Litigation Fund WCX Pty Ltd v Daren Mitchell (No 2)

[2025] NSWCA 33

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:

Litigation Fund WCX Pty Ltd v Daren Mitchell (No 2) [2025] NSWCA 33

Hearing dates:

On the papers

Date of orders:

10 March 2025

Decision date:

10 March 2025

Before:

Griffiths AJA

Decision:

(1) Litigation Fund WCX Pty Ltd is to pay the first respondent’s costs of the notice of motion filed 24 January 2025 and the notice of motion filed 14 January 2025 on an indemnity basis.

(2) Order pursuant to s 98(4)(c) of the Civil Procedure Act 2005 (NSW) that the first respondent is entitled to a specific gross sum in the total amount of $69,336.33 (plus GST).

(3) The first respondent’s costs are payable forthwith by Litigation Fund WCX Pty Ltd such that they are payable within 28 days hereof.

Catchwords:

COSTS — application for gross sum costs order pursuant to s 98(4)(c) of Civil Procedure Act 2005 (NSW) — application for indemnity costs — costs of two notices of motion

Legislation Cited:

Civil Procedure Act 2005 (NSW), s 98(4)(c)

Cases Cited:

Beau Timothy John Hartnett trading as Hartnett Lawyers v Anthony Robert Bell as Executor of the Estate of the late Mabel Dawn Deakin-Bell (No 2) (2023) 113 NSWLR 381; [2023] NSWCA 311

Litigation Fund WCX Pty Ltd v Darren Mitchell [2025] NSWCA 27

Mitchell v Roads and Maritime Services (now known as Transport for NSW) (No 3) [2024] NSWSC 1593

Texts Cited:

Nil

Category:

Costs

Parties:

Litigation Fund WCX Pty Ltd (Applicant)
Darren and Rosaline Mitchell (First Respondent)
Roads and Maritime Services (now known as
Transport for NSW) (Second Respondent)

Representation:

Counsel:
R Coshott (Applicant, with leave)
J Redwood SC and H Cooper (First Respondents)

Solicitors:
Ironbridge Legal (First Respondents)
Crown Solicitor for NSW (Second Respondent)

File Number(s):

2024/00351500

Publication restriction:

Nil

JUDGMENT

1. On 28 February 2025, I published reasons for judgment in Litigation Fund WCX Pty Ltd v Darren Mitchell [2025] NSWCA 27. The reasons related to why the Court made an order for security for costs in favour of the first respondent and granted the Funder’s application for a stay (which was uncontested) but subject to a condition sought by the first respondent that the Funder pay into Court the amount of the judgment debt.

2. These reasons relate to costs and take into account the first respondent’s submissions filed 7 March 2025 and a supporting affidavit by their solicitor, Mr Trevor Withane, affirmed 25 February 2025. The applicant failed to provide submissions or any evidence within the stipulated time. The Court made orders that the issue of costs would be determined on the papers.

3. These reasons assume a familiarity with my previous reasons. I shall also adopt the same abbreviations.

Should the first respondent obtain an order for costs on an indemnity basis?

4. The first respondent sought costs of both their notice of motion filed 24 January 2025 and the Funder’s notice of motion filed 14 January 2025 on an indemnity basis.

5. In brief, the first respondent contends that the Court should apply the same reasoning as that of McGrath J in his Honour’s judgment on costs in Mitchell v Roads and Maritime Services (now known as Transport for NSW) (No 3) [2024] NSWSC 1593. In particular, they refer to what his Honour said at [62]:

I consider that by the Funder making a demand for the payment of the funds in the Ironbridge trust account to it, the plaintiffs were placed in a situation where they had no alternative other than to make an application to the court to resolve the dispute over those funds. Until that dispute was resolved, the plaintiffs did not have sufficient funds of their own to progress the proceedings on behalf of the group members to whom they owed fiduciary duties. Those circumstances require that the plaintiffs be fully compensated by the Funder paying the plaintiffs’ costs on an indemnity basis. Such an approach meets the considerations mentioned in Oshlack at [67]–[68], particularly resting on the fairness between the plaintiffs and the Funder due to conditions which had been created by the Funder.

6. I accept that submission. The Funder has sought leave to appeal from McGrath J’s first judgment but presumably will seek to extend that application in due course.

7. I accept the first respondent’s submission that they are required by their fiduciary duties as lead plaintiffs in the representative proceeding to defend the substantive proceeding. Their application for security for costs should be viewed in that broader context. Moreover, each of the Funder’s five primary submissions in opposition to the application for security for costs was rejected for reasons which are set out in my earlier reasons for judgment at [21]-[42].

Gross sum costs order

8. The first respondent seeks a gross sum costs order pursuant to s 98(4)(c) of the Civil Procedure Act 2005 (NSW), relying upon the principles stated in cases such as Beau Timothy John Hartnett trading as Hartnett Lawyers v Anthony Robert Bell as Executor of the Estate of the late Mabel Dawn Deakin-Bell (No 2) (2023) 113 NSWLR 381; [2023] NSWCA 311 at [45]-[46] per Bell CJ and Adamson JA.

9. I accept the first respondent’s submissions in favour of there being a gross sum costs order. First, for the reasons set out in my earlier judgment, there are reasons to doubt whether the Funder has sufficient financial means to pay such costs as are ultimately assessed.

10. Secondly, Mr Withane’s latest affidavit provides an adequate basis for the Court to arrive fairly and confidently at a gross sum.

11. Thirdly, it is relevant to take into account the procedural history of the matter. The Funder’s application for leave to appeal is appropriately described as “a yet more remote satellite dispute”. It is consistent with the overarching purpose to minimise the prospect of further such disputes, including a contested taxation before a costs assessor.

12. Fourthly, although not determinative, it is relevant to note that McGrath J made an order for costs on a gross sum basis in the proceedings below. See his Honour’s reasons at [69]-[74] and [78]-[85], which I will not repeat but with which I respectfully agree.

13. I have had regard to Mr Withane’s latest affidavit and, subject to some exceptions which I will shortly identify, I consider that it provides a sufficient basis upon which the Court can assess costs on an indemnity basis.

14. In brief, Mr Withane explained why the first respondent seeks a gross sum costs order in the amount of $73,341.13 (plus GST). This figure is arrived at by adding the following four amounts:

1. professional fees charged by Ironbridge in respect of the two motions, in the amount of $37,206 (plus GST);

2. disbursements, in the amount of $1,880.13 (plus GST);

3. counsels’ fees in respect of the two motions, in the amount of $31,580 (plus GST); and

4. estimated future professional fees to be charged by Ironbridge in relation to this application, in the amount of $2,675 (plus GST).

15. For the following reasons, I propose to vary some of these figures. In the case of disbursements, Mr Withane’s figure of $1,880.13 (plus GST) is wrong. Based on annexure “B” to his affidavit, the figure should be $1,885.33 (plus GST).

16. Secondly, Mr Withane’s figure of $31,580 (plus GST) for counsels’ fees is also wrong. Based on annexures “C”, “D” and “E” to his affidavit, the figure should be $31,080 (plus GST).

17. Thirdly, Mr Withane’s figures concerning counsels’ fees includes fees for matters apart from the two motions. Thus, $3,000 (plus GST) charged by Mr Redwood SC for “Review and settling of submissions on leave to appeal” should be deducted. Similarly, Mr Cooper’s charge of $510 (plus GST) for “Settling affidavit on use of funds on security for costs application” (referring to 24 February 2025) should not be taken into account having regard to what I said at [52] of my earlier reasons for judgment.

18. Fourthly, Mr Withane’s figures at [31] of his latest affidavit are arithmetically incorrect. Correcting for the errors identified at [15] and [16] above, the indemnity sum of $73,341.13 (plus GST) should be $72,846.33 (plus GST).

19. For all these reasons, I consider that a gross sum costs order should be made on an indemnity basis in the amount of $69,336.33 (plus GST).

Costs payable forthwith

20. The relevant principles are conveniently summarised by McGrath J in his latest judgment at [87]-[91], with which I respectfully agree. His Honour ordered the Funder to pay lump sum costs forthwith.

21. For similar reasons, a similar order should be made here. I will order the Funder to pay the gross sum costs order forthwith and in any event within 28 days of the date of these orders.

Conclusion

22. For these reasons, I will make the following orders:

1. Litigation Fund WCX Pty Ltd is to pay the first respondent’s costs of the notice of motion filed 24 January 2025 and the notice of motion filed 14 January 2025 on an indemnity basis.

2. Order pursuant to s 98(4)(c) of the Civil Procedure Act 2005 (NSW) that the first respondent is entitled to a specific gross sum in the total amount of $69,336.33 (plus GST).

3. The first respondent’s costs are payable forthwith by Litigation Fund WCX Pty Ltd such that they are payable within 28 days hereof.

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Decision last updated: 10 March 2025