FEDERAL COURT OF AUSTRALIA
LFDB v MS S M (No 2) [2018] FCA 2062
File number: NSD 1448 of 2018 Judge: MARKOVIC J Date of judgment: 20 December 2018 Catchwords: COSTS – lump sum costs – whether costs should be fixed in a lump sum – application allowed. Legislation: Federal Court of Australia Act 1976 (Cth) ss 20A(2), 43
Federal Court Rules 2011 (Cth) r 40.02(b)
Cases cited: Bitek Pty Ltd v IConnect Pty Ltd (2012) 290 ALR 288; [2012] FCA 506
Paciocco v ANZ (No 2) (2017) 253 FCR 403
Su v Australian Fisheries Management Authority (No 3) [2008] FCA 2018
Date of hearing: Determined on the papers Registry: New South Wales Division: General Division National Practice Area: Commercial and Corporations Sub-area: General and Personal Insolvency Category: Catchwords Number of paragraphs: 27 Solicitor for the Applicant: Knight Family Lawyers Solicitor for the Respondent: Marque Lawyers ORDERS
NSD 1448 of 2018 BETWEEN: LFDB
Applicant
AND: MS S M
Respondent
JUDGE:
MARKOVIC J
DATE OF ORDER:
20 DECEMBER 2018
THE COURT ORDERS THAT:
1.The applicant pay the respondent’s costs on a lump sum basis in the sum of $20,950.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
MARKOVIC J:
On 13 September 2018 the Court made orders dismissing LFDB’s application to set aside a bankruptcy notice served on him by MS S M (Application) and ordering that LFDB pay MS S M’s costs of that application: see LFDB v MS S M [2018] FCA 1397. MS S M has applied for an order that those costs be awarded in a lump sum.
In support of the application MS S M relies on an affidavit affirmed by her solicitor, Damian Bruce Sturzaker on 20 September 2018. In response, LFDB relies on an affidavit affirmed by him on 1 November 2018. The parties agreed that they would not provide submissions and that it was appropriate for the Court to proceed on the basis of their respective affidavits.
The parties also agreed that the issue of whether costs should be awarded on a lump sum basis and, if so, the quantification of those costs, should proceed on the papers. I was satisfied that these issues could be dealt with in that way: see s 20A(2)(c)(ii) of the Federal Court of Australia Act 1976 (Cth) (Federal Court Act).
LEGAL PRINCIPLES
Section 43(1) of the Federal Court Act empowers the Court to award costs in favour of a party and, relevantly, provides that the Court or a Judge may award a party costs in the specified sum: see s 43(3)(d).
Rule 40.02(b) of the Federal Court Rules 2011 (Cth) (Rules) provides that a party or a person who is entitled to costs may apply to the Court for an order that costs be awarded in a lump sum, instead of, or in addition to, any taxed costs.
The…
Continue reading LFDB v MS S M (No 2)
Sign in free to access the full text
- AGLC
- LFDB v MS S M (No 2) [2018] FCA 2062
- Case
- [2018] FCA 2062
- Decision Date
CaseChat Overview and Summary
The court found that the respondent's costs for the application were reasonable and that she was entitled to recover those costs on a lump sum basis. The court accepted the evidence of Mr Sturzaker, who provided an estimate of the costs incurred by the respondent. The court noted that there was no evidence presented by the applicant to contradict the estimate. The court also considered the nature of the work performed, including the urgency of the matter and the need for senior counsel, which it found to be justified. Regarding the application for lump sum costs, the court determined that the amount claimed for professional fees should be reduced to 75% of the total estimate, given the lack of justification for the higher percentage claimed by the respondent.
In conclusion, the court ordered that the applicant pay the respondent's costs on a lump sum basis in the amount of $20,950, which included $7,400 for professional fees, $9,800 in counsel fees, and $3,750 for costs associated with the application for lump sum costs. The court emphasised that the decision was based on the evidence presented and the principles of reasonableness in awarding costs.
Orders
Orders of the court
1. The applicant pay the respondent’s costs on a lump sum basis in the sum of $20,950.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Ratio Decidendi
Legal Principle Established
LFDB does not rely on expert evidence from a costs assessor or evidence of his own solicitor based on his experience to dispute the amount claimed by MS S M. Rather LFDB:(1)says that no evidence has been provided by MS S M to support the amount claimed by way of timesheets and that until that material is provided he cannot make any observations about the costs claimed;(2)asserts that no allowance has been made for secretarial or paralegal work leading him to conclude that work that could have been undertaken by a paralegal or secretary was undertaken by a lawyer, senior associate or partner;(3)disputes Dr Ward was retained to provide advice, as opposed to appearing on the hearing of the Application, and disputes that the matter was so complicated that it required senior counsel of Dr Ward’s standing;(4)alleges that the work undertaken could have been undertaken by someone other than a lawyer or that it could have been undertaken by a lawyer and clerical staff; and (5)disputes the estimate claimed for future costs in connection with the application for lump sum costs asserting that, in relation to the claim for $5,000 to prepare Mr Sturzaker’s affidavit, no detailed explanation was given as to who prepared the affidavit and how long it took. Consideration In my opinion, MS S M is entitled to recover $20,950 on a lump sum basis for her costs of the Application comprising the following:(1)$7,400 for professional fees incurred in connection with the Application;(2)$9,800 in counsel fees; and(3)$3,750 for costs in relation to the application for a lump sum costs order. My reasons for reaching this conclusion follow. First, Mr Sturzaker’s evidence is that the calculations in respect of the costs claimed by MS S M are correct and capable of verification if required by the Court via the timesheets of the lawyers involved in the matter and invoices rendered to MS S M. I did not require that verification to be provided and had no reason to doubt that Mr Sturzaker had properly set out the amount incurred. LFDB said that he could not verify the amounts claimed without the underlying material but there is no evidence that he sought that material from MS S M’s lawyers and was refused access to it nor was any application made for that material to be provided. Secondly, I was satisfied that, given the urgency with which this matter was dealt and his knowledge of the issues as a result of his prior involvement, it was appropriate that Dr Ward be retained to act for MS S M on the application. Thirdly, Mr Sturzaker’s evidence is that in his experience it is common to recover on a party-party basis between 75% and 85% of solicitors’ fees and 100% of disbursements, including counsel’s fees. However, he goes on to say, without providing any particular justification, that MS S M would in this case recover 85% of Marque Lawyers’ fees. Given the lack of fulsome explanation for that conclusion, in my opinion, it is appropriate that the recovery of professional fees on the Application be assessed at 75%, rather than 85%, an amount which is approximately $7,400. I accept Mr Sturzaker’s evidence that it is common to recover 100% of disbursements, including counsel’s fees.