Spotpress Pty Ltd v Spotpress Newspapers Pty Ltd (in liq)

These reasons for judgment concern the costs of these proceedings, in which the principal judgment was delivered on 25 September 2025: Spotpress Pty Ltd v Spotpress Newspapers Pty Ltd [2025] NSWSC 1094. Submissions and evidence in relation to costs were received from the plaintiffs on 10 December 2025, from the third and fourth defendants on 28 January 2026, and from the plaintiffs in reply on 18 February 2026. The first and second defendants, who went into liquidation on 21 December 2025, did not wish to be heard in relation to costs.

It is convenient for present purposes to repeat the substance of my description in the principal judgment of the parties and their role in the transactions and events giving rise to the proceedings, before summarising the outcome of the proceedings.

The first defendant/cross-claimant, Spotpress Newspapers Pty Limited, operated a printing business with three components: the “coldset business”; the “heatset business”; and the “hybrid business”. The coldset business conducted printing for newspapers, and is therefore also referred to as the newspaper business. The heatset business conducted printing for magazines and catalogues. The hybrid business is a term used by the parties to describe printing for publications that require both coldset and heatset printing services.

The second defendant/cross-claimant, Grasett Investments Pty Limited, owned certain assets used in the operation of the business.

The first defendant/cross-claimant operated the business from premises at 24-26 Lilian Fowler Place, Marrickville. At all relevant times until shortly after the commencement of the final hearing of these proceedings, those premises were owned by the third defendant/cross-claimant, JG & DG Properties Pty Ltd.

The fourth defendant, Mr John Georgantzakos, and his brother Mr Dimitri Georgantzakos were the directors of each of the first, second and third defendants at all times material to the proceedings, and at the time of the hearing.

On 7 March 2023, the first and second defendants/cross-claimants entered into an Asset Sale Agreement for the sale of the heatset business and the hybrid business to the first plaintiff/cross-defendant, Spotpress Pty Limited. The purchase price was $6,000,000, of which $2,500,000 was payable on completion, and $3,500,000 was the subject of vendor finance under the terms of a Loan Deed between the first and second defendants/cross-claimants as lenders, the first plaintiff/cross-defendant as borrower, and the second and third plaintiffs/cross-defendants, TMA Australia Pty Limited and TMA Capital Australia Pty Limited, as guarantor and limited guarantor (respectively). Various other documents were executed on that day, including a lease of the Marrickville premises between the third defendant/cross-claimant as lessor and the first plaintiff/cross-defendant as lessee, a Services Agreement pursuant to which the first defendant/cross-claimant engaged the first plaintiff/cross-defendant to provide certain services which it would require for a period after completion in order to continue operating the coldset business, and an agreement pursuant to which the first plaintiff/cross-defendant engaged the fourth defendant Mr John Georgantzakos to provide certain consulting services following completion of the sale of business. Completion occurred simultaneously with execution on 7 March 2023.

Mr Anthony Karam and Ms Corriene Karam were directors of each of the first, second and third plaintiffs/cross-defendants at all times material to the proceedings, and at the time of the hearing.

In these reasons, as in the principal judgment, I adopt the parties’ conventions of referring to:

Other terms used in these reasons have the same meaning as in the principal judgment.

The proceedings arose out of alleged breaches by the Sellers of Seller Warranties given to the Buyer in the Asset Sale Agreement, other alleged breaches of the Asset Sale Agreement, alleged misleading or deceptive conduct by the Sellers, a dispute about the construction and/or rectification of certain provisions of the Asset Sale Agreement, a dispute about the amount owing under the Loan Deed and the Buyer’s right to set off certain amounts against the amount owing, an alleged breach of the Consulting Services Agreement by Mr John Georgantzakos, alleged misleading or deceptive conduct by the Buyer in relation to the electricity supply clause in the Lease, and an alleged breach of the Lease by JG & DG Properties in relation to electricity supply charges for the Marrickville premises being passed on to the Buyer (as lessee).

All but two of the claims pressed by the plaintiffs at final hearing were claims against the Sellers or the Spotpress Seller. [1] The principal claims were claims by the Buyer against the Sellers for damages in the range of $3,190,000 and $5,040,000 for breaches of Seller Warranties in the Asset Sale Agreement, a claim for damages in the sum of $600,000 against the Sellers for failure to transfer the hybrid business to the Buyer in breach of the Asset Sale Agreement, and a claim for rectification of provisions of the Asset Sale Agreement concerning transferring employees and their accrued entitlements, which (on the plaintiffs’ case) would reduce the purchase price payable to the Sellers under the Asset Sale Agreement by $1,221,972 and result in a corresponding reduction in the amount owing by the Buyer to the Sellers (and guaranteed by the TMA Entities) under the Loan Deed.

The plaintiffs’ only claim against Mr John Georgantzakos was a claim by the Buyer for damages in the sum of $347,109 for causing the Sellers not to transfer the hybrid business to the Buyer in breach of his Consulting Services Agreement with the Buyer.

The plaintiffs’ only claim against JG & DG Properties was a claim to be indemnified in respect of electricity costs paid by the Buyer in respect of the Marrickville premises during the term of the Lease in excess of the costs that (on the plaintiffs’ case) the Buyer was obliged vis-à-vis JG & DG Properties to pay pursuant to the relevant provisions of the Lease. The cross-claim filed by the Sellers and JG & DG Properties included a claim that the Buyer had engaged in misleading or deceptive conduct in relation to those provisions, and a claim for rectification of those provisions in a manner that would have defeated the Buyer’s claim for indemnity. The amount of the indemnity claimed by the Buyer was $292,811 up to and including March 2025.

All of the claims arose out of or related to one or more of the agreements referred to at [7] above. However, each claim gave rise to distinct factual and legal issues. Prior to the final hearing, almost all of the non-expert evidence served by the defendants in support of their defences and cross-claims comprised affidavits of Mr John Georgantzakos. That reflects his role as the only active director of the corporate defendants and the person who had negotiated the transaction documents on their behalf and who had first-hand knowledge of the various events that occurred after the execution of the agreements which gave rise to the plaintiffs’ claims. As a result of that role, Mr John Georgantzakos was in a position to give evidence about the numerous distinct factual issues raised by the plaintiffs’ claims.

The outcome of the proceedings was as follows for the reasons explained in the principal judgment:

The outcome represents success for the plaintiffs in respect of all claims pressed at the final hearing, and in respect of their defence of the cross-claim.

Contrary to the submissions now made by the plaintiffs in relation to costs, that success cannot be expressed in terms of one outcome against all defendants.

The plaintiffs’ claim against Mr John Georgantzakos in relation to the failure to transfer the hybrid business was distinct from their claim against the Sellers in respect of the same subject matter because, although it arose out of substantially the same facts, it relied on a breach of the Consulting Services Agreement which Mr John Georgantzakos entered into with the Buyer and to which the Sellers were not parties. The plaintiffs’ claim against Mr John Georgantzakos in relation to the failure to transfer the hybrid business was also distinct from each of the plaintiffs’ other claims against the Sellers, their claims against the Spotpress Seller, and their claim against JG & DG Properties, in the sense that it raised different factual and legal issues from those other claims.

The plaintiffs’ claim against JG & DG Properties arose wholly under the Lease and raised different legal and factual issues compared to the plaintiffs’ claims against all of the other defendants. The cross-claim filed by JG & DG Properties alleging misleading or deceptive conduct in relation to the inclusion of the relevant electricity supply clause in the Lease turned on a factual dispute about what was said and done at a meeting at which the final versions of transaction documents (including the Lease) were reviewed by the parties and their solicitors, and the contents of the final version of the Lease reviewed at that meeting. Those issues, and the legal question whether what occurred constituted misleading or deceptive conduct on the part of the Buyer, were different from the issues raised by the plaintiffs’ claim against JG & DG Properties and from the issues raised by the plaintiffs’ claims against all other defendants.

Final orders were made on 21 November 2025, except in relation to costs.

On 21 December 2025, each of the Sellers went into liquidation. Since that time, the Sellers have had separate legal representation. The solicitors who acted for all of the defendants at trial have continued to act for Mr John Georgantzakos and JG & DG Properties.

On 4 February 2026, an order was made by consent of all parties granting leave to the plaintiffs pursuant to s 500(2) of the Corporations Act 2001 (Cth) to continue the proceedings against each of the Sellers in respect of the question of costs and in respect of any variation to or extension of freezing orders made against the defendants (including the Sellers) during the course of the hearing.

The plaintiffs submit that costs should follow the event of the proceedings, that the Court should make an order requiring the defendants (jointly and severally) to pay their costs, that those costs should be paid on an indemnity basis from the date of the plaintiffs’ offer of compromise made on 14 January 2025 (or alternatively from one of four later dates on which the plaintiffs made further, revised offers to the defendants), and that the Court should make an order pursuant to s 98(4) of the Civil Procedure Act 2005 (NSW) (the CPA) fixing the amount of those costs as:

As I have already mentioned, the Sellers do not wish to be heard in relation to costs.

Mr John Georgantzakos and JG & DG Properties accept that the plaintiffs are entitled to an order for their costs. They also accept that this is an appropriate case for the Court to fix the amount of costs, but submit that the total amount fixed should be less than that for which the plaintiffs contend. It is further submitted that the costs order should not be made against all defendants jointly and severally, and that costs orders should be made against each of Mr John Georgantzakos and JG & DG Properties severally, and should be limited in each case to a small proportion of the plaintiffs’ total costs as fixed by the Court having regard to the nature and value of the distinct claims made against each of them compared to the higher value of the multiple claims made against the Sellers and the claims made against the Spotpress Seller. No objection is taken to a costs order being made against the Sellers jointly and severally. It is further submitted on behalf of Mr John Georgantzakos and JG & DG Properties that there is no basis for a costs order to be made on an indemnity basis.

In support of their application for indemnity costs, the plaintiffs rely, in cascading alternative order, on the following offers on the following dates:

The offer made on 14 January 2025 was expressed as an offer pursuant to r 20.26 of the UCPR to compromise the whole of the proceedings on the following terms:

I accept the plaintiffs’ submission that the offer made on 14 January 2025 was a valid offer of compromise under r 20.26. The third and fourth defendants did not submit otherwise.

The plaintiffs’ offer made on 24 April 2025 was expressed as an offer pursuant to r 20.26 to compromise the whole of the proceedings on the same terms as the 14 January 2025 offer, save that the amount of the “Settlement Sum” to be paid by “the defendants” had increased to $2,167,961 and the offer was open for acceptance for 7 days after service (not 28 days).

I accept the plaintiffs’ submission that the 24 April 2025 offer was a valid offer of compromise under r 20.26.

Some or all of the defendants made a counter-offer to the plaintiffs, the terms of which are not in evidence. The plaintiffs rejected that counter-offer and made a Calderbank offer to the defendants on 2 May 2025 on terms similar in substance and effect to the 14 January 2025 offer, save that the amount of the “Settlement Sum” to be paid by “the defendants” was reduced to $1,250,000 (on the basis that the defendants would release the plaintiffs from any further claims concerning disputed assets in the plaintiffs’ possession and that the parties would give mutual releases that would release the plaintiffs from any claim in respect of moneys advanced under the Loan Deed) and it was proposed that the plaintiffs would assume responsibility for electricity supply to the Marrickville premises for the remainder of the term of the Lease (rather than JG & DG Properties indemnifying the Buyer for part of the electricity costs paid under the Lease). That offer was expressed to be open for acceptance until 5:00pm on 5 May 2025, being the first day of the final hearing.

As the plaintiffs submitted, it was clear from the terms of the without prejudice letter under which each of the 14 January and 24 April 2025 offers of compromise was sent, and from the terms of the 2 May 2025 Calderbank offer, that the parties would have paid their own costs of the proceedings and the plaintiffs would not have been entitled to pre-judgment interest on any component of the “Settlement Sum” if the defendants had accepted any of those offers.

The plaintiffs’ two Calderbank offers made during the course of the final hearing on 14 May and 19 May 2025 were made on terms that were more favourable to the plaintiffs, reflecting their evolving assessment of their prospects of success in the proceedings.

The headline term of the 14 May 2025 offer was that “the defendants” would pay a “Settlement Sum” of $4,497,500, of which $2,000,000 was attributed to the plaintiffs’ claims and the balance was attributable to the plaintiffs’ costs and disbursements. The offer was open for acceptance until midnight on 14 May 2025.

The headline term of the 19 May 2025 offer was that judgment would be entered for the plaintiffs “against all defendants” in the sum of $3,000,000 and an order would be made requiring “the defendants” to pay the plaintiffs’ costs in the fixed sum of $3,442,500, being a total “Settlement Sum” of $6,442,500. The 19 May 2025 offer was open for acceptance until 5:00pm on 20 May 2025.

As the plaintiffs’ submissions candidly acknowledge, all of the offers were addressed to the defendants jointly. As was submitted on behalf of Mr John Georgantzakos and JG & DG Properties, it follows that the offers were only capable of acceptance by the defendants jointly with the result that each of Mr John Georgantzakos and JG & DG Properties would have become liable jointly with the Sellers to pay the Settlement Sum stipulated in the offer. In the case of each offer, that Settlement Sum far exceeded the quantum of the plaintiffs’ claims against each of Mr John Georgantzakos and JG & DG Properties referred to at [13]-[14] above.

The plaintiffs submit that each offer nevertheless involved a real and genuine element of compromise for each of the defendants and was capable of acceptance by the defendants jointly, and that the defendants acted unreasonably in not jointly accepting each offer within the time that it was open for acceptance, for four reasons.

The first reason identified by the plaintiffs is that all of the defendants have been unsuccessful in the proceedings and (I infer) that this overall outcome was foreseeable by the defendants at the time that each of the offers was made. That is so, but it does not follow that the offers involved a real and genuine element of compromise for each of the four defendants. In my opinion, they did not involve a genuine compromise for Mr John Georgantzakos against whom the Buyer claimed damages of $347,109, or for JG & DG Properties against whom the Buyer claimed an indemnity in the amount of $292,811 up to and including March 2025 (even allowing for an increase in the amount of that indemnity for each month until the expiry of the three-year term of the Lease in March 2026). As the plaintiffs submitted, acceptance of any of the first three offers by the defendants jointly would have avoided an adverse costs order in the proceedings. However, for the reasons explained at [43]-[45] below, I reject the plaintiffs’ submission that the question whether the offers involved a real and genuine element of compromise for the defendants must be addressed on the assumption that, if the offer were not accepted and if the plaintiffs succeeded in their claims, a costs order in favour of the plaintiffs would most likely be made against the defendants jointly and severally.

The second reason identified by the plaintiffs is that all defendants were in the same interest and closely related in that one of the Sellers was the corporate vehicle that operated the printing business and the other was the owner of some of the assets used in the operation of that business, JG & DG Properties was (until shortly after the commencement of the hearing) the owner of the Marrickville premises from which the business was conducted, and Mr John Georgantzakos was a director of each of the Sellers and of JG & DG Properties.

As I have explained at [12]-[20] above, all but two of the plaintiffs’ claims in the proceedings were made against the Sellers, each of whom was a party to the Asset Sale Agreement and the Loan Deed out of which those claims arose. I therefore accept that the Sellers had substantially the same interest in the proceedings. However, having regard to the distinct nature of the plaintiffs’ claims against each of Mr John Georgantzakos and JG & DG Properties, I reject the submission that those two defendants had the same interest in the proceedings as each other or that they had the same interest as the Sellers.

The third reason identified by the plaintiffs is that the defendants were jointly represented, reflecting the fact that each of the Sellers and JG & DG Properties was effectively controlled by Mr John Georgantzakos. It follows, in the plaintiffs’ submission, that each offer was capable of acceptance by the defendants jointly because Mr John Georgantzakos was in a position to assess his own interests and the interests of each of the Sellers and JG & DG Properties and to give instructions in relation to the offers which bound each of them. It may be accepted that Mr John Georgantzakos was in that position, but it does not follow that he had any reason to cause the defendants jointly to accept an offer to settle the proceedings on terms that would have rendered him personally liable, and that would have rendered JG & DG Properties liable, for amounts claimed by the plaintiffs only against the Sellers. Indeed, it would likely have constituted a breach of his duties as a director of JG & DG Properties to do so. Contrary to the plaintiffs’ submissions, it is not to the point that the interests of the defendants were not opposed to one another in the proceedings, or that each defendant intended to rely on evidence to be given by Mr John Georgantzakos in defending the claims made against it by the plaintiffs. The point is that the relatively modest claims made against JG & DG Properties and Mr John Georgantzakos were distinct from the claims made against the Sellers in the amount of up to $5,640,000 and the additional claims made against the Spotpress Seller. Acceptance of any of the offers would have required JG & DG Properties and Mr John Georgantzakos to assume joint liability with the Sellers for a Settlement Sum calculated by reference to the whole of the plaintiffs’ claims in an amount which far exceeded the maximum value of the claims against JG & DG Properties and Mr John Georgantzakos.

The fourth reason identified by the plaintiffs is that the 14 January 2025 offer and the following four offers each involved a real and genuine element of compromise for each defendant taking into account their overall financial exposure in the proceedings, including exposure to an adverse costs order that the defendants must be taken to have realised would most likely be made in favour of the plaintiffs against the defendants jointly and severally.

I reject that submission. As the plaintiffs submitted and the third and fourth defendants acknowledged, the liability of unsuccessful defendants for the costs of the successful plaintiffs is ordinarily joint and several as between the defendants. I respectfully adopt Nixon J’s summary of the applicable principles in Global Risk Alliance Group Services Pty Ltd v Harmer (No 2): [16]

As I have already explained, the Sellers, JG & DG Properties and Mr John Georgantzakos each conducted distinct defences in response to the plaintiffs’ different claims brought against each of them. JG & DG Properties also prosecuted its cross-claim for alleged misleading or deceptive conduct of the Buyer in relation to the electricity supply clause in the Lease. In those circumstances, contrary to the plaintiffs’ submissions, the defendants cannot be taken to have realised that any costs orders in favour of the plaintiffs would most likely be made against all of the defendants jointly and severally. At the time of the offers, the defendants had good reason to believe that, consistently with the principles referred to immediately above, any costs orders made in favour of the plaintiffs would be likely to be made against them severally and on terms that limited the costs liability of the Sellers, JG & DG Properties and Mr John Georgantzakos to the costs of the plaintiffs’ distinct claims against them. In circumstances where it is accepted that a gross sum costs order is appropriate, and the plaintiffs have chosen to quantify their costs as one fixed sum for their total costs rather than a fixed sum for their distinct claims against the Sellers, JG & DG Properties and Mr John Georgantzakos, I accept the submission made on behalf of JG & DG Properties and Mr John Georgantzakos that the sum fixed by the Court for the plaintiffs’ total costs should be apportioned between them in accordance with the Court’s broad brush assessment of the extent to which the relevant claims (and the defence of JG & DG Properties’ cross-claim) contributed to the plaintiffs’ total costs. Because of the distinct issues raised by the plaintiffs’ claims and their defence of JG & DG Properties’ cross-claim, their costs incurred in prosecuting each of those claims and defending the cross-claim are attributable to the relevant defendant’s defence of each claim and to the conduct of that cross-claim, rather than to the joint conduct of the defendants in the proceedings. That the defendants shared common legal representation during the final hearing (and at earlier stages of the proceedings) and relied principally on the evidence of one lay witness does not change that reality. The fact that the fourth defendant Mr John Georgantzakos is a director of JG & DG Properties and each of the Sellers, does not make it just that he and JG & DG Properties should bear the burden of compensating the plaintiffs for their costs of prosecuting their distinct claims against the Sellers.

In respect of the offers of compromise made under r 20.26 on 14 January and 24 April 2025, r 42.14 of the UCPR provides:

For all of the reasons explained above, the plaintiffs have not obtained against the defendants jointly an order or judgment that is more favourable to them than either of the offers. The plaintiffs have obtained a more favourable outcome only against the Sellers. The offers were not capable of acceptance by the Sellers. It follows in my opinion that the requirements of r 42.14(1) are not satisfied and that r 42.14(2) is not engaged.

Even if I had come to the conclusion that r 42.14(2) was engaged in respect of the 14 January and 24 April 2025 offers, I would have exercised the discretion to order otherwise on the basis that acceptance of either offer would have exposed JG & DG Properties and Mr John Georgantzakos to liability to pay a Settlement Sum that significantly exceeded the amounts claimed against each of them by the plaintiffs. The exercise of that discretion would have had the consequence that no defendant would have been ordered to pay all or any part of the plaintiffs’ costs on an indemnity basis (as opposed to the ordinary basis) from the date of the offers on account of the defendants’ failure to jointly accept one of the offers.

I accept the submissions made on behalf of JG & DG Properties and Mr John Georgantzakos that the subsequent Calderbank offers did not involve a real and genuine element of compromise for those defendants, and that it was not unreasonable for the defendants not to have jointly accepted one or other of those offers, thereby exposing JG & DG Properties and Mr John Georgantzakos to liability to pay the whole of the proposed “Settlement Sum” in each offer. For the reasons explained at [44]-[45] above, it was unlikely at the time of the offers that adverse costs orders would ultimately be made against the defendants jointly and severally, and I do not accept that the existence of that unlikely prospect at that time warrants assessing those offers as involving a real and genuine element of compromise for all of the defendants including JG & DG Properties and Mr John Georgantzakos. Accordingly, the defendants’ failure to jointly accept those offers does not warrant the exercise of the costs discretion by ordering the defendants to pay any part of the plaintiffs’ costs on an indemnity basis rather than on the ordinary basis. [17]

It is not necessary to address the defendants’ alternative submissions that an indemnity costs order should not follow from their failure to accept the offers because the plaintiffs’ case changed after the 14 January and 24 April 2025 offers were made and/or because of the short time frames for which the offers made on and after 2 May 2025 were open for acceptance.

It is common ground between the plaintiffs on the one hand and JG & DG Properties and Mr John Georgantzakos on the other hand that this is an appropriate case for a gross sum costs order. The evidence provides a just basis for fixing an amount of the plaintiffs’ total costs. [18]

The Court is not required to undertake a detailed examination of the kind that would be carried out in a costs assessment, and is entitled to take an impressionistic or “broad brush” approach to the quantification of the costs to be ordered in favour of the plaintiffs. The gross sum specified should nevertheless be based on an informed assessment of the actual costs having regard to the information before the Court. [19] The Court is entitled to take into account that the usual outcome of costs assessments where costs are assessed on the ordinary basis represents a proportion in the range of 60% to 85% of the actual costs incurred. A discount to reflect that reality should be applied as part of the impressionistic approach to a gross sum costs order. [20]

It is therefore common for a party seeking a gross sum costs order to adduce expert evidence from a legal costs consultant setting out their opinion about the percentage discount that would likely be applied to that party’s actual costs if those costs were to be assessed, based on the expert’s review of evidence given by the solicitor on the record as to the history of the proceedings and the nature and complexity of the issues raised by the proceedings and the scope of the evidence adduced by each party, and the expert’s review of invoices issued by the party’s solicitors and the underlying narrative time records, together with records of disbursements including counsel’s fees. In reviewing that material, the expert identifies features of the particular case, including the nature of the work done, the manner in which the work was done, and the time spent doing the work, that the expert considers informs the percentage discount that would be likely to be applied on assessment. Such evidence is of assistance to the Court in determining what discount should be applied to the moving party’s actual costs when applying a broad brush approach in order to arrive at a quantum of the costs to be paid by the other party or parties that is just in the circumstances of the particular case.

I reject the evidence adduced by JG & DG Properties and Mr John Georgantzakos from experienced specialist legal costs consultant Ms Suzanne Ward that percentage reductions to a successful party’s actual costs are typically greater when gross sum costs orders are made than when costs are assessed. The only evidence cited by Ms Ward in support of that statement is a list of ten judgments delivered between 10 and 21 years ago in which the percentage of costs incurred recovered under a gross sum costs order ranged between 41% and 81%. In my opinion, that list demonstrates nothing more than that each case in which a gross sum costs order is sought will turn on its own circumstances.

I note that Ms Ward refers to the judgment of the Court of Appeal in Rahman v Rahman [21] at [42] as authority for the proposition that “it is ‘usual to apply a discount of 30-35% in the case of a party/party order when assessing a gross sum costs order’”. However, paragraph [42] of the judgment merely records a submission made by one of the parties and not a “usual” or “typical” range embraced by the Court of Appeal. The gross sum costs orders made by the Court of Appeal in favour of the successful respondents to the appeal in that case applying the broad brush approach amounted to 74% of the actual costs of the first respondent and 84% of the actual costs of the second and third respondents. [22]

The plaintiffs adduced expert evidence from Ms Kerrie-Ann Rosati, an experienced legal costs consultant, who gave evidence of the kind referred to at [53] above and expressed her opinions about the percentage of each category of costs that the plaintiffs would be likely to recover on assessment. Ms Ward gave evidence criticising certain aspects of Ms Rosati’s evidence, and Ms Rosati gave evidence in reply.

The plaintiffs incurred total solicitors’ fees of $2,306,982.17 (excluding GST), being the total amount invoiced to the plaintiffs by their solicitors after writing off various charges totalling $78,758.57.

Ms Rosati identified that 20 fee earners at Thomson Geer charged for work performed on the matter, and opined that the hourly rates charged by each fee earner were reasonable as they were well within the range that is routinely allowed on costs assessments in matters of this kind and were also within the 2023 Guideline rates issued by the New South Wales Costs Assessment Rules Committee.

Ms Rosati’s analysis of the time records identified that 96.44% of the work (in terms of time recorded) had been done by one partner (17.35% of the time recorded and 24.99% of the total fees charged), two senior associates (58.36% of the time recorded and 60.15% of the total fees charged), and four associates (20.73% of the time recorded and 13.02% of the total fees charged). Of the four associates, one of them performed 20.52% of the work (in terms of time recorded, which accounted for 12.9% of the fees charged). Only 3.49% of the time recorded and 1.80% of the total fees charged were attributable to lawyers (that is, solicitors below associate level), and that work had been split between five lawyers. One law graduate had performed 0.04% of the work (in terms of time recorded, which accounted for 0.03% of the total fees charged). One law clerk had performed 0.03% of the work (in terms of time recorded, which accounted for 0.01% of the fees charged).

Ms Rosati opined that the utilisation of a core team of four – one partner, two senior associates, and one associate - was an appropriate breakdown of work in the circumstances of these proceedings. Ms Rosati did not express reasons for that opinion. Nor did Ms Rosati identify the particular features of the proceedings that rendered it appropriate, in her opinion, to have more than half of the work performed by senior associates and almost none of the work performed by lawyers or law graduates. The partner in question, Mr Peter Harrison, gave evidence in support of the plaintiffs’ application for a gross sum costs order, but did not explain the reason for not involving lawyers and law graduates in performing aspects of the work appropriate to their levels of skill and experience, which would have reduced the total solicitors’ fees on account of the lower hourly rates for lawyers and law graduates.

Having reviewed the narratives of Thomson Geer’s time records, Ms Rosati expressed the view that it was likely on assessment that “some reductions would be applied to the incurred costs to account for a level of duplication in the reviewing and drafting of the affidavit evidence, submissions and pleadings” having regard to the number of different fee earners with Thomson Geer attending to such tasks and the extensive assistance provided by, and time spent by, counsel.

Ms Rosati expressed the view that, based on Mr Harrison’s affidavit and the documents provided to her, the length of the pleadings, the number of lay and expert witness affidavits, the volume of documents discovered, and the page length of the parties’ submissions, the issues in the proceedings were complex, a significant amount of evidence was filed, a number of interlocutory applications were filed and heard, the amounts in issue were substantial, and the proceedings were strenuously contested. Ms Rosati therefore considered that the amount of costs incurred by the plaintiffs was proportionate to the scope and complexity of the litigation.

Ultimately, Ms Rosati opined that it was reasonable in this case to apply a reduction of 20% to the solicitors’ costs actually incurred by the plaintiffs, being at the lower end to mid-point of the range of reductions usually applied to solicitors’ costs of between 15% and 35% on assessment of party and party costs on the ordinary basis. Ms Rosati stated that she had reached that conclusion taking into account the information provided to her, the descriptions of the work performed in the invoices and the itemised narratives, the hourly rates, and the size of the Thomson Geer team performing the work. Ms Rosati stated that she had also taken into account the number of time entries that Thomson Geer had written off and not charged for at the invoicing stage, which represented a discount of approximately 3% to the fees that would otherwise have been charged.

Ms Ward gave evidence criticising Ms Rosati’s approach and conclusion on five grounds.

First, Ms Ward considered that Ms Rosati had adopted the wrong starting point for the plaintiffs’ total solicitors’ costs, because she had not excluded the plaintiffs’ costs of their own amendments which had been allowed on the basis that the plaintiffs pay the defendants’ costs thrown away by reason of the amendments, and because she had not excluded the plaintiffs’ costs thrown away by reason of the vacation of final hearing dates in August 2024 to accommodate the plaintiffs’ reply evidence.

Second, Ms Ward considered that Ms Rosati had erred in taking into account Thomson Geer’s write-offs when determining the appropriate percentage reduction to total solicitors’ costs because the work written-off is work of a kind for which costs are generally not recoverable on a solicitor and client basis (such as administration, file management, leaving messages, attempted phone calls, printing, and preparing internal agendas), and did not represent a discount on actual costs that would warrant a reduced discount when fixing a gross sum for the plaintiffs’ costs.

Third, Ms Ward opined that Ms Rosati had understated the time spent and fees charged by Mr Harrison in describing him as having performed a “largely supervisory role” and in stating that he had not recorded extensive periods of time.

Fourth, Ms Ward considered that the “top-heavy” staffing of the matter within Thomson Geer required a larger percentage reduction to solicitors’ costs than Ms Rosati’s proposed 20% reduction.

Fifth, Ms Ward considered that Ms Rosati had provided insufficient explanation in her report of her reasons for the proposed 20% reduction, in that a reader of the report is not able to understand the reasons why the matters referred to by Ms Rosati led to that percentage reduction rather than some other percentage reduction.

Ultimately, Ms Ward opined that a 35% reduction to solicitors’ fees was appropriate to address the five matters raised by Ms Ward which I have summarised above.

Ms Ward’s first criticism referred to at [65] above is misconceived for three reasons. First, as Ms Rosati states in reply, she has adopted as her starting point the plaintiffs’ total costs, and then made such reductions as she considers appropriate from those total costs. That approach is consistent with the indemnity principle. Second, it does not follow from the plaintiffs being ordered to pay the defendants’ costs thrown away by the plaintiffs’ amendments in May 2024 that the plaintiffs are not entitled to have their costs of making those amendments included in the scope of a costs order in their favour following their successful prosecution of their amended claims. I note that the defendants have not adduced any evidence identifying or quantifying any costs incurred by them which they claim were thrown away as a result of the plaintiffs’ amendments. If they had done so, then it would have been appropriate to offset amounts against the amount of a gross sum costs order in the plaintiffs’ favour. Third, the evidence does not indicate that the plaintiffs incurred any costs as a result of the vacation of the hearing dates in August 2024. There is no evidence of the plaintiffs’ solicitors or counsel charging cancellation fees.

In relation to Ms Ward’s second criticism, Ms Rosati’s evidence in reply clarifies that she did not regard the work written-off as a pre-existing reduction to the plaintiffs’ costs, but rather as one of a number of billing practices adopted by the plaintiffs’ solicitor which, taken together, would inform the appropriate reduction to incurred costs for the purpose of a costs assessment as between party and party on the ordinary basis.

Ms Ward’s third criticism unfairly seizes on one sentence in Ms Rosati’s report and does not acknowledge the whole of Ms Rosati’s evidence, including the evidence that I have summarised at [59] above.

Ms Ward’s fourth criticism has considerable force in the absence of any evidence of Mr Harrison explaining why the work was undertaken by fee earners at the level described at [59] above, and in the absence of any evidence of Ms Rosati opining as to whether this was reasonable in the circumstances of the present case. Ms Rosati characterises the issues raised by the proceedings as complex. In my opinion, there was a multitude of issues, but the individual issues were not particularly complex in the scheme of commercial litigation. There is no apparent reason why appropriate tasks could not have been delegated to lawyers and graduates working under the supervision of associates or senior associates so as to reduce the total professional fees.

I accept Ms Ward’s fifth criticism of Ms Rosati’s evidence. Ms Rosati has identified numerous matters that she has considered in arriving at her opinion about the quantum of solicitors’ fees that the plaintiffs would be likely to recover on assessment as between party and party, but her report does not expressly articulate the reasons why those matters, taken together, led her to conclude the plaintiffs would recover 80% of the solicitors’ costs actually incurred. However, Ms Ward has not explained the reasons for her opinion that a 35% reduction is appropriate. For the reasons I have already explained, I do not accept Ms Ward’s evidence that there is some generally applicable principle or guideline that gross sum costs orders should incorporate a reduction of at least 30% of the costs actually incurred by the successful party.

Applying the broad brush approach described above, and doing the best I can given the limitations of Ms Rosati’s and Ms Ward’s evidence referred to above, I consider that the solicitors’ fees actually incurred by the plaintiffs should be reduced by 30% rather than 20% for the purpose of formulating a gross sum costs order in favour of the plaintiffs to account for the unexplained “top-heavy” approach to the solicitors’ performance of the work described at [59] above. That 30% adjustment will reduce the total solicitors’ fees from $2,306,982.17 to $1,614,887.52.

The plaintiffs adduced evidence that they incurred total counsel fees of $1,177,653.33 (excluding GST).

Ms Rosati identified that nine counsel were briefed in the matter at different times over the course of the proceedings. Based on her review of the invoices issued by each counsel, Ms Rosati opined that the rates charged by each counsel were reasonable, that there was little (if any) duplication between the work of the different counsel briefed at different times, and that there was an appropriate allocation of work between senior and junior counsel briefed at any given time. Ms Rosati had regard to Mr Harrison’s evidence explaining the reasons why different counsel were briefed at different times. Although the charging rates were reasonable, Ms Rosati noted that the rates of senior counsel were outside the Guidelines and that the fees of senior counsel would therefore be likely to be reduced on assessment as between party and party on the ordinary basis. Ms Rosati opined that the fees of senior counsel who appeared for the plaintiffs at the hearing would be likely to be further reduced to disallow additional time charged beyond the daily rate for excess hours of work performed during the hearing, and to correct an apparent duplication error in one of the invoices. Taking all of those matters into account, Ms Rosati applied a 44% reduction to the fees of senior counsel who appeared at the hearing, reductions of between 18% and 21% to the three senior counsel who were briefed at earlier stages of the proceedings, and a reduction of 10% to the fees of junior counsel. These reductions allowed for the contingency that some duplication between the solicitor and counsel team might be identified on assessment, notwithstanding that Ms Rosati did not express a positive opinion that such duplication had occurred and Ms Rosati concluded that there was little (if any) duplication within the counsel team. The overall effect of Ms Rosati’s reductions to each counsel’s individual fees is to reduce total counsel fees from $1,177,653.33 to $841,825.99 (an overall reduction of 28.5%).

Ms Ward agreed with Ms Rosati’s adjustments to counsel’s rates, but opined that there should be an overall reduction to counsel’s fees at the higher end of the “typical lump sum range of 30 to 40%” to allow for overlap, reading in and duplication that “necessarily” arises from briefing nine counsel. Ms Ward opined that counsel’s fees should be reduced to $709,579.41 for the purpose of a gross sum costs order, which would amount to a 40% reduction.

As Ms Rosati addressed in her reply evidence and as the plaintiffs submitted, Ms Ward’s opinion was not supported by any consideration of Mr Harrison’s evidence or any analysis of counsel’s invoices, and there is no “typical lump sum range” of discounts. The invoices support Ms Rosati’s opinion that there was little (if any) duplication of work between counsel and limited charges for reading in.

I embrace those criticisms of Ms Ward’s evidence. I prefer Ms Rosati’s evidence in relation to counsel’s fees.

The plaintiffs adduced evidence that they incurred total experts’ fees of $432,014.70 (excluding GST).

Ms Rosati’s evidence identifies that $397,017.50 of that sum represents the fees of FTI Consulting Technology for the three reports of the expert forensic accountant Ms Wright, $26,007.20 represents the fees for the expert report of Mr Dawson, and the remaining $8,990.00 represents the fees for the report of Mr Capraro. Ms Rosati notes that the fee for Mr Capraro’s report was a fixed fee, while Mr Dawson charged for the work on his report at an hourly rate of $220 and Ms Wright charged at an hourly rate of $720 (with lesser rates being charged for the time of staff assisting Ms Wright). Ms Rosati opined that expert fees are usually allowed on a costs assessment as between party and party if it was appropriate for the expert to be briefed and the expert’s costs were generally reasonable. Based on her review of the experts’ invoices and the other materials provided to her, Ms Rosati opined that the rates charged by the experts were not excessive and their total fees appeared to be reasonable for a matter of the scope and complexity of this case.

Ms Ward opined that the expert fees should be reduced by 35% consistently with what she considered is the “typical lump sum range” of discounts. Ms Ward did not express any other reason for this proposed reduction, and made no reference to having considered the experts’ reports or their invoices for their fees.

I prefer Ms Rosati’s evidence. Ms Wright’s fees, which account for almost all of the expert fees incurred by the plaintiff, appear to me to be reasonable based on her detailed reports which contain financial modelling to support quantification of damages for breach of Sellers Warranties based on multiple scenarios reflecting numerous potential combinations of liability findings. Although the individual issues raised by the proceedings were not complex in the scheme of commercial litigation, the multiplicity of issues raised and many different potential outcomes that would arise from different combinations of outcomes in respect of each individual issue rendered Ms Wright’s task complex. Ms Wright’s rate appears to me to be reasonable based on the level of skill and experience required to prepare reports of that nature. I accept Ms Rosati’s evidence that the plaintiffs would be likely to be allowed the expert fees actually incurred in the amount of $432,014.70 on assessment as between party and party on the ordinary basis.

It is common ground between the parties that the whole of the other disbursements incurred by the plaintiffs in the total sum of $196,301.79 should be included in a gross sum costs order.

The effect of my reasons and conclusions at [56]-[86] may be summarised as follows:

Mr John Georgantzakos and JG & DG Properties submitted that there should be a further reduction of $100,000 from the gross sum to account on a broad brush basis for the costs attributable to claims abandoned by the plaintiffs in their written submissions filed shortly before the commencement of the hearing on 5 May 2025. However, as the plaintiffs submitted, most of the claims abandoned were alternative formulations of claims that were pressed and on which the plaintiffs succeeded, relying on the same evidence. I accept the plaintiffs’ submission that the defendants’ proposed deduction of $100,000 is an arbitrary amount for which no justification is put forward. It would have been open to the defendants to seek an order for any costs thrown away by them as a result of the plaintiffs’ abandonment of those claims (if any) and to offset any such wasted costs against the gross sum costs order in favour of the plaintiffs. The defendants did not adduce any evidence of any costs thrown away.

Mr John Georgantzakos and JG & DG Properties also submitted that there should be a further reduction of $450,000 from the gross sum on account of the plaintiffs’ amendments made in May 2024 and the vacation of the hearing dates in August 2024. For the reasons explained at [71] above, I accept the plaintiffs’ submission that there is no rational basis for any such deduction.

For all of the reasons explained at [51] to [89] above, the plaintiffs’ costs should be fixed in the total sum of $3,085,030.00 pursuant to s 98(4)(c) of the Civil Procedure Act.

I now turn to the question of how that total sum should be apportioned between the costs orders to be made as against the Sellers, Mr John Georgantzakos and JG & DG Properties. [23]

It is submitted on behalf of JG & DG Properties and Mr John Georgantzakos that they should be ordered to pay 5% and 15% (respectively) of the plaintiffs’ total costs of the proceedings (in the amount fixed by the Court) and that the Sellers (jointly) should be ordered to pay the remaining 80%. The suggested percentages of 5% and 15% appear to have been arrived at on the basis that the amount of costs to be paid by each of JG & DG Properties and Mr John Georgantzakos should not significantly exceed the damages recovered by the plaintiffs against each of them.

The plaintiffs did not make any submission as to the proportion of the sum fixed in respect of the plaintiffs’ total costs that each of JG & DG Properties and Mr John Georgantzakos should be ordered to pay if the Court declined to make a costs order against all defendants jointly and severally. The plaintiffs submitted that the defendants have not identified discrete and separable issues that should be the subject of different costs orders. For the reasons I have already explained, costs orders should distinguish between the plaintiffs’ costs of their distinct claims against the Sellers, JG & DG Properties and Mr John Georgantzakos. The Court is not constrained to make one costs order against all defendants jointly and severally by reason of the plaintiffs’ failure to adduce evidence of the quantum of their costs of their distinct claims against the Sellers, JG & DG Properties and Mr John Georgantzakos. However, I accept the plaintiffs’ submission that the monetary amount of the judgments obtained against each of the Sellers, JG & DG Properties and Mr John Georgantzakos should not be the sole consideration that informs the apportionment of liability for the plaintiffs’ costs between the defendants. Rather, the liability should be apportioned according to a broad brush assessment of the extent to which the claims against each defendant (and the plaintiffs’ defence of JG & DG Properties’ cross-claim) contributed to the plaintiffs’ total costs.

The plaintiffs’ claims against the Sellers raised questions of construction of the Seller Warranties and wide-ranging factual issues which were the subject of both lay and expert evidence. The lay evidence included accounts of many disputed conversations during the negotiation of the Asset Sale Agreement and associated documents, and detailed evidence about the manner in which the Transferred Business was operated after completion of the sale and whether and how that differed from the manner in which it had been operated as part of the Sellers’ overall business prior to the sale. The plaintiffs’ principal lay witnesses were Ms Corienne Karam who swore eleven affidavits and Mr Anthony Karam who swore three affidavits. Ms Karam was cross-examined for approximately half a day and Mr Karam was cross-examined for less than one day. The plaintiffs relied on evidence from three other lay witnesses, one of whom was cross-examined for a short period and two of whom were not required for cross-examination. The Sellers served multiple affidavits of Mr John Georgantzakos which were ultimately not read. The Sellers relied on affidavits of three other lay witnesses, whose cross-examination occupied a little less than half a day in total. The expert evidence served by the plaintiffs comprised one report of Mr Matias Dawson in support of their claim that the Accounts had understated the electricity consumption and costs of the Transferred Business, and the three reports of Ms Wright served by the plaintiffs to which I have referred at [83]-[85] above. The Sellers served one report of Mr Andrew Ross which responded to Ms Wright’s first report only. The parties’ lay evidence and Ms Wright’s reports included evidence relevant to the Sellers’ failure to transfer the hybrid business to the Buyer on completion of the Asset Sale Agreement, which was also relevant to the plaintiffs’ claim against Mr John Georgantzakos for breach of his obligations under clause 15.4 of the Consulting Services Agreement that he had entered into with the Buyer. However, that was only one of many subjects addressed by the lay evidence and Ms Wright and accounted for only a small proportion of the volume of that lay and expert evidence and the time spent in cross-examination of those witnesses who were cross-examined.

The plaintiffs’ claim against JG & DG Properties involved the construction of the Lease and documentary evidence relied on by the plaintiffs to quantify damages for breach of the Lease, properly construed, by applying historical electricity supply charging rates as at the date of the Lease to the post-completion electricity consumption at the Marrickville premises.

In relation to JG & DG Properties’ cross-claim for alleged misleading or deceptive conduct concerning the electricity supply clause in the Lease and the plaintiffs’ defence of that cross-claim, the parties relied on documentary evidence, including email correspondence attaching various iterations of the draft Lease. JG & DG Properties relied on evidence from Mr Dmitry Georgantzakos, Ms Catherine Badenhorst and Mr Rhys Lyons about what occurred at the meeting at which the final version of the Lease was discussed and executed together with the transaction documents. The plaintiffs cross-examined Mr Dmitry Georgantzakos for a little more than an hour, Ms Badenhorst for approximately twenty minutes, and Mr Lyons for approximately fifty minutes. The plaintiffs relied on evidence from Ms Corienne Karam, Mr Anthony Karam and Mr Wyld, solicitor. Counsel for the defendants cross-examined Mr Wyld for approximately fifty minutes. As I have already mentioned, counsel for the defendants cross-examined Mr Karam for a total time of less than one day and Ms Karam for approximately half a day. A short time in each of those cross-examinations related to questions about the negotiation of the relevant clause of the Lease at the meeting in question.

Taking into account all of the matters at [94] to [96] and the substance of the legal and factual issues raised by the plaintiffs’ claims against the Sellers, against JG & DG Properties and against Mr John Georgantzakos and the substance of the legal and factual issues raised by JG & DG Properties’ cross-claim for alleged misleading or deceptive conduct, it is my impression that approximately 70% of the plaintiffs’ costs are attributable to their claims against the Sellers, approximately 10% of the plaintiffs’ costs are attributable to their claims against Mr John Georgantzakos, and approximately 20% of the plaintiffs’ costs are attributable to their claims against JG & DG Properties and their defence of that defendant’s cross-claim.

As a cross-check of that impression, I have considered whether those proportions result in disproportionality between the amount of the plaintiffs’ costs that will be payable by each of Mr John Georgantzakos and JG & DG Properties and the amount for which the plaintiffs succeeded against each of those defendants. I have concluded that they do not. The amount of costs that will be payable by Mr John Georgantzakos is less than the amount for which the plaintiffs succeeded against him, even before pre-judgment and post-judgment interest is taken into account, and is proportionate to the work done by the plaintiffs to prepare the detailed factual evidence about post-completion dealings between the parties in order to prove that Mr John Georgantzakos caused the Spotpress Seller to fail to transfer the hybrid business to the Buyer. [24] The amount of costs that will be payable by JG & DG Properties is greater than the amount that the Buyer was found to have overpaid for electricity in the period up to March 2025 and, will likely be greater than the amount overpaid in the period up to the end of the Lease. [25] However, the proportion of the plaintiffs’ costs that I have attributed to JG & DG Properties reflects the extent of the work done by the plaintiffs in adducing evidence from three witnesses in defence of the cross-claim, in preparing for the cross-examination of the four witnesses from whom JG & DG Properties had served evidence in relation to the cross-claim (only three of whom were cross-examined as a result of Mr John Georgantzakos’ affidavits not being read), and the detailed work that the plaintiffs were required to do by reference to documents to calculate the difference between the electricity charges payable under the relevant clause of the Lease and the electricity charges paid by the plaintiffs. I consider that it was reasonable for the plaintiffs to undertake that work in light of the evidence they had to meet in relation to the cross-claim, [26] and in order to prove their own claim as to the amount by which the Buyer (as lessee) had overpaid for electricity on the proper construction of the Lease.

I note that freezing orders made against the four defendants and Nyxos Pty Ltd on 16 May 2025 and varied and extended on 28 May 2025 will cease to operate on the expiry of seven days after the making of final costs orders. For the avoidance of doubt, it is appropriate to reserve liberty to the plaintiffs to apply for any variation or further extension of those orders within that seven day period.

For all of the foregoing reasons, the orders of the Court are as follows: