In the matter of Yowie Group Ltd (No 2)
[2025] NSWSC 605
•12 June 2025
|
New South Wales |
Case Name: | In the matter of Yowie Group Ltd (No 2) |
Medium Neutral Citation: | [2025] NSWSC 605 |
Hearing Date(s): | On the papers |
Date of Orders: | 12 June 2025 |
Decision Date: | 12 June 2025 |
Jurisdiction: | Equity - Corporations List |
Before: | Nixon J |
Decision: | 1. Order, pursuant to section 98(4)(c) of the Civil Procedure Act 2005 (NSW), that the Defendant pay the Plaintiff’s costs of the proceeding in the gross sum of $33,000 (inclusive of GST). |
Catchwords: | COSTS – application for gross sum cost order pursuant to s 98(4) of the Civil Procedure Act 2005 (NSW) – whether appropriate to make a gross sum cost order – quantum of gross sum – no issue of principle |
Legislation Cited: | Civil Procedure Act 2005 (NSW) s 98 |
Cases Cited: | Bolton v WAM Active Ltd (No 2) [2025] NSWCA 99 |
Category: | Costs |
Parties: | Keybridge Capital Limited (Plaintiff) |
Representation: | Counsel: |
File Number(s): | 2025/181404 |
Publication Restriction: | Nil |
JUDGMENT
By Interlocutory Process filed on 29 May 2025, the Plaintiff, Keybridge Capital Limited, seeks a gross sum costs order against the Defendant, Yowie Group Limited.
This proceeding was commenced by way of Originating Process filed in Court by the Plaintiff on 12 May 2025, seeking an order, pursuant to ss 173 and 1303 of the Corporations Act 2001 (Cth), that Yowie forthwith deliver to Keybridge a complete copy of Yowie’s register of members. At the hearing on 21 May 2025, Yowie sought an adjournment, which I refused. Yowie did not otherwise make any submissions in opposition to Keybridge’s application. I delivered ex tempore reasons for judgment: In the matter of Yowie Group Ltd [2025] NSWSC 524 (the Primary Judgment).
Following the delivery of the Primary Judgment, Keybridge indicated to the Court that it intended to make an application for its costs to be paid on a gross sum basis. Accordingly, I made directions for evidence and submissions to be served in respect of any such application, with the intent that the application be determined on the papers.
Keybridge filed its application, evidence and submissions on 29 May 2025. Yowie was directed to file any evidence and submissions in response by 4 June 2025. As at the date of this judgment, 12 June 2025, Yowie has not filed any such material. I have accordingly proceeded on the basis that Yowie does not seek to be heard on this application.
For reasons set out below, I am satisfied that an order for gross sum costs should be made.
Applicable Principles
Section 98 of the Civil Procedure Act 2005 (NSW) enlivens a broad power to award costs, including a power to award costs in a specific gross sum instead of assessed costs (s 98(4)(c)).
In Hamod v State of New South Wales & Anor [2011] NSWCA 375 at [816], Beazley JA, with whom Giles and Whealy JJA agreed, observed that:
"The terms of s 98(4), together with the more general considerations reflected in the Civil Procedure Act ..., suggest that factors that merit particular consideration include: the relative responsibility of the parties for the costs incurred ...; the degree of any disproportion between the issue litigated and the costs claimed; the complexity of proceedings in relation to their cost; and the capacity of the unsuccessful party to satisfy any costs liability ..."
In Gabrielle v Abood (No 4) [2023] NSWCA 100 at [6], the Court (Bell CJ, Kirk and Adamson JJA), referred to Hamod and said that:
“The power to make a gross sum costs order provided by s 98(4)(c) of the Civil Procedure Act 2005 (NSW) is discretionary. Authority establishes that the discretion is not confined and may be exercised whenever the circumstances warrant its exercise; it should only be exercised when the Court considers that it can do so fairly between the parties, and that includes having sufficient confidence in arriving at an appropriate sum on the materials available; courts have typically applied a discount in assessing costs on a gross sum basis; and the court is not required to undertake a detailed examination of the kind that would be appropriate to taxation or formal costs assessment...”
In particular, gross sum costs have been awarded in situations where the quantum of costs is small and the history of the litigation indicates a likelihood, if assessment were to occur, of delay and expense, which would be disproportionate to the amount at issue: see, for example, In the matter of Palladium Consulting Pty Limited [2013] NSWSC 92 at [14] (Black J); Pritchard v Fryer (No 2) [2018] NSWSC 261 at [2], [13] (Fullerton J); In the matter of Cardinal Group Pty Ltd (in liq) and Cardinal Project Services Pty Ltd (in liq) (Lump Sum Costs) [2018] NSWSC 895 at [6] (Gleeson JA); and In the matter of Boss Constructions (NSW) Pty Ltd (No 2) [2019] NSWSC 554 at [3] (Rees J).
Where it is appropriate to make a gross sum costs order, the Court is not required to undertake a detailed examination or line-by-line analysis of the costs claimed, but rather is to take a “broad brush” approach: Harrison v Schipp (2002) 54 NSWLR 738; [2002] NSWCA 213 at [22], [52] (per Giles JA).
An award of gross sum costs should be “based on an informed assessment of the actual costs having regard to the information before the court (for example, by relying on costs estimates or bills)”: Hamod at [820].
In adopting a broad brush approach, the Court will typically apply a discount to the amounts claimed in assessing costs on a gross sum basis: Lorenzato v Lorenzato & Anor (No 2) [2011] NSWSC 790 at [3] (Black J).
In Gupta v Fordham Laboratories Pty Ltd (No 2) [2018] NSWSC 694, Ward JA (as her Honour then was) stated (at [31]) that a recovery on a party/party basis of between 70%-80% was commensurate with the rule of thumb adopted in various other matters: see for instance Green Camel Pty Ltd v Urban Ecological Systems Ltd [2017] NSWSC 362 at [59]-[67] (per Ward CJ in Eq); and Ji Woo International Education Centre at [29].
In the recent decision of Salmon v Albarran (No 2) [2025] NSWCA 115, the Court of Appeal (Ward ACJ, Leeming and Ball JJA) applied not only a reduction in respect of solicitors’ fees in line with the evidence in that case that such costs are normally reduced by 20-30%, but also a 10% discount to counsel’s fees, “reflecting that the assessment of party/party costs is less than a full indemnity” (at [29]). The Court then applied a further discount of 10% to the total costs, which was “required, to reflect the fact that there will be no assessment, and [the party against whom the costs order is made] is losing the opportunity of doing better on assessment than on the gross sum costs assessed by this Court” (at [30]). Their Honours observed that:
“Another way of putting this is that the approach of this Court is not to do the best it can to determine the likely outcome of a costs assessment, but instead to determine an amount of which it can be said with a measure of confidence that any assessment would yield a greater amount. To that end, we apply a further 10% discount.”
Determination
Should a gross sum costs order be made?
This is a matter where the costs are relatively modest. Keybridge’s application was heard only nine days after the proceeding was commenced, with limited evidence served by both parties. It is relatively straightforward for the Court to assess the work required to address the real issues in dispute in the proceeding. Further, there is sufficient evidence before the Court, in the form of the itemised bills for the proceeding and the supporting affidavit of Keybridge’s solicitor, to allow an informed assessment to be made of an appropriate sum.
As set out in the Primary Judgment, there is a history of litigation between, on the one hand, Mr Bolton and Mr Patton (who are presently directors of Yowie and formerly directors of Keybridge), and the current directors of Keybridge on the other: see, for instance WAM Active Limited v Keybridge Capital Limited (No 2) [2024] NSWSC 1496; In the matter of Keybridge Capital Limited [2025] NSWSC 240; In the matter of Keybridge Capital Limited (No 2) [2025] NSWSC 354; In the matter of Keybridge Capital Limited (No 3) [2025] NSWSC 423; Bolton v WAM Active Ltd (No 2) [2025] NSWCA 99.
Further, as set out in the affidavit of Keybridge’s solicitor, Mr Hodges, in support of the gross sum costs application, the previous history of litigation has included protracted disputes about costs orders in prior proceedings.
Having regard to those matters, I accept Keybridge’s submission that there is a significant risk that any costs assessment would result in delay and expense disproportionate to the amount at issue.
Accordingly, I am satisfied that an order for gross sum costs should be made.
Quantum of gross sum costs order?
Exhibited to Mr Hodges’ affidavit is an invoice issued by Mills Oakley to Keybridge which contains itemised time entries in respect of work undertaken between the period of 9 May 2025 to 21 May 2025. Each entry sets out the person at Mills Oakley who performed the work, the hourly rate applied, and the time spent on that task.
Mr Hodges also gives evidence in respect of the fees of counsel briefed on behalf of Keybridge in respect of this proceeding. Exhibited to Mr Hodges’ affidavit are the invoices of Mr Emmett SC and Mr Krochmalik, which similarly itemise entries in respect of work undertaken, the time spent performing the work, and the hourly rate applied.
Based upon the invoices issued by Mills Oakley and by counsel acting for Keybridge in this proceeding, Mr Hodges calculates the costs of Keybridge in respect of this proceeding as follows:
| Solicitors’ Fees (excluding GST) | $29,898.50 |
| Counsel’s Fees (excluding GST) | $10,200.00 |
| Disbursements | $3,773.00 |
| GST | $4,009.85 |
| Total (including GST) | $47,881.35 |
Mr Hodges gives evidence that, based on his experience, a successful party recovers between 65% and 75% of solicitors’ fees actually incurred by the party and 100% of disbursements, including counsel’s fees. Mr Hodges notes that 70% of the solicitors’ fees incurred by Keybridge in this proceeding is $23,021.85 (inclusive of GST).
On this basis, the total figure sought for costs (including disbursements) is $38,014.85 (including GST).
I am satisfied that it is appropriate to apply a discount of 30% to Keybridge’s solicitors’ fees. I am also satisfied that it is appropriate to make a gross sum costs award which is inclusive of GST, having regard to the evidence before the Court that Keybridge is not eligible to claim back the GST component of legal fees incurred.
However, I consider that two further discounts should be applied.
First, there should be a discount of 10% to counsel’s fees. This is applied to reflect the fact that the assessment of party/party costs is less than a full indemnity, and also in recognition of the fact that, according to Mr Hodges, Keybridge engaged two counsel “due to their limited availability to deal with this matter on an urgent basis”, raising the risk of some doubling up of work. The application of this discount reduces the figure for counsel’s fees (inclusive of GST) by a sum of $1,122.
Secondly, a further discount of 10% should be applied to the total costs to reflect the fact that there will be no assessment, such that Yowie is losing the opportunity of doing better on assessment than on the gross sum costs assessed by this Court.
Applying those discounts leads to the following result:
Amount claimed (inclusive of GST): $38,014.85
Less 10% discount for counsel’s fees: ($1,122.00)
Subtotal: $36,892.85
Less further 10% discount on total costs: ($3,689.29)
Total: $33,203.56
For those reasons, and adopting a broad brush approach, I have determined that Yowie should be ordered to pay Keybridge’s costs of the proceeding in the gross sum of $33,000 (inclusive of GST). I will make an order to this effect.
Keybridge also seeks a gross sum costs order in respect of its costs of this interlocutory application. I am satisfied, for reasons given above, that the Court should also make such an order in respect of the costs of this application.
The costs of the interlocutory application are, as set out in Mr Hodge’s affidavit, solicitors’ fees of $4,549.60 (inclusive of GST) and the Court filing fee of $1,497 (no GST). Keybridge seeks the sum of $4,681.72, being 70% of the solicitors’ fees (equating to $3,184.72 including GST) together with the full filing fee.
For reasons given above, I consider that there should be a further 10% reduction to the total costs (excluding the filing fee), to reflect the fact that there will be no assessment, such that Yowie is losing the opportunity of doing better on assessment than on the gross sum costs assessed by this Court. Accordingly, and adopting a broad brush approach, I have determined that Yowie should be ordered to pay Keybridge’s costs of this application in a gross sum of $4,400 (inclusive of GST). I will make a gross sum costs order in this amount.
ORDERS
For the reasons given above, I make the following orders:
(1)Order, pursuant to section 98(4)(c) of the Civil Procedure Act 2005 (NSW), that the Defendant pay the Plaintiff’s costs of the proceeding in the gross sum of $33,000 (inclusive of GST).
(2)Order, pursuant to section 98(4)(c) of the Civil Procedure Act 2005 (NSW), that the Defendant pay the Plaintiff’s costs of the Interlocutory Process filed on 29 May 2025 in the gross sum of $4,400 (inclusive of GST).
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