Green v Legal Profession Admission Board (No 2)

[2021] NSWSC 112

Supreme Court

New South Wales

Medium Neutral Citation:

Green v Legal Profession Admission Board (No 2) [2021] NSWSC 112

Hearing dates:

On the papers

Decision date:

19 February 2021

Jurisdiction:

Common Law

Before:

Adamson J

Decision:

(1)   Order the plaintiff to pay the defendant’s costs of the proceedings.

(2) In respect of the costs payable pursuant to order (1) above, order the plaintiff, pursuant to s 98(4)(c) of the Civil Procedure Act 2005 (NSW), to pay to the defendant the amount of $25,000 within 28 days of the date of this order.

Catchwords:

COSTS — Party/Party — General rule that costs follow the event — Application of the rule and discretion

COSTS – fixed in gross sum – appropriateness of such an order – discounts applied to legal costs – conduct of plaintiff in increasing costs of proceedings

Legislation Cited:

Civil Procedure Act 2005 (NSW), s 98

Judiciary Act 1903 (Cth), s 78B

Legal Profession Uniform Law (NSW), ss 16-20, 28

Supreme Court Act 1970 (NSW), s 69

Uniform Civil Procedure Rules 2005 (NSW), r 42.1

Cases Cited:

Bechara (t/as Bechara and Co) v Bates [2016] NSWCA 294

Green v Legal Profession Admission Board [2020] NSWSC 1655

Category:

Costs

Parties:

Andrew John Green (Plaintiff)
Legal Profession Admission Board (Defendant)

Representation:

Counsel:
Self-represented (Plaintiff)
K Pham (Defendant)

Solicitors:
Not applicable (Plaintiff)
Crown Solicitor’s Office (Defendant)

File Number(s):

2020/136972

Judgment

Introduction

1. On 20 November 2020, I made orders dismissing the plaintiff’s appeal and otherwise dismissing the amended summons. I reserved the question of costs. I published my reasons: Green v Legal Profession Admission Board [2020] NSWSC 1655 (the principal judgment). To avoid unnecessary repetition, these reasons are to be read with the principal judgment.

2. By notice of motion filed on 22 December 2020, the sole remaining defendant, the Legal Profession Admission Board (the Board), sought an order for costs in its favour fixed in the gross sum of $25,000 pursuant to s 98(4)(c) of the Civil Procedure Act 2005 (NSW). The Board relied on the affidavit of Sophie Maltabarow, affirmed 22 December 2020, who confirmed that the Board did not seek an order for the costs of its application for costs.

Procedural history of the matter

3. The procedural history of the matter is summarised below and is taken from the Court record and from the unchallenged affidavit of Ms Maltabarow.

4. The plaintiff commenced the proceedings by summons filed on 7 May 2020. The summons named the New South Wales Bar Association as the first defendant and the Board as the second defendant. At the first return date, the plaintiff indicated that he proposed to file an amended summons. Directions were made that he do so by 15 June 2020. The plaintiff failed to comply with the direction. The matter was stood over for further directions on 25 June 2020. When the matter came before the Registrar on that day, the following directions were made:

“1.    Plaintiff has leave to file the Amended Summons by 4pm on 29 June 2020.

2.    Any Amended Summons would need to elect the nature of the proceedings and which proceedings would proceed first if relevant.

3.    Matter stood over for further Directions Hearing on 2 July 2020.”

5. The plaintiff ultimately filed the amended summons on 1 July 2020. The directions hearing on 2 July 2020 was stood over for a day. On 3 July 2020, directions were made for the filing and service of evidence, submissions and a court book. The matter was listed for hearing on 18 November 2020.

6. By notice of motion filed on 10 September 2020, the first defendant sought an order that it be removed as a party as well as an order for indemnity costs. Directions for the conduct of the motion were made on 16 September 2020. On 17 September 2020, the first defendant’s motion was listed for hearing on 22 October 2020. At a further directions hearing on 12 October 2020, the parties were directed to file and serve written submissions in response to the amended summons.

7. On 22 October 2020, Wilson J heard the notice of motion and ordered that the first defendant be removed as a party to the proceedings. Her Honour ordered the plaintiff to pay the first defendant’s costs of the proceedings on the ordinary basis up to but not including 3 June 2020 and on an indemnity basis on and from 3 June 2020.

8. The plaintiff’s amended summons purported to raise constitutional issues, thereby requiring a notice under s 78B of the Judiciary Act 1903 (Cth) to be filed and served on the Attorneys-General of the Commonwealth, States and Territories.

9. On 11 November 2020, the Board filed, on behalf of the plaintiff, such a notice and set out the constitutional issues raised by the plaintiff. The Board arranged for the notice to be served, as required by s 78B.

10. I heard the amended summons on 18 November 2020, following agreement between the parties that the issues raised by the s 78B notice could be deferred pending delivery of my reasons on the substantive matters. As referred to above, I published the principal judgment on 20 November 2020.

11. The Board’s solicitors, the Crown Solicitor’s Office, wrote to the plaintiff on 27 November 2020 and again on 4 December 2020 informing him of its position and inquiring as to his position on costs. The plaintiff failed to respond. Nor did he respond to a letter from the Crown Solicitor’s Office dated 16 December 2020, informing him of the Board’s intention to seek a gross sum costs order. On 27 January 2021, I made directions in chambers requiring the plaintiff to file any submissions and evidence on the question of costs by 11 February 2021 and the Board to file any submissions and evidence in response by 25 February 2021. I also directed that the question of costs be determined on the papers but granted the parties liberty to apply to relist the matter before me.

12. The plaintiff has filed neither evidence nor submissions in support of any application he might choose to make for costs or in response to the Board’s application for costs. My Associate emailed the plaintiff (and copied the Crown Solicitor’s Office into the email) on 12 February 2021 but received no response. She emailed the parties on 17 February 2021 to inform them that the matter would be determined on the basis of what had been filed to date. I infer from the plaintiff’s lack of response and non-compliance with directions since the judgment was delivered, that he has decided no longer to engage with the proceedings.

Consideration

13. Ms Maltabarow’s unchallenged evidence is that the Board has incurred $48,382 in costs, which comprised $32,102 for the Crown Solicitor’s Office’s professional fees (which did not include GST because of an arrangement between the Crown Solicitor’s Office and the Board) and $16,280 in counsel’s fees.

14. In calculating the Board’s claim for costs against the plaintiff, Ms Maltabarow deposed that she deducted $4,815 from the Crown Solicitor’s fees and $3,440 from counsel’s fees, which were amounts that related to the proper construction of ss 16-20 of the Legal Profession Uniform Law (NSW) (Uniform Law). She did so on the basis that the plaintiff did not raise the issue which was, accordingly, not in dispute in the proceedings. She also discounted the balance of the Crown Solicitor’s fees ($27,287) by 20% to arrive at a figure of $21,830. Ms Maltabarow did not discount the balance of counsel’s fees, which, accordingly, resulted in an amount of $12,840. The total of the two figures is $34,670. Ms Maltabarow discounted this amount by a further 28% to arrive at the claim for fixed costs of $25,000.

15. Ms Maltabarow deposed as to the hourly charge-out rates for paralegals, Senior/Principal Solicitors and the Assistant Crown Solicitor for the period up to 30 June 2020 and thereafter. The hourly rates for paralegals are $150 up to 30 June 2020 and $155 thereafter; for Senior/Principal Solicitors are $384 up to 30 June 2020 and $397 thereafter; and for the Assistant Crown Solicitor are $480 up to 30 June 2020 and $496 thereafter. Counsel was engaged at the rate of $160 per hour up to a maximum of $1,200 per day (equivalent to 7½ hours).

16. The hourly rates charged by the Crown Solicitor’s Office for its own staff would appear to be reasonable. The hourly rates at which the Crown Solicitor’s Office engages counsel are significantly below market rate and do not adequately represent the value of services provided by counsel, particularly counsel as skilled as Ms Pham. This conclusion is fortified by the relative parity between the hourly rate paid to counsel and the hourly rate for a paralegal. I assume that this was the reason why Ms Pham’s fees were not discounted for the purposes of the application, except for the deduction referred to above which was made to take account of matters not in dispute.

17. I accept Ms Maltabarow’s evidence that the conduct of the plaintiff substantially increased the costs of the proceedings. The number of directions hearings referred to above was occasioned by the plaintiff’s delay in clarifying the nature of the relief he sought and in filing the amended summons, which was foreshadowed at the first return date. Further, the plaintiff persisted in a claim for relief pursuant to s 69 of the Supreme Court Act 1970 (NSW), although a claim for such relief was otiose, having regard to the nature of an appeal (being a de novo appeal) under s 28 of the Uniform Law: see the principal judgment at [84]. The claim for damages was not maintainable: see the principal judgment at [110]-[116].

18. In addition, the Board attended to filing and serving the notice required by s 78B of the Judiciary Act, as the plaintiff, being self-represented, was insufficiently familiar with the requirements of the section to do so effectively. I infer that the Board did so in order to advance the administration of justice and fulfil its role as a model litigant. This work was necessary, having regard to the way the plaintiff put his case, although there was, as I found in [78] of the principal judgment, no real or substantial constitutional point.

19. It was the plaintiff’s responsibility to prepare the court books. However, it is not uncommon, where one party is impecunious or self-represented, for the other party to prepare court books in order to advance the hearing and assist the court. In the present case the Board incurred the costs of preparing court books for the substantive hearing in order that the matter could be heard efficiently within the allocated time of one day.

20. The Board has been wholly successful in the proceedings. It is entitled to an order that the plaintiff pay its costs of the proceedings in accordance with the general rule that costs follow the event: Uniform Civil Procedure Rules 2005 (NSW), r 42.1.

21. The Court of Appeal in Bechara (t/as Bechara and Co) v Bates [2016] NSWCA 294, summarised the relevant principles applicable to the making of a gross sum costs order pursuant to s 98(4)(c) of the Civil Procedure Act as follows:

“[12]    The power to award a lump-sum should only be exercised when the Court considers that it can do so fairly between the parties and where an appropriate sum can be determined from the available materials: Harrison v Schipp (2002) 54 NSWLR 738; [2002] NSWCA 213 at 742–723 [21]–[22]; Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119 at 123.

[13]    The power may also be exercised where a party’s conduct has unnecessarily contributed to the costs of the proceedings, especially where the costs incurred have been disproportionate to the result of the proceedings: Hamod v New South Wales [2011] NSWCA 375 at [818] per Beazley JA (Giles and Whealy JJA agreeing).

[14]    A ‘broad brush’ approach is appropriate. To require the same or similar level of detail as in a formal costs assessment would defeat the purpose of the lump sum order: AuspineLtd v Australian Newsprint Mills Ltd (1999) 93 FCR 1; [1999] FCA 673 at 5 [16]; Pensonv Titan National Pty Ltd (No 3) [2015] NSWCA 121 at [7].

[15]    The courts have typically applied a discount in assessing costs on a gross sum basis: Hamod v New South Wales at [814].

...

[18]    The Court is satisfied that the total costs of this litigation will become even more disproportionate if the costs are referred for assessment and a lump-sum costs order is not made. The reasoning in Hamod v New South Wales at [816]–[817] is apposite.”

22. The allowances and discounts made by the Crown Solicitor’s Office with respect to its fees and the level of detail provided in Ms Maltabarow’s affidavit are sufficient to indicate that the sum claimed is fair to the plaintiff. For the reasons given above, I am satisfied that the plaintiff’s conduct has unnecessarily and substantially added to the costs of the proceedings. I am also concerned that, if an order under s 98(4)(c) is not made, the costs of the assessment will exacerbate the disproportionality between the costs of the proceedings and the issues in dispute.

23. For the reasons set out above, I am persuaded that the Board’s application for an order under s 98(4)(c) of the Civil Procedure Act ought be granted.

Orders

24. For the reasons given above, I make the following orders:

1. Order the plaintiff to pay the defendant’s costs of the proceedings.

2. In respect of the costs payable pursuant to order (1) above, order the plaintiff, pursuant to s 98(4)(c) of the Civil Procedure Act 2005 (NSW), to pay to the defendant the amount of $25,000 within 28 days of the date of this order.

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Decision last updated: 19 February 2021