Poulos v Eberstaller (No 2)

[2014] NSWSC 235

Supreme Court

New South Wales

Medium Neutral Citation:	Poulos v Eberstaller (No 2) [2014] NSWSC 235
Decision date:	17 March 2014
Before:	Pembroke J
Decision:	See paragraph [13]
Catchwords:	COSTS - gross fixed sum costs order
Legislation Cited:	Civil Procedure Act 2005 (NSW) Conveyancing Act 1919 (NSW) Family Law Act 1975 (Cth)
Cases Cited:	Poulos v Eberstaller [2013] NSWSC 1849
Category:	Costs
Parties:	Lisa Ann Poulos - plaintiff Hans Richard Eberstaller - first defendant Premjit Singh - second defendant
Representation:	Counsel: K P Tang - for the plaintiff R Gorszyca - (solicitor) for the first defendant No appearance for the second defendant Solicitors: Allygroup - for the plaintiff Bruce & Stewart Lawyers - for the first defendant No appearance for the second defendant
File Number(s):	2013/245442

Judgment

Introduction

1. On 12 December 2013 in Poulos v Eberstaller [2013] NSWSC 1849, I said at [45]:

The first and second defendants should pay the plaintiff's costs. They should be severally liable. If so advised, I will entertain an application by the plaintiff for a special costs order, if there are grounds for doing so. This is an appropriate case for a fixed lump sum costs order: see Ireland v Retallack (No 2) [2011] NSWSC 1096 at [38] - [44]. In the circumstances of this case and given the relationship between husband and wife, and particularly having regard to the conduct of the first defendant which I have explained at length above, including his predilection for disputation, it is not in the interests of justice that the plaintiff be subjected to a lengthy contested costs assessment. I am in a better position than a costs assessor to undertake an assessment. The parties should agree on directions for a time-table for written submissions and any evidence on the amount of an appropriate assessment of the plaintiff's costs of these proceedings.

1. The plaintiff duly obtained a report from a highly experienced costs consultant, Peta Solomon, who concluded that in her opinion the 'likely recovery of costs' [by the plaintiff] 'should the matter proceed to assessment on an ordinary basis' was $148,278.78. There was no competing expert evidence, no cross-examination of Ms Solomon and no direct challenge to her evidence.

1. However the first defendant contended that only approximately $45,000 should be allowed to the plaintiff. His principal arguments were as follows. He submitted that these proceedings are a 'matrimonial cause' and that the court is exercising jurisdiction under the Family Law Act 1975 (Cth). It followed, he submitted, that the Family Law Rules 2004 (Cth) governed any question of costs and that consequently each party should pay his or her own costs. Alternatively, he submitted that the scale of costs in the Family Court of Australia should apply to these proceedings. In further alternative, he contended that due to wastage and duplication, not all of the costs which are the subject of Ms Solomon's report, should be allowed. He does not oppose the making of a lump sum costs order. The only issue is the amount.

Matrimonial Cause

1. I am prepared to accept that these proceedings may arguably, and coincidentally, satisfy the definition of 'matrimonial cause' within the meaning of Section 4(1)(ca)(i) or (ii) of the Family Law Act 1975 (Cth). That definition refers to 'proceedings between the parties to a marriage with respect to the property of the parties to the marriage ... arising out of the marital relationship, or in relation to concurrent, pending or completed divorce proceedings between those parties'.

1. However, that is not the point. There has never been a suggestion that this court lacked power to deal with this dispute or was not properly exercising the jurisdiction of this court. Nor has it ever been contended that this court was not a proper or convenient forum. No such contentions were put to Robb J at the interlocutory injunction hearing. None were put to me at the final hearing. No cross-vesting application to the Family Court of Australia was made.

1. Although the origin of the first defendant's primary obligation to the plaintiff was an agreement embodied in consent orders of the Family Court of Australia, the cause of these proceedings was a purported sale of the Bellevue Hill property by the first defendant to the second defendant. When the plaintiff commenced these proceedings her immediate objective was to prevent or set aside that sale. She sought an order pursuant to Section 37A of the Conveyancing Act 1919 (NSW) avoiding the transfer. It was a quintessential Equity proceeding.

1. It would not have mattered whether the underlying obligation arose out of consent orders of the District Court, the Land & Environment Court or the New South Wales Administrative Tribunal. Whatever the original source of the cause of action, the hearing in a case such as this involves the exercise of the jurisdiction of this court. That includes the broad discretionary power to award costs pursuant to Section 98 of the Civil Procedure Act 2005 (NSW).

1. In any event, for what it is worth, Section 117(2) of the Family Law Act, like section 98(4)(c) of the Civil Procedure Act, confers on a court a discretion to make any order as to costs as it considers just. Both provisions authorise the making of gross fixed sum costs orders. Whether the source of jurisdiction is section 98 of the Civil Procedure Act or section 117 of the Family Law Act, I would, on the unique facts of this case, exercise my powers in the same way to reach the same result.

Discretion

1. In addition, the first defendant raised several particular objections to the amount put forward by the plaintiff's costs consultant. The first was that the rates set out in Schedule 3 of the Family Law Rules should be treated as 'an important guide to the rates which apply'. I do not agree.

1. The approach adopted by the costs consultant was orthodox and appropriate for proceedings in this court. I see no warrant for the costs being assessed by reference to the Family Law Rules. The commencement of proceedings in this court was necessitated by the first defendant's conduct in purporting to sell and transfer the property to the second defendant. He has only himself to blame for the fact that these proceedings were initiated. Having been regularly initiated, the costs usually allowable in this court should apply.

1. The first defendant also says that two counsel for the plaintiff were not justified. However the costs consultant dealt carefully with this issue and there was no challenge to her reasoning or her conclusion. She said in relation to the fees of junior counsel, Mr Tang:

34. I consider that the hourly rates charged by Mr Tang of counsel are substantially below market rates. The rates of charge by Mr Tang are below senior law clerk/junior solicitor rates and I consider same will be sustained without reduction.

35. I also note that savings were achieved by the preparation of submissions by Mr Tang at an extremely low hourly rate which also reduced the time which would otherwise have been required to be spent by Mr Sneddon on preparation which time would have been chargeable at more than double the hourly rate of Mr Tang.

36. I have had regard to the tasks undertaken by counsel, the time claimed and the rates of charge and I consider that counsels' fees would likely be sustained in full if costs were considered on either and ordinary or indemnity basis.

1. I accept the reasoning of the costs consultant and I do not think that I should reduce the amount allowable to the plaintiff because she engaged two counsel. These were the two main issues advanced in oral submissions by the first defendant's solicitor. The other matters were subsidiary and I will not detail them. I have, however, carefully considered each of them, especially having regard to the report of the costs consultant and my own knowledge and familiarity with the case. None of these further contentions on the appropriate amount was developed in argument. They do not justify any elaboration by me. None of them influences me to exercise my discretion other than to award to the plaintiff the full amount claimed.

Orders

1. I therefore give judgment to the plaintiff against each of the first and second defendants in the sum of $148,278.78

Decision last updated: 18 March 2014