Ghosh v Miller (No 2)

[2016] NSWSC 713

Supreme Court

New South Wales

Medium Neutral Citation:	Ghosh v Miller (No 2) [2016] NSWSC 713
Hearing dates:	27 May 2016
Decision date:	03 June 2016
Before:	Fullerton J
Decision:	The plaintiff is to pay the defendant’s costs
Catchwords:	COSTS - gross sum costs order – assessed costs
Legislation Cited:	Civil Procedure Act 2005 (NSW), s 98(4)(c)
Cases Cited:	Ghosh v Miller [2016] NSWSC 430
Category:	Principal judgment
Parties:	Ratna Ghosh (Plaintiff) Rodney Miller (Defendant)
Representation:	Counsel: P Macarounas (Plaintiff) M Maconachie (Defendant)   Solicitors: In person (Plaintiff) Higgins & Dix (Defendant)
File Number(s):	2014/333115
Publication restriction:	Nil

Judgment

1. HER HONOUR: On 14 April 2016, I dismissed the plaintiff’s summons and directed that the parties file, serve and exchange submissions on the question of costs. Mr Maconachie, who appeared for the defendant on the hearing of the summons, foreshadowed that in the event the summons was dismissed, he was instructed to make application for a special costs order pursuant to s 98(4)(c) of the Civil Procedure Act 2005 (NSW), being a gross sum costs order on an indemnity basis.

2. Mr Maconachie read an affidavit of Anthony Patrick Maher, his instructing solicitor, of 7 April 2016 in support of that application. Mr Maher annexed a large number of documents, including the costs agreement entered into by the defendant with Mr Maher’s firm, updated from time to time as the proceedings progressed. It also included his tax invoice extending over a number of folio pages in the amount $78,926.39, including counsel’s fees in the amount of $31,573.33. Counsel’s costs agreement was also annexed, as was counsel’s tax invoice.

3. On the plaintiff’s application, I adjourned the hearing of the costs application and directed the parties to file and serve submissions.

4. At the adjourned hearing on 27 May 2016, the defendant read a further affidavit from his solicitor where costs were sought in a further amount of $7,109.09, inclusive of counsel’s costs of $1,991.67, representing his further costs incurred from the date of judgment.

5. Mr Macarounas of counsel appeared for the plaintiff on 14 April 2016 and on 27 May 2016.

6. On the latter occasion, Mr Macarounas relied upon written submissions furnished by the plaintiff by email to my Associate dated 27 May 2016.

7. The plaintiff’s submitted position was, in short, and ignoring the hyperbole, that there is unfairness in the defendant’s application to have costs awarded in a gross sum as it deprives her of the opportunity to seek advice from a costs consultant and to rely on that advice for the purposes of a costs assessment. In particular, she complains that she is deprived of the opportunity to formulate any challenge to Mr Maher’s bill of costs and/or the fees charged by counsel. She challenges the quantification of costs in the amount of $78,926.39 as “grossly inflated”. She does not seek to be heard on the question whether the defendant is entitled to a costs order in his favour, but resists the making of a specified gross sum costs order both at all and in the amount claimed.

8. At the hearing of the application, I indicated to counsel that in my view, having considered the evidence filed in support of the application in excess of 130 pages, that it seemed to me that it called for an examination of the material commensurate with the detailed examination required in a formal costs assessment, and that the authorities are clear that defeats the purpose of making a gross sum costs order. The authorities also make clear that what is called for is a “broad brush approach” to the exercise of determining the amount that might be considered as an appropriate amount to be ordered as a gross sum, but that approach is only appropriate where the court has sufficient confidence that a reliable assessment can be made of the claimant’s entitlement to costs on the available evidence, taking into account the nature of the proceedings and the way they have been conducted by the parties.

9. I made it clear to the parties that I did not consider that the quantification of costs in an amount exceeding $80,000 could be justified, despite the application including costs assessed on an indemnity basis and despite the plaintiff’s conduct of the proceedings which, I accept, have consistently been in ignorance of or defiance of her obligations as a litigant under s 56 of the Civil Procedure Act.

10. This is not the occasion to dilate further those matters. Suffice to say that while there is much force in Mr Maconachie’s submission that the plaintiff was obstinate and recalcitrant as a litigant through the course of the many interlocutory stages through which the proceedings passed before the summons was actually listed for hearing, which necessitated that he be represented as the defendant to that summons and the respondent to repeated applications of various kinds by the plaintiff, and while he was, of course, entitled to have counsel appear, nonetheless the quantum of costs thereby incurred is not immediately justifiable.

11. It is reasonable to predict that there will be a delay were the matter to be referred for assessment and, given that the dispute to which the issues raised on the summons concerns a costs assessment, there is also a risk that the costs assessment process will further protract the dispute between the parties.

12. What cannot be overlooked, however, is that the appeal brought by way of summons concerns the decision of a magistrate that the costs be paid by the plaintiff in the amount of $5,496.94. As my reasons for judgment reflect (Ghosh v Miller [2016] NSWSC 430), there was no merit in the proceedings brought by summons following the magistrate’s refusal of an application that the costs assessment be reviewed.

13. Whilst I was satisfied that the appeal had no prospects of success and that the plaintiff conducted the proceedings on her own behalf contrary to her obligations as a litigant, there remains a need for there to be reasonable proportionally between the costs sought and costs incurred having regard to the nature of the case if a gross sum costs order is to be made.

14. In the course of the hearing, I drew my concerns to the attention of counsel and invited them to take further instructions, having indicated in plain terms to Mr Maconachie that a gross sum costs order in the amount he sought was an amount I would not readily be persuaded should be awarded.

15. By refusing the application, the default position is that I would order costs in the defendant’s favour, leaving the defendant to seek to recover the full amount on assessment.

16. On receipt of further instructions, and with Mr Macarounas receiving further instructions from his client by telephone, Mr Maconachie invited me, in undertaking the broad brush approach required as a matter of principle, to discount the amount sought by 25 per cent. I am unable to see, even with that compromise on the defendant’s part, that I can avoid a critical examination of Mr Maher’s tax invoice, inclusive of counsel’s fees and some interrogation of the fees of junior counsel if I am to be satisfied, to an appropriate degree of confidence, that costs quantified on that basis is appropriate in all the circumstances.

17. Despite there being much to commend the making of a gross sum costs order in this case, given the history of the proceedings, and despite what I acknowledge is the breadth of the discretion to make a costs order in a fixed sum, I decline to exercise the discretion under s 98(4) of the Civil Procedure Act in this case.

18. Accordingly, the order I make in final disposition of the proceedings is that the plaintiff pay the defendant’s costs.

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