Harrison v Schipp

[2002] NSWCA 213

Reported Decision: (2002) 54 NSWLR 738

New South Wales

Court of Appeal

CITATION:	Harrison & Anor v Schipp [2002] NSWCA 213
FILE NUMBER(S):	CA 40728/98
HEARING DATE(S):	21 & 24 June 2002
JUDGMENT DATE:	3 July 2002
PARTIES :	D J Schipp - Claimant G A Harrison - Opponent
JUDGMENT OF:	Giles JA

COUNSEL:	M J Slattery QC & J M Hennesy - Claimant G Lucarelli - Opponent
SOLICITORS:	Dibbs Barker Gosling - Claimant Blake Dawson Waldron - Opponent
CATCHWORDS:	COSTS - order for costs of appeal - beneficiary of order seeks further order for payment of a fixed sum for counsels' fees instead of assessed costs - discussion of power to make further order - whether power should be exercised. D.
CASES CITED:	Beach Petroleum NL v Johnson (1995) 57 FCR 119; Hadid v Lenfest Communications Inc [2000] FCA 628; Leary v Leary (1987) 1 WLR 72; Sparnon v Apand Pty Ltd (von Doussa J, 4 March 1998, unreported); Union des Assurances de Paris IARD v Petersen (3 March 1998, Master Malpass, unreported); Wentworth v Wentworth (CA, 21 February 1996, Clarke JA, unreported).
DECISION:	(1) In respect of the costs payable pursuant to order 5 of the orders made on 20 February 2001 the first appellant pay to the respondent $63,998 for counsel's fees instead of the assessed costs for counsels' fees. (2) That the first appellant pay the respondent's costs of the notice of motion filed on 10 May 2002.

CA 40728/98

GILES JA

Wednesday 3 July 2002

HARRISON & ANOR v SCHIPP

Judgment

1 GILES JA: This is an application for orders for payment of a fixed sum in respect of costs previously ordered to be paid and issue of a “certificate of taxation” in that sum. For the reasons which follow, in my opinion the order for payment of a fixed sum should be made, but not the order for the issue of a “certificate of taxation”.

History

2 In 1991 Mrs Delcie Schipp brought proceedings against Mr George Harrison and his company Emibarb Pty Ltd, Mr Don Cameron and his company Don Cameron Real Estate Pty Ltd, and other defendants. At a later time the proceedings were extended to include a claim by Mrs Schipp against Mr Harrison’s insurers pursuant to s 6 of the Law Reform (Miscellaneous Provisions) Act 1946. Mr Harrison and Mr Cameron cross-claimed against Mrs Schipp.

3 The proceedings were heard by Einstein J over many days in the period 26 September 1997 to 7 April 1998. Judgment was given on 9 July 1998. Two hearings and judgments on ancillary matters followed. Orders were made on 9 September 1998.

4 His Honour ordered the Harrison defendants and the Cameron defendants to pay Mrs Schipp $230,880.04 as equitable compensation and $394,526.81 interest, and to pay Mr Schipp’s costs of the proceedings on an indemnity basis. The claim against the insurers failed, and Mrs Schipp was ordered to pay the insurers’ costs of the proceedings. Mrs Schipp’s application for a Bullock order or a Sanderson order against Mr Harrison in respect of the insurers’ costs was declined. The cross-claim failed, and Mr Harrison and Mr Cameron were ordered to pay Mrs Schipp’s costs of the cross-claim on an indemnity basis.

5 The Harrison defendants and the Cameron defendants appealed, the Harrison defendants in proceedings 40728/98 and the Cameron defendants in proceedings 40761/98. Mrs Schipp cross-appealed, contingently seeking to overturn the failure of her claim against Mr Harrison’s insurers and seeking a Bullock order against Mr Harrison in respect of the insurers’ costs.

6 The appeals and the cross-appeal as to the insurers’ costs were heard by Handley and Fitzgerald JJA and myself on 15, 16, 17 and 18 May 2000 and with supplementary written submissions. The hearing of the cross-appeal as to the insurers’ liability was deferred. Judgment was given and orders were made on 20 February 2001.

7 It was ordered that the appeals be dismissed, save that the order for costs on an indemnity basis was set aside and in lieu thereof it was ordered that the Harrison defendants and the Cameron defendants pay Mrs Schipp’s costs. The cross-appeal as to the insurers’ costs was dismissed. As to the costs of the appeals and the cross-appeal, by order 5 it was ordered -

“Appellants pay 90 per cent of the respondent’s costs of the appeals and cross-appellants [sic: cross-appellant] pay the first and second cross-respondents’ costs of the cross-appeal.”

8 Mrs Schipp did not proceed with the cross-appeal as to the insurers’ liability, and at a later date the cross-appeal in that respect was dismissed with costs.

9 Mr Harrison then brought proceedings against Mrs Schipp seeking that the orders as to equitable compensation and interest and as to the cross-claim made by Einstein J on 9 September 1998, and the substituted costs order and the orders as to the costs of the appeals and cross-appeal made on 20 February 2001, be set aside. Emibarb Pty Ltd and the Cameron defendants were named as co-defendants with Mrs Schipp.

10 The proceedings were removed to the Court of Appeal pursuant to Pt 12 r 2 of the Supreme Court Rules. They were heard by Handley JA, Ipp AJA and myself on 12 March and 15 May 2002.

11 On 10 May 2002 Mrs Schipp filed a notice of motion in the appeal of the Harrison defendants in proceedings 40728/98, claiming orders -

“(1) Pursuant to Pt 52A r 6(2)(a) and (c) the First Appellant pay a gross sum representing 75% of the amount of counsels’ fees incurred by the respondent on the appeal in respect of the respondent’s costs for counsels’ fees in the appeal instead of assessed costs for counsels’ fees.

(2) That the Registry issue a Certificate of Taxation to the Respondent for the costs, and in the sum described in prayer 1 above.”

12 Mr Harrison and Emibarb Pty Ltd were named as respondents to the notice of motion. Emibarb Pty Ltd was then and is now subject to a deed of company arrangement. It did not participate, and for all that appeared was not served with the notice of motion.

13 The notice of motion was returnable before Handley JA, Ipp AJA and myself on 15 May 2002. The hearing of the notice of motion was deferred until Mr Harrison’s proceedings then being heard had been determined.

14 Judgment was given and orders were made in Mr Harrison’s proceedings on 21 June 2002. It was ordered that the proceedings be dismissed with costs.

15 With the concurrence of the parties, I then heard the notice of motion exercising the powers of the Court of Appeal pursuant to s 46 of the Supreme Court Act 1970. The hearing was by the reading of affidavits on which no deponent was cross-examined and the tender of documents, and on written submissions.

The security for costs

16 By orders made in the appeals on 19 October 1999 the Harrison defendants and the Cameron defendants were to provide security of $50,000 for Mrs Schipp’s costs of the appeals. A bank guarantee dated 19 May 2000 was provided, by cl 2 of which National Australia Bank Ltd undertook to pay $50,000 to Mrs Schipp -

“ … [u]pon the Bank receiving at its branch while this guarantee remains in force an unconditional written demand from the Beneficiary accompanied by this guarantee and a certificate signed by the Beneficiary’s solicitor, Mark Addison of Barker Gosling, certifying that George Andrew Harrison, Emibarb Pty Ltd and Donald Ross Cameron have not paid Delcie Joan Schipp the amount that they are liable to pay as her costs in proceedings CA40728 of 1998 and CA40761 of 1998 in the Supreme Court of New South Wales, Sydney Registry, Court of Appeal within 28 days of the parties reaching agreement as to the quantum of their costs or the issue of a costs certificate …”.

17 In a letter dated 9 March 2001 Mrs Schipp’s solicitors wrote to the solicitors for Mr Harrison and Emibarb Pty Ltd -

“We note the orders of the Court of Appeal on 20 February 2001 against your clients Mr Harrison & Emibarb Pty Limited.
We also note that we hold an original Bank Guarantee in the sum of $50,000 from the National Australia Bank dated 19 May 2000. A copy of the Bank Guarantee is enclosed . We draw your attention to Clause 2 thereof.
In accordance with the Bank Guarantee our respective clients must attempt to agree on the quantum of costs of the appeals prior to us making a demand upon the National Australia Bank pursuant to clause 2.
Our costs of the appeals, including junior and senior counsels’ fees, exceed $160,000. We enclose copies of memoranda of counsels’ fees from Mr Slattery QC and Mr Hennessy. These total $76,404.00. These would be claimed in full in any costs assessment.
We therefore request your client’s [consent] to the release of the Bank Guarantee in the total sum of $50,000 so that we may attend to the payment of part of these fees.”

18 The evidence appears not to include all the relevant ensuing correspondence or communications, but by a letter dated 21 November 2001 to the solicitors for Mr Harrison and Emibarb Pty Ltd Mrs Schipp’s solicitors noted that “your client [sic] has refused to agree that [Mrs Schipp] is entitled to exercise the Bank Guarantee”. In a letter to Mrs Schipp’s solicitors dated 22 November 2001 the solicitors for Mr Harrison and Emibarb Pty Ltd said -

“In Court of Appeal proceedings number 40728 of 1998 Mr Harrison and Emibarb provided security for costs of $50,000 in the form of a bank guarantee. They were subsequently ordered to pay Mrs Schipp’s costs of the appeal.
Mr Harrison has refused to consent to the $50,000 being released to Mrs Schipp. That is because until she has had her costs to be assessed under Division 6 of the Legal Profession Act , those costs remain unquantified and there is no amount that is payable. The costs order was made on 20 February 2001, which is now nine months ago. Mrs Schipp has had ample time since then to have her costs assessed, but she has not done so.
In any event, in the fresh proceedings Mr Harrison seeks an order that the costs order be set aside.”

19 With the dismissal of the “fresh proceedings” on 21 June 2002, there was no outstanding challenge to the costs order in respect of which Mrs Schipp claims the orders in the notice of motion. On behalf of Mrs Schipp, it was made plain that she wished to have the orders so that she could call for payment under the bank guarantee.

The Part 52A r 6(2) power

20 Part 52A r 6 of the Rules provides -

“(6)(1) Subject to this Part, where, by or under these rules, or any order of the Court, costs are to be paid to any person, that person shall be entitled to assessed costs.
(2) Where the Court orders that costs be paid to any person, the Court may, at any time prior to the costs being referred to the registrar for assessment, further order that, as to the whole or any part (specified in the order) of the costs, instead of assessed costs, that person shall be entitled to -
(a) a proportion specified in the order of the assessed costs;

(b) the assessed costs from or up to a stage of the proceedings specified in the order; or

(c) a gross sum specified in the order instead of the assessed costs.”

21 The power conferred by r 6(2) is not confined, and may be exercised whenever the circumstances warrant its exercise. It may appropriately be exercised where the assessment of costs would be protracted and expensive, and in particular if it appears that the party obliged to pay the costs would not be able to meet a liability of the order likely to result from the assessment (Leary v Leary (1987) 1 WLR 72; Sparnon v Apand Pty Ltd (von Doussa J, 4 March 1998, unreported); Beach Petroleum NL v Johnson (1995) 57 FCR 119; Hadid v Lenfest Communications Inc [2000] FCA 628).

22 Of its nature, specification of a gross sum is not the result of a process of taxation or assessment of costs. As was said in Beach Petroleum NL v Johnson at 124, the gross sum “can only be fixed broadly having regard to the information before the Court”; in Hadid v Lenfest Communications Inc at [35] it was said that the evidence enabled fixing a gross sum “only if I apply a much broader brush than would be applied on taxation, but that … is what the rule contemplates”. The approach taken to estimate costs must be logical, fair and reasonable (Beach Petroleum NL v Johnson at 123; Hadid v Lenfest Communications Inc at [27]). The power should only be exercised when the Court considers that it can do so fairly between the parties, and that includes sufficient confidence in arriving at an appropriate sum on the materials available (Wentworth v Wentworth (CA, 21 February 1996, unreported, per Clarke JA).

A situation for exercise of the Part 52A r 6(2) power

23 Mrs Schipp served a bankruptcy notice on Mr Harrison on 24 June 2001. The time for compliance with the bankruptcy notice was extended to 18 September 2001. Mr Harrison failed to comply with it. On 23 October 2001 Mrs Schipp filed a creditor’s petition applying for a sequestration order against the estate of Mr Harrison, alleging that he owed her $687,662.23 pursuant to the judgment in the proceedings heard by Einstein J and had committed an act of bankruptcy in not complying with the bankruptcy notice.

24 Mr Harrison’s initial notice of intention to oppose the creditor’s petition included the ground, “That he is able to pay his debts”. By a letter to Mrs Schipp’s solicitors dated 19 November 2001, his solicitors stated that the ground “is not pressed”.

25 Although I do not think there was evidence to that effect, it was common ground that the hearing of the creditor’s petition was deferred until the result of Mr Harrison’s proceedings was known. There was no evidence of any further or anticipated action in relation to the creditor’s petition following the dismissal of those proceedings on 21 June 2002.

26 Exhibit B before me is a letter from Mr Harrison’s accountants relating to his financial position. In the bankruptcy proceedings it was ordered that an affidavit containing the same letter remain confidential to the parties’ lawyers, and by consent I made a like order in this application. I therefore do not disclose the contents of the letter.

27 Mrs Schipp submitted that Mr Harrison “has little or no prospect of being [able] to meet either the full amount or substantially the full amount of the judgment entered against him by Justice Einstein or the costs of the original proceedings or costs of the appeal proceedings”.

28 I find that Mr Harrison has no prospect of paying from his own resources the amount ordered to be paid by Einstein J or the costs of the original proceedings. If the costs he must pay pursuant to the order as to the costs of the appeals made on 20 February 2001 are of the order of $160,000, the figure stated in the letter of 9 March 2001, I find that he has little prospect of paying that sum from his own resources. The combined amounts would be wholly out of the question. There was no evidence suggesting payment otherwise than from Mr Harrison’s own resources. If Mr Harrison were to be made bankrupt, Mrs Schipp would have substantial under-recovery.

29 It was not in dispute, as I understand it, that assessment of the costs payable pursuant to the order as to the costs of the appeals made on 20 February 2001 would be protracted and expensive. I would so find in any event.

30 If an assessment of costs were made, the expense incurred by Mrs Schipp would be added to her under-recovery. This is a situation appropriate for the exercise of the Pt 52A r 6(2) power. Mrs Schipp should not have to spend a lot more money which she will not recover in order to obtain, to the extent to which she will have recovery, the costs payable pursuant to the order as to the costs of the appeals made on 20 February 2001.

31 There was no evidence of the financial position of Emibarb Pty Ltd, Mr Cameron or Don Cameron Real Estate Pty Ltd. Mr Harrison did not submit that they or one of them might be good for the judgment sum and all costs. It seemed to be assumed that they would not, given the amounts an understandable assumption. It was not suggested that Mrs Schipp would spend the money on an assessment of costs in any event, in order to recover the costs from them or one of them.

32 Mr Harrison has an order against Mrs Schipp for the costs of the cross-appeal, which should be understood as the cross-appeal as to the insurers’ costs. Mr Harrison did not submit that his entitlement to costs bore upon the exercise of the Pt 52A r 6(2) power. No order was made that the respective amounts of costs be set off against each other. Mr Harrison’s entitlement to costs would have little impact on his total indebtedness to Mrs Schipp.

33 In my opinion, if on the broad-brush approach an amount of the order of 75 per cent of counsels’ fees is a fair and reasonable estimation of the costs payable in respect of counsels’ fees, the power conferred by Pt 52A r 6(2)(c) should be exercised.

The amount payable in respect of counsels’ fees

34 The evidence included copies of counsels’ memoranda of fees referred to in the letter of 9 March 2001 as totalling $76,404, plus a late-tendered memorandum of fees for $8,926 which I have marked Exhibit C. The memoranda of fees covered the period 24 December 1998 to 22 May 2000. They varied in their detail. The total is $85,330, 75 per cent of which is $63,998.

35 Mr Mark Addison, Mrs Schipp’s solicitor, is experienced in commercial litigation and the preparation of bills of costs. In his opinion -

“ … in the circumstances of the appeal in this matter, and its degree of difficulty [Mrs Schipp] would be likely to recover at least 75% of the fees charged by Senior and Junior counsel if the matter were to proceed to a formal assessment of the costs of [Mrs Schipp].”

36 Mr Addison also says -

“10. I crave leave to refer to the ‘Defendant’s Orange Book Volume 3 of 3’ filed in the fresh facts proceedings. That volume contains the written submissions of Mrs Schipp in the Appeal proceedings. Those submissions were 63 pages in length, with 10 extra pages of Schedules. There were no submissions contained therein which dealt with the Cross Appeal against Mr Harrison’s insurers, the third Cross Respondent in these proceedings. Mrs Schipp did, by her counsel, file separate written submissions regarding the Cross Appeal against the third Cross Respondent in these proceedings. Those submissions were 13 pages in length.

11. Of the total of 86 pages of written submissions lodged on behalf of Mrs Schipp, only 15% was dedicated to the issues concerning the Cross Appeal.

12. I do not have a transcript of the hearing of the Appeal, and none has been submitted as evidence in the fresh facts proceedings. I do not have any recollection of any oral submissions being made regarding the Cross appeal at the hearing of the appeal in these proceedings.”

37 Mr Stanley Drummond, the solicitor for Mr Harrison and Emibarb Pty Ltd, is also experienced in commercial litigation and has been involved in numerous matters where costs have been taxed or assessed. He says that he has observed “that there is a wide divergence between the approaches taken by particular costs assessors”. He says that there are numerous items in the memoranda of fees “which could relate, wholly or partly to work which would not be allowed on an assessment of Mrs Schipp’s costs against the appellants pursuant to the costs order”. He says -

“6. In particular, there are numerous items which appear to relate, or which could relate, wholly or partly to:

(a) execution of the judgment in Equity Division proceedings number 6425 of 1991;

(b) an order for examination and production filed against Mr Harrison in Equity Division proceedings number 6425 of 1991;

(c) an order for examination and production filed against Mr Cameron in Equity Division proceedings number 6425 of 1991;
(d) the cross appeal but not the Harrison appeal;

(e) both the Harrison appeal and the Cameron appeal; or
(f) the Cameron appeal but not the Harrison appeal.

7. The memoranda of fees from Mr Slattery QC (pages 11 to 15) are all headed “RE; SCHIPP v CAMERON” and do not mention Mr Harrison or Emibarb, or Mrs Schipp’s cross appeal. From those memoranda of fees:

(a) I cannot identify any items which relate solely to the Harrison appeal; or

(b) how such items as may relate to both appeals (but not the cross appeal or other extraneous work) are to be apportioned between the Harrison appeal and the Cameron appeal.”

38 Mr Drummond says that having regard to these matters and to his observation of the wide divergence -

“I doubt that on an assessment of Mrs Schipp’s costs of the Harrison appeal as much as 75 per cent of the amounts appearing in the memoranda of fees from counsel which are pages 11 to 23 of Mr Addison’s affidavit would be determined as fair and reasonable.”

39 The hearing of the notice of motion should not become a process of taxation or assessment of costs. It is nonetheless relevant to consider what might be determined as a fair and reasonable amount for counsels’ fees if there were assessment by a costs assessor. In an assessment of costs pursuant to the Legal Profession Act 1987 a costs assessor must consider whether or not it was reasonable to carry out the work to which the costs relate and what is a fair and reasonable amount of costs for the work concerned (s 108F(1)). The costs are to be determined by assessing the amount of costs that, in the costs assessor’s opinion, is a fair and reasonable amount (s 208F(2)), and the costs assessor may have regard to all or any of a number of stated matters (s 208G).

40 In determining whether an amount of the order of $63,998 can with sufficient confidence be found to be a fair estimation between the parties, the way they joined issue in the notice of motion is material. It is convenient to proceed by reference to Mr Harrison’s submissions.

41 Mr Harrison accepted that he is liable under the orders for the costs of the appeals jointly and severally with Emibarb Pty Ltd. He submitted that on the proper construction of the orders he is liable only for 90 per cent of assessed costs directly referable to the appeal of the Harrison defendants and half of 90 per cent of the assessed costs common to the appeals of the Harrison defendants and the Cameron defendants. Although no figures were suggested, if that were so the sum which would be assessed as payable by Mr Harrison would be less than if the Harrison defendants and the Cameron defendants were jointly and severally liable for all the 90 per cent of the costs of the appeals.

42 Mr Harrison drew support from the decision of Master Malpass in Union des Assurances de Paris IARD v Petersen (3 March 1998, unreported). Two related insureds claimed indemnity from the one insurer in separate proceedings. The proceedings were heard together. The claims failed, and the proceedings were dismissed “with costs”. The costs assessor took the view that the insureds could not have brought one proceedings and become jointly and severally liable to costs, and that in any event they did not. He considered that where the work related to both proceedings half the total allowance for the work should be attributed to each proceedings, and where the work could be identified as referable to one proceedings the amount allowed should be attributed to that proceedings. The Master held that the costs assessor had not erred in law, and that his determination -

“ … may be seen as an exercise in which he gave consideration to the relevant matters and assessed an amount of costs for each proceeding which was in his opinion, a fair and reasonable amount.”

43 In the present case there were two appeals, one by the Harrison defendants and the other by the Cameron defendants. But the relevant order was more explicit than that in Union des Assurances de Paris IARD v Petersen. It was, “Appellants pay 90 per cent of the respondent’s costs of the appeals … “. Although there were separate notices of appeal, albeit in almost identical terms, there was the one set of appeal papers, and in substance the Harrison defendants and the Cameron defendants made common cause in the appeals. Construing the order according to its terms, as an order whereby each of the Harrison defendants and the Cameron defendants is liable for all the 90 per cent of the costs of the appeals in like manner to multiple parties to the one proceedings having joint and several liability, does not offend against the circumstances in which the order was made. In my opinion the words of the order are clear. Mr Harrison is liable for 90 per cent of the costs of the appeals, without the differentiation for which he contended.

44 Mr Harrison submitted that, even if that differentiation was not accepted, his liability does not include (a) any costs referable to Mrs Schipp’s cross-appeal as to the insurers’ costs (he had a costs order in his favour in that respect); or (b) any costs referable to the contingent cross-appeal against the insurers. He submitted that Mrs Schipp’s evidence had to identify from the total of counsels’ fees what fees were referable to what. The opinion of Mr Addison, he said, was little more than assertion. It was unsupported by any analysis by way of such identification; indeed, Mr Harrison submitted that the opinion was of such minimal probative value “as warrants exclusion under section 135 of the Evidence Act”. Mr Harrison said that Mr Addison’s reference to the written submissions was of little value, because number of pages was not a measure of intellectual effort or a sufficient guide to fair and reasonable costs. Given the doubt of which Mr Drummond gave evidence, he said, the Court could not be satisfied that at least 75 per cent of the total of counsels’ memoranda of fees would be recoverable as costs of the appeals.

45 There was no objection to the affidavit of Mr Addison. It is too late for s 135 of the Evidence Act, although the weight to be given to Mr Addison’s opinion is another matter.

46 Mr Drummond does not suggest that, so far as work related to what he called the Harrison appeal or the Cameron appeal, it was not reasonable to carry out the work; nor does he suggest that, so far as work related to the Harrison appeal or the Cameron appeal, the costs for the work concerned were not a fair and reasonable amount. On the affidavit evidence of Mr Addison and Mr Drummond, the issue between them concerned what work related to the Harrison appeal as distinct from the Cameron appeal, as distinct from the cross-appeal, and as distinct from what Mr Drummond called “other extraneous work”. The only indication of extraneous matters was Mr Drummond’s references to activity in proceedings 6425 of 1991, the original proceedings heard by Einstein J.

47 Mr Addison accepted that the total amount in the memoranda of fees would not be recovered on an assessment of costs. In the absence of cross-examination, I consider that I can take it that he anticipated the matters raised by Mr Drummond. As the parties left the evidence, finding what of the $85,330 was for work relating to the costs of the appeals (for the reasons earlier given meaning both what Mr Drummond calls the Harrison appeal and what he calls the Cameron appeal), as distinct from the cross-appeal and the extraneous work, will be central to finding whether an amount of the order of $63,998 is a fair and reasonable estimation of the costs payable in respect of counsels’ fees.

48 Mr Addison wrote the letter of 9 March 2001 in which, after referring to “the costs of the appeals”, he said that counsels’ memoranda of fees would be claimed in full. Unless it is reasonably apparent from the memorandum, I see no reason to speculate that an item relates to the extraneous work. Items in junior counsel’s memoranda for 24 March 1999 ($150), 12 June 1999 ($500), 16 June 1999 ($225), 23 June 1999 ($37.50), 16 August 1999 ($75), 19 August 1999 ($150), 20 October 1999 ($675), 21 October 1999 ($1500), 22 October 1999 ($1500), 25 October 1999 ($300), appear to relate to extraneous work. Cross-reference to items for the same dates in senior counsel’s less detailed memoranda suggests exclusion of items for 23 June 1999 ($80) and 16 August 1999 ($400). I exclude $5,593 from the $85,330.

49 The cross-appeal in relation to the insurers’ costs placed little demand on counsel in comparison with the detailed attention to the facts and law in the principal area of dispute in the appeals. No more than 10 per cent of counsels’ fees could be attributed to it, and I include in that junior counsel’s item for drafting the notice of cross-appeal. I exclude $7,974 from the now $79,737.

50 Counsel prepared for the contingent claim to overturn the failure of the claim against Mr Harrison’s insurers, although the hearing of the cross-appeal in that respect was deferred. Of the now $71,763, $24,225 was for the four hearing days of the appeal and the supplementary submissions. The items for the remaining $47,538 are often specifically directed to the appeals of the Harrison defendants and the Cameron defendants rather than the cross-appeal involving the insurers, and to attribute 10 per cent to preparation of the cross-appeal involving the insurers would be generous. I exclude $4,754 from the $71,763, again including in that junior counsel’s item for drafting the notice of cross-appeal.

51 The result is $67,010. Mrs Schipp has an order for 90 per cent of her costs of the appeals, and 90 per cent of $67,010 is $60,309.

52 The apparent mathematical exercise is nonetheless an estimation. It is also not the end of the process of estimation. I bear in mind Mr Addison’s opinion, and that Mr Drummond’s opinion is one of doubt, not forthright denial; Mr Drummond’s opinion appears also to be founded in part on separating out the costs of what he called the Cameron appeal. The mathematics brings an amount a little less than the $63,998, about 95 per cent of that amount. But I have made favourable allowances to Mr Harrison in the mathematics, and it must be repeated that while the approach must be logical, fair and reasonable, it is a broad approach. I am satisfied that it can fairly be estimated, on the broad-brush approach, that an amount of the order of 75 per cent of the total of counsels’ memoranda of fees would be recoverable as costs of the appeals, and on the evidence that that amount is a fair and reasonable gross sum in respect of counsels’ fees.

53 Mr Harrison submitted that even if the Court were so satisfied the orders claimed in the notice of motion should not be made, because it would be futile to make them. The argument ran as follows. Mrs Schipp’s purpose is to call for payment under the bank guarantee. In the absence of agreement (and there was no agreement), calling for payment under the bank guarantee needed “the issue of a costs certificate”. That could only mean a certificate issued by a costs assessor setting out the determination of an application for assessment of costs, see s 208J of the Legal Profession Act. Costs were no longer taxed by or in the Court, and the Court had no power to order that the registry issue a certificate of taxation to Mrs Schipp for the costs. Nor did the Court have power to order that the registry issue a certificate of determination; only a costs assessor could issue a certificate of determination, and the certificate of determination had to result from an application for assessment of costs and the making of a determination in the manner directed by the Legal Profession Act (see Division 6 of Part II). The Court could not make the second order sought or any order that the registry issue a certificate of determination, and since the first order sought would not enable Mrs Schipp to call for payment under the bank guarantee, the first order sought should not be made either.

54 I agree that the Court can not make an order in the terms of the second order sought. There is no longer taxation of costs, and under the Legal Profession Act there is assessment of costs. The costs assessor gives a certificate of determination, not a certificate of taxation. The registry does not issue a certificate of taxation, or a certificate of determination. The Court can not order that the registry issue a certificate of determination.

55 It does not follow that the first order sought should not be made. If the grounds for making it have been made out, that Mrs Schipp has the purpose of calling for payment under the bank guarantee does not stand in the way. She is entitled to the order even if her purpose can not be achieved.

56 In any event, I do not accept that Mrs Schipp’s purpose can not be achieved. Section 208I of the Legal Profession Act preserves the Court’s power “to determine in any particular case the amount of costs payable … “. Part 52A r 1(1) provides that Pt 52A applies to and in respect of, inter alia, “costs payable or to be assessed under any order of the Court”; by Pt 52A r 1(2) the application is subject to the Legal Profession Act. Costs may be payable under an order of the Court although not to be assessed under an order of the Court, and costs under an order pursuant to Pt 52A r 6(2)(c) are of that kind – a gross sum specified in the order instead of assessed costs. The order for payment of a gross sum will in due course be entered by the sealing of a minute of the order signed by the registrar or by the Judge or Master by whom it was made (Pt 41 r 13), and on payment of the prescribed fee the registrar must furnish to a party to any proceedings a certified or office copy of the minute of any order entered in the proceedings (Pt 41 r 15). I consider it fairly arguable that the furnishing of a certified copy of the minute of an order that Mrs Schipp is entitled to a gross sum specified in the order would be the issue of a costs certificate within the meaning of the bank guarantee. “Costs certificate” is not a term of art. The certified copy of the minute of order serves the same end as a certificate of determination, in that it is the best evidence of an amount payable to Mrs Schipp by way of costs. That appears to be what the bank guarantee intends.

57 I appreciate that National Australia Bank Ltd is not a party to Mrs Schipp’s proceedings. What I have said addresses that part of Mr Harrison’s argument in which he submitted that “the issue of a costs certificate” in the bank guarantee could only mean the issue of a certificate of determination in an assessment of costs. It is sufficient that a contrary view is fairly arguable.

The result

58 In my opinion, Mrs Schipp should have an order for payment of the fixed sum of $63,998.

59 Part 52A r 6(2)(c) speaks of a further order that a person is entitled to a gross sum specified in the order instead of the assessed costs. On one view, the further order must specify the gross sum as regards all persons liable to pay costs under the initial order. If that were so, Emibarb Pty Ltd, Mr Cameron and Don Cameron Real Estate Pty Ltd would be necessary parties to the notice of motion. Mr Harrison did not submit that the rule should be read in that way. I see no reason why the rule should not be given effect by an order that one of a number of parties jointly and severally liable under the initial order pay a stated sum instead of assessed costs, leaving the other parties liable unaffected. An order directed to a particular party is not excluded by anything in the rule, and is within its evident purpose of enabling flexibility in tailoring costs orders as justice requires.

60 Mr Harrison’s submissions did question whether, so far as Mr Harrison was liable for any costs of the Cameron appeal, Mr Harrison would have an equitable right of contribution against Mr Cameron and Don Cameron Real Estate Pty Ltd and whether, if so, the Cameron defendants should be parties to the notice of motion. The submission was in connection with the construction of the order as to the costs of the appeals made on 20 February 2001. What rights Mr Harrison may have against the Cameron defendants (or Emibarb Pty Ltd) is a matter for another day, if that day ever comes. I do not consider that any complexity in working out those rights is a reason against giving Pt 52A r 6(2) effect by an order that Mr Harrison pay a stated sum instead of assessed coss.

61 I do not think that Mrs Schipp’s failure to obtain the second order sought warrants an order other than that Mr Harrison pay her costs of the notice of motion.

62 I order -

1. That in respect of the costs payable pursuant to order 5 of the orders made on 20 February 2001 the first appellant pay to the respondent $63,998 for counsel’s fees instead of the assessed costs for counsels’ fees.

2. That the first appellant pay the respondent’s costs of the notice of motion filed on 10 May 2002.

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