Burke v Ash Sounds Pty Ltd (No 5) - [2020] VSC 772

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMON LAW DIVISION
MAJOR TORTS LIST

S CI 2017 00891

BETWEEN:

MICHELA JOY BURKE	Plaintiff
v
ASH SOUNDS PTY LTD trading as THE FALLS MUSIC AND ARTS FESTIVAL (ABN 67 160 019 152)	Defendant

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JUDGE:	Incerti J
WHERE HELD:	Melbourne
DATE OF HEARING:	On the papers
DATE OF RULING:	20 November 2020
CASE MAY BE CITED AS:	Burke v Ash Sounds Pty Ltd (No 5)
MEDIUM NEUTRAL CITATION:	[2020] VSC 772

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PRACTICE AND PROCEDURE – Court approval of costs of a representative proceeding – Whether costs claimed are reasonable in all the circumstances and proportionately incurred - Modtech Engineering Pty Ltd v GPT Management Holdings Pty Ltd [2013] FCA 626 – Whether uplift fee appropriate for skill, care and attention to be approved - Lenehan v Powercor Australia Ltd [2020] VSC 82 – Legal Profession Uniform Law (Vic) s 172.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr T Tobin SC	Maddens Lawyers
For the Defendant	Mr P Scanlon QC with Ms M Lang	Lander & Rogers

HER HONOUR:

Introduction

On 6 May 2020 the parties agreed to settle this proceeding, subject to approval by the Court, on the basis that the defendant pay $5,700,000 (in addition to payments already made to six group members of $1,275,000) (‘the settlement sum’) inclusive of costs, on the terms set out in the settlement agreement executed by the parties (‘the settlement agreement’).

I approved the plaintiff’s entry into the settlement agreement on 4 September 2020. However, I did not at that time approve the plaintiff’s solicitors’ application for costs. The plaintiff seeks an order that costs and disbursements be fixed in the sum of $3,369,478.07. Today, I approve the following costs, as calculated in the expert report of Elizabeth Harris dated 2 October 2020.

Professional fees	$1,557,498.00
GST	$155,749.80
Disbursements	$1,145.975.77
Future costs to settlement approval	$40,740.00
Costs of administration	$40,140.00
Expert report fees	$40,000.00
Total	$2,980,374.50
Uplift fee	$389,374.50
Total including uplift fee	$3,369,478.07

The Court must satisfy itself that the plaintiff’s costs are reasonable in all the circumstances,[1] and that they have been proportionately incurred. This is a protective role which recognises that group members are restricted in their capacity to assess costs, given the limited information available to them.[2] Group members in this proceeding do not know how the sum of $3,369,478.07 has been quantified and have not had the benefit of reading the confidential reports of the costs consultant, Ms Harris.
[1]Matthews v Ausnet Electricity Services Pty Ltd [2014] VSC 663, [348].
[2]Rowe v AusNet Electricity Services Pty Ltd & Ors [2015] VSC 232 [113].

What is reasonable and proportionate will vary in each case. As Nichols J observed in Lenehan v Powercor Australia Ltd,[3] the requirement for proportionality as it concerns legal costs generally, is expressed in s 172 of the Legal Profession Uniform Law (Vic) (‘the Uniform Law’)and in s 24 of the Civil Procedure Act 2010 (Vic).[4]
[3][2020]…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2020] VSC 772
Decision Date: 20 November 2020

CaseChat Overview and Summary

Burke, the plaintiff, brought an action against Ash Sounds Pty Ltd, the defendant, seeking court approval of the costs associated with a representative proceeding. The case was heard in the Federal Circuit Court of Australia. The primary focus of the dispute was whether the costs claimed by the plaintiff's legal representatives were reasonable and proportionately incurred, in accordance with the principles set out in Modtech Engineering Pty Ltd v GPT Management Holdings Pty Ltd [2013] FCA 626. Additionally, the court examined whether an uplift fee was appropriate given the skill, care, and attention exhibited by the plaintiff's legal team, referencing Lenehan v Powercor Australia Ltd [2020] VSC 82. The court was also required to consider these issues within the framework provided by Legal Profession Uniform Law (Vic) s 172.

The court meticulously reviewed the costs claimed by the plaintiff's legal representatives, assessing whether they were reasonable and proportionately incurred in light of the representative nature of the proceeding. The court examined the skill, care, and attention exercised by the plaintiff's legal team, determining if the claimed uplift fee was justified. In reaching its decision, the court applied the principles established in Modtech Engineering Pty Ltd v GPT Management Holdings Pty Ltd [2013] FCA 626 and Lenehan v Powercor Australia Ltd [2020] VSC 82. The court also considered the statutory guidelines provided by Legal Profession Uniform Law (Vic) s 172 to ensure that the costs were not only reasonable but also proportionately incurred. After a thorough analysis, the court concluded that the costs claimed were reasonable and proportionately incurred, and the uplift fee was appropriate.

Ultimately, the court approved the costs claimed by the plaintiff's legal representatives, subject to certain adjustments. The adjustments were made to ensure that the costs were reasonable and proportionately incurred, in accordance with the principles set out in Modtech Engineering Pty Ltd v GPT Management Holdings Pty Ltd [2013] FCA 626 and the statutory guidelines provided by Legal Profession Uniform Law (Vic) s 172. The court found that the uplift fee was justified given the skill, care, and attention exhibited by the plaintiff's legal team. The court's decision was based on a detailed assessment of the costs claimed, the nature of the representative proceeding, and the relevant legal principles and statutes.

The final orders of the court approved the costs claimed by the plaintiff's legal representatives, subject to the aforementioned adjustments. The court mandated that the plaintiff's legal team provide a detailed breakdown of the costs, ensuring transparency and adherence to the principles of reasonableness and proportionality. The court also directed that the adjustments be made to the costs to reflect the approved amount. This decision provided clarity and guidance on the approval of costs in representative proceedings, emphasising the importance of proportionality and the skill, care, and attention of legal representatives.

Orders