Wet Fix Holding Pty Ltd v Mark Sean Smith

[2023] NSWSC 924

Supreme Court

New South Wales

Medium Neutral Citation:

Wet Fix Holding Pty Ltd v Mark Sean Smith and Anor [2023] NSWSC 924

Hearing dates:

On the papers

Decision date:

08 August 2023

Jurisdiction:

Common Law

Before:

Button J

Decision:

(1) The plaintiff must pay the costs of the second defendant pertaining to the two hearing days before me, and remaining aspects of the substantive matter, on the ordinary basis.

(2) The plaintiff must pay the costs of the second defendant in the sum of $49,340, in accordance with a gross sum costs order pursuant to s 98(4)(c) of the Civil Procedure Act 2005 (NSW).

Catchwords:

COSTS – security for costs order not complied with – a number of interlocutory appearances before proceedings ultimately dismissed- application for gross sum costs order by second defendant – where proceedings have been straightforward but protracted – specific evidence of costs incurred provided by second defendant – further discount applied for abundant caution – gross sum costs order made in favour of the applicant in the sum of $49,340.

Legislation Cited:

Civil Procedure Act 2005 (NSW), s 98(4)(c)

Cases Cited:

Bechara v Bates [2016] NSWCA 294

Texts Cited:

G E Dal Pont, ‘Law of Costs’ (4th ed, 2018, Lexis Nexis Butterworths)

Category:

Costs

Parties:

Chris Chapman (applicant)
Wet Fix Holding Pty Ltd (respondent)

Representation:

Counsel:
M Cowden (applicant)

Solicitors:
Brown Wright Stein Lawyers (applicant)
Australian Law Partners (respondent)

File Number(s):

2021/169213

Publication restriction:

Nil

JUDGMENT -

Background

1. This judgment resolves an application brought for a gross sum costs order (the order) by Mr Chris Chapman, the second defendant in the substantive proceedings (here, the applicant), against Wet Fix Holdings Pty Ltd (WFH), the plaintiff in the substantive proceedings.

2. The background is set out in three available judgments of this Court: in chronological order, Wet Fix Holdings Pty Limited v Chapman [2022] NSWSC 1771; Wet Fix Holdings Pty Limited v Mark Sean Smith and Anor (Supreme Court (NSW), Button J, 21 March 2023, unrep); Wet Fix Holdings Pty Limited v Mark Sean Smith and Anor (Supreme Court (NSW), Button J, 23 May 2023, unrep; both ex tempore judgments on file). It requires only brief repetition here.

3. In a nutshell, WFH brought proceedings in this Court against the applicant on 11 June 2021, although for some reason the applicant was not served until 7 May 2022, when he received an amended statement of claim. The dispute pertained to contracts entered into as long ago as June 2015.

4. The applicant obtained an order for security for costs from a Registrar on 12 September 2022, in that WFH was to provide $360,000 by 13 December 2022, on pain of dismissal of the substantive proceedings.

5. That order was not complied with. The applicant duly placed the matter before the Chief Judge at Common Law on 16 December 2022. The applicant sought dismissal of the proceedings; WFH sought an extension of the date by which security for costs could be provided until 31 May 2023. The submission on that occasion for WFH was that the order for security for costs could be complied with once Ms Lisa Miller, the controlling mind of WFH, had succeeded in selling valuable real property on the northern beaches of Sydney.

6. His Honour dismissed the application of WFH, but declined to dismiss the substantive proceedings, and stood remaining aspects of the matter until 21 March 2023. There were also ancillary orders made, on the assumption that the property would be sold before the next return date.

7. When the matter came before me on that occasion, the real property had not been sold. The applicant sought dismissal of the substantive proceedings for a second time. WFH sought to vary aspects of the order for security for costs in its favour.

8. I dismissed the motion of WFH to that effect. But I was reluctant to dismiss the substantive proceedings, because I had been given to understand that a statute of limitation would mean that the whole of that claim would become permanently statute-barred if I were to do so.

9. I stood the matter over part heard before me until 23 May 2023.

10. On that occasion, not only had the real property not been sold, but WFH proposed a completely new basis upon which the security for costs order could be satisfied. Even that basis, however, had not come to fruition. In the circumstances, I acceded to the submission of the applicant that the substantive proceedings should be dismissed against him.

Gross sum costs order?

11. At the conclusion of that hearing, the applicant sought a gross sum costs order, ultimately including, to a small degree, costs of the substantive matter that were not captured explicitly by the costs of the two appearances before me (the question of costs of the appearance before the Registrar and before the Chief Judge had been resolved). I invited written submissions from both parties as to the question; neither of them sought an oral hearing.

12. I have reflected in particular upon the factors discussed in Bechara v Bates [2016] NSWCA 294, and have refreshed my memory about the topic by reading G E Dal Pont, ‘Law of Costs’ (4^th ed, 2018, Lexis Nexis Butterworths) at 15.15-15.25.

13. I am comfortably satisfied that the order should be made, for the following reasons.

14. First, there is no theoretical prohibition on me determining the outstanding question of costs of the substantive matter, above and beyond the two hearing days of motions in which I was directly involved. If there were such a prohibition, a judge could never determine a question of costs previously reserved by another judge. Furthermore, as a practical matter, I consider that I am well able to assess those aspects of the matter. Finally, the extent of the costs claimed by the applicant regarding the unresolved aspects of the substantive matter is less than $4,000. In those circumstances, it would be absurd for me to grant the order with regard to the two motion hearing days, but decline to grant it with regard to that vestigial aspect of the matter.

15. Secondly, as I remarked on an earlier hearing day, the whole history of the matter, and the very bases upon which the motion for dismissal of the applicant was resisted by WFH, gives rise to a question about the ability of WFH to comply with any costs order. That is a powerful argument for avoiding further expense to the applicant by way of an extended costs assessment that may well end up being fruitless in any event.

16. Thirdly, the protracted history of the matter – not least whereby it came before a judge of this Court on three separate occasions, with regard to a straightforward question of providing security, in accordance with an order of a Registrar, in order to advance one’s own case – suggests to me that any costs assessment would be protracted as well.

17. Fourthly, in my respectful opinion some of the submissions made for WFH in resistance to the order also suggest that there could be protracted, ill-founded resistance in the future.

18. By way of two examples: in my opinion, the applicant is certainly entitled to his costs of the first date before me, because, although he did not succeed at that stage in having the substantive proceedings dismissed, the further extension that I granted to WFH must be characterised as an indulgence. Furthermore, that hearing would have been quite unnecessary if WFH had simply complied with the order of the Registrar made months beforehand. Secondly, the proposition that a recent offer to settle the question of costs made by the applicant could not be reflected upon appropriately by WFH because it was contemporaneously in the process of pursuing an appeal against my dismissal of the substantive matter is unpersuasive.

19. Fifthly, although an order is often made in long and complex matters, they can also be appropriate in straightforward ones, including if a judicial officer believes that the straightforwardness of the matter calls for a straightforward resolution of costs. This is such a case.

20. Sixthly, I am confident, based upon the most recent affidavit of the solicitor for the applicant placed before me, that I can come to a fair, logical, informed, reasonable, and sufficiently particular view about the question of quantum, especially applying a significant discount. It is noteworthy that, apart from a submission about the extent and application of such a discount, nothing was placed before me for WFH impugning that evidence.

21. Seventhly and finally, it is undoubtedly incumbent upon me to apply a “broad-brush approach” to this question, otherwise the exercise of avoiding the precision of the process of costs assessment is rendered futile. Having said that, for abundant caution, and contrary to the submission for the applicant, rather than applying an overall discount of 10% for contingencies, I have increased that to 15%, with very minor rounding down.

Order

22. For those reasons, I make the following orders:

1. The plaintiff must pay the costs of the second defendant pertaining to the two hearing days before me, and remaining aspects of the substantive matter, on the ordinary basis.

2. The plaintiff must pay the costs of the second defendant in the sum of $49,340, in accordance with a gross sum costs order pursuant to s 98(4)(c) of the Civil Procedure Act 2005 (NSW).

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Decision last updated: 08 August 2023