A case note on the matter of Whitehall v Oxborough [2023] NSWDC 167
On 23 May 2023, the Court delivered its judgment on the issue of costs in the New South Wales District Court matter of Whitehall v Oxborough [2023] NSWDC 167 before his Honour Scotting DCJ. Rostron Carlyle Rojas Lawyers, representing the defendant, Mr Oxborough, and instructing Richard Potter SC of Counsel, sought a gross sum costs order in favour of the defendant against the plaintiff. In the defendant’s submissions, a costs assessment would cause undue delay to, what was submitted, were already protracted litigation proceedings, such that a gross sum costs order would achieve the overarching purpose of a “just, quick and cheap” resolution of the proceedings.
Ultimately, the Court was persuaded by the defendant’s submissions, making an order that the plaintiff is to pay the sum of $300,000 on account of the defendant’s costs of the proceeding. The Court’s decision in these proceedings emphasises the importance of expediency and cost-effectiveness, especially in cases where there is a genuine risk of the plaintiff being unable to meet an adverse costs order.
Background and Legal Framework
The plaintiff commenced defamation proceedings against the defendant, but the claim was dismissed at the final hearing due to a failure by the plaintiff to appear at the final hearing. The Court, in the costs hearing, noted ongoing sporadic and intermittent participation by the plaintiff in complying with court directions and processes. The Court exercised its power under section 98(4)(c) of the Civil Procedure Act 2005 (NSW), which provides the Court with the discretion to award a specified gross sum instead of referring the parties for costs assessment. This approach, as taken by the Court in these proceedings, is to avoid unnecessary expenses, delays, and complications associated with the cost assessment process.
In determining the appropriate sum to award to the defendant for his costs, His Honour considered several factors outlined in the supporting authorities of Idoport Pty Ltd v National Australia Bank [2007] NSWSC 23, and Hamod v State of New South Wales [2011] NSWCA 375, including but not limited to:
- an exercise of discretion is a means to avoid expense, delay and aggravation in protracted litigation;
- the Court must have regard to an award that is logical, fair and reasonable;
- the Court must utilise the information available to it and deliver a determination that is not prejudicial to one party, to avoid causing an injustice;
- the proportionality of the costs;
- the complexity of the proceedings; and
- the capacity of the unsuccessful party to pay.
Factual Considerations
The defendant’s key submissions in support of a gross sum costs order were that the ongoing costs and delay in the finalisation of the proceedings, and the plaintiff’s sporadic involvement in the matter had cost the defendant more than it should. The defendant, in particular, highlighted its costs incurred in preparation for trial, questioning the plaintiff’s commitment to pursue the matter to a final hearing.
In response, the plaintiff relied on various submissions, both in fact and law, as to why a gross sum costs order would not be appropriate. Mr Whitehall drew the Court’s attention to alleged admissions of liability for defamatory comments in the defendant’s defence, and, in addition, cited delays caused by ongoing health issues, an injunction in separate Supreme Court of New South Wales proceedings, an inability to secure pro-bono legal representation, and general complications caused by the COVID-19 pandemic in retort to the defendant’s prayer for a gross sum costs order.
Court’s Analysis and Decision
The Court carefully evaluated both parties’ submissions and evidence on the issue of costs. While acknowledging the impact of external factors such as the COVID-19 pandemic, the Court found that the plaintiff’s selective involvement and non-compliance were significant contributors to the delays in the proceedings. His Honour, in considering his costs decision, cited the plaintiff’s failure to inform the Court about his health issues and difficulties in obtaining legal representation despite his having sufficient time to do so, such that it was reasonable for the defendant to continue its preparation for trial, and for it to now seek those costs payable by the plaintiff. The plaintiff had also made allusions in the lead up to the costs application that he intended to apply to have the judgment set aside but had taken no steps to do so. Ultimately the Court was satisfied that the continuation of the proceedings would be “unnecessarily protected”, due to the plaintiff’s “dilatory conduct”.
The Court rejected the plaintiff’s claims of defamation being impactful on the costs application, as no hearing had taken place (such that those issues could not be determined), and the defence did not admit liability. His Honour also dismissed the plaintiff’s argument that the gross sum costs were excessive, emphasizing that estimates provided in cost agreements were subject to change due to the evolving nature of litigation. It was noted that, albeit the defendant may not have paid the sums claimed in the costs argument to its solicitors, His Honour was satisfied that the costs agreements obligated the defendant to pay those amounts.
In exercising his discretion, His Honour considered the plaintiff’s capacity to pay, in the context of his ill health and inability to work, and generally in the interest of justice, concluding that a gross sum costs order would be the most appropriate and efficient solution. His Honour also considered that it could determine the quantification of costs, without the need for further delay and increased costs in having a costs assessor do so. On that basis, and upon the evidence produced by the parties, the Court ordered the gross sum costs order in favour of the defendant, with a modest discount applied to account for potential contingencies had the costs been assessed.
Conclusion
This judgment highlights the Court’s commitment to ensuring a just, quick, and cheap resolution, to matters in dispute, and especially in cases where there is a risk of the plaintiff’s financial inability to meet their costs obligations. This decision serves as a reminder that the award of costs in litigation is discretionary, and takes into account each party’s conduct in dealing with proceedings efficiently whilst engaged in litigation.
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