James v City of Port Melbourne

[2010] VSC 91

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

No 10403 of 2008

MARK WILLIAM JAMES	Plaintiff
v
CITY OF PORT MELBOURNE (ABN 21 762 977 945)	Defendant

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JUDGE:	ROSS J
WHERE HELD:	Melbourne
DATE OF HEARING:	16 November 2009
DATE OF JUDGMENT	29 March 2010
CASE MAY BE CITED AS:	James v City of Port Melbourne
MEDIUM NEUTRAL CITATION:	[2010] VSC 91	Revised 29 March 2010

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ACCIDENT COMPENSATION – settlement – Award of costs – Accident Compensation Act 1985 – ss 134AB(30 and (31) – Entitlement of solicitor to recover costs from a worker – considerations in making an order under s 134AB(30)

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr P Jewell SC with Mr M Ruddle	Clark, Toop and Taylor
For the Defendant	Mr R Middleton SC  with Ms B Knoester	Thomson Playford Cutlers

HIS HONOUR:

1. Mr James’ claim against the City of Port Melbourne settled on 17 November 2009 and, by consent, the Defendant was ordered to pay the Plaintiff’s costs.

1. The solicitors for Mr James (Clark, Toop and Taylor, ‘the Plaintiff’s solicitors’) have applied to the Court for an order for an award of a non recoverable professional costs and disbursements in accordance with s 134AB(30) of the Accident Compensation Act 1985.  It is proposed that the award of costs be capped at $55,000, inclusive of GST.

1. In matters such as these solicitors are generally precluded from obtaining solicitor/client costs that are not recoverable on a party/party basis without an order from the Court.  Subsections 134AB(30) and (31) of the Act deal with this issue and are in the following terms:

(30)A person who represents or acts on behalf of a worker is not entitled—

(a)to recover any costs from that worker in respect of any proceedings under this section; or

(b)to claim a lien in respect of those costs; or

(c)to deduct those costs from any sum awarded as damages—

unless an award of costs has been made by the court in respect of those costs or those costs are payable in accordance with this section by the worker.

(31)     The court, on the application of—

(a)the worker; or

(b)the person representing or acting on behalf of the worker—

may determine the amount of costs to be awarded to the person representing or acting on behalf of the worker.

1. The purpose of s 134AB(30) is to provide for a degree of Court supervision of the costs which may be paid personally by the worker.

1. In Acir v Frosster Pty Ltd[1] J Forrest J recently considered the principles relevant to the determination of an application pursuant to s 134AB(30). In particular, his Honour considered[2] that a Court may, without limiting its general discretion, take the following matters into account:

   [1][2009] VSC 539.

   [2]Ibid. [28].

·The retainer between the worker and solicitor and the consequential entitlement of the solicitor to costs “due and payable” by the worker to the solicitor.

·The purpose of sub-s (30) is to ensure Court supervision of any bills of costs rendered by the solicitor to a worker.

·The limit of 80% of party/party costs set by s 134AB(29) and imposed on the recovery of costs from the Defendant.

·The extent to which the Court considers that non-recoverable costs have been expended by the solicitor on behalf of the worker to achieve the result obtained.

·The satisfaction of the Court that the worker understands his or her right to have the Court fix the amount of costs (either by way of taxation or by order pursuant to sub-s 31) and that the worker has a general understanding of his or her rights in relation to the avenues of redress or review of the costs sought by the solicitor.

·The manner in which the claim has been conducted, and in particular whether the solicitor has exposed the worker to adverse cost consequences which could have been avoided by careful and responsible preparation of the claim.

·A reliable estimate of the solicitor/client costs has been put forward providing the Court with some guidance as to the basis for the estimated amount of solicitor/client costs.

·Whether, in the circumstances of the case, it is desirable that the Court fix the amount of costs (by either setting a ceiling or approving the amount) as opposed to making an order for solicitor/client costs generally.

·Whether, in the circumstances of the case, it is appropriate to refer the estimation of such costs to an experienced officer of the Court, such as (in this Court) the Associate Judge who is the Taxing Master.

1. I respectfully agree with his Honour’s consideration of the matters to which the Court may have regard in determining an application such as this.  I also note that in Qualma v Toll Transport Pty Ltd Gillard J regarded the solicitor’s retainer as the predominant consideration as it carried with it an obligation on the part of the worker to meet the costs incurred by the solicitor on his behalf.[3]

   [3][2004] VSC 81. I note that, as Forrest J observes at [27], Gillard J was concerned with fixing the amount under s 134AB(31) but his Honour’s observations are also apposite to whether the order should be made under s 134AB(3).

1. The application in this case is supported by affidavit of the Plaintiff and two affidavits of the Plaintiff’s solicitor, Gary Douglas Taylor.  The Plaintiff says that when he instructed his solicitors he was advised about the likely legal costs he would be charged at the conclusion of his matter.  He was also advised that party/party legal costs would be recovered from the Defendant up to a rate of 80% of scale and that he would be required a pay solicitor/client costs.

1. The Plaintiff also acknowledges that the has been advised of his rights to:

(i)        seek a bill of costs in taxable form;

(ii)       have the bill of costs taxed by the Taxing Master;

(iii)      seek a review of costs with the Victorian RPA; and

(iv)      seek independent legal advice and/or costing advice.

1. The Plaintiff was represented by his solicitors subject to a disclosure statement and conditional costs agreement provided in accordance with the solicitors’ statutory obligations.

1. The Plaintiff consents to the costs order sought by his solicitors.  An estimate of the solicitor/client costs in this matter has been prepared by Ms Fiona Mullen, the Plaintiff’s solicitor’s in-house Costs Consultant.  Ms Mullen estimates such costs to be in the order of $52,683.20 to $62,683.30 (inclusive of GST)[4].

   [4]See Exhibit GDT2 to Mr Taylor’s affidavit of 24 March 2010.

1. In the circumstances of this case I am satisfied that there is no reason not to give effect to the solicitors retainer and their entitlement to recover their solicitor/client costs from Mr James.  I make the following orders:

1.        The plaintiff’s solicitors, Clarke, Toop and Taylor, be entitled to recover from the plaintiff, Mark William James, any costs incurred by the solicitors on his behalf, subject to the following conditions:

(a)       the calculation of such costs take into account payment by the defendant’s solicitors of costs pursuant to the orders of the Court; and

(b)      that such costs not exceed $55,000, inclusive of Goods and Services Tax.

2.        Liberty to apply.

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