Wormald v Maradaca Pty Ltd

1. [1]

   THE COURT: On 13 November 2020, we gave judgment in this matter, allowing an appeal brought by Mr Shaun Edmund Wormald and Wirra Wirra Investments Pty Ltd as trustee for the Wormald Trust (Wirra Wirra) (together, the Appellants), and allowing a cross-appeal brought by Mr John Leonard Barrett and Mr Steven Moran (the Cross-Appellants) against Maradaca Pty Ltd and ELB Pty Ltd (together, the Respondents): see Wormald v Maradaca Pty Ltd [2020] NSWCA 289. These reasons assume familiarity with that judgment.

2. [2]

   The Court set aside the orders of the primary judge of 24 April 2020 and 8 May 2020 and in lieu thereof, entered the following orders:

3. [3]

   The Appellants thereafter filed a Notice of Motion on 10 December 2020, seeking a variation of the costs orders and, on 21 December 2020, the following orders were made by consent (although the orders do not appear to have been entered until 23 December 2020):

4. [4]

   These orders included the costs of the proceedings at first instance.

5. [5]

   On 5 August 2021, the Appellants and Cross-Appellants (together, the Applicants) filed a Notice of Motion in which they seek the following orders:

6. [6]

   The solicitor for the Applicants, Ms Kiera Lee Peacock, affirmed an Affidavit dated 4 August 2021 in support of the Applicants’ Notice of Motion dated 5 August 2021. The Respondent’s solicitor, Mr John David De Mestre, swore an Affidavit in reply on 10 September 2021. The Registrar directed that the parties file written submissions in relation to the Notice of Motion with a view to the application being determined on the papers.

Consideration

1. [7]

   The Respondents raised what is in effect a threshold issue, submitting that the Court lacks power to make a gross sum costs order. They contended that the application is for a variation of the orders made on 23 December 2020 and, as such, is governed by Uniform Civil Procedure Rules 2005 (NSW) r 36.16(3A) (UCPR) which provides:

2. [8]

   The Respondents submit that because the motion of 5 August 2021 was a motion “for the setting aside or variation of a judgment or order” already entered, but was not filed within 14 days of the orders made on 23 December 2020 (but was filed some 7 months after the 14-day period expired), the application is out of time and that no application to extend time has been made, nor any explanation given for the delay in making the application.

3. [9]

   The Respondents rely on Riva NSW Pty Ltd v Mark A Fraser and Christopher P Clancy trading as Fraser Clancy Lawyers (No 4) [2018] NSWCA 327 at [59]-[62] (Riva), in which Leeming JA, sitting by himself, said the following:

4. [10]

   A contrary view was reached by White J (as his Honour then was) in Short v Crawley (No 45) [2013] NSWSC 1541 at [27] (Short), in which, in a carefully reasoned judgment, his Honour concluded that, although an application for a gross sum costs order would result in a variation of a previous order, the variation would not be in respect of a claim for relief or of any question arising on a claim for relief that had been determined. His Honour referred to s 98 of the Civil Procedure Act 2005 (NSW), subsections (3) and (4) of which provide that:

5. [11]

   White J also pointed to the decision of von Doussa J in Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119 in relation to materially identical provisions in the Federal Court Rules 1979 (Cth). White JA (as he had become) adhered to the views he had expressed in Short in Livers v Legal Services Commissioner (No 2) [2021] NSWCA 164 at [6] and in Eliezer v The Council of St Andrews Cathedral School (No 2) [2021] NSWCA 227 at [40]-[45].

6. [12]

   Leeming JA’s attention does not appear to have been drawn in Riva to the consideration of the question in Short by White J.

7. [13]

   It is not necessary in the present case to resolve any difference between these two approaches because we would, as a matter of discretion, decline to make the orders sought. This is for the following reasons.

8. [14]

   First, there is no apparent reason why the orders were not sought in December 2020 when orders varying the original costs orders were sought and made. If a gross sum costs order is to be sought, it should generally be sought at the time when any other costs questions are being considered.

9. [15]

   Secondly, more than 8 months have passed since the making of the varied costs orders but the matters principally relied upon by the Applicants in support of the making of a gross sum costs order predate the making of those orders. In other words, there is no obvious reason why the gross sum costs order should not have been sought earlier and at a time when the proceedings were fresh in the mind of the Court. Moreover, the basis for the application, namely the “very real concern that the costs assessment process will be unduly protracted and expensive” was put at a very high level of generality upon which we are not prepared to act.

10. [16]

    Thirdly, it is not appropriate for the time of the Court of Appeal to be occupied in a consideration of a claim for a gross sum costs order in respect of proceedings at first instance as well as in the Court of Appeal. This is all the more so in light of the Applicants’ submission that “the issues in dispute between the parties were wide ranging” as well as the fact that, as the Respondents have pointed out, much of the evidence relied upon by the Applicants involves short form or relatively short form tax invoices or generalised assertions or estimates as to what work was done by different lawyers at different times. This seems to us to be a case where an experienced costs assessor would be far better placed than the Court to make a fair and proper assessment. In this context, the legal representatives of both parties as well as the parties themselves will be subject to their obligations under the Civil Procedure Act to further the overriding purpose of that Act, by acting so as to facilitate the just, quick and cheap disposition of the costs assessment process.

11. [17]

    For these reasons, the Notice of Motion should be dismissed with costs.