Naro Investments Pty Limited v Benjamin and Khoury Pty Limited (No 2)

[2020] NSWSC 689

Supreme Court

New South Wales

Medium Neutral Citation:	Naro Investments Pty Limited v Benjamin & Khoury Pty Limited (No 2) [2020] NSWSC 689
Hearing dates:	On the papers
Date of orders:	03 June 2020
Decision date:	03 June 2020
Jurisdiction:	Equity
Before:	Rees J
Decision:	Plaintiff to pay defendant’s costs of motion in fixed sum, payable forthwith.
Catchwords:	COSTS – application for costs to be fixed in a gross sum — quantification — no issue of principle — costs fixed — payable forthwith
Legislation Cited:	Civil Procedure Act 2005 (NSW), s 98(4)(c) Uniform Civil Procedure Rules 2005 (NSW), r 42.7
Cases Cited:	Bell Lawyers Pty Ltd v Pentelow [2019] HCA 29 Naro Investments Pty Limited v Benjamin & Khoury Pty Limited [2020] NSWSC 656
Category:	Costs
Parties:	Naro Investments Pty Limited (First Plaintiff/ Applicant)   Benjamin & Khoury Pty Limited (Defendant/First Respondent) Andask Pty Limited (Second Respondent)
Representation:	Counsel: Ms N Obrart (First Plaintiff/Applicant) Ms M Castle (Defendant/First Respondent) Mr D Edney (Second Respondent)   Solicitors: Harper James Law Group (First Plaintiff/Applicant) Benjamin & Khoury Solicitors (Defendant/First Respondent) Assured Legal Solutions (Second Respondent)
File Number(s):	2019/182253

Judgment

1. HER HONOUR: On 21 May 2020, I gave judgment in Naro Investments Pty Limited v Benjamin & Khoury Pty Limited [2020] NSWSC 656, refusing to make orders sought by the first plaintiff, Naro Investments Pty Limited, to restrain its first registered mortgagee, Andask Pty Limited, from taking steps to sell the mortgaged property. Also a respondent to Naro’s motion was a law firm, Benjamin & Khoury, who are defendants in the substantive proceedings but against whom no relief was sought in the motion. Nonetheless, Benjamin & Khoury filed an affidavit in response to the motion, accompanied by two lever arch folders of documents to which it was unnecessary to refer. At the conclusion of the hearing, Benjamin & Khoury sought their costs of the motion, such costs to be payable forthwith.

2. As to whether a costs order should be made in favour of Benjamin & Khoury at all, Naro submitted that the orders sought in the motion, being the continuation of the marketing of the two properties together, was one which was previously agreed to by Benjamin & Khoury as being the most beneficial way to proceed. The reason the properties were being sold at all was to pay legal fees owing to Benjamin & Khoury. Although Benjamin & Khoury chose to oppose the application, no orders were sought against the law firm and the application was in pursuance of what Benjamin & Khoury had indicated was the preferred position in terms of marketing the properties together. That submission was well made. It was also consistent with the law firm’s request that I make a notation in my judgment and orders that the parties would exercise their best endeavours to market the properties together and try and achieve a joint sale if possible.

3. I indicated that I was minded to order that Naro pay the law firm’s costs of the motion but to fix the amount. I expressed concern as to why the affidavit filed by Benjamin & Khoury had been prepared at all, and further concern as to the amount of costs which had been incurred in that process which was sought to be recovered from Naro. I directed Benjamin & Khoury to provide to my Chambers, copied to Naro’s legal representatives, the amount of legal costs which were sought, together with any submissions as to why these costs should be paid forthwith. The plaintiffs’ legal representatives were invited to provide any submissions in reply. The parties agreed that I could fix an appropriate amount of costs in Chambers and decide whether any costs should be payable forthwith on the papers.

4. Benjamin & Khoury sought legal costs for the motion in the sum of $6,600, including counsel’s fees and disbursements. Benjamin & Khoury’s counsel advised that this figure had been discounted. I was also advised that this figure did not include professional fees incurred by the solicitors for the hearing of the motion in accordance with Bell Lawyers Pty Ltd v Pentelow [2019] HCA 29. There was no affidavit in support of this. That does not mean that I doubt counsel for Benjamin & Khoury, but simply that, ordinarily, such matters are the subject of evidence. In any event, Benjamin & Khoury submitted that the costs should be fixed in the sum of $6,600 payable forthwith as the plaintiffs’ motion was in effect a separate proceeding and ought to have been commenced by way of summons in which some form of final relief should have been sought. Rather, the first plaintiff elected to file a motion in these proceedings and join Andask as the second respondent. The motion having been dismissed, the separate proceedings had come to an end. There was no reason why Benjamin & Khoury should have to wait until the conclusion of these proceedings to recover their costs incurred in opposing Naro’s motion. Thus, it was submitted that the Court should exercise its power under rule 42.7 of the Uniform Civil Procedure Rules 2005 (NSW) and order that Naro pay Benjamin & Khoury’s costs in the sum fixed and payable forthwith.

5. Naro submitted, correctly, that Benjamin & Khoury had not proffered any evidence such as tax invoices in respect of the costs sought. In the absence of any evidence, Naro submitted that Benjamin & Khoury’s costs should be fixed in the sum of $2,200 as it was not necessary for the law firm to prepare submissions or the evidence it did or brief counsel on the application given that no orders were sought against the law firm. Whilst Naro accepted that its motion concerned a discrete issue, given the amount involved and the significant litigation taking place between the plaintiffs and the defendant, it was submitted that the interests of justice did not require that the amount be paid forthwith.

6. As to the amount, I accept Naro’s submissions. Whilst Benjamin & Khoury was a named respondent to the motion, no relief was sought against the firm. Benjamin & Khoury was obviously entitled to participate in the hearing of the motion but, given that no relief was sought against the firm and where Naro was effectively advancing a marketing campaign supported by the firm, I do not consider that it was necessary to prepare a detailed affidavit annexing two volumes of material. The focus of the motion was not whether Benjamin & Khoury had advanced the sale of the property expeditiously and, if not, why not, but whether the first registered mortgagee should be restrained from exercising its power of sale. Whilst the Court is generally assisted by parties briefing counsel, even where a party has a relatively minor role on a particular application, it seems to me that Benjamin & Khoury’s reasonable costs on a party and party basis of appearing in relation to the motion are as calculated by Ms Obrart, and I fix Benjamin & Khoury’s costs in that amount in the absence of any evidence to the contrary.

7. As to whether the costs should be paid forthwith, Naro accepted that determination of the motion brings to an end a discrete chapter in this litigation which, I apprehend, will drag on interminably without close case management. In those circumstances, I consider it appropriate that these costs be payable forthwith rather than make Benjamin & Khoury wait until the conclusion of the proceedings.

8. For these reasons I make the following order:

1. Order pursuant to section 98(4)(c) of the Civil Procedure Act 2005 (NSW) that the defendant is to be entitled to a specified gross sum in the amount of $2,200 including GST in respect of its costs of the first plaintiff’s motion filed on 14 May 2020, such costs to be payable forthwith.

**********

Decision last updated: 03 June 2020