SULLIVAN v KREPP - [2023] SASC 4

Supreme Court of South Australia
(Civil)
SULLIVAN v KREPP
[2023] SASC 4
Reasons of Auxiliary Judge Norman a Master of the Supreme Court
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - TAXATION AND OTHER FORMS OF ASSESSMENT
Indemnity costs assessed on a Lump Sum basis.
Uniform Civil Rules 2020 (SA), referred to.
Viscariello v Macks (No 4) [2022] SASC 30; Blyth & Fanshawe, In re; Ex parte Wells (1882) 52 LJQB 186; Turter AO v Connor (No 2) [2021] SADC 151; Jones v Sutton (No 2) [2005] NSWCA 203; Auspine Ltd v Australian Newsprint Mills Ltd [1999] FCA 673; Leary v Lea [1987] 1 WLR 72; Ginos Engineers Pty Ltd v Autodesk Australia Pty Ltd [2008] FCA 1051, considered.

SULLIVAN v KREPP
[2023] SASC 4
In the Supreme Court of South Australia – Civil

This is a lump sum taxation of costs of the applicant pursuant to the order of Judge Bochner made on 9 September 2022. Following that order, and in support of his application for lump sum costs, the applicant filed an affidavit of his solicitor Mr Ibrahim dated 2 March 2022 exhibiting the costs then claimed, and in an affidavit dated 28 September 2022 of his solicitor Mr McGrath this claim was supplemented with updated figures for the period between 8 February 2022 and 20 September 2022 and providing an estimate that a further $1,000 would be incurred from then until the hearing. No materials have been filed by the respondent in response to the applicant’s claim.
Background
The proceedings were commenced on 29 June 2018. The applicant’s claim was for equitable relief, misappropriation, detinue and damages for conversion. Prior to September 2007, having been convicted of criminal offences, he was on bail pending sentencing and had arranged for the respondent, a friend, to assist him in storing his personal belongings and finalising the settlement of a property he owned in New South Wales. Shortly afterwards he was sentenced to a period of imprisonment and when he was released on 31 January 2013 he ascertained that the net proceeds of sale of his property, which were in the order of $300,000, were not in his account. Further, his items of personal property including his motor vehicle had not been returned to him. He commenced proceedings in an attempt to recover his money and his property.
The proceedings were characterised by delays and failures of the respondent to comply with Court orders. On 25 October 2019 the respondent applied to set aside the proceedings or alternatively a stay and this application was opposed and argued. On 31 January 2020 Judge Bochner dismissed the application, providing reasons on 5 March 2020. The respondent issued and proceeded with an appeal against these orders which was heard by Peek J, who on 11 June 2020 dismissed the appeal and awarded to the applicant his costs of the appeal on the ordinary basis. On 28 August 2020 the applicant issued an application,…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading SULLIVAN v KREPP

Details

AGLC: SULLIVAN v KREPP [2023] SASC 4
Case: [2023] SASC 4
Decision Date: 24 January 2023

CaseChat Overview and Summary

Sullivan v Krepp involved the applicant seeking indemnity costs assessed on a lump sum basis following the order of Judge Bochner made on 9 September 2022. The applicant, who commenced proceedings on 29 June 2018, sought equitable relief, misappropriation, detinue, and damages for conversion, alleging that the respondent had misappropriated his property and funds. The proceedings were marked by delays and non-compliance with court orders by the respondent. After a series of hearings and orders, the applicant was awarded damages in the sum of $463,017.60, and costs on an indemnity basis. The applicant then applied for these costs to be fixed on a lump sum basis, supported by affidavits detailing the costs incurred. The respondent did not respond to the applicant's claim for lump sum costs.

The court was required to determine whether the applicant was entitled to indemnity costs assessed on a lump sum basis. This involved considering the absence of submissions from the respondent on the costs claim, whether the costs claimed were reasonably incurred, and whether there was an apparent conflict between the costs orders made by different judges. The court also had to evaluate the charge-out rates claimed by the applicant's solicitors, the concept of proportionality, and the details of the individual items, counsel fees, and disbursements as provided in the schedule of costs and the affidavits.

The court found that the respondent had not complied with the onus of showing that the costs claimed were unreasonably incurred, as required by UCR 191.1. Consequently, the applicant was deemed entitled to the costs claimed. The court also noted an apparent conflict between the costs orders made in relation to the appeal and the final judgment, but concluded that this did not significantly affect the overall costs. The charge-out rates of the applicant’s solicitors were considered reasonable, and the concept of proportionality was taken into account in the assessment. The detailed breakdown of costs, including solicitor’s charges, counsel fees, and disbursements, supported the applicant’s claim.

The court ordered that the applicant’s costs be fixed on a lump sum basis as claimed, and directed the respondent to pay the applicant’s costs in the amount of $68,451.97. This included costs associated with the principal proceedings, the appeal, and the assessment of damages. The court’s decision was based on the applicant’s compliance with the procedural requirements and the reasonableness of the costs claimed.

Orders

Orders of the court

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Background

Background to the litigation

This is a lump sum taxation of costs of the applicant pursuant to the order of Judge Bochner made on 9 September 2022. Following that order, and in support of his application for lump sum costs, the applicant filed an affidavit of his solicitor Mr Ibrahim dated 2 March 2022 exhibiting the costs then claimed, and in an affidavit dated 28 September 2022 of his solicitor Mr McGrath this claim was supplemented with updated figures for the period between 8 February 2022 and 20 September 2022 and providing an estimate that a further $1,000 would be incurred from then until the hearing. No materials have been filed by the respondent in response to the applicant’s claim.Background The proceedings were commenced on 29 June 2018. The applicant’s claim was for equitable relief, misappropriation, detinue and damages for conversion. Prior to September 2007, having been convicted of criminal offences, he was on bail pending sentencing and had arranged for the respondent, a friend, to assist him in storing his personal belongings and finalising the settlement of a property he owned in New South Wales. Shortly afterwards he was sentenced to a period of imprisonment and when he was released on 31 January 2013 he ascertained that the net proceeds of sale of his property, which were in the order of $300,000, were not in his account. Further, his items of personal property including his motor vehicle had not been returned to him. He commenced proceedings in an attempt to recover his money and his property. The proceedings were characterised by delays and failures of the respondent to comply with Court orders. On 25 October 2019 the respondent applied to set aside the proceedings or alternatively a stay and this application was opposed and argued. On 31 January 2020 Judge Bochner dismissed the application, providing reasons on 5 March 2020. The respondent issued and proceeded with an appeal against these orders which was heard by Peek J, who on 11 June 2020 dismissed the appeal and awarded to the applicant his costs of the appeal on the ordinary basis. On 28 August 2020 the applicant issued an application, seeking judgment and an assessment of damages. That argument was heard by Judge Bochner on 17 November 2020 who struck out the defence but gave the respondent an opportunity to apply to file a further pleading, which opportunity was not taken up by the respondent. At a further hearing on 16 December 2020 Judge Bochner awarded judgment for the applicant for damages to be assessed, fixed a program to assess those damages, and awarded costs to the applicant of his successful application and certified the hearing as fit for counsel. Subsequently, an assessment of damages was undertaken on 15 February 2021 and Judge Bochner awarded damages in the applicant’s favour in the sum of $463,017.60. An order was also made for the respondent to pay the applicant’s costs of the whole of the proceedings on an indemnity basis. On 2 March 2022 the applicant applied for his costs to be fixed on a lump sum basis and filed the affidavit of Mr Ibrahim’s affidavit, exhibited a detailed breakdown of these costs, including the solicitor’s charges of the principal proceedings, counsel fees and disbursements, and of the costs of the appeal including solicitor’s charges, counsel fees and disbursements.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

The rule is quite clear in its terms and effect.ConsiderationNo submissions on lump sum costs received from the respondent. As set out above, the Court has not had the benefit of any submissions from the respondent in relation to the applicant’s costs claim. He has accordingly failed to comply with the onus upon him required by UCR 191.1 to show that the costs claimed were unreasonably incurred, so I have formed the view that in these circumstances the applicant is entitled to the costs he has claimed. In case for any reason, I am in error in coming to the above conclusion, I have independently considered the applicant’s claim for indemnity costs on its merits. In this regard I take into account various considerations. First, an apparent conflict between the costs order made by Peek J in relation to the respondent’s interlocutory appeal and the final costs order made by Judge Bochner. Secondly, the charge out rates claimed by the applicant’s solicitors as compared with the court scales for the applicable periods. Thirdly, the concept of proportionality. And finally, a consideration of the details provided with respect to the individual items, counsel fees and disbursements as set out in the schedule of costs and in Mr McGrath’s affidavit of 28 September 2022.Conflicting costs orders It appears from the costs orders made in these proceedings that there is an apparent conflict between the costs order made in favour of the applicant by Peek J on 11 June 2020 following dismissal of the respondent’s interlocutory appeal, namely that the applicant have the costs of the appeal on the ordinary basis (presumably this means the standard costs basis as defined in UCR 191.1), and the costs order made by Judge Bochner on awarding final judgment in the applicant’s favour on 15 February 2021, namely that the respondent pay the applicant’s costs of the proceedings (presumably the whole of the proceedings) on an indemnity basis. However, neither the respondent nor the applicant have raised this issue with the court, in either written or oral submissions. In any event, in the context of the claim as a whole, the appeal costs sought by the applicant of $19,670.48 are in the order of only 12.5% of the costs as a whole, and if they were to be assessed on the standard basis as opposed to an indemnity basis, the overall difference between the standard costs and indemnity costs with respect to the appeal would not seem to be significant. Charge out rates of the applicant’s solicitors The charge out rates of the applicant’s solicitors are set out in the schedule exhibited to Mr Ibrahim’s affidavit. It appears from this schedule that they span four separate time periods from the commencement of the proceedings, namely from 9 January 2018 to 12 September 2018, then from that date to 10 July 2019, then from that date to 2 July 2020, and finally from that date to the conclusion of the matter on 12 February 2021. The solicitors working on the file were charging at the following hourly rates:Ms Alexopoulos $375, $380, $395 (no claim after 2 July 2020)Mr Fabbro $425, $440, $460, $480 Mr Ibrahim $330, $330, $345, $370Mr McGrath $440, $440, $460, $475