Deighton v Dewit [2021] NSWSC 852

Supreme Court New South Wales

Medium Neutral Citation: Deighton v Dewit [2021] NSWSC 852 Hearing dates: 13 July 2021 Date of orders: 13 July 2021 Decision date: 13 July 2021 Jurisdiction: Common Law Before: Wright J Decision: Pursuant to s 98(4)(c) of the Civil Procedure Act 2005 (NSW), the amount of the costs ordered to be paid in Order 2 made on 11 December 2020 is $10,000. Catchwords: COSTS – Party/Party – Specific court rules in relation to costs – Civil Procedure Act 2005 (NSW), s 98(4)(c) – where specified gross sum costs order is sought – where discount is applied to costs order COSTS – Party/Party – Application for gross sum costs order – where costs of assessment would be disproportionate Legislation Cited: Civil Procedure Act 2005 (NSW), s 98(4)(c). Cases Cited: AuspineLtd v Australian Newsprint Mills Ltd (1999) 93 FCR 1; [1999] FCA 673 Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119; 135 ALR 160 Dye v Commonwealth Securities Ltd (No. 2) [2012] FCA 407 Hadid v Lenfest Communications Inc [2000] FCA 628 Hamod v State of New South Wales [2011] NSWCA 375 Harrison & Anor v Schipp (2002) 54 NSWLR 738; [2002] NSWCA 213 Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWSC 23 In the matter of GTH Equipment Pty Ltd [2017] NSWSC 1816 Ireland v Retallack (No 2) [2011] NSWSC 1096 Pritchard v Fryer (No 2) [2018] NSWSC 261 Zepinic v Chateau Constructions (Aust) Ltd [2014] NSWCA 99 Category: Costs Parties: Alyn (Alan) Deighton (Plaintiff) Johannes Frederick Dewit (Defendant) Representation: Counsel: G Barter (Plaintiff) D Baran (Defendant)

Solicitors: Slater and Gordon (Applicant) Turnbull Hill (Respondent) File Number(s): 2020/00301955

EX TEMPORE Judgment (REVISED) 1. On 21 October 2020 the plaintiff, Mr Deighton, filed a motion seeking a freezing order in relation to a claim for damages for injuries allegedly suffered as a result of sexual assaults by the defendant, Mr Dewit, on the plaintiff between 1987 and 1989. 2. The Court heard the matter on 11 December 2020 and found in favour of the defendant in relation to the application for the freezing order. On that occasion the following orders were made: "(1) The notice of motion filed on 21 October 2020 is dismissed. (2) The plaintiff is to pay the defendant's costs of the motion, such costs to be payable forthwith. (3) The Court grants liberty to the defendant to apply for a gross sum costs order under s 98(4)(c) of the Civil Procedure Act 2005 (NSW) on two days' notice." 1. There has been no appeal from those orders. 2. The defendant has now made an application for the costs to be dealt with by way of a gross sum costs order and has provided an affidavit from Mr Cameron Duncan, solicitor, setting out the amount of the costs sought. 3. The solicitor for the plaintiff has also affirmed an affidavit in relation to this application for the gross sum costs order and it is disclosed in that affidavit that the plaintiff is not a person of means. I infer that it is unlikely that the plaintiff could pay any substantial costs order if one is made against him. 4. Section 98 of the Civil Procedure Act gives the Court wide powers with regard to the issue of costs and, in particular, s 98(4)(c) of the Civil Procedure Act states that: (4) …at any time before costs are referred for assessment the Court may make an order to the effect that the party to whom costs are to be paid is to be entitled to— … (c) a specified gross sum instead of assessed costs, … 1. An order seeking specified costs for summary assessment of costs by the Court is to be distinguished from a detailed assessment of costs by a costs assessor. [1] 2. Subject to the proviso that it is to be exercised judicially [2] , the Court generally has an unlimited discretion in making an order under s 98(4). [3] In particular, the terms of s 98(4)(c) are not subject to any express limitation other than that an order may only be made before costs may be referred for assessment. [4] There is no dispute in this case that the costs of the motion filed on 21 October 2020 have not been referred for assessment. 3. The authorities establish that a gross sum costs order may be appropriate in situations such as: 1. where the subject matter/litigation concerns modest sums of money [5] ; 2. where the costs assessment would be protracted and expensive [6] ; 3. where there is a risk of satellite litigation if costs are assessed [7] ; 4. where the evidence reveal that the party against whom costs are awarded is unlikely, due to their financial position, to be able to pay those costs and, accordingly, the party in whose favour the costs were awarded would be unlikely to be able to recover tax costs in due course [8] ; and 5. where the expense and delay of taxation is disproportionate to the amount of costs recoverable [9] . 1. In my view, the circumstances of the present case are ones which involve modest sums of money, having regard to the litigation that comes before this Court. It is also the case that it is unlikely that the applicant will be able to recover costs because of the limited means of the respondent and, I am also satisfied that the expense and the delay of taxation is disproportionate to the amount of costs which are presently in issue. 2. I also take into account that there is a proposal to join the State of New South Wales in the proceedings. It seems to me that this is a factor which weighs in favour of costs being quantified on a gross sum basis at this stage but it also suggests that other orders in relation to the payment of costs, such as a stay pending payment and the ability to seek to have the proceedings struck out if the costs are not paid, as sought by the defendant, would be inappropriate. 3. The discretion to order a gross sum costs order is only to be exercised when the Court considers that it can do so fairly between the parties and that includes having sufficient confidence in arriving at an appropriate sum on the materials available. [10] 4. In this case the Court does have available a detailed tax invoice setting out the items of work undertaken and the amount charged for each item submitted by the solicitors for the defendant to the defendant as well as counsel's memorandum of fees. 5. Further, any sum ordered to be paid pursuant to s 98(4)(c) of the Civil Procedure Act should be based on an informed assessment of the actual costs incurred having regard to the available information and that the estimate of costs should be fair, logical and reasonable. [11] The information that is available provides the basis for such an assessment to be made by the Court in this case. 6. In making a gross sum costs order, the Court should be mindful of the need to prevent prejudice to the unsuccessful party by an overestimation of the costs while at the same time avoiding an injustice to the successful party by applying an arbitrary failsafe discount on the estimate submitted to it. [12] 7. A broad-brush approach to fixing costs is to be adopted for the purposes of a calculation of quantum under this provision. In applying a broad approach to gross sum awards courts have usually applied a discount to the amount claimed. [13] 8. In this case the affidavit of Cameron Duncan of 3 July 2021 establishes that the solicitor's tax invoice to the defendant was for a total of $11,360.45, made up of solicitor's fees of $3,860.45 and counsel's fees of $7,500.00, the latter as set out in the attached memorandum of fees from Mr Baran. 9. When applying a discount, the discount typically is applied either to the entire gross lump sum or differentially between the solicitor's fees and counsel's fees. 10. Experience teaches that, in an assessment of party/ party costs, recovery is in the order of 60 to 85 percent of the solicitor/client fees. This is equivalent to a discount of between 15 and 40 percent being applied. 11. In this case, I have reviewed the invoice, generally but not on an item by item basis, and it appeared to me that the amounts claimed were reasonable and modest and not out of keeping with the subject matter and the amount involved. 12. In my view it would be likely on assessment that some of the solicitor's fees and items charged would not be allowed but this would not be to any significant extent. In the circumstances, a discount of 20 percent in relation to the solicitor's fees would be appropriate, and, in relation to counsel's fees, a discount of 7.5 percent would be appropriate. 13. In those circumstances, the mathematics would be that the solicitor's fees of $3,860.45, discounted by 20 percent, would yield $3,088.36, which I round to $3,100.00. Counsel's fees of $7,500, discounted by 7.5 percent, would yield $6,937.50. Rounded, I bring that to $6,900.00. That would make a total of $10,000.00 after the rounding. 14. It appears to me in all of the circumstances, that this would be an appropriate gross sum to order by way of costs and I am satisfied that it is fair, logical and reasonable on the basis of the material before me. 15. As I indicated, I would not be minded to make any further orders in addition to the quantification order and, I note that Mr Baran did not press for any other orders. 16. In those circumstances, the order of the Court is, pursuant to s 98(4)(c) of the Civil Procedure Act 2005 (NSW), the amount of the costs ordered to be paid in Order 2 made on 11 December 2020 is $10,000.

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Endnotes 1. Zepinic v Chateau Constructions (Aust) Ltd [2014] NSWCA 99 at [28]; Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWSC 23 at [117]; Harrison & Anor v Schipp (2002) 54 NSWLR 738; [2002] NSWCA 213 at [21]. 2. Hamod v State of New South Wales [2011] NSWCA 375 at [815]; Beach Petroleum NL v Johnson (No.2) (1995) 57 FCR 119 at 120. 3. In the matter of GTH Equipment Pty Ltd [2017] NSWSC 1816 at [9]; Ireland v Retallack (No 2) [2011] NSWSC 1096 at [38]-[41]. 4. In the matter of GTH Equipment Pty Ltd [2017] NSWSC 1816 at [9]. 5. Zepinic v Chateau Constructions (Aust) Ltd [2014] NSWCA 99 at [31]. 6. Harrison & Anor v Schipp (2002) 54 NSWLR 738; [2002] NSWCA 213 at [21]-[22]. 7. Pritchard v Fryer (No 2) [2018] NSWSC 261 at [2]. 8. Harrison & Anor v Schipp (2002) 54 NSWLR 738; [2002] NSWCA 213 at [21]; Hadid v Lenfest Communications Inc [2000] FCA 628 at [25]; Dye v Commonwealth Securities Ltd (No. 2) [2012] FCA 407 at [10]. 9. Hamod v State of New South Wales [2011] NSWCA 375 at [819]. 10. Hamod v New South Wales [2011] NSWCA 375, at [813]; Harrison & Anor v Schipp (2002) 54 NSWLR 738; [2002] NSWCA 213 at [22]. 11. Hamod v State of New South Wales [2011] NSWCA 375, at [815]; Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119; 135 ALR 160. 12. Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWSC 23, at [9]; Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119; 135 ALR 160. 13. Hadid v Lenfest Communications Inc [2000] FCA 628 at [35]; Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119 at 124; 135 ALR 160.

Amendments 15 July 2021 - Correction to End Note 13. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 15 July 2021