Gemma Constantinidis v Maxwell William Prentice in his capacity as trustee for the Estate of George Constantinidis (No 2)

I delivered judgment on (inter alia) the plaintiff’s notice of motion for default judgment and the notice of motion filed by the fifth and seventh defendants for summary dismissal of the plaintiff’s claim on 24 February 2023: Gemma Constantinidis v Maxwell William Prentice in his capacity as trustee for the Estate of George Constantinidis [2023] NSWSC 128.

Order 10 made on that day provided for applications for special costs orders to be filed and served by 13 March 2023 and made returnable before me for mention and directions on 17 March 2023. Ms C Perry, the solicitor for the fifth and seventh defendants, made an oral application for gross sum costs orders for each of her clients, and asked that the applications be dealt with there and then in order to minimise unnecessary costs on behalf of the fifth and seventh defendants.

I acceded to that request on certain terms, for two reasons. First, the plaintiff had been informed of the delivery of the judgment but chose not to appear. Secondly, in circumstances where there was some doubt that any costs order would be met by the plaintiff (a bankruptcy notice had been served on the plaintiff by other parties in respect of unpaid costs from the Family Law Proceedings), the incurring of further costs by adjourning the costs hearing seemed inappropriate.

One of the terms I imposed was that a copy of the transcript and exhibits 1 and 2, being Ms Perry’s costs agreements and tax invoices in relation to each of the fifth and seventh defendants respectively, should be forwarded to the plaintiff to give her the opportunity to respond to what had been said on behalf of the fifth and seventh defendants. I indicated that I would inform the plaintiff and the fifth and seventh defendants of the outcome of their application on 17 March 2023, the date to which the proceedings have been adjourned, even if reasons would be provided at a later date. As matters have transpired, these reasons for the orders will also be delivered on that date.

Ms Perry indicated that the total of the costs charged to the fifth defendant was $12,093.51, and the total of the costs charged to the seventh defendant was $12,686.55. In each case she was seeking a gross sum costs order in the amount of $10,000.00. Ms Perry drew my attention to In the matter of Aquaqueen International Pty Ltd [2015] NSWSC 500 where she had made a similar application for her client in that case, and her charge out rates (which were same rates as she charged the fifth and seventh defendants) were approved as reasonable by Black J in that judgment.

Each of the costs agreements and disclosures pertaining to the fifth and seventh defendants disclosed a charge out rate by Ms Perry of $500.00 per hour plus GST. Justice Black referred to Ms Perry’s evidence in Aquaqueen as follows:

Justice Black went on to say at [29]:

Ms Perry now has 29 years of experience as a solicitor and has been an accredited specialist for about 24 years in commercial litigation and insolvency.

In Qasim v Bird & Ors (No 3) [2022] NSWSC 418 I set out extracts from Harrison & Anor v Schipp (2002) 54 NSWLR 738; [2002] NSWCA 213, Hamod v State of New South Wales [2011] NSWCA 375 and Bobb v Wombat Securities Pty Ltd & Ors (No 2) [2013] NSWSC 863 in relation to gross sum costs orders. It is not necessary to set those extracts out in this judgment. It is sufficient to note that the Court of Appeal made clear in Hamod that the discretion under s 98(4) of the Civil Procedure Act 2005 (NSW) is not confined and may be exercised whenever the circumstances warrant its exercise.

Further, the discretion in s 98(4) may be exercised where the assessment of costs would be protracted and expensive and, in particular, if it appeared that a party obliged to pay the costs would not be able meet a liability of the order likely to result from an assessment: Hamod at [813]. Further, as Beech-Jones J said in Bobb at [6], apart from complex cases, another common category of cases in which lump costs will be awarded is the very short and relatively straightforward case where it can be expected that costs will be modest and that the pursuit of a costs assessment process might lead to unnecessary expense: see also Australasian Performing Rights Association Limited v Marlin [1999] FCA 1006 at [4]; Keen v Telstra Corporation Limited (No 2) [2006] FCA 930 at [6]; Dickens v State of New South Wales [2018] NSWSC 14 at [9].

On 24 February 2023, my associate forwarded to the plaintiff an email which informed the plaintiff of Ms Perry’s costs application, attached a copy of the transcript of the hearing of that application, and invited the plaintiff to make any submissions in relation to that application by 14 March 2023. Ms Perry forwarded to my associate a copy of the email she sent to the plaintiff on 24 February 2023 attaching copies of Exhibits 1 and 2.

The plaintiff responded with a large number of emails addressed variously to my associate, the associate for the Chief Justice, Ms Perry, the solicitor for the other defendants, and even some of the parties, which, for the most part, did not address the question of costs at all. Rather, the emails complained about my judgment, the Registrar, Ms Perry and the various defendants in the proceedings. Most of the emails were in the form of some sort of appeal to the Chief Justice to correct what were said to be the wrongdoing of a number of persons including me.

Most of the emails reiterated complaints against the defendants which formed the basis of my principal judgment as well as the various bankruptcy and family law judgments discussed in my principal judgment. The email of 9 March 2023 at 11.00am appeared to make a claim for costs against AAA Recycling, Ms Perry and Polczynski Robinson, although without stating any basis for the claim.

On 14 March 2023, the date by which the plaintiff was directed to make any submissions in relation to the application by the fifth and seventh defendants for a gross sum costs order, the plaintiff sent a further email making similar points to those made in the earlier emails I have mentioned. She also enclosed a document headed “Formal Statement” which appeared to be addressed to the Chief Justice. This document, while mentioning costs in passing, reiterated many of the plaintiff’s complaints which had been litigated time and again, and most recently in the amended statement of claim that I dealt with in my principal judgment.

In that statement the plaintiff said this concerning costs:

The plaintiff also said that costs assessment was a right of every party the subject of a costs order.

Section 56(2) of the Civil Procedure Act 2005 (NSW) provides that the Court must seek to give effect to the overriding purpose, which is to facilitate the just, quick and cheap resolution of the real issues in the proceedings, when it exercises any power given to it by the Act or Rules. The facility to make a gross sum costs order under s 98(4)(c) is such a power. Moreover, s 60 of the Civil Procedure Act provides that the practice and procedure of the Court should be implemented with the object of resolving the issues between the parties in such a way that the cost to the parties is proportionate to the importance and complexity of the subject-matter in dispute,

In Qasim, I said at [15]:

The position of the present plaintiff is not dissimilar from that assessment. As my judgment of 24 February 2023 shows, the present plaintiff has repeatedly attempted to litigate the same matters over and over again. Any costs assessment process is likely to be lengthy, expensive and out of proportion to the amount of the costs being assessed in the present case.

In my opinion, this matter falls into the class of case referred to by Beech-Jones J in Bobb at [6]. The amounts claimed for costs by the fifth and seventh defendants are modest. There is the further matter of the prospects of the plaintiff being able to pay any costs order assessed. On 23 July 2019 a bankruptcy notice was issued to the plaintiff in respect of unpaid costs from the family law proceedings (see at [23] of my principal judgment). Although that bankruptcy notice has expired, the costs remain unpaid.

All of those matters persuade me that a gross sum costs order should be made in respect of each of the fifth and seventh defendants.

The authorities have made clear that, when assessing the purpose of making a gross sum costs order, a broad brush approach may be taken: Zepinic v Chateau Constructions (Aust) Ltd (No. 2) [2014] NSWCA 99 at [31] and [38]; Hamod at [819]-[820].

I agree with Black J in Aquaqueen at [30] that allowing 70% of the actual solicitor-client costs is a common practice of the Court.

The two cost totals do not include Ms Perry’s fees for the appearance to take the reserved judgment and to argue the question of costs. I consider that when an allowance is made for the costs of that appearance on 24 February 2023 a figure of $10,000.00 is approximately equal to 70% of the total costs of each of the fifth and seventh defendants.

In my principal judgment, I raised issues concerning the tenth and twelfth defendants. The tenth defendant had never been served properly with the amended statement of claim. The twelfth defendant is not correctly named whether as a business name or a company. I ordered that the plaintiff was to file an amended statement of claim correctly naming the twelfth defendant. I also ordered that such amended statement of claim was to be served on the tenth and twelfth defendants within 14 days of 24 February 2023. No such amended statement of claim has been filed or served.

The naming of the twelfth defendant does not comply with the r 7.19 of the Uniform Civil Procedure Rules 2025 (NSW). Where the plaintiff has failed to correct that position, although given the opportunity to do so, the proceedings will be dismissed against the twelfth defendant.

In relation to the tenth defendant, r 12.7 UCPR relevantly provides:

The plaintiff filed the amended statement of claim joining the tenth defendant on 29 April 2022. The tenth defendant has never been served in accordance with the UCPR. The plaintiff was given the opportunity to correct the problem as a result of my orders of 24 February 2023. She has done nothing to rectify the problem. Rule 6.2(4)(a) UCPR provides that originating process is valid for service for six months from the date of filing. That period expired on 28 October 2022. The proceedings against the tenth defendant should be dismissed.

Accordingly, I make the following orders: