Warren v Efficient Pure Plumbing Pty Ltd (No 2)

[2022] VSC 745

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE
COMMON LAW DIVISION

JUDICIAL REVIEW AND APPEALS LIST

S ECI 2022 00889

BETWEEN:

LUKE WARREN	Appellant
v
EFFICIENT PURE PLUMBING PTY LTD (ACN 156 020 825)	Respondent

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JUDGE:	Barrett AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	On the papers, submissions filed by the Respondent on 12 October 2022
DATE OF RULING:	6 December 2022
CASE MAY BE CITED AS:	Warren v Efficient Pure Plumbing Pty Ltd (No 2)
MEDIUM NEUTRAL CITATION:	[2022] VSC 745

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COSTS – Whether costs should be awarded on a gross sum basis –  Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 63.07(2)(c) – Civil Procedure Act 2010 (Vic) s 65C(2)(c) – Giurina v Greater Geelong City Council (No 2) [2021] VSCA 341 – Sunland Waterfront (BVI) Ltd v Prudentia Investments Pty Ltd (No 3) [2012] VSC 399 – Costs awarded on a gross sum basis.

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ON THE PAPERS:	Counsel	Solicitors
For the Appellant
For the Respondent	Mr J Gladwin, solicitor	Gladwin Legal

HIS HONOUR:

1. This is a costs ruling following the decision of Warren v Efficient Pure Plumbing Pty Ltd.[1]

   [1][2022] VSC 594.

1. On 7 October 2022, I delivered reasons in this proceeding, and ordered that the appeal be dismissed pursuant to r 58.10(9)(b) of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (‘Rules’).  At the conclusion of those reasons I stated as follows:

The usual rule is that costs follow the event.  In this case, EPP [the respondent] has been successful.  Accordingly, I propose also to order that Mr Warren [the appellant] pay EPP’s costs of and incidental to the appeal on a standard basis to be taxed in default of agreement, unless the parties notify the Court within 7 days of this decision that they contend for a different order as to costs.  If they do, then I direct the parties, within 7 days of this decision, to file submissions of no more than 3 pages, and the parties will be notified of the further disposition of that question in due course.

1. The appellant has not filed any submissions on costs.

1. On 12 October 2022, the respondent filed submissions on costs, supported by an affidavit of Mr Gladwin, being the respondent’s solicitor, affirmed on 12 October 2022. The respondent seeks an order that the appellant pay its costs of $5,254.30 on a gross sum basis pursuant to r 63.07(2)(c) of the Rules or alternatively s 65C(2)(c) of the Civil Procedure Act 2010 (Vic) (‘CPA’).

1. In the circumstances there is no reason to depart from the usual order that costs should follow the event.  The question then is whether it should be specifically in the amount sought, or whether it should be on a particular basis to be taxed in default of agreement.

1. Rule 63.07(2)(c) of the Rules provides:

63.07   Taxed or other costs provision

(1)Subject to this Order, where by or under these Rules or any order of the Court costs are to be paid to a party, that party shall be entitled to taxed costs.

(2)Where the Court orders that costs be paid to a party, the Court may then or thereafter order that as to the whole or any part of the costs specified in the order, instead of taxed costs, that party shall be entitled to—

…

(c)a gross sum specified in the order instead of taxed costs;

…

Section 65C(2)(c) of the CPA provides:

65C      Other costs orders

(1)In addition to any other power a court may have in relation to costs, a court may make any order as to costs it considers appropriate to further the overarching purpose.

(2)Without limiting subsection (1), the order may—

…

(c)award a party costs in a specified sum or amount;

…

1. In Giurina v Greater Geelong City Council (No 2) (‘Giurina’),[2] the Victorian Court of Appeal considered the application of r 63.07 and s 65C, and whether a gross sum of costs should be ordered.  The Court held:

The Court may award a gross sum of costs in order to avoid the expense, delay, and aggravation involved in protracted litigation arising out of taxation.  This involves a broad brush approach, without the rigour and precision of the process of taxation, however, the Court should be confident that the approach taken to the estimate of costs is logical, fair and reasonable.[3]

[2][2021] VSCA 341.

[3]Ibid [16] (citations omitted).

1. The Court of Appeal in Giurina relied on Sunland Waterfront (BVI) Ltd v Prudentia Investments Pty Ltd (No 3),[4] in which Croft J set out the relevant principles as follows:[5]

   [4][2012] VSC 399.

   [5]Ibid [84].

The clear object of rule 63.07 of the Rules is, in my view, similar to the object of the corresponding Federal Court rule, as discussed by Sackville J in Seven Network Limited v News Limited, as follows:[6]

‘(i)The purpose of the subrule is to avoid the expense, delay and aggravation involved in protracted litigation arising out of taxation: Beach Petroleum v Johnson (No 2), at 120, per von Doussa J, applying Leary v Leary [1987] 1 All ER 261; Harrison v Schipp (2002) 54 NSWLR 738, at 742 [21] per Giles JA.

(ii)An order that costs be assessed as a gross sum does not envisage that any process similar to that involved in taxation should take place.  On the contrary, the Court applies a much broader brush than would be used on a taxation of costs pursuant to O 62: Beach Petroleum v Johnson (No 2), at 120, 124, per von Doussa J; Harrison v Schipp, at 743 [22], per Giles JA.

(iii)The Court should be confident that the approach taken to the estimate of costs is logical, fair and reasonable.  The Court should be astute to avoid both overestimating the recoverable costs and underestimating the appropriate amount, for example by applying an arbitrary discount to the amounts claimed: Beach Petroleum v Johnson (No 2), at 123, per von Doussa J.

(iv)Although the power to assess a gross sum for costs involves the exercise of a discretion, it is necessary to bear in mind fundamental principles applicable to an assessment of costs on a party and party basis.  These include the principles contained in O 62 r 19 (embodying the ‘necessary or proper’ test) and those stated in Stanley v Phillips (1966) 115 CLR 470, at 478, per Barwick CJ (on a party and party taxation the emphasis is upon obtaining adequate representation to enable justice to be done, not upon the propriety of steps taken to ensure maximum success in the cause): Auspine Ltd v Australian Newsprint Mills Ltd (1999) 93 FCR 1, at 4–5 [12]–[15], per O’Loughlin J; Charlick Trading Pty Ltd v Australian National Railways Commission [2001] FCA 629, at [6]–[8], per Mansfield J.

(v)Although the methodology permitted by O 62 r 4(2)(c) initially involves a broader approach than on a normal taxation, the provisions of O 62 and Sch 2 provide assistance in fixing an appropriate gross sum: Charlick Trading Pty Ltd v ANRC, at [10], per Mansfield J.’

[6][2007] FCA 1062, at [25].

1. The respondent submits that a gross sum costs order should be made because:

(a)   the proceedings had no reasonable prospects of success;

(b)  given the appellant’s demonstrated failure to comply with various orders of the Court in this appeal, a taxation will more likely than not delay matters and result in the incurring of unnecessary costs relative to the total amount which is proposed to be claimed; and

(c)   the respondent seeks costs (albeit on a solicitor client basis) but in respect of only a small number of items in a broadly reasonable amount.

1. I am satisfied that there is a sufficient justification to make a costs order on a gross sum basis in the amount sought.  In the circumstances there is a real possibility that if a gross sum order is not made then costs will not be agreed, and ultimately taxation of those costs will be required, which will lead to further costs and delay.  Further, in the context of litigation of this kind in this Court, which include several appearances, the amount claimed is a modest amount.  I have read the invoices exhibited to the affidavit of Mr Gladwin affirmed on 12 October 2022.  Taking a broad brush approach to costs as detailed in those invoices, I am satisfied that they are logical, fair and reasonable.  I note for example that Mr Gladwin charged $200.00 for each of the appearances in court on 11 May 2022 and 11 August 2022, $240.00 for an appearance on 30 August 2022, and $400.00 for an appearance on 13 July 2022.  The other costs itemised in the invoices also appear reasonable in terms of the time spent on the identified tasks, and the amount charged for them.

1. I will order that the appellant pay the respondent’s costs of the appeal in the amount of $5,254.30 on a gross sum basis.