Islam v Commonwealth Bank of Australia

[2025] NSWSC 806

Supreme Court

New South Wales

Medium Neutral Citation:

Islam v Commonwealth Bank of Australia [2025] NSWSC 806

Hearing dates:

9 April 2024

Date of orders:

30 July 2025

Decision date:

30 July 2025

Jurisdiction:

Common Law

Before:

Harrison CJ at CL

Decision:

Order that the plaintiffs pay the defendant’s costs of and incidental to the proceedings on the indemnity basis.

Catchwords:

COSTS – order for costs following summary dismissal of plaintiff’s proceedings against the bank – application for payment of indemnity costs or alternatively as a gross sum – whether costs should be awarded on an indemnity basis – where plaintiffs commenced proceedings with no cause of action or prospect of recovering damages – frivolous and vexatious proceedings – order for costs on indemnity basis

Legislation Cited:

Civil Procedure Act 2005 (NSW), s 98

Uniform Civil Procedure Rules 2005 (NSW), rr 42.2, 42.5

Cases Cited:

Ahern v Aon Risk Services Australia Ltd (No 2) [2022] NSWCA 39

Cabport Pty Ltd v Marinchek (No 2) [2013] NSWCA 131

Hamod v New South Wales [2002] FCA 424

Hamod v New South Wales [2011] NSWCA 375

Ingot Capital Investments Pty Ltd v Macquarie Equity Capital Markets Ltd (No 7) [2008] NSWSC 199

Islam v Commonwealth Bank of Australia [2024] NSWSC 149

Leichhardt Municipal Council v Green [2004] NSWCA 341

Category:

Costs

Parties:

M D Rajibul Islam (Plaintiff)
Trustees of Gulf Bridge Investment Trust (Second Plaintiff)
Mortgage Plus Australia Pty Ltd (Third Plaintiff)
Mortgage Plus Australia LLC – New Mexico (Fourth Plaintiff)
Harmanos Ltd – London (Fifth Plaintiff)
Credit Mee Limited UK (Sixth Plaintiff)
Secure it Plus LLC Delaware USA (Seventh Plaintiff)
Commonwealth Bank of Australia (Defendant)

Representation:

Counsel:
F Tao (Defendant)

Solicitors:
Gadens (Defendant)

File Number(s):

2023/91975

Publication restriction:

Nil

JUDGMENT

1. HIS HONOUR: The Commonwealth Bank of Australia seeks costs on an indemnity basis or, in the alternative, costs calculated as a gross sum, following orders made by me on 1 March 2024 summarily dismissing the proceedings brought by Mr Islam against the Bank: Islam v Commonwealth Bank of Australia [2024] NSWSC 149. I ordered Mr Islam to pay costs. The bank provided me with written submissions in accordance with an agreement, noted by me on 9 April 2024, which included that I should determine the outstanding costs issue on the papers. Those submissions were as follows.

Indemnity costs order

2. Section 98(1)(c) of the Civil Procedure Act 2005 permits the Court to order costs on an ordinary or indemnity basis. UCPR 42.2 provides that, unless the Court orders otherwise or the rules otherwise provide, costs payable are to be assessed on an ordinary basis. UCPR 42.5 deals with an order for costs on an indemnity basis.

3. Costs are awarded on the ordinary basis unless there are exceptional circumstances: Leichhardt Municipal Council v Green [2004] NSWCA 341. An order for indemnity costs is not made to punish an unsuccessful party for persisting with a case that fails, but to compensate a successful party fully for costs incurred, when the Court takes the view that it was unreasonable for the other party to have subjected the successful party to the expenditure of costs: Hamod v New South Wales [2002] FCA 424 at [20].

4. Whether an indemnity costs order should be made depends, at least in part, on whether there was a relevant delinquency by the unsuccessful party: Ingot Capital Investments Pty Ltd v Macquarie Equity Capital Markets Ltd (No 7) [2008] NSWSC 199 at [24]; Cabport Pty Ltd v Marinchek (No 2) [2013] NSWCA 131 at [6]. That is to be determined by reference to the conduct of the proceedings, not the conduct that is the subject of the substantive dispute.

5. The bank submits Mr Islam has acted unreasonably in the proceedings. First, they should never have been brought. Mr Islam's claims arose from the bank’s compliance with a freezing order issued by the Court against him in an unrelated proceeding. The bank has been unwittingly drawn into this litigation, described by the Court as "in truth both frivolous and vexatious and an abuse of the process of the court": Islam v Commonwealth Bank of Australia [2024] NSWSC 149 at [12].

6. Ms Laban's unchallenged evidence is that Mr Islam served numerous court documents on the bank, including various iterations of statements of claim and affidavits. The purpose and relevance of those documents were, and remain, unclear. The bank was put to the cost of considering the documents and ensuring to its reasonable satisfaction that nothing significant arose from them. The bank was unable safely to take a position without considering this material.

7. Ms Laban also deposes to Mr Islam's conduct in respect of nine directions hearings before the Registrar. Mr Islam's adversarial position on every aspect of the proceedings meant that solicitor's and counsel's attendance at each directions hearing was prolonged.

8. The bank should obtain an indemnity costs order so that it can be compensated for the costs incurred in defending itself from its compliance with the freezing order which was presented as a claim for damages in the amount of $750 million.

Gross sum costs order

9. Section 98(4)(c) of the Civil Procedure Act 2005 provides as follows:

(4) In particular, at any time before costs are referred for assessment, the court may make an order to the effect that the party to whom costs are to be paid is to be entitled to--

(a) costs up to, or from, a specified stage of the proceedings, or

(b) a specified proportion of the assessed costs, or

(c) a specified gross sum instead of assessed costs, or

(d) such proportion of the assessed costs as does not exceed a specified amount.

10. This provision is directed at avoiding the expense, delay and aggravation likely to be involved in a contested costs assessment process: Hamod v New South Wales [2011] NSWCA 375 at [813]-[820]; Ahern v Aon Risk Services Australia Ltd (No 2) [2022] NSWCA 39 at [14]-[16], and at [18] as follows:

“[18] If it considers it appropriate to make the order, the Court may adopt a 'broad brush' approach to quantification, as to require the Court to undertake a detailed examination of the kind carried out in a formal costs assessment would defeat the purpose of the order: Harrison v Schipp at 743; Penson v Titan National Pty Ltd (No 3) [2015] NSWCA 121 at [7]. The costs ordered 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]. Courts have typically applied a discount when assessing costs on a gross sum basis, though the aptness of a discount primarily depends on the accuracy and reliability of the costs evidence available to the Court: Hamod at [814].”

11. Mr Islam's conduct as a self-represented litigant, in this as well as a number of other proceedings before this Court and inferior state courts, provides an indication that the costs assessment process will be significantly more drawn-out than the application for a specified gross sum costs order.

12. Ms Laban's evidence provides a detailed and cogent explanation for the work performed and the costs incurred by the bank:

1. Mr Islam has served numerous documents, all of which had to be read and considered in order to identify whether Mr Islam had articulated a legitimate legal claim or an actionable grievance;

2. There has been a total of eleven directions hearings in the proceedings including nine directions hearings before the Registrar, each of which has taken an unnecessarily long time to be heard and decided due to Mr Islam's refusal to consent to straightforward procedural directions, his non-appearance or late appearance, resulting in the proceeding being called towards the end of a long Registrar's list of matters; and

3. Ms Laban engaged a more experienced solicitor (Senior Associate) to have the day-to-day carriage of the proceeding, as opposed to a cheaper but more inexperienced junior lawyer.

13. Whilst the ambit claim for damages was apparent from Mr Islam's claim against the bank when first commenced, the bank, as a large financial institution, was required to undertake substantive internal enquiries concerning the alleged basis of any underlying claim. The bank could not ever confidently assume, despite the form and content of the material on which Mr Islam relied, that he had no claim whatsoever. The bank had to investigate its relationship with Mr Islam and the manner in which it had been conducted. So much is evident from the detailed time entries set out in the bank’s solicitors' itemised invoices.

14. Ms Laban's evidence is that the charge out rates for this matter are discounted and well below her firm's usual rate. She has also carefully reviewed the time-entries and written off $9,051.80 in professional fees, such that in her view only reasonably incurred charges would be billed to the bank. Ms Laban's practice ought to satisfy the Court that the legal costs incurred, in respect of which a gross sum costs order is sought, are fair and reasonable.

15. Ms Laban explains that in her experience:

1. Indemnity costs orders result in solicitors' fees recovered at approximately 90% and disbursements at approximately 100%, which would result in a figure of $81,048.87;

2. Costs assessed on an ordinary basis would generally result in solicitors' fees recovered at approximately 70% and disbursements at approximately 95%, which would result in a figure of $65,949.66.

16. Mr Islam did not provide written or oral submissions in response to the bank.

Discernment

17. As I trust my principal reasons for judgment make plain, the plaintiffs commenced these proceedings in circumstances where they had no cause of action or any prospect of recovering even nominal damages. The proceedings were frivolous and vexatious and an abuse of the process of the Court. While I do not conclude from Mr Islam’s decision not to make submissions on this issue, it is very difficult to perceive of anything he could legitimately have put in response to the defendant’s application.

18. Against the contingency that Mr Islam may wish to have an opportunity to contest the quantum of the costs he is required to pay, which I consider should be paid on an indemnity basis, I will make an order in those terms. If or when he seeks to have such costs assessed on that basis by a costs assessor, he will be able to do so at that time.

Order

1. I order that the plaintiffs pay the defendant’s costs of and incidental to the proceedings on the indemnity basis.

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Decision last updated: 30 July 2025