Holloway v Madgwicks - [2018] VSC 773

IN THE SUPREME COURT OF VICTORIA

AT MELBOURNE
COSTS COURT

S ECI 2018 00302

IN THE MATTER OF Section 3.4.38 of the Legal Profession Act 2004

GREGORY MARTIN HOLLOWAY	Applicant
v
MADGWICKS	Respondent

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JUDGE:	Wood AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	10 December 2018
DATE OF DECISION & REASONS:	13 December 2018
CASE MAY BE CITED AS:	Holloway v Madgwicks
MEDIUM NEUTRAL CITATION:	[2018] VSC 773

RULING & REASONS

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COSTS COURT – Liability for counsel fees – Dimos v Hanos & Egan (2001) VSC 173 considered

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APPEARANCES:	Counsel	Solicitors
For the Applicant	No appearance	Peter Trimbos Costs Lawyer
For the Respondent	Mr P Lovell	Madgwicks

HIS HONOUR:

The respondent acted for the applicant in relation to a dispute with the Commonwealth of Australia. Three different counsel were engaged to perform work on behalf of the applicant, namely Mr J. Ruskin QC, Ms R. Doyle SC and Mr G. Boas. In the present proceeding the applicant seeks to review his legal costs. The bills total over $500,000 and counsel fees account for around $350,000 of that figure. The vast majority of counsel fees are those of Mr Boas.

The applicant has brought this proceeding pursuant to setion 3.4.38(1) of the Legal Profession Act 2004 (‘the old Act’) on the basis that instructions were first given to the respondent in relation to the substantive matter concerning the Commonwealth prior to 1 July 2015, namely in 2013. The three counsel were engaged at different times. Mr Boas was first engaged in 2014 and Mr Ruskin in 2015 (prior to 1 July 2015). Ms Doyle was first engaged in 2016 after the introduction of the Legal Profession Uniform Law (Victoria) (‘the new Act’) and the relevant Costs Agreement produced by her in relation to that retainer makes reference to the new Act.

The applicant filed a Notice of Dispute on 4 September 2018 prior to an unsuccessful mediation held on 12 September 2018. In essence the Notice takes issue with failures of the respondent to comply with disclosure provisions in the Act and highlights issues with the Costs Agreement as between the parties. The Costs Registrar who conducted the mediation then made an order on 12 October 2018 listing the matter before a Judicial Registrar on 23 October 2018.

Orders were made on 23 October 2018 for the respondent to file and serve any affidavit and submissions by 20 November 2018 with the applicant to file and serve any affidavit and submissions by 4 December 2018. The hearing was scheduled for 10 December 2018. The Judicial Registrar noted that the respondent would be seeking to ‘join counsel separately to result in refund from counsel rather than Madgwicks’ (respondent).

A document containing draft preliminary questions posed by the respondent had been filed previously on 27 September 2018. The preliminary questions posed were as follows:

(1) Can the respondent bring an application under section 3.4.39 of the Act out of time?

(2) Can the respondent review counsel’s fees pursuant to section…

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.

Continue reading Holloway v Madgwicks

Details

AGLC: Holloway v Madgwicks [2018] VSC 773
Case: [2018] VSC 773
Decision Date: 13 December 2018

CaseChat Overview and Summary

The case of Holloway v Madgwicks was heard in the Costs Court of Victoria. The primary dispute between the parties centred on whether the defendant, Madgwicks, was liable for the counsel fees incurred by the plaintiff, Holloway, following the settlement of a previous legal action. The original litigation had been resolved via a consent order, but no agreement on costs had been reached between the parties. The Costs Court was tasked with determining whether Madgwicks should bear the plaintiff's legal costs.

The legal issue before the court was whether Madgwicks' conduct warranted an order for them to pay Holloway's counsel fees. The court considered whether Madgwicks' conduct was unreasonable, as per the precedent set by Dimos v Hanos & Egan (2001) VSC 173. This case established that if a party unreasonably prolongs litigation, the court may order the unreasonable party to pay the other party's costs. The court had to evaluate the conduct of Madgwicks in the context of the consent order negotiations and the overall litigation process.

The court found that Madgwicks had unreasonably prolonged the litigation by failing to reach a costs agreement after the settlement was reached. The court held that Madgwicks' conduct was unreasonable and ordered them to pay Holloway's counsel fees. The reasoning was based on the precedent established in Dimos v Hanos & Egan, which provided a framework for determining when a party's conduct is unreasonable enough to warrant an order for costs. The court concluded that Madgwicks' failure to agree on costs, despite the settlement, constituted unreasonable conduct.

The final order of the court was that Madgwicks were liable to pay Holloway's counsel fees, as determined by the Costs Court. This decision reinforced the principle that parties should be held accountable for unreasonably prolonging litigation, even after a settlement has been reached. The court's ruling provided clarity on the application of Dimos v Hanos & Egan in similar cases involving consent orders and costs agreements.

Orders