Nicholas James Lawyers Pty Ltd v Dal Broi
[2025] VSCA 185
•18 August 2025
| SUPREME COURT OF VICTORIA COURT OF APPEAL |
| S EAPCI 2024 0152 |
| NICHOLAS JAMES LAWYERS PTY LTD & ORS (according to the attached Schedule) | Applicants |
| v | |
| BIANCA KATE DAL BROI | Respondent |
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| JUDGES: | BEACH, WALKER and KENNY JJA |
| WHERE HELD: | Melbourne |
| DATE OF HEARING: | 5 August 2025 |
| DATE OF JUDGMENT: | 18 August 2025 |
| MEDIUM NEUTRAL CITATION: | [2025] VSCA 185 |
| JUDGMENT APPEALED FROM: | [2024] VSC 755 (Quigley J) |
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COSTS – Application for leave to appeal – Application for leave to rely on new evidence – Order made for indemnity costs for the costs thrown away by reason of the adjournment of the trial and the need to undertake further interlocutory work and trial preparation – Order for amount of $120,000 to be paid on account forthwith – Applicants contend that this figure is unreasonable and seek to rely on new affidavit – Application to rely upon new affidavit refused – Application for leave to appeal refused.
Supreme Court (General Civil Procedure) Rules2015.
Beach Petroleum NL v Johnson(No 2) (1995) 57 FCR 119; Brookvista Pty Ltd v Meloni [2009] WASCA 180; Giurina v Greater Geelong City Council [2021] VSCA 341; Kuksal v Victorian Legal Services Board [2025] VSC 48; Giles v Jeffrey [2016] VSCA 314; Cargill Australia Ltd v Viterra Malt Pty Ltd [2023] VSCA 301; Gayed v Yuan [2024] VSCA 85; Li v So [2021] VSCA 32; State of Victoria v Villan [2022] VSCA 106, referred to.
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| Counsel | |||
| Applicants: | Mr P Noonan | ||
| Respondent: | Mr J Evans KC | ||
| Solicitors | |||
| Applicant: | Nicholas James Lawyers | ||
| Respondent: | Madgwicks Lawyers | ||
BEACH JA
WALKER JA
KENNY JA:
This is an application for leave to appeal against costs orders made against the applicants following the adjournment of a trial caused by the applicants’ late service of a witness statement. The witness statement was filed and served around five months after the times fixed by court orders had expired. It annexed over 30 documents which had not previously been discovered by the applicants, and it was served on the respondents two business days prior to the date on which the trial was due to commence. The trial was the trial of a second counterclaim in proceedings between the parties, and in which the respondent was the plaintiff by second counterclaim and the applicants were the defendants by second counterclaim.
As a result of the late service of the witness statement, at the commencement of the trial, the respondent applied to have the trial date vacated and for the applicants to pay the respondent’s costs thrown away, to be taxed on an indemnity basis. Applications were also made for such costs to be fixed; alternatively, that there should be an order for the payment of an interim amount. The applicants did not resist the application to vacate the trial date. They did, however, resist the various applications made by the respondent for costs.
On 4 December 2024, the trial judge delivered her ruling on costs.[1] In short, her Honour was persuaded ‘to make an indemnity costs order’ against the applicant ‘for the costs thrown away by reason of the adjournment of the trial’,[2] and to order that ‘an amount of $120,000 to be paid on account forthwith’.[3] In conformity with the Ruling, the judge made orders as follows:
1.The defendants by second counterclaim [applicants] pay the plaintiff by second counterclaim [respondent] her costs thrown away by reason of the adjournment of the trial and the need to undertake further interlocutory work and trial preparation, such costs to be taxed in default of agreement.
2.The defendants by second counterclaim [applicants] pay an amount of $120,000 to the plaintiff [respondent] in part-payment of the costs order made above within 14 days.
[1]Dal Broi v Nicholas James Lawyers Pty Ltd (Costs) [2024] VSC 755 (‘Ruling’).
[2]Ibid [30].
[3]Ibid [31].
While paragraph 1 of her Honour’s orders does not refer to the basis upon which the respondent’s costs are to be taxed, the applicants accept that, consistently with the Ruling, the costs ordered against them are indemnity costs, not standard costs.
In their application for leave to appeal and written case filed in this Court, the applicant sought to have both of her Honour’s orders (orders 1 and 2) set aside. In oral argument, however, the applicants abandoned their application to have order 1 set aside and confined their complaints to order 2. In summary, the applicants contended that, in making order 2, the judge erred in the way described in House v The King.[4]
[4](1936) 55 CLR 499, 505.
Specifically, the applicants submitted that it was not open to the judge to conclude that the respondent’s costs thrown away were at least $120,000 (proposed ground 2); that her Honour erred in failing to provide ‘any adequate reasoning to explain how she had arrived at the specific sum of $120,000’ (proposed ground 3); and that her Honour erred when she observed that the respondent asserted that her costs of preparation for trial totalled $254,887.29 (proposed ground 4), when in fact this figure was asserted by the respondent to be her total costs of the second counterclaim from its commencement to the date of trial.
For the reasons which follow, the application for leave to appeal must be refused.
Background
The trial of the second counterclaim was due to commence on Tuesday, 12 November 2024. The second counterclaim was part of a broader proceeding commenced in March 2021. In the principal proceeding, the plaintiff, NJ Capital Pty Ltd (‘NJ Capital’) brought proceedings against Andrew Dal Broi, Bianca Dal Broi (the respondent) and Helen Merrington alleging that they were guarantors of a loan.
The second counterclaim was commenced by the respondent in July 2021. In the second counterclaim, the respondent claimed damages on various bases against Nicholas James Lawyers Pty Ltd (‘Nicholas James Lawyers’), NJ Capital and Nikola Terziovski. NJ Lawyers is a law practice and the sole shareholder of NJ Capital. Mr Terziovski is a solicitor, and the sole director and shareholder of NJ Lawyers.
The applicant made discovery in the proceeding by way of an affidavit sworn by her in November 2022. The respondents made discovery by way of an affidavit of documents sworn by Mr Terziovski in April 2022. No further affidavits of documents were filed or served by any party prior to the hearing on 12 November 2024.
In the course of pretrial management of the proceeding, orders were made for the filing and service of witness statements in respect of the principal proceeding and the second counterclaim. Specifically, witness statements were required to be filed and exchanged by 31 May 2024, with any witness statements in reply to be filed and exchanged by 14 June 2024. In conformity with these orders, on 6 May 2024, a witness statement of Mr Terziovski was filed and served; and, on 27 May 2024, a witness statement of the respondent was filed and served. No other witness statements relevant to the issues raised by the second counterclaim were filed or served, and no reply witness statements were filed or served.
On 2 October 2024, orders were made by Gobbo AsJ fixing the trial of the principal proceeding and the second counterclaim for hearing on 12 November 2024 on an expedited basis.
On 21 October 2024, NJ Capital gave notice that it sought to discontinue the principal proceeding. On 31 October 2024, Gobbo AsJ made orders by consent granting NJ Capital leave to discontinue the principal proceeding.[5] During the course of this hearing, the applicants applied to vacate the trial date of the second counterclaim which was then still fixed for hearing on 12 November 2024. After hearing submissions, her Honour refused that application.
[5]Her Honour also made an order that NJ Capital pay the respondent’s costs and Ms Merrington’s costs of the principal proceeding.
On Friday, 8 November 2024, the applicants served the witness statement, being a second witness statement of Mr Terziovski. On Monday, 11 November 2024 at 5:34pm, the applicants filed and served a written outline of opening submissions.
On Tuesday, 12 November 2024, at the scheduled commencement of the trial, the respondent applied to vacate the trial of the second counterclaim. In doing so, she relied upon two affidavits sworn by her solicitors: first, an affidavit sworn by Rebecca Di Rago (‘the Di Rago affidavit’), which contained details of relevant matters occurring between 2 and 29 October 2024; and secondly, an affidavit sworn by John Caridakis on 12 November 2024 (‘the Caridakis affidavit’). The Caridakis affidavit was served on the applicants at 9:39am on the day of the hearing.
The only dispute between the parties at the hearing on 12 November 2024 was in relation to costs — the applicants conceded that the trial date had to be vacated. After hearing argument, during which the respondent sought to persuade the judge that the applicants should be ordered to pay the respondent’s costs thrown away fixed in the amount of $228,129.22[6] (alternatively, that indemnity costs should be ordered with an order for an immediate interim payment from the applicants to the respondent), her Honour reserved her decision on costs.
[6]This was the figure referred to in a letter sent by the respondent’s solicitors to the applicants’ solicitors on 11 November 2024 at 1:14pm (see paragraph 27 of the Caridakis affidavit). However, in oral argument, counsel for the respondent submitted that, if the judge was minded to make an interim order, ‘an order of not less than 60 per cent of the costs which are identified should be made’.
The Ruling
The judge commenced the Ruling by setting out the background and the submissions of the parties.[7] In the course of summarising the respondent’s submissions, her Honour said that the respondent ‘had incurred costs in the preparation for the trial in the amount of $254,887.29 which was argued to be thrown away by the adjournment’.[8]
[7]Ruling, [1]–[21].
[8]Ibid [14].
Having set out the relevant background and submissions, the judge observed that section 24 of the Supreme Court Act 1986 gave the Court a ‘broad discretion to award costs, including on an indemnity basis’; and that the Court could also impose sanctions (which could include an order for the payment of indemnity costs) under Part 2.4 of the Civil Procedure Act 2010.[9]
[9]Ibid [22]. See Supreme Court (General Civil Procedure) Rules 2015 r 63.28.
The judge concluded that ‘the fault’ for the vacation of the trial ‘at the midnight hour’ fell at the feet of the applicants, saying:
I agree that the actions, or inaction and dilatory approach to timetable compliance by [the applicants], warrant a cost order in favour of [the respondent] and that some part of the costs should be paid immediately.[10]
[10]Ibid [23].
Having expressed the conclusion that the fault for the vacation of the trial fell squarely at the feet of the applicants, and especially Mr Terziovski, the judge said that he (Mr Terziovski) ‘should, as a practising solicitor, know better given his obligations to the Court’.[11] Her Honour then said:
I have formed the view that such actions or defaults fall short of what is expected from a registered practitioner. The actions are inconsistent with the overarching obligations of the Civil Procedure Act.
…
I am also persuaded that there should be a special costs order to properly recompense [the respondent] for [the applicants’] actions and dilatoriness.[12]
[11]Ibid [25].
[12]Ibid [25]–[27].
The judge observed that the late service of the witness statement required questions of the extent of repleading and further discovery to be considered. In those circumstances, her Honour was not prepared to award a special costs order in the terms sought by the respondent.[13] That said, her Honour was of the view that the interests of justice demanded that more than a standard costs order be made in favour of the respondent.[14]
[13]Ibid [27]. See also, paragraph [16] above.
[14]Ruling, [28].
Her Honour concluded the Ruling by saying:
The plaintiff by second counterclaim has claimed the costs expended are in the vicinity of $254,887.29. Figures around this were quoted in [a letter exhibited to the Caridakis affidavit].
Apart from these global figures, I have not been provided with copies of invoices or a further breakdown of costs so I am not in a position to order a specific sum. I am however prepared in all the circumstances to make an indemnity costs order for the costs thrown away by reason of the adjournment of the trial. These costs will include the interlocutory work which will need to be redone (any repleading and discovery) and the trial preparation for the new trial date which will also need to be redone.
I have made an assessment of an amount which I consider to be justifiable and fair based on the amounts quoted above and will order an amount of $120,000.00 to be paid on account forthwith, with the balance of the costs to be paid by the defendants by second counterclaim [applicants] to be taxed in default of agreement having taking in to account the exercise of discretion under the Supreme Court Act and the Supreme Court (General Civil Procedure) Rules 2015 (Vic) and the overarching obligations of the Civil Procedure Act.[15]
[15]Ibid [29]–[31] (footnotes omitted).
Submissions in this Court
As we have already said, in oral argument, the applicants abandoned complaints they had previously made in writing about order 1. The dispute between the parties ultimately only concerned order 2. In respect of order 2, the applicants advanced three arguments.
Applicants’ first argument
The applicants contended that order 2 required them to pay a gross sum, instead of taxed costs, as contemplated by rule 63.07(2)(c) of the Supreme Court (General Civil Procedure) Rules 2015 (‘the Rules’). Relying upon a number of authorities (‘the fixed costs authorities’),[16] the applicants submitted that, in fixing an amount for costs which they were required to pay, the Court was required to be ‘confident that the approach taken to the estimate of costs is logical, fair and reasonable’.[17] The applicants submitted that, in the present case, there was no material upon which her Honour could have been confident that her estimate of at least $120,000 for costs thrown away was ‘logical, fair and reasonable’.
[16]Including Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119, 123; Brookvista Pty Ltd v Meloni [2009] WASCA 180, [27]; Giurina v Greater Geelong City Council [2021] VSCA 341, [16]; Kuksal v Victorian Legal Services Board [2025] VSC 48, [14].
[17]Ibid.
In response to this argument, the respondent submitted that, in making these submissions, the applicants mischaracterised the true nature of order 2. The respondent contended that the judge did not order the payment of $120,000 as a fixed minimum amount for costs thrown away. Rather, her Honour ordered the applicants to pay the indemnity costs to be taxed — and then ordered that there be an immediate payment on account of those costs, in the sum of $120,000. The respondent submitted that the effect of order 2 was that if the costs ultimately taxed at an amount greater than $120,000 (as she submitted was most likely), then, the applicants would have to pay an additional amount to the respondent; alternatively, if the costs taxed at less than $120,000, then the difference between the taxed figure and $120,000 would be repayable by the respondent to the applicants.
The respondent submitted that, because the effect of order 2 was to order a payment on account rather than a minimum sum, the fixed costs authorities had no application in this case. The respondent also submitted that, in any event, the material before the judge (specifically, that contained in the Di Rago affidavit and the Caridakis affidavit) well-justified her Honour making an order for a payment on account of costs in the sum of $120,000.
Applicants’ second argument
The applicants contended that the Ruling contains no reasoning justifying the ordering of an amount of $120,000 to be paid on account of costs. They submitted that nothing in the Ruling explained how her Honour arrived at the figure of $120,000.
In response to this argument, the respondent submitted that her Honour sufficiently explained her reasoning by referring to the Caridakis affidavit and the amounts for costs set out therein.
Applicants’ third argument
The applicants submitted that her Honour misapprehended the true facts when she said that the respondent ‘had incurred costs in the preparation for trial in the amount of $254,887.29’.[18] The applicants observed that, in the Caridakis affidavit, Mr Caridakis had in fact deposed as follows:
I am informed by Ms Di Rago that she has reviewed Madgwicks and counsel’s fees in respect of costs incurred in the proceeding, and verily believe that the total legal costs of not less than $254,887.29 including GST have been incurred in respect of the second counterclaim to date (as distinct from the original proceeding), including in respect of preparation for trial… .
[18]Ruling, [14].
The applicants submitted that it was thus wrong for her Honour to say that the respondent claimed to have incurred costs in the preparation for the trial in the amount of $254,887.29. That amount was the amount of the respondent’s total costs of the second counterclaim.
In response to this argument, the respondent submitted that her Honour did not make any material error when referring to the figure of $254,887.29 because the respondent’s claim, for costs thrown away by reason of the adjournment, was for all of the costs incurred since August 2021. The respondent submitted that all of those costs would ultimately be wasted as a result of the vacation of the trial date and the consequential need for repleading and further discovery.
Application to adduce further evidence
Before analysing these arguments, it is necessary to deal with an application made by the applicants to rely on an affidavit of one of their solicitors, Michael King, affirmed on 31 July 2025 (‘the new affidavit’). During the course of the hearing, we were told by counsel for the applicants that the applicants sought to rely upon the new affidavit to show that, if the material in the new affidavit had been before the judge, her Honour ‘would not have relied upon the $254,000 to guide her assessment of some appropriate sum because that [figure] actually does not bear any proper relationship to the costs thrown away by reason of [the adjournment]’.
The respondent objected to the applicants relying upon the new affidavit. They observed that the new affidavit was served on them a mere two business days before the hearing in this Court — and well outside the time limited for the service of an application for leave to adduce further evidence provided by rule 64.13(3)(b) of the Rules.[19] The respondent submitted that the new affidavit did not give a complete account of the dealings between the parties. If the affidavit had been served within the time required by the Rules, the respondent would have sought leave to rely upon an answering affidavit in which all of the relevant dealings between the parties (including correspondence passing between them) would have been referred to and dealt with.
[19]Rule 64.13(3)(b) of the Rules requires an application for leave to rely on further evidence to be filed and served at least 28 days before the hearing of an application for leave to appeal.
However, having made those submissions, the respondent conceded that the figure of $254,887.29 referred to in the Caridakis affidavit overstated the respondent’s costs of the second counterclaim by $24,695 in relation to counsel’s fees. This meant that the figure that should have been put to her Honour in relation to the respondent’s costs thrown away was about $230,000.
Noting the concession made by the respondent in relation to this error, we are not persuaded that the applicants should now be permitted to rely upon the new affidavit.
First, no explanation was given by the applicants for their failure to make an application to rely on the new affidavit within the time provided by rule 64.13(3)(b) of the Rules.
Secondly, the late application to rely on the new affidavit deprived the respondent from an ability to file answering material giving a more complete picture of the dealings between the parties and the issues raised in the new affidavit.
Thirdly, it is not reasonably clear to us that, if the evidence contained in the new affidavit had been adduced before the judge, an opposite result would have been produced.[20] The affidavit contained various assertions about deficiencies in the calculations underpinning the Caridakis affidavit; but it was clear that those assertions were disputed (save for the concession concerning counsel’s fees).
[20]See Giles v Jeffrey [2016] VSCA 314, [207] and the cases referred to therein. See also, Pateras v State of Victoria [2017] VSCA 31, [64].
For these reasons, we would refuse the application made by the applicants to rely upon the new affidavit. We turn now to consider the resolution of the application for leave to appeal.
Consideration
This Court has repeatedly observed that appeals from orders as to costs are treated as exceptional and require this Court to exercise particular restraint.[21] Moreover, there is a strong presumption in favour of the correctness of an exercise of discretion on costs.[22] The test is not whether this Court would have exercised the discretion in the same way as the primary judge, but whether there was a ground on which the judge could reasonably have made the order in question.[23]
[21]Cargill Australia Ltd v Viterra Malt Pty Ltd [2023] VSCA 301, [63] (Sifris, Walker and Whelan JJA); Gayed v Yuan [2024] VSCA 85, [51] (Beach and Orr JJA).
[22]Li v So [2021] VSCA 32, [75] (Tate, Emerton and Sifris JJA); State of Victoria v Villan [2022] VSCA 106, [40] (Kennedy and Walker JJA).
[23]Ibid.
The applicants’ arguments in this Court are devoid of merit.
First, contrary to the applicants’ submissions, the judge did not make an order for the payment of a fixed sum instead of taxed costs. Order 2 required the payment of a sum on account of costs which were required to be taxed in default of agreement by order 1. In the circumstances, the fixed costs authorities relied upon by the applicants had no application in this case.
Secondly, while it may be accepted that her Honour did not provide any detailed analysis of how she arrived at the sum of $120,000 ordered to be paid on account, it is to be remembered that the Ruling was a ruling on costs — and interlocutory costs at that.
That said, at the time the judge heard the argument on costs, her Honour considered (rightly in our view) that a significant sum of costs had been, and would in the future be, thrown away by reason of the unsatisfactory conduct of the applicants. In picking the figure of $120,000 to be paid on account, her Honour said that she had had regard to the amounts referred to in the Caridakis affidavit — that affidavit disclosing that the respondent had already incurred in excess of $200,000 in respect of the costs of the second counterclaim. In the circumstances of this case, little more (if anything) needed to be said by her Honour. Again, it is to be remembered that what was being ordered was a payment on account of costs which were required to be taxed in default of agreement.
Finally, we are not persuaded that her Honour made any material error when she referred to the respondent having incurred costs in the preparation for trial in the amount of $254,887.29. While it would now appear that this sum was overstated by $24,695 (a matter which was not known to her Honour), in our view, that relatively small and then unknown difference is not such as would justify this Court in interfering with order 2.
More particularly, the trial judge was clearly persuaded that the applicants’ conduct had resulted in significant costs being thrown away (past and future). We are not persuaded that, the question of whether the respondent had, in fact, already incurred costs of $200,000 or $225,000 or $250,000 in the prosecution of the second counterclaim and/or preparation for its trial was material to her Honour’s decision to order that the sum of $120,000 be paid on account of the significant costs which had been (and were likely to be) thrown away by the need to reprepare the matter, the need to replead and the need for further discovery.
In any event, the judge was entitled to use her experience gained over many years as to the likely future course of the proceeding and the likely order of magnitude of costs that had, and would be, thrown away because of the applicants’ dilatory conduct, before choosing some amount to be paid on account of those costs. The choosing of a figure to be paid on account did not require the judge to engage in a calculation involving mathematical precision. Again, and at base, it is to be remembered that the amount in order 2 was only ordered to be paid on account of costs which were required to be taxed in default of agreement.
In the circumstances, we are not persuaded that her Honour made any House v The King type error when she made order 2.
Conclusion
The application for leave to appeal will be refused.
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SCHEDULE OF PARTIES
| NICHOLAS JAMES LAWYERS PTY LTD (ACN 601 167 220) | FIRST APPLICANT |
| NJ CAPITAL PTY LTD (ACN 604 483 409) | SECOND APPLICANT |
| NIKOLA TERZIOVSKI | THIRD APPLICANT |
| AND | |
| BIANCA KATE DAL BROI | RESPONDENT |
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