Tam v Z5 Venture Capital Pty Limited (No 2)

[2018] NSWSC 88

Supreme Court

New South Wales

Medium Neutral Citation:	Tam v Z5 Venture Capital Pty Limited (No 2) [2018] NSWSC 88
Hearing dates:	On the papers
Decision date:	12 February 2018
Jurisdiction:	Common Law
Before:	Adamson J
Decision:	(1) I note that, as no party has applied for a contrary order, order (2) made on 14 December 2017 takes effect as an order that the defendant pay the plaintiffs’ costs of the proceedings, such costs not to include directions hearings or appearances prior to 23 October 2017.  (2) Order the defendant to pay the plaintiffs’ costs in the specified gross sum of $68,000.
Catchwords:	COSTS – application for costs in gross sum – no response to plaintiffs’ evidence – appropriate to make order
Legislation Cited:	Civil Procedure Act 2005 (NSW) s 98(4)
Cases Cited:	Hamod v State of New South Wales [2011] NSWCA 375 Penson v Titan National Pty Ltd (No 3) [2015] NSWCA 121 Tam v Z5 Venture Capital Pty Limited [2017] NSWSC 1750
Category:	Costs
Parties:	Siu Mei Tam (First Plaintiff) Amazing Grace Sze Family Pty Limited (ACN 607 797 017) as trustee for the Amazing Grace Sze Family Trust (Second Plaintiff) Z5 Venture Capital Pty Limited (ACN 165 882 646) (Defendant)
Representation:	Counsel: D Junn (Solicitor) (Plaintiffs) B Knight (Solicitor) (Defendant)   Solicitors: Dixon Holmes Lawyers (Plaintiffs) Unsworth Legal (Defendant)
File Number(s):	2016/313263

Judgment

Introduction

1. On 14 December 2017 I made orders in this matter and published reasons for my decision: Tam v Z5 Venture Capital Pty Limited [2017] NSWSC 1750. My orders were, relevantly, as follows:

1. (1)   Judgment for the second plaintiff in the sum of $1,454,411.

2. (2)   Subject to a written application for a different order being made to my Associate together with any evidence to be relied on in support by 29 January 2018, order the defendant to pay the plaintiffs’ costs of the proceedings, such costs not to include directions hearings or appearances prior to 23 October 2017.

3. (3) Grant liberty to any party to apply for a gross sum costs order pursuant to s 98(4) of the Civil Procedure Act 2005 (NSW), such application to be made in writing to my Associate, together with any material relied on in support, by 29 January 2018.

2. As no application was made within the time allowed for an order different from the default order provided for in (2) above, the default costs order stands: that the defendant pay the plaintiffs’ costs of the proceedings, such costs not to include directions hearings or appearances prior to 23 October 2017.

3. By email sent on 29 January 2018 (within the time provided in order (3) above) the plaintiffs made an application for the costs to be ordered on a gross sum basis pursuant to s 98(4) of the Civil Procedure Act 2005 (NSW) (the Act). An unsworn copy of an affidavit of Donald Junn, the solicitor on the record for the plaintiffs, was provided to my Associate as an attachment to the email. I regard this document as constituting both the evidence in support of the application as well as the submissions in favour of the application. The sworn version was provided on 5 February 2018 when the deponent returned from overseas. By email sent on 9 February 2018 the defendant’s solicitors, as a courtesy to the Court, sent an email to my Associate, noting that the defendant had been directed to file a response to the plaintiffs’ submissions by 7 February 2018 but that they had no instructions whether to file submissions in response. In these circumstances, I infer from the defendant’s failure to provide its solicitor with instructions to respond that the defendant does not propose to do so.

4. I am satisfied that it is appropriate to make an order under s 98(4) of the Act that costs be paid in a gross sum. It is undesirable in a matter such as this for the successful party to be obliged to spend further sums (which may be irrecoverable) having costs assessed: Hamod v State of New South Wales [2011] NSWCA 375 at [816]-[817] (Beazley JA, Giles and Whealy JJA agreeing). The plaintiffs’ claim reflects an acceptance that, because the full assessment process has not been engaged, it is appropriate to apply a discount when assessing costs on a gross sum basis: Hamod v State of New South Wales at [814]; Penson v Titan National Pty Ltd(No 3) [2015] NSWCA 121 at [7] (Campbell AJA).

5. Mr Junn has annexed to his affidavit a copy of the costs disclosure agreement between his firm and the plaintiffs dated 28 July 2016; a copy of the fee disclosure made by Mr Young SC; invoices relating to the matter; and a table setting out the basis of the calculation for the amount claimed as a lump sum costs order. The total claimed is $68,058.69.

6. Having reviewed this evidence, I am satisfied that the amount claimed is reasonable and that a gross sum costs order ought be made in the order of the sum claimed, being 70% of the costs incurred which are within the ambit of the order I made on 14 December 2017 (that is, the costs incurred apart from the cost of directions hearings and appearances prior to 23 October 2017). I have rounded down the figure in recognition of the fact that the ordering of a gross sum costs order is intended to be broad-brush process, as a substitute for the more detailed process of costs assessment.

Order and notation

7. I make the following notation and order:

1. I note that, as no party has applied for a contrary order, order (2) made on 14 December 2017 takes effect as an order that the defendant pay the plaintiffs’ costs of the proceedings, such costs not to include directions hearings or appearances prior to 23 October 2017.

2. Order the defendant to pay the plaintiffs’ costs in the specified gross sum of $68,000.

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Decision last updated: 12 February 2018