Grubisa v Zhou (No 2)

1. [1]

   On 20 August 2025, I gave judgment in these proceedings: see Grubisa v Zhou [2025] NSWSC 942 (Principal Judgment).

2. [2]

   These reasons assume familiarity with and maintain the same abbreviations as in the Principal Judgment.

3. [3]

   In the Principal Judgment, I dismissed the Statement of Claim and directed the parties to confer to seek to agree any other orders to give effect to the reasons, including on the Cross-Claim and the appropriate costs order.

4. [4]

   The parties were agreed that no further orders were required on the Cross-Summons and that the Plaintiff/Cross-Defendant is to pay the Defendant/Cross-Claimant’s costs of the proceedings including of the Statement of Claim and the Cross-Summons on the ordinary basis. They were not able to agree whether there should be a gross sum costs order or whether costs should be assessed. The parties have provided written submissions supporting their respective positions.

5. [5]

   These reasons determine whether a gross sum costs order should be made.

6. [6]

   For the reasons set out below, I am not satisfied that I should make a gross sum costs order.

Overview of the respective positions

1. [7]

   The Plaintiff seeks the following orders:

   1. (1)

      The plaintiff/cross-defendant is to pay the defendant/cross claimant’s costs of the proceedings, including of the Statement of Claim and the Cross Summons, on the ordinary basis as assessed or agreed.

   2. (2)

      The Cross Summons is otherwise dismissed.

2. [8]

   The Defendant seeks the following orders:

   1. (1)

      the Plaintiff is to pay the Defendant/Cross Claimant’s costs of the proceedings, including of the Statement of Claim and the Cross Summons, assessed on a gross sum basis in the sum of $80,000; and

   2. (2)

      the Cross Summons is otherwise dismissed.

Legal principles

1. [9]

   The relevant principles are not in dispute and are well settled.

2. [10]

   Section 98(4)(c) of the Civil Procedure Act 2005 (NSW) provides:

3. [11]

   In Manariti Plumbing Pty Ltd v Universal Property Group Pty Ltd (No 2) [2025] NSWCA 185 (Manariti), Free JA (McHugh and Ball JJA agreeing) recently summarised the relevant principles governing an application for a gross sum costs order at [30]-[38]:

4. [12]

   The parties also place reliance on Maximus Holdings (NSW) Pty Limited trading as Schreuder Partners Compensation Lawyers (ABN 40 110 829 868) v Sandra Primerano [2024] NSWSC 321 at [65] where I set out Peden J’s summary of the relevant principles in Bell v Hartnett Lawyers (No 4) [2023] NSWSC 1592 at [49].

Submissions

1. [13]

   The Defendant submits that a gross sum costs order is appropriate for four reasons:

   1. (1)

      requiring the Defendant to go through the assessment process would involve further unreasonable cost and delay in circumstances where the principal claim advanced by the Plaintiff in the proceedings for specific performance was only abandoned in effect at the commencement of the final hearing, with the consequence that the costs incurred by the Defendant in meeting this claim were wholly wasted;

   2. (2)

      there is no reason in this case to believe that the Plaintiff has substantial assets, especially in circumstances where the Plaintiff was unable to obtain the finance necessary to complete the purchase which was the subject of the proceedings;

   3. (3)

      there is sufficient information available to the Court to enable an appropriate gross sum to be ordered so as to be fair between the parties;

   4. (4)

      the amount of the proposed gross sum costs order ($80,000) is relatively modest in the circumstances of the proceedings as a whole, and involves an appropriate discount to actual solicitor client costs ($107,000) of about 25%, putting the proportion sought (75%) well within the reasonable range (of 60% to 85% of solicitor client costs) recognised by the Court.

2. [14]

   The Plaintiff submits that a gross sum costs order is inappropriate because:

   1. (1)

      the hearing was not complex or lengthy as it turned on one issue and only occupied one day;

   2. (2)

      there is no reason why an assessment of costs will be unusually protracted and expensive as the narrations for the fees claimed by the defendant run to only about three pages;

   3. (3)

      the defendant has not provided the Court with sufficient information for the Court to be able to assess the costs on a gross sum basis fairly between the parties;

   4. (4)

      a number of the items claimed by the defendant appear to be unreasonable;

   5. (5)

      there is no reason to find that the plaintiff is so impecunious that he will be unable to meet a costs order;

   6. (6)

      by withdrawing his claim for specific performance, the Plaintiff narrowed the scope of the claim and in any event did not obviate the need to determine the central factual and legal issue of the date of the contract.

3. [15]

   In reply, the Defendant submits:

   1. (1)

      there is sufficient information in the invoices;

   2. (2)

      there are no individual items that are excessive;

   3. (3)

      the Court should be reluctant to assume that the Plaintiff will be readily able to meet a substantial costs order;

   4. (4)

      the Plaintiff only withdrew the specific performance claim on the eve of the final hearing which resulted in the Defendant incurring unnecessary and effectively wasted costs.

Consideration

1. [16]

   In my view, it would not be appropriate for the Court to make a gross sum costs order in the facts of this case and on the material presented to me.

2. [17]

   First, this is not a lengthy nor complex case which might give rise to further unnecessary expense and delay at a costs assessment. The hearing went for one day. The invoices, on my assessment, run for no longer than four pages. There is no evidence to suggest that a costs assessment would be protracted, expensive or burdensome.

3. [18]

   Second, I am not satisfied that the Plaintiff is impecunious. There is no evidence on the costs application as to the net asset position of the Plaintiff. The Defendant cast the test in the negative, that the Court should not assume that the Plaintiff can meet a substantial costs order. However, the Defendant has not positively demonstrated that the Plaintiff is in fact impecunious. The Plaintiff has been represented throughout the proceedings by solicitors and counsel.

4. [19]

   Third, the costs are substantial, and a further costs assessment would not be disproportionate. The total costs are $107,000 which is substantial in the context of a hearing that ran for only one day with only a limited number of issues .

5. [20]

   Fourth, the evidence on the application is insufficient to arrive at an appropriate sum to be fair between the parties. The solicitor for the Defendant, Vincent Cheng, does not depose as to how long he has been in practice, nor as to any experience in the assessment process, or whether the costs incurred are proportionate in the relevant sense.

6. [21]

   Fifth, Plaintiff has drawn attention to a number of entries in the itemised costs which the Plaintiff says would be challenged in a costs assessment on the grounds of reasonableness and proportionality. The Court is not in a position to determine the ultimate merits of those objections, and these are matters for an expert costs assessor to assess: see Manariti at [48]-[52]. This is not determinative but is a factor against the appropriateness of a gross sum costs order.

7. [22]

   Further, most of the entries in the itemised costs are very brief and provide little detail as to the substantive work involved, making an assessment of its appropriateness quite difficult. Further, no memoranda of fees from counsel have been provided.

8. [23]

   The fact that the Court, on applications such as the present, can bring to bear its own experience as to costs (see Tran v Bakour (No 2) [2025] NSWSC 272 at [29]) does not require the Court, in every case, to determine what an appropriate gross sum is.

Orders

1. [24]

   The orders of the Court are:

   1. (1)

      The Plaintiff/Cross-Defendant is to pay the Defendant/Cross-Claimant’s costs of the proceedings, including of the Statement of Claim and the Cross-Summons, on the ordinary basis as assessed or agreed.

   2. (2)

      The Cross-Summons is otherwise dismissed.