Franjo Strumfin by his Litigation Guardian Peter Chodat v Anka Strumfin

[2021] NSWSC 436

Supreme Court

New South Wales

Medium Neutral Citation:

Franjo Strumfin by his Litigation Guardian Peter Chodat v Anka Strumfin [2021] NSWSC 436

Hearing dates:

On the papers

Decision date:

28 April 2021

Jurisdiction:

Equity

Before:

Robb J

Decision:

No order made at this stage

Catchwords:

COSTS — Indemnity costs order already made — Application for a gross sum costs order — Insufficient information provided for Court to assess gross sum — Further submissions to be provided

Cases Cited:

Beach Petroleum NL v Johnson (1995) 135 ALR 160

Franjo Strumfin by his Litigation Guardian Peter Chodat v Anka Strumfin [2021] NSWSC 94

Harvey v Barton (No 4) [2015] NSWSC 809

Category:

Costs

Parties:

Franjo Strumfin by his Litigation Guardian Peter Chodat (plaintiff)
Anka Strumfin (first defendant)
Elizabeth Strumfin (second defendant)

Representation:

Counsel: K M Francis (plaintiff)
Self-represented (second defendant)

Solicitors: Kovacevic Lawyers (plaintiff)

File Number(s):

2020 / 324369

Judgment

1. The primary judgment in this matter was delivered on 16 February 2021 in respect of a hearing in the Duty List that took place on 10 December 2020: see Franjo Strumfin by his Litigation Guardian Peter Chodat v Anka Strumfin [2021] NSWSC 94.

2. The effect of that judgment was to authorise the solicitor for the plaintiff to make certain payments to the plaintiff out of money received by the solicitor from the sale of a property at Wollongong. The objective of the orders was to facilitate certain orders made by the Federal Circuit Court on 14 August 2020.

3. For reasons given in the primary judgment, I made an order that the second defendant pay the plaintiff's costs of the proceedings on the indemnity basis.

4. I granted leave to the plaintiff to apply for an order for his costs to be paid on a gross sum basis.

5. The Court has since received written submissions from the plaintiff dated 2 March 2020 and from the second defendant, appearing in person, dated 16 March 2021.

6. The thrust of the second defendant's submissions was to argue that no costs order should be made against her. That submission is inconsistent with the order for costs that I have already made in these proceedings. I add that I do not understand the reason given by the second defendant as to why no costs order should be made against her. So far as I can tell, this submission was not made at the hearing that led to the delivery of the primary judgment.

7. The plaintiff set out reasons why, in accordance with the Court's practice, it is appropriate for the plaintiff's indemnity costs to be calculated on a gross sum basis in pars 11 to 19 of his written submissions.

8. The strongest argument in favour of the plaintiff's costs being determined on a gross sum basis is that the second defendant has shown a pattern of disregard for the orders made by the Federal Circuit Court in connection with her attempts to frustrate the plaintiff receiving the money ordered to be paid to him out of the sale proceeds of the Wollongong property. There is in my view a high probability that the second defendant will not participate in any assessment process of the plaintiff's costs in a rational and cooperative manner.

9. Given that the Court is entitled to adopt a broad approach in assessing costs on a gross sum basis, having regard to the information before the Court, I consider that it would be appropriate to fix the amount of the costs payable to the plaintiff by the second defendant if I were satisfied that the determination would satisfy the requirement that it be "logical, fair and reasonable": see Beach Petroleum NL v Johnson (1995) 135 ALR 160 at 164 per von Doussa J. If the evidence were sufficient, and as the basis of the costs order is that the plaintiff be indemnified for his costs, it may have been appropriate to make a gross sum costs order without a substantial discount: Harvey v Barton (No 4) [2015] NSWSC 809 at [47]-[48] per Slattery J.

10. The evidence in support of the application consisted of tax invoices from the plaintiff's solicitors dated 24 November 2020 in the sum of $10,723.07 and 1 March 2021 in the sum of $26,460.92. The total amount is $37,183.99.

11. As I have recorded above, the proceedings were commenced in the Duty List on 13 November 2020 and heard on 10 December 2020.

12. The plaintiff's solicitor's 24 November 2020 tax invoice contains 30 entries for work done on dates before 13 November 2020. The details given for many of those line items appear on their face to relate to the settlement of the sale of the Wollongong property and the withdrawal of the caveat lodged by the plaintiff with the authority of the orders of the Federal Circuit Court. The disbursements included the solicitor's professional fees in connection with the PEXA settlement and PEXA's processing fee request, being a total of $660. I am not able to quantify the amount of the solicitor's professional costs for the period before the commencement of the proceedings that related to the settlement of the sale of the Wollongong property.

13. It is also difficult to tell from the details given in both of the plaintiff's solicitor's tax invoices whether any other line items for the period after 13 November 2020 related to work done in respect of the sale of the Wollongong property.

14. The disbursements included in the plaintiff's solicitor's second tax invoice included tax invoices from Kells dated 20 November 2020 and 26 February 2021 in the amounts of $2,104 and $520 respectively. As I understand it, the plaintiff's litigation guardian was a solicitor at Kells, so that Kells' fees relating to the litigation guardian's participation in the proceedings should be included in the costs payable by the second defendant. However, it appears that at least a number of the line items in Kells' tax invoices may relate to the conveyancing aspect of the matter.

15. The total fees charged by the plaintiff's counsel in his initial tax invoice of $11,000 do not appear to be unreasonable, although it is not clear why a charge has been made for a day set aside for appearance before the Duty Judge on 30 November 2020.

16. I accept that the separate tax invoice issued by the plaintiff's counsel for the drafting of the submissions regarding the lump sum costs order of $660 is reasonable.

17. Finally, there is a tax invoice dated 8 December 2020 issued by a different counsel for the plaintiff that claimed $825 for attendance at a call over list in this Court on 8 December 2020. I do not know how this amount relates to the plaintiff's costs of these proceedings in so far as they are the subject of the costs order made in favour of the plaintiff on 10 December 2020.

18. There may often be a difficulty where an application by a party for a gross sum costs order is supported only by the party's solicitor's tax invoices and supporting tax invoices to prove disbursements. It may not be possible for the Court to be sufficiently confident by looking only at the brief details that explain each line item that the particular cost for that line item is a proper subject to be included in the assessment of the gross sum to be payable for the party's legal costs.

19. That is the position with the present application. I would consider fixing a gross sum, but I would have to be comfortably satisfied that each line item is in fact related to the proceedings that led to the primary judgment and the application for the gross sum costs order. All work relating to the conveyancing aspect of the sale of the Wollongong property and the withdrawal of the caveat would have to be removed from the plaintiff's claim.

20. I will publish these reasons for judgment and cause them to be served on the plaintiff and the second defendant. I will give the plaintiff an opportunity to provide further evidence in support of his application within 10 days. Any further material in support of the application should be delivered to my Associate and sent to the second defendant. The second defendant will have a further 10 days in order to respond to the application.

21. Even though I made an order that the plaintiff's costs be paid on the indemnity basis, the plaintiff should bear in mind that it is usual for an applicant for a gross sum costs order to approach the application on a conservative basis. The Court must still be confident that the amount of costs claimed is proper and genuine. As, even on the indemnity basis, the claimant can expect to save costs compared to the usual assessment process, the claimant can also expect that there may be some discount that flows from the broad nature of the assessment exercise given that the objective of the application is to obtain an order for a fixed amount of costs by a process that obviates the Court being given full details of the nature of each line item in the costs claimed.

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Decision last updated: 28 April 2021