Johnson Winter & Slattery v MP Investments Nominees Pty Ltd

Johnson Winter & Slattery sought an interim allocatur from MP Investments Nominees Pty Ltd for unpaid costs in the amount of $500,000. The dispute arose from legal services provided in a lease dispute involving a building in Melbourne. The plaintiff, a law firm, acted for the defendant, the building's owner, in proceedings against Oaks Hotels and Resorts Pty Ltd. The parties had agreed to the taxation of costs on two bases: Supreme Court rates for work done before November 18, 2010, and the terms of a retainer agreement for work done afterward. The retainer agreement provided for higher hourly rates and interest on unpaid invoices. As a result of a consent order, the plaintiff's claim was reduced to $1,264,976.81, plus GST, of which $547,821.83 had been paid. The plaintiff sought an interim allocatur to secure payment of approximately two-thirds of its claim.

The legal issues involved the appropriateness of issuing an interim allocatur and the defendant's contentions that the amount claimed would not ultimately be awarded. The defendant argued that any counsel fees that were unusual in amount should be reduced, that an excessive number of counsel were engaged, that work was not carried out by people of the appropriate seniority, and that the time spent on various tasks was excessive. The plaintiff countered that the retainer agreement governed these issues. The court had to determine whether the amount of the interim allocatur would be owing to the plaintiff at the end of the taxation.

The court held that it had the power to issue an interim allocatur under Supreme Court Civil Rule 274. The court referred to Russo v Buck & Ors (No 5), where Judge Lunn held that where there is likely to be a substantial delay in adjudicating on the costs, it is appropriate to make an order for the immediate payment of an amount on account of costs payable for those costs which appear to be beyond any reasonable dispute. The court found that the plaintiff's claim was not unreasonable, and that the defendant's contentions did not affect the amount of the interim allocatur. The court ordered that an interim allocatur in the amount of $200,000 (inclusive of GST) should issue.

The court made an order that an interim allocatur in the amount of $200,000 (inclusive of GST) should issue. The defendant was ordered to pay this amount forthwith.