Kisimul Holdings Pty Ltd v Simms

[2018] NSWSC 688

Supreme Court

New South Wales

Medium Neutral Citation:	Kisimul Holdings Pty Ltd v Simms [2018] NSWSC 688
Hearing dates:	15 May 2018
Decision date:	15 May 2018
Jurisdiction:	Common Law
Before:	Adamson J
Decision:	See paragraph [19].
Catchwords:	COSTS – application for stay or suspension of costs assessment affirmed by Review Panel – application refused
Legislation Cited:	Civil Procedure Act 2005 (NSW) Pt 6, s 98(4) Legal Profession Act 2004 (NSW) ss 385(2), 386(1) Legal Profession Uniform Law Application Act 2014 (NSW) s 85(1)(a) Profession Uniform Law Application Regulation 2015 (NSW) cl 50
Category:	Procedural and other rulings
Parties:	Kisimul Holdings Pty Ltd (Plaintiff) Sonia Elizabeth Simms (First Defendant) Sonia Simms Pty Ltd (Second Defendant)
Representation:	Counsel: D Farrar (Plaintiff) G Mavrakis (Defendant)   Solicitors: Farrar Lawyers (Plaintiff) Mavrakis & Associates Lawyers (Defendants)
File Number(s):	2018/140866

Judgment – EX TEMPORE

Introduction

1. By summons filed on 4 May 2018, Kisimul Holdings Pty Ltd (the plaintiff) seeks orders in relation to costs which have been assessed, and reviewed by the Review Panel, following a costs order made by Bergin CJ in Eq in favour of the defendants at the conclusion of proceedings commenced by the plaintiff in the Equity Division on 4 July 2014. On 16 April 2018, judgment was entered in favour of the defendants against the plaintiff by this Court in the sum of $88,718.50, being the amount of the costs assessment, which was upheld by the Review Panel.

2. The plaintiff seeks an order pursuant to s 386(1) of the Legal Profession Act 2004 (NSW) (the 2004 Act) that the operation of a certificate of determination of costs dated 15 November 2017 be suspended until further order of the Court. The plaintiff also seeks an order for suspension of the certificate of determination of the costs of the assessment. Further, the plaintiff seeks an order suspending the certificate of determination of the Review Panel of costs of assessment dated 6 April 2018. The plaintiff also seeks leave to appeal against the decision of the Review Panel pursuant to s 385(2) of the 2004 Act.

Proceedings in the Equity Division

3. I note that the defendants filed a motion in the Equity Division proceedings for the payment out of monies which had been paid into court by the plaintiff in compliance with orders for security for costs. The evidence established that two sums of money were paid into court. The notice of motion was returnable before Hammerschlag J on 27 April 2018. His Honour ordered that $50,000 out of the total of $88,718.50, being the amount of the costs assessment, be released to the defendants, apparently on the basis of a concession by the plaintiff that its challenge to the assessment, even if successful, would not bring the final amount below $50,000. On that basis his Honour, relevantly, ordered the release, relevantly, of $50,000 and stood over the notice of motion to 18 May 2018 for further directions.

The grounds of appeal

4. The summons for leave to appeal was filed on 4 May 2018. It does not identify the grounds on which leave is sought or, if leave is granted, the proposed grounds of appeal. In the course of oral argument Mr Farrar, who appears on behalf of the plaintiff, identified the proposed grounds of appeal. As I understand Mr Farrar’s submissions there are two proposed grounds of appeal.

5. First, Mr Farrar submitted that the determination of the Review Panel is invalid because it referred in the document affirming the determination under review to s 85(1)(a) of the Legal Profession Uniform Law Application Act 2014 (NSW) and cl 50 of the Legal Profession Uniform Law Application Regulation 2015 (NSW) rather than to the 2004 Act. It was common ground that the 2004 Act applied to the assessment of costs as the proceedings commenced prior to 1 July 2015.

6. Mr Farrar identified as the second proposed ground of appeal the contention that the costs assessor did not consider submissions made by the plaintiff in that, in its reason for decision, those submissions were not specifically referred to as having been provided by the plaintiff. The ground relies on the following recitation in the reasons of the costs assessor:

“2.   DOCUMENTS RECEIVED

2.1   The application for costs assessment was dated 15 March 2017 and lodged on 16 March 2017.

2.2   I received the following documents and material:

(a)   From the Costs Applicants:

(i)    Application for Assessment of Ordered Costs dated 15 March 2017 including supporting materials and Judgement/Order made 27 June 2016;

(ii)    Letter dated 18 April 2017 with supporting materials in reply to my letter of 27 March 2017;

(iii)    Further letter/submission dated 18 April 2017;

(iv)    Reply dated 30 May 2017 to Costs Respondent's submissions dated 28 April 2017 and 5 May 2017;

(v)    Letter dated 28 July 2017 with detailed Bill of Costs in reply to my letter of 22 June 2017.

(b)   From the Costs Respondent:

(i)    Letter/submission dated 6 April 2017 in reply to my letter of 27 March 2017;

(ii)    Letter with further submission dated 10 April 2017;

(iii)    Letter with further submission dated 20 April 2017;

(iv)    Submissions/Objections dated 28 April 2017;

(v)    Reply dated 16 June 2017 to Costs Applicant's Reply Submission dated 30 May 2017.

2.3   I considered all the documents I received.”

7. Mr Farrar submitted that there was no reference in the list of documents provided by the Costs Respondent (the plaintiff) the Submissions/Objections dated 5 May 2017 in paragraph 2.2(b)(iv). I note that paragraph 2.2(a)(iv) refers to the Reply to the Costs Respondent’s submissions dated 5 May 2017. Mr Farrar further submitted that, although the Review Panel said in its reasons for decision that it had considered all submissions made to the original costs assessor, I should not take it at its word, having regard to the omission referred to above in the costs assessor's recitation in the reasons for decision of documents considered.

The alleged prejudice to the plaintiff

8. Mr Farrar further submitted that, as the first defendant is apparently presently practising on the island of Jersey, there is a risk that, if the appeal is successful, the plaintiff will not be able to recover the costs. I was informed by Mr Mavrakis, who appears on behalf of the defendants, that the first defendant has strong ties to New South Wales and that her parents live in Mollymook. She is apparently working temporarily in Jersey. Further, Mr Farrar submits that the second defendant, who is a company, has not filed any returns with ASIC for some four years. Accordingly, he submitted that I could have no confidence that the second defendant is an extant company who would be able to meet any further claim on its funds if the appeal were successful.

Consideration

9. This dispute revolves around what should occur with the balance of the $38,718.50 which presently remains in Court, but is the subject of an application for release which will be considered by Hammerschlag J on 18 May 2018. In considering the plaintiff’s application, I do not intend to interfere with his Honour’s ultimate determination of the issue raised by the defendant’s notice of motion in the Equity Division, although my decision in this matter may have some bearing on it.

10. Following the Review Panel’s decision to affirm the costs assessment, it was converted into a judgment of this Court. Accordingly, it does not appear to me that the power I have to suspend the operation of the determination or decision under s 386 of the 2004 Act is either apposite or available. The real question is whether I am prepared to stay the judgment of the Court, that being the relevant operative order.

11. Although the plaintiff has not sought leave to amend its summons to apply for a stay, in light of the submissions that have been made it would appear to me that I should consider that question of whether this Court should grant a stay of that judgment. The only basis on which the stay should be granted is that, in the event the plaintiff obtains leave to appeal against the decision of the Review Panel or that of the original costs assessor, then it may be out of pocket if the defendants do not have the funds to make up the difference.

12. In deciding whether to grant a stay, it is necessary to consider the interests of justice as provided for in Part 6 of the Civil Procedure Act2005 (NSW). The proposed grounds of appeal do not appear to be strong. The second ground is barely arguable. As to the first ground proposed, although the applicable legislation was misstated, Mr Farrar was unable to identify any material difference which would lead to a different result under the 2004 Act than its successor, since the relevant aim of both is the determination of what costs are fair and reasonable.

13. The amount in dispute, which appears to be limited in broad terms to the $38,000, would appear to be grossly disproportionate to the amount of time and costs that this Court, and the parties, will spend on the matter if leave were granted. I have also considered the present location of the first defendant and the material concerning the second defendant company. In all the circumstances, I am not persuaded that it is in the interests of justice to stay the judgment of this Court; or to accede to the claims for relief made by the plaintiff in prayers 1, 2 and 3 of the summons.

14. Accordingly, the applications for suspension of the certificate or the determination of the Review Panel and the (implied) application for a substantive stay of the judgment are dismissed.

15. The parties have provided me with a copy of short minutes of order. I note that the parties consent to orders in terms of paragraphs 4, 5 and 6.

Costs

16. The defendants apply for the costs of today’s application. This application is resisted by Mr Farrar, who submits that the costs should be reserved pending the application for leave to appeal. In my view, the matters the subject of today's application were discrete. The defendants have been successful. Accordingly, there is no reason to depart from the general rule pursuant to Uniform Civil Procedure Rules 2005 (NSW) r 42.1 that costs ought follow the event.

17. The defendants applied for an order that the costs be specified in a gross sum instead of assessed costs pursuant to s 98(4) of the Civil Procedure Act. I consider that this is an entirely appropriate order to make particularly in the circumstances of this case where, as I have said in my reasons above, there appears to be a disproportionality between the amount at issue and the time and costs that will be expended in the resolution of all disputes between the parties.

18. Mr Mavrakis has submitted that the sum specified should be $2,000 including GST. I note the matter was referred to me as Duty Judge by the Registrar at 10am and the matter stood in the list until the hearing commenced at about 11.50am. It is now 1.20pm. In these circumstances, I consider the amount sought by Mr Mavrakis to be an appropriate and reasonable amount. Although the defendants sought that the costs be paid forthwith, I propose to allow 28 days for payment.

Orders

19. For the reasons given above I make the following orders:

1. Refuse a stay of the judgment entered in favour of the defendants in this Court in matter number 2018/120068.

2. Dismiss the plaintiff’s claims for relief in prayers 1, 2 and 3 of the summons.

3. Order the plaintiff to pay the defendants’ costs of the application on 15 May 2018 in the gross sum of $2,000, inclusive of GST, to be paid within 28 days hereof.

4. BY CONSENT

5. Direct the plaintiff to file and serve by 5 June 2018 a statement setting out the grounds upon which the plaintiff asserts that leave to appeal should be granted.

6. Direct the defendant to file and serve by 18 June 2018 a statement setting out the grounds on which the defendants oppose a grant of leave to appeal.

7. Stand over the summons to 9am on 19 June 2018 before the Registrar for further directions.

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Decision last updated: 16 May 2018