Rahman v Rahman (No.6)

The first defendant, Ms Mita Rahman, moves the Court for orders under Civil Procedure Act 2005 (“CPA”), s 98(4)(c) that a specified gross sum be fixed instead of assessed costs in respect of costs orders made against the plaintiff by Kunc J on 11 July 2025 and Lindsay J on 22 August 2025 (“the Kunc J and Lindsay J costs orders”). This is the Court’s sixth judgment in these protracted proceedings. The previous judgment Rahman v Rahman (No. 5) [2025] NSWSC 1280 sets out (at [1]) the course of the previous judgments.

This judgment assumes familiarity with and should be read with the previous judgments. Persons, events and things are referred to in this judgment in the same way as they are in those previous judgments.

When these proceedings were before the Court on 24 October 2025 the Court foreshadowed it would consider making a specified gross sum costs order under CPA, s 98(4)(c) with respect to the Kunc J and Lindsay J costs orders and directed the trustees and the solicitors for the defendant, Ms Rahman, to provide a bill of costs together with such evidence as they wish to rely upon to justify the making of CPA, s 98(4)(c) orders. Mr Rahman was directed to provide evidence or submissions in reply by 3 November 2025. A full opportunity having been granted to all parties to provide material, the Court is now in a position to make a determination under CPA, s 98(4)(c) with respect to the Kunc J and Lindsay J costs orders, insofar as they were made in favour of Ms Mita Rahman.

The Court is not yet in a position to make a CPA, s 98(4)(c) order with respect to the costs of the trustees for the Kunc J and Lindsay J costs orders. The trustees claim for costs may need revision as result of the decision of the Court of Appeal in Rahman v Rahman (No. 2) [2025] NSWCA 266 delivered on 11 December 2025. There the Court of Appeal was considering the making of a CPA, s 98(4)(c) order in respect of an appeal in these proceedings, where cost orders had been made in favour of both the first defendant and the trustees against the plaintiff, Mr Rahman. The Court of Appeal in that case accepted Mr Rahman's submissions that the trustees were not entitled to claim costs charged personally by them through an incorporated legal practice: Rahman v Rahman (No. 2) [2025] NSWCA 266 at [73] – [78]. The Court of Appeal pointed out that the trustees were nevertheless entitled to be indemnified against the trust corpus but that would need to be by order of the primary judge.

Prima facie, the costs claimed by the trustees in respect of the Kunc J and Lindsay J costs orders should be treated the same way. The trustees have now limited the quantum of their s 98(4)(c) claim for costs against Mr Rahman to conform with the reasons of the Court of Appeal. The trustees provided to all parties in mid-January 2026 and to the Court revised calculations of their costs to conform with the Court of Appeal's decision in Rahman v Rahman (No. 2) [2025] NSWCA 266. But the plaintiff, Mr Rahman, has not yet had an opportunity to respond to this revised claim. Therefore s 98(4)(c) issues as between the trustees and Mr Rahman with respect to the Kunc J and Lindsay J costs orders remain reserved until Mr Rahman can respond to the trustees revised claim.

This is an appropriate case for the making of a CPA, s 98(4)(c) order. The Court of Appeal recognised the appropriateness of such an order in the related appeal proceedings. After setting out the applicable principles for the making of CPA, s 98(4)(c) orders (at [60] – [64]), to which the Court now has regard, the Court of Appeal said at [65] – [69] of this case:

The same considerations that enlivened the Court of Appeal’s s 98(4)(c) discretion apply to the assessment of the Kunc J and Lindsay J costs orders. Mr Rahman's conduct at first instance has been no less obstructive and wasteful than has been observed by the Court of Appeal in the proceedings before it. He denies this in his submissions and affidavit evidence but the Court is of a contrary view.

The Court will therefore make a specified gross sum costs order in respect of the Kunc J and Lindsay J costs orders. The Court has the benefit of written submissions filed on behalf of Ms Mita Rahman by her solicitor, Mr Bharath Balasubramanian of Marsdens Law Group on 27 October 2025, supported by an affidavit of Mr Balasubramanian of 27 October 2025. The Court is satisfied on the basis of this material that the Court can fairly as between the parties make a specified gross sum costs order under CPA, s 98(4)(c) and that an appropriate sum can be determined on the available materials: Zepinic v Chateau Constructions (Aust) Ltd (No. 2) [2014] NSWCA 99 at [28]-[29].

Kunc J’s costs order of 11 July 2025 were on the ordinary basis. Lindsay J ordered the payment of costs on the indemnity basis on 22 August 2025. Mr Balasubramanian’s affidavit sets out the tax invoices for each of those matters and the Court is satisfied as to their authenticity and reasonableness.

With respect to Kunc J’s orders of 11 July 2025 the Court is prepared to allow between 65 to 75 per cent of the first defendant's professional legal costs and 100 per cent of the disbursements, as that would be the likely outcome of an assessment of costs. That is a range of between $7,381.34 and $7,935.52. The Court will fix a specified gross sum in respect of these costs at $7,500, a reasonable sum in the circumstances.

Lindsay J's costs orders of 22 August 2025 were made on the indemnity basis. It would be appropriate, as Mr Balasubramanian says from his experience a costs assessor would do, allow 80 to 90 per cent of professional costs and 100 per cent disbursements upon an assessment. From the available evidence that would result a costs assessment outcome in the range $4,650.44 to $5,074.16. The Court will allow under CPA, s 98(4)(c) in respect of these costs orders a specified gross sum of $4,850, as reasonable in the circumstances. The orders made below reflect these amounts.

Kunc J’s orders of 11 July 2025 provided for payment forthwith out of the proceeds of sale of property 1 and property 1A. It is appropriate that the cost orders made by Lindsay J be treated the same way and the orders below provide for that. Mr Rahman’s submissions dispute that this is an appropriate case for a payment forthwith order. He submits that no deductions for costs from sale proceeds should occur until these proceedings are returned to the Federal Circuit Court and Family Court of Australia (“FCFCOA”). But that is highly impractical as this Court is far more familiar with the circumstances in which these costs were incurred.

Mr Balasubramanian’s evidence on 27 October 2025 also substantiates that Marsdens’ professional fees of preparing its application for this CPA, s 98(4)(c) order were $2,200 including GST. The Court will also make an order for these costs in favour of Ms Rahman and will make a CPA, s 98(4)(c) order in respect of the quantum of those costs in the sum of $2,000.

On 30 October 2025 the Court dismissed the plaintiff's motions dated 16 September and 14 October 2025 and ordered the plaintiff to pay both the defendants’ costs and the trustees’ costs of the plaintiff's two said motions.

The parties were directed to file evidence and submissions in support of an application for those cost orders to be paid forthwith and the subject of a specified gross sum cost order under CPA, s 98(4)(c). The Court has received additional evidence and submissions in support of that application.

For the same reasons as applied in relation to the Kunc J and Lindsay J costs orders, the Court indicated on 30 October 2025 that it would fix a gross sum under s 98(4)(c) in favour of the trustees and the first defendant and against the plaintiff in respect of these costs orders. Protracted and disputatious costs assessments are likely with all future costs orders in these proceedings unless the plaintiff’s procedural conduct of them markedly changes.

Once again the Court has the benefit of an affidavit from Mr Balasubramanian as to the first defendant’s costs incurred in relation to the 16 September and 14 October 2025 motions. The Court’s orders of 30 October 2025 ordered the plaintiff to pay the trustees and the defendants’ costs of the two motions on the ordinary basis. Mr Balasubramanian's affidavit of 3 November 2025 sets out an appropriate calculation for those costs on the ordinary basis were the Court to proceed to a costs assessment.

Mr Balasubramanian’s evidence is that the defendant has incurred professional fees in the sum of $14,010 (excluding GST) in respect of the 17 September 2025 motion and the 14 October 2025 motion. Despite Mr Rahman’s submissions to the contrary, the Court accepts that in this case costs assessment be a protracted and disputatious process and it is appropriate to make a s 98(4)(c) order fixing a specified sum instead of assessed costs. Mr Balasubramanian says, and the Court accepts, that the defendant could reasonably expect to receive approximately 65 to 80 per cent of professional costs and 100 per cent of disbursements, upon the assessment of costs on the ordinary basis. That is relevantly a range from $7,005 (50 per cent) up to $11,208 (80 per cent). In the Court’s view, an appropriate figure to use for this assessment is a little under 65 per cent which would be $9,100.

Mr Balasubramanian also estimated that the defendant’s costs of making the application for a gross sum costs order were $1,800 (plus GST). The Court will fix under s 98(4)(c) $1,500 as a reasonable lump sum in respect of that preparation.

Once again, the trustees’ claim for costs of the 16 September and 14 October 2025 motions have been modified because of the decision of the Court of Appeal. Mr Rahman will be allowed an opportunity to respond to this revised claim, which will then be dealt with in chambers.

As these proceedings are reaching the stage at which a final accounting will need to take place, it is important that the parties identify with precision (a) any motions or applications which have been made and dismissed, and not yet been the subject of costs orders and (b) any costs orders which are not yet the subject of a CPA, s 98(4)(c) order. It will not be possible for a final accounting to take place between these parties unless all outstanding cost orders are dealt with and quantified. The Court looks to the parties to provide a final schedule of the cost orders which are yet to be made and of the cost orders that are yet to be quantified.

The plaintiff, Mr Rahman, also has outstanding applications that need to be argued and resolved in relation to the responsibility for the appointment of the trustees. The Court anticipates that any submissions in relation to these motions can be dealt with in writing and if necessary spoken to briefly by the parties. The parties will be directed to provide a list of all these outstanding matters to the Court in advance of the next directions hearing on 19 February 2026. The parties will be required to file their agreed (or separate) schedules of these outstanding matters by Monday, 16 February 2026.

It is important for the Court to contain the contest between these parties so that it does not cause unnecessary damage to either of them. As the Court of Appeal has emphasised, the plaintiff has pursued repeated and unsuccessful motions for interlocutory relief. These motions have occasioned unnecessary and unreasonable costs to the other parties. Most importantly, the trustees have indicated that the frequency and intensity of these conflicts are threatening to deplete the proceeds of sale of the subject properties, property 1 and property 1A. The continuation of conflict such as this is not consistent with the objectives of CPA, Part 6 or Family Law Act 1975 (Cth), s 117. Firm measures need to be taken to contain this expenditure, and to ensure these parties can go their own way, free of conflict with one another and with some of their joint assets.

The trustees reported to the Court on 17 December 2025, that after the payment of the mortgage debt, council rates, costs and the fees of the sale that the balance of the proceeds of the sale of property 1A of $1,359,431.03 were paid into the trust account of the trustees, together with the balance of the deposit after the payment of agents’ fees of $39,870.10. Significant though these sums are, there is a real prospect that depending on which way the Court’s orders go in relation to the costs of the current proceedings, and which of the plaintiff’s and the defendants have to bear the trustees’ costs (if they are not borne jointly) one or other party may end up having very little distributed in his or her favour. It is important therefore that the contest between these parties be contained.

The Court has foreshadowed making an order which is not uncommon in cases of repetitive unsuccessful motions by one side. That order would be that the Court will require that party, in this case the plaintiff, Mr Rahman to seek leave before filing any motions. The Court would then scrutinise the parties’ motion to see whether leave should be granted to allow it to be filed. This has been effective in other cases to respective motions that are repetitive, vexatious or oppressive, to save the respondents from the motions from incurring unnecessary costs in dealing with them. Such orders would also require that applications may only be made by formal written motion.

The Court has already foreshadowed such an order and Mr Rahman has included in his written submissions his opposition to it. The Court has decided that it will require Mr Rahman to show cause on 19 February 2026 why such an order should not be made. The Court will require him to show cause because of the observations of the Court of Appeal identified above and his many unsuccessful repetitive motions in these proceedings. The need to impose case management orders of this kind was fully discussed by the Court in Rahman v Rahman (No. 5) [2025] NSWSC 1280 at [36] and [37].

The trustees reported to the Court on 17 December 2025 that they have each received a subpoena issued by Mr Rahman from the FCFCOA seeking documents and for the trustees to attend on 16 December 2025 to give oral evidence. The trustees claim the subpoenas were not properly served and were not accompanied by conduct money. The trustees have reported that they were dealing with the Associate to Judge Kemp in relation to the subpoenas. This Court has previously indicated that management of both of these proceedings is much assisted by the fact that a single judge of the FCFCOA is managing the corresponding family law proceedings between these parties.

This Court has also previously indicated it will deal with all issues in relation to the trustees for sale appointed by this Court. This Court has foreshadowed that it will remit these matters to the FCFCOA once the trustees for sale have retired and all costs associated with their appointment have been dealt with. This Court will deal with all determinations in relation to the conduct of the trustees for sale and it is expected that the FCFCOA will deal with all the family law issues thereafter: see Rahman v Rahman (No. 3) [2025] NSWSC 678 at [70] – [71].

The Court also will require Mr Rahman to show cause on 19 February 2026 why he should not be restrained from taking any action in the FCFCOA to challenge the trustees’ costs or in relation to the allocation of the trustees’ costs as between Mr Rahman and Ms Rahman. These are clearly matters for this Court and it will undoubtedly assist the FCFCOA’s determination of the remaining family law issues for this Court to resolve all the trustee-related issues. This is an unusual step but given the history of these proceedings Mr Rahman may need to be restrained from muddying the waters between the two jurisdictions to avoid wasteful duplication of proceedings and costs. Mr Rahman will therefore be asked to show cause why such an order should not be made on the 19 February 2026.

In Rahman v Rahman (No. 5) [2025] NSWSC 1280 (at [39] – [42]) the Court considered an application by Ms Wafa Rahman in respect of expenses associated with the sale of property 1, the completion which settled on 3 June 2025. Her application was unsuccessful for the reasons there given.

The Court notes it did not make any separate cost orders against Ms Wafa Rahman. Neither the defendant nor the trustees appear to have applied for such an order. The argument on this issue on this occasion was of minimal compass and probably added very little to the costs of the other parties, who were present in Court to prosecute a more substantial contest with Mr Rahman. The Court will not make any additional cost orders in relation Ms Wafa Rahman, unless one or other party especially applies for such orders on 19 February 2026, explaining why the costs are other than minimal.

It is not necessary for these costs orders to be payable forthwith, but the trustees will be authorised to deduct them from moneys held by them for the benefit of the plaintiff. For these reasons the Court makes the following orders and directions:s