fees represent substantial amounts of money. However I am not satisfied there is any objective tenable challenge that was provided by the Defendant to the unreasonableness of either fee. Dr Bhanji was an overseas expert who being a resident of Canada was capable of meeting in person with Mrs Fisher-Pollard who also resides in Canada.

47. In the case of Dr Bhanji his fee of $49,479.88 included a review of medical records, capacity assessment and IME, communications with lawyers, expert opinion and physician location (Exhibit FH2 340). Dr Bhanji’s fees did not solely concern the writing of a report but included numerous communications with solicitors for the Plaintiff. As evident in the billing summaries provided by Ms Henderson in Exhibit FH2 at Tab 7 there are at least 40 email references and at least 5 phone conference references provided indicating a number of communications between herself and Dr Bhanji.

48. In the case of the video link fees it does not appear the fee of $16,187.19 for court filing fees and costs of video link evidence represents exclusively the amount for the video link for Dr Bhanji’s evidence in court. For example in Exhibit FH2 at page 338 the Tax Invoice of Schweizer Kobras solicitors for the Plaintiff of 10 May 2018 lists as a disbursement $2,203 “Fees for video link for Dr Nadeem Bhanji 12.3.18”. There are also a number of filing fees clearly identified as disbursements in the tax invoices provided by Ms Henderson in Exhibit FH2 at Tab 7.

49. In my view as I have indicated previously there should be an award of indemnity costs. In addition to taking a “broad brush” approach if it assesses a lump sum the Court has routinely applied a discount to the lump sum figure so as to allow for contingencies and this can typically be in a range of a discount of 10-30%. In my assessment I should apply a discount of 20% to the costs claimed to allow for contingencies.

50. I would order therefore the Defendant pay the costs assessed on an indemnity basis, and in particular the amount of $419,099.67 less 20% and I would invite the parties to prepare short minutes of order to reflect these reasons as soon as is practicable.

Decision last updated: 06 June 2018