Transport for NSW v Boensch (No 3)

This judgment determines the issue of the costs following my earlier judgment in Transport for NSW v Boensch (No 2) [2023] NSWSC 1354 (Principal Judgment). The Principal Judgment ruled on two applications made by the plaintiff/cross-defendant, Transport for NSW (TfNSW), by notices of motion filed 26 May 2023 and 14 July 2023, against the first defendant/cross-claimant, Franz Boensch, respectively seeking orders:

This judgment also deals with the effect (if any) of Mr Boensch having filed a Notice of Intention to Appeal, and then a Notice of Appeal of, the decision in the LEC Proceedings: Boensch v Transport for NSW and Registrar General of New South Wales [2023] NSWLEC 82, Robson J.

This judgment assumes familiarity with the Principal Judgment. Shorthand expressions I used in the Principal Judgment are also used in this judgment.

In summary, in the Principal Judgment I determined that:

TfNSW relied on the following evidence:

Mr Boensch relied on the affidavit of Franz Boensch filed 2 December 2023.

At the hearing, Ms G Keesing appeared for TfNSW, instructed by Holding Redlich. Mr Boensch was self-represented.

The argument about costs before me was unnecessarily long, extending across almost an entire day’s worth of hearing over two hearing dates on 29 November 2023 and 13 December 2023. This was primarily because Mr Boensch relied on an argument regarding the likely stultification of his claim should he be ordered to pay costs forthwith on a gross sum basis as contended for by TfNSW (issues that are dealt with below). As a result, I adjourned the first day of hearing to enable Mr Boensch to put on affidavit evidence of his financial position. I did so because I was concerned he may consider that he had not had the opportunity to put all of the material before the court that he wished on that topic.

Once Mr Boensch had read his affidavit at the hearing on 13 December 2023, I permitted limited cross-examination of him to occur.

Section 98 of the Civil Procedure Act 2005 (NSW) (CPA) relevantly states that:

The discretion to award costs in s 98 of the CPA is wide and to be given a liberal construction, but must be exercised judicially, not arbitrarily, capriciously or so as to frustrate the legislative intent: Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11, Gaudron and Gummow JJ at [21]–[22].

Also in Oshlack, McHugh J at [67] said (citations omitted):

In Northern Territory v Sangare (2019) 265 CLR 164, Kiefel CJ, Bell, Gageler, Keane and Nettle JJ at [24]– [25] stated (citations omitted):

Whether a party is rich or poor generally speaking has no relevant connection to the litigation but is relevant to the extent that it may inform the structure of the costs order: Sangare at [32].

The power to award costs in s 98 of the CPA is expressly subject to the rules of court.

Rule 42.1 of the UCPR provides that:

Rule 42.7 of the UCPR provides that:

“Event” in the expression “follow the event” in r 42.1 refers to the practical result of a particular claim: Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd (No 2) [2014] NSWCA 219, Ward, Emmett and Gleeson JJA at [15].

The effect of the costs discretion — to be exercised in s 98 of the CPA at any stage of the proceedings and read subject to the provisions in rr 42.1 and 42.7 of the UCPR — is that an order for the costs of an interlocutory application is based on the practical result of the application and costs do not become payable until the conclusion of the proceedings, unless there are discretionary factors that require some other order.

There are numerous discretionary factors which might give rise to an order for the costs of an interlocutory application to be payable forthwith.

In Fiduciary Ltd v Morningstar Research Pty Ltd (2002) 55 NSWLR 1; [2002] NSWSC 432, Barrett J at [10]–[13] said:

In Bowman v Datalec Services Pty Ltd & Ichor Constructions Pty Ltd [2021] NSWSC 1360, Bellew J at [79] helpfully summarised the general principles regarding the discretion under r 42.7 of the UCPR to order costs payable forthwith in the following way (footnotes omitted):

The issue of whether there should be a gross sum costs order under s 98(4)(c) of the CPA is also at play in these proceedings. In Hamod v New South Wales [2011] NSWCA 375, Beazley JA (with whom Giles and Whealy JJA agreed) at [816]–[818] summarised factors relevant to the making of a gross sum costs order as follows:

The basis on which the calculation of a gross sum should be made was also considered in Hamod, Beazley JA at [819]–[820] stating:

There were numerous issues concerning costs raised at the hearing. I have set out below the parties’ submissions in relation to each of these issues and my determination of them.

The principal submission of TfNSW is that it should be awarded its costs of the Notice to Produce Motion and the Dismissal Motion as a gross sum, payable forthwith, in the amount of $56,550.30.

The principal submission of Mr Boensch is that there should be no order of costs at this stage of the proceedings as it would stultify him in his defence and cross-claim and punish him, and that any costs order should be made at the end of the final hearing of the proceedings.

I reject all of the submissions made by Mr Boensch which seek to re-open the arguments about the production of documents under the notice to produce. Many of Mr Boensch’s submissions sought to re-contest the issue of the boundary determination and for that reason are misconceived.

TfNSW says that it was successful on the Dismissal Motion and the Notice to Produce Motion and it should receive an award of costs in its favour on both.

Mr Boensch submits that TfNSW has not been successful in summarily disposing of all of the cross-claim or in setting aside all of the notice to produce as it requested and, therefore, it cannot be considered to have been successful on its applications. He says that any costs award against him would be punishment. He submits that costs should be costs in the cause or reserved to be consistent with the decision in Boensch v Bingham [2023] NSWSC 1152 where the proceedings brought by Mr Boensch were not struck out in whole and in relation to those parts which were struck out, he was given leave to replead them.

He also submits that the approach by Ball J in Anchorage Capital Master Offshore Pty Ltd v Sparkes (No 2) [2019] NSWSC 550 is applicable in this case, where the costs of a pleading amendment application were ruled to be the plaintiffs’ costs of the amended claim such that if the amended claim failed at trial they would not be entitled to their costs.

In my view, the practical result of the Dismissal Motion was that TfNSW was successful in having the whole of the parts of the cross-claim disputing the location of the boundary summarily dismissed and having the whole of the parts of the cross-claim making claims in the nature of negligence struck out. Both of those outcomes were sought in the Dismissal Motion and contested by Mr Boensch. For those reasons, I consider that TfNSW is entitled to an order for costs in its favour on the Dismissal Motion.

In reaching this determination, I am compensating TfNSW for having brought an application in which it was wholly successful, not punishing Mr Boensch as he asserts.

I do not think the decision in Bingham to reserve costs assists Mr Boensch because in that case only parts of the claim were struck out and leave to replead given, whereas here a substantial amount of the cross-claim has been summarily dismissed and the balance was struck out with leave to replead. The success of TfNSW on the Dismissal Motion was substantial. There is no reason to reserve costs in the present case.

The decision in Anchorage is not relevant to the exercise of my discretion because the facts involved in it are vastly different from those that I am dealing with in this case. In Anchorage, the plaintiffs applied to amend their claim by joining additional plaintiffs and an additional defendant and pleading new causes of action arising from the joinder of those parties. The defendants resisted the amendments, but the plaintiffs were substantially successful on the amendment application. The defendants successfully argued before Ball J that the plaintiffs should not have an award of costs in their favour because they were not wholly successful, and it would not be reasonable to permit the plaintiffs to recover the costs if their amended case failed.

In these proceedings, TfNSW has been wholly successful in obtaining the orders that it sought in the Dismissal Motion, being to summarily dismiss or strike out the cross-claim. The event which TfNSW sought has occurred and TfNSW should be compensated for its success in obtaining that outcome.

In my view, the practical result of the Notice to Produce Motion was that TfNSW was successful in setting aside all but three of the 13 categories of documents which were sought. That result was the natural outcome following the determination of the Dismissal Motion. While Mr Boensch was successful in maintaining three categories of documents, they formed an insignificant part of the hearing before me. For those reasons, I consider that TfNSW is entitled to an order for costs in its favour on the Notice to Produce Motion.

TfNSW’s submissions in favour of an award of costs payable forthwith aligned with the three factors stated in Morningstar, being that:

Mr Boensch made numerous submissions which were wide-ranging and not soundly based in any evidence before me, and which criticised the approach of TfNSW as frustrating the litigation, continuously concealing documents, and fabricating a miscarriage of justice by consciously and deliberately concealing evidence to manipulate the proceedings. None of those matters are made out on the evidence before me and I reject them.

Putting aside those matters, the relevant submissions made by Mr Boensch are that a costs order at this stage of the proceedings would stultify his defence and cross-claim, that TfNSW has been a substantial contributor to his current financial situation, and that a costs order would punish him. Mr Boensch also submitted that costs payable forthwith are the exception, referring to In the matter of Elsmore Resources [2014] NSWSC 1390, Black J at [5] stating (after referring to Morningstar):

I am satisfied that the outcome of the Dismissal Motion (but not the Notice to Produce Motion) will be to produce a new beginning of sorts in the proceedings by the narrowing of the issues to just those which concern the negligence claim. However, those issues of negligence have been present in the proceedings since the cross-claim was filed on 15 September 2021, notwithstanding Mr Boensch has been required to replead them (which he has now done by the filing of the amended statement of cross-claim on 8 December 2023). While there is the completion of the discrete aspect of the cross-claim concerning the location of the boundary, the other parts of the cross-claim continue, albeit in a new form. But there is not such a new beginning that what has gone before could be considered as separate and distinct from what will now follow.

I am also not satisfied that Mr Boensch behaved unreasonably in relation to the two applications. Mr Boensch is self-represented. Even though he is subject to the same rules as all other litigants, it cannot be expected that he will have the same laser focus on relevance that one might expect from those with legal qualifications, experience and skill who are acting for TfNSW. While it is true that much of the material that Mr Boensch required for inclusion in the Court Book for the hearing of the two applications was superfluous to the real issues raised by the applications, I do not think that this amounted to unreasonable conduct on his part.

It is quite clear to me that the final hearing of these proceedings will not be held for at least 9–12 months. The history of the proceedings to date and what is proposed for the further interlocutory steps in them would suggest that this might be a conservative estimate. The proceedings commenced on 29 June 2021. TfNSW served its lay evidence-in-chief on 5 December 2022. With repeated extensions of time, Mr Boensch served his lay evidence on 17 January 2023, 5 July 2023, 13 July 2023, and 19 September 2023. Mr Boensch has indicated that he intends to serve expert evidence from a land surveyor, a flow engineer, an aerial photo expert, and a quantity surveyor, although no application for leave to rely on such evidence has yet been made.

Balancing all of these factors, I do not consider that I should depart from the default position in r 42.7 of the UCPR, with the result that the costs of the Dismissal Motion and the Notice to Produce Motion should not become payable by Mr Boensch until the conclusion of the proceedings.

TfNSW submits that I should exercise my discretion under s 98(4)(c) of the CPA to award costs payable to it on a gross sum basis, citing the circumstances of avoiding the expense, delay and aggravation arising from assessment, including the inability of Mr Boensch to pay costs. This inability would require TfNSW to fund additional costs for the assessment which in turn would be irrecoverable. TfNSW also submits that Mr Boensch’s conduct has unnecessarily contributed to the costs in question and that Mr Boensch has greater relative responsibility than TfNSW for the costs incurred.

TfNSW submits that the logical, fair, and reasonable approach to an estimation of the gross sum costs should involve the broad-brush approach of applying an impressionistic discount of around 30% to the solicitors’ fees incurred, whilst allowing for disbursements (including counsel’s fees) in full. The evidence is that the solicitors’ fees are $49,443 and when discounted at 30% are $34,610, to which are added counsel’s fees of $21,000 and other disbursements of $940.30 (neither of which is to be discounted), resulting in total costs of $56,550.30.

Mr Boensch submits that TfNSW’s costs are excessive. He otherwise did not make any specific submissions on the subject of a gross sum order.

In my view, it is appropriate that a gross sum costs order should be made. On Mr Boensch’s own evidence, he has no assets of any real value (including only $73.10 in his bank account, two body-damaged 40-year-old Mercedes cars, a damaged 50-year-old Triumph motorbike and hand tools), no regular income (estimated to be about $500 per week), and a liability on a loan from ANZ Bank of about $560,000. I am satisfied that this is an appropriate case in which TfNSW should not be put to the inevitable irrecoverable expense, delay, and aggravation of a contested assessment of its costs. For those reasons I consider that TfNSW should be awarded gross sum costs instead of assessed costs.

I am also satisfied that the costs which have been calculated by TfNSW in the amount of $56,550.30 have been appropriately discounted by 30% for the solicitors’ fees and should, applying a broad-brush approach to the calculation of the gross sum, be awarded.

In the Principal Judgment I stated at [90]–[99]:

In my reasoning in the Principal Judgment (particularly at [93]-[94]), I emphasised the fact that Mr Boensch did not seek to appeal the decision in the LEC proceedings and that if he wished to do so, the appropriate forum is the Court of Appeal of this court.

At the hearing before me which led to the Principal Judgment (on 5 September 2023), there was no evidence of any intention of Mr Boensch to appeal the decision in the LEC proceedings. Yet Mr Boensch and TfNSW (but not their counsel, Ms Keesing) were both aware at that time that on 30 August 2023 Mr Boensch had filed and served a Notice of Intention to Appeal the decision in the LEC proceedings made on 28 July 2023. That fact was not drawn to my attention.

By operation of r 51.9(1) of the UCPR, the period within which Mr Boensch was required to file a Notice to Appeal following his filing of the Notice of Intention to Appeal on 30 August 2023 was 3 months after 28 July 2023. This period expired on 28 October 2023.

Mr Boensch says that the filing of the Notice of Intention to Appeal demonstrates that an appeal is on foot, such that the evidence does not support the findings in the Principal Judgment at [90]–[97]. Mr Boensch requests that:

At the time of the hearing before me on 29 November 2023 and 13 December 2023, there was no evidence that Mr Boensch had filed a Notice to Appeal, and he was well outside the time within which to do so.

On 15 January 2024, my Associate was provided with a copy of a Notice of Appeal of the decision in the LEC proceedings with a material date of 29 November 2023. One of the orders sought in the Notice of Appeal is that time for filing an appeal be extended.

In circumstances where:

As a result, I do not propose to make any of the orders sought by Mr Boensch.

The orders I propose to make are: