Stankovic v State of NSW (No. 2)

I gave judgment in this matter on 8 February 2016: Stankovic v State of NSW [2016] NSWSC 18. I ordered that the proceedings should be dismissed and that the Plaintiff should pay the Defendants’ costs. After publication of my reasons the Defendants applied that the costs should be payable by a lump sum costs order. The parties agreed directions for the service of evidence and written submissions. The application was listed for hearing before me on 17 March 2016.

On that day counsel for the Defendants sought to read an affidavit of Bruce Cantrill sworn 22 February 2016. Mr Stankovic objected saying that he had only been given a copy of the affidavit in Court that morning. Further enquiry by me disclosed that the affidavit had been served in accordance with the directions both by posting it to P O Box 92, Castle Hill, NSW, 2154 and by email to Mr Stankovic at the contact email address appearing on all documents filed by him. The post office box was the address identified in the Statement of Claim as being his address. Mr Stankovic said that he had not accessed his emails and did not deny that the document had been sent to his post office box. In those circumstances I said that I would read the affidavit.

No evidence was put forward by Mr Stankovic.

The affidavit from Mr Cantrill set out both in the body of the affidavit and the detailed annexure the work performed by the Crown Solicitor acting for the Defendants. It set out the charge rates for those persons in the Crown Solicitor’s Office who had worked on the matter. It deposed to the incurring by the Defendants of costs to date, including counsel’s fees at $19,392.50 with an estimate of costs in relation to the hearing of the present application of $3,260. The total costs were, therefore, $22,652.50.

Mr Cantrill is a very experienced solicitor who has worked as a solicitor in the Crown Solicitor’s Office for 27 years. He says that in that time he has become aware of matters in which costs incurred by the Crown Solicitor have been referred for assessment of party/party costs. Based on Mr Cantrill’s knowledge he estimated that the Defendants are likely to have their costs assessed in an amount of approximately 90% of solicitor/client costs.

I accept Mr Cantrill’s evidence and his expertise.

Section 98 Civil Procedure Act 2005 (NSW) relevantly provides:

The Defendants submitted in accordance with various authorities that the present case was an appropriate one for the making of a lump sum costs order. The Defendants submitted that the purpose of the Rule was to avoid expense, delay and the aggravation of a costs assessment process. The probable inability of a party to pay a costs order is an important consideration for the making of a lump sum costs order so that the other party is not put to wasted time and expense of the costs assessment process.

The Plaintiff submitted that not only should no lump sum costs order be made but that no costs order at all should be made because he was intending to appeal against my judgment. Since I have already made an order that the Plaintiff pay the Defendants’ costs I took the submission to be one that I should not make any further order in relation to costs pending the outcome of the appeal.

The remainder of the Plaintiff’s submissions again dealt with the substantive matters that I dealt with in my earlier judgment. I endeavoured on a number of occasions to direct the Plaintiff to a consideration of whether a lump sum costs order should be made but without success.

In Harrison & Anor v Schipp [2002] NSWCA 213; (2002) 54 NSWLR 738 Giles JA said of the earlier equivalent provision to s 98(4) (Pt 52A r 6(2) Supreme Court Rules 1970 (NSW)):

In Hamod v State of New South Wales and Anor [2011] NSWCA 375 Beazley JA (with whom Giles and Whealy JJA agreed) said:

Although some of the authorities including Hamod and Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119 have noted that the gross sum costs procedure was particularly useful in complex cases, other authorities have made it clear that the old Rule (now s 98(4)(c)) is expressed in general terms and is not limited to cases of that type: Australasian Performing Rights Association Ltd v Marlin [1999] FCA 1006; Simone Starr-Diamond v Talus Diamond (No. 4) [2013] NSWSC 811 at [8] and Bobb v Wombat Securities Pty Ltd & Ors (No 2) [2013] NSWSC 863 at [6].

The evidence in the present case tends to suggest that there will be a probable inability on the Plaintiff’s part to pay any costs order. The Plaintiff has on a number of occasions referred to himself as being penniless and living on the street with the support of a disability pension only. The Defendants acted quickly to bring the present proceedings to an end. I do not consider that it would be appropriate for the parties to go through a costs assessment exercise which would be disproportionate to the speed with which the present proceedings have been brought to an end.

The further issue to be determined is the precise sum that the Plaintiff should pay. When assessing the costs for the purpose of making a gross sum order a broad brush approach may be taken: Zepinic v Chateau Constructions (Aust) Ltd (No 2) [2014] NSWCA 99 at [31] and [38]; Hamod v State of New South Wales (No 13) [2009] NSWSC 756 at [31]; see also Hamod (Court of Appeal) at [819]-[820] and Young v Hones (No 3) [2014] NSWSC 499 at [28]-[30].

The cases to which my attention has been drawn and some others show a range of discounts on the costs figure which has been established. So, for example, in Attorney General in and for the State of NSW v Bar-Mordecai [2013] NSWSC 1307 Schmidt J appears to have reduced the costs by 10% (at [16]). The Court of Appeal in Harrison v Schipp took a similar approach at [51]. In Simone Star Diamond Slattery J allowed 80% and in Coshott v Parker (No 3) [2015] NSWSC 1195 Hall J at [78] allowed 70%. This discount is not only concerned with the relationship between solicitor/client costs and party/party costs but also with contingencies relevant to a costs assessment process: Hamod (CA) at [814] and [820].

In my opinion the appropriate order is that the Plaintiff should pay the Defendants’ costs in the sum of $18,122 being 80% of the total costs incurred by the Defendants. This amount includes the costs of the present application in which the Plaintiff was unsuccessful.

I make the following order: