The Owners – Strata Plan No 93543 v Zhang (No 2)

On the fourth day of the hearing, 25 March 2021, I acceded to the defendant’s application to adjourn the proceedings. The adjournment was sought to enable the defendant’s expert, Mr Nakhla, to conclude his conclave with the plaintiff’s expert, Mr Verinder, to enable Mr Nakhla and Mr Verinder to give concurrent evidence thereafter and for final submissions.

I also ordered that the defendant pay the plaintiff’s costs thrown away by the adjournment, that such costs be assessed as a gross sum pursuant to s 98(4) of the Civil Procedure Act 2005 (NSW), and that the defendant pay such costs within 14 days of publication of these reasons.

These reasons are concerned with what costs of the plaintiff have been “thrown away” by the adjournment.

The reason that it was necessary for the defendant to seek the adjournment was the late service of Mr Nakhla’s report dealing with the matters in contest with Mr Verinder.

During 2020, the defendant failed to comply with a number of orders concerning the service of his expert evidence.

Ultimately, on 19 August 2020, the defendant served an earlier report of Mr Nakhla several days after the time set in a guillotine order made by Hammerschlag J on 19 June 2020.

On 28 August 2020, Hammerschlag J gave the defendant leave to rely upon Mr Nakhla’s report but stated:

His Honour then set the matter down for hearing for five days commencing on 22 March 2021.

Mr Nakhla’s further report was served after hours on 11 March 2021; six working days before the hearing. The report comprises over 300 pages.

The explanation given for the delay in serving Mr Nakhla’s second report needs only to be stated to reveal its inadequacy.

That explanation was:

Why Mr Marando thought it would be adequate for Mr Nakhla’s report to be made available only on 8 March 2021, some two weeks before the hearing, was not explained.

The result of the late service of Mr Nakhla’s second report was that Mr Nakhla was not able to conclave with Mr Verinder in relation to this report and was thus unable to participate in concurrent evidence during the period set down for hearing.

It was in those circumstances that, rather than refusing to grant the defendant leave to rely upon Mr Nakhla’s second report, I granted the adjournment.

It would have been necessary to adjourn the proceedings in any event for final submissions because, assuming Mr Nakhla had been able to conclave and give concurrent evidence during the time allocated for hearing, it was clear that no time would be available within that period for submissions.

However, as things stand now, the matter must not only be adjourned for one day for final submissions, but for a further day or two prior to the day set for final submissions to accommodate the concurrent evidence.

I have since allocated 19 and 20 May 2021 for the concurrent evidence of Mr Nakhla and Mr Verinder and 24 May 2021 for final submissions.

In that context, I invited submissions from counsel as to the quantum of the fees that I should determine to be paid as a gross sum under s 98(4) of the Civil Procedure Act.

For the plaintiff, Mr Rogers submitted that I should allow the following amounts which are specified in an affidavit sworn by the plaintiff’s solicitor, Mr Asfour:

The total of these figures is $22,000.

For the defendant, Mr Moorehouse accepted that the first of these figures, $6,000 counsel fees for 26 March 2021, represents costs thrown away by reason of the adjournment.

As to the fees Mr Verinder will charge for participating in the conclave and writing his report, and the fees Mr Rogers and Mr Asfour will charge for perusing the further report, Mr Rogers submitted that “[h]ad the proceedings not been adjourned there would have been no further conclave and no requirement for either preparation of a further report or a need to peruse it” and that these costs “arise only because of the adjournment”.

I infer from this submission that these fees of Messrs Verinder, Rogers and Asfour are extra fees, over and above those that would have been charged during the week allocated for the hearing. Thus, these are extra costs caused by the adjournment which would not have been incurred but for the adjournment.

As to the legal fees to be incurred for the further concurrent evidence, although I have allocated two further days, Mr Rogers’ submissions assume only half a day of “additional time in Court” will be needed for this.

Had Mr Nakhla been in a position to engage in concurrent evidence during the week commencing 22 May 2021, this could have occurred on the afternoon of Thursday 25 March 2021 and on Friday 26 March 2021. As it was, the proceedings were adjourned shortly after lunch on Thursday 25 March 2021. But the plaintiff will have incurred the costs of that day in any event and will be compensated for the costs of Friday 26 March 201 by the order to which the defendant consents.

In those circumstances, I do not see the figure at [19(d)] as being, as Mr Rogers submitted, “additional to any cost lost on 26 March 2021”.

As I have said, the extra day now needed for final submissions would have been required in any event as, even if Mr Nakhla’s report had been served in time for it to be dealt with during the week allocated for the hearing, submissions could not then have proceeded.

Thus, my conclusion is that the extra costs caused to the plaintiff by the adjournment, and which the plaintiff would not incur but for the adjournment, is $17,600.

However, Mr Moorehouse submitted that, other than the $6,000 referred to at [19(a)], these costs were not “thrown away” by the adjournment because they were not costs reasonably incurred before the adjournment which can now be said to be wasted.

This submission invites attention to what is meant by an order that a party pay the “costs thrown away” by (in this case) an adjournment of the proceedings.

Professor Dal Pont deals with the matter in his work Law of Costs [2] and states that the beneficiary of an order for “costs thrown away”:

The authority that Professor Dal Pont cites for this proposition is that of Williams J in The Fashion Warehouse Pty Ltd v Pola [3] where his Honour said [4] after having reviewed authority:

Williams J’s observations were cited with approval by the Western Australian Court of Appeal in Brookvista Pty Ltd v Meloni. [5]

In Edelman v Badower, [6] Mukhtar AsJ said: [7]

In the passages I have emphasised, these authorities refer to “costs thrown away” as being costs already incurred at the time of the order.

Indeed, in Ziliotto v Dr Hakim (No 2), [8] Davies J said: [9]

No doubt in most cases the costs that are “thrown away” by an adjournment are costs in respect of “work done”.

However, in my opinion, the question of what costs are “thrown away” by an adjournment in a particular case will depend upon the circumstances of that case.

I am not able to agree that “costs thrown away” can never include costs not yet incurred. That is especially so if, as is the case here, those future costs are incurred by reason of the adjournment and would not have been incurred but for the adjournment.

In this case, the substance of the matter is that the adjournment I granted was by reason of the late service of Mr Nakhla’s report. It is that late service, and the concomitant adjournment, that will now cause the plaintiff extra costs that it would not otherwise have incurred. I can see no reason why these costs should not be characterised as “costs thrown away” by the adjournment.

Accordingly, pursuant to s 98(4) of the Civil Procedure Act, I specify as a gross sum the costs thrown away by the adjournment of these proceedings on 24 March 2021 as $17,600.

By reason of my orders of 25 March 2021, those costs are payable within 14 days of today.