Islam v Australian Securities & Investments Commission

HIS HONOUR: On 6 October 2023, I dismissed these proceedings and awarded costs against Mr Islam: Islam v Australian Securities & Investments Commission [2023] NSWSC 1188. The first and second defendants now ask for an order that the costs be paid on the ordinary basis up until 28 July 2023 and on an indemnity basis thereafter, or alternatively that I make a gross sum costs order. Mr Islam opposes this.

The first and second defendants move on the affidavits of Sean Behringer sworn on 29 September 2023 and 23 November 2023. Mr Behringer was not required for cross-examination.

On 28 July 2023, the first and second defendants sent Mr Islam an Offer of Compromise pursuant to UCPR 20.26 offering to resolve the matter upon the basis of judgment in favour of the first and second defendants with no order as to costs. The offer was expressed to be open for a period of 14 days. It was not accepted.

The letter containing the offer asserted that the summons filed by Mr Islam on 24 May 2023 did not disclose a reasonable cause of action, was an abuse of process, was frivolous and vexatious and caused prejudice to the defendants. Without repeating the matters in my earlier judgment, those contentions were made out.

In some cases an offer that effectively calls for the opposing party to capitulate might not be construed as a genuine offer to compromise the proceedings but instead a suggestion in terrorem that the opposing party should just capitulate. In the present case, I formed the view that Mr Islam’s contentions were utterly hopeless and were beyond revival in any form. In such a case it is difficult not to be sympathetic to an offer that relieves the opposing party of costs that have been unnecessarily incurred in responding to a claim that is wholly without merit.

There is in my view no reason in the circumstances of this case why the first and second defendants should not have its costs on an indemnity basis from 28 July 2023.

Should a gross sum costs order be made? Mr Behringer’s affidavit contains a detailed analysis and calculation of the costs claimed by the first and second defendants. A costs summary is included. Mr Behringer deposes to a belief that the amounts claimed are correct and in his opinion the costs summary is fair and accurate. The costs calculated on the ordinary basis up to 28 July 2023 and on an indemnity basis thereafter total $11,711.50.

Doing the best I can, I consider that the first and second defendants are entitled to a gross sum costs order in the amount claimed. In forming that view, I have taken account of the likely additional costs that would be incurred and time that would be wasted by requiring the parties to proceed to a formal assessment of costs. Such a course would be wholly disproportionate to the issues and amounts involved.