Qayom v Kylamanda Investments Pty Ltd
[2018] VCC 2064
•11 December 2018
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMON LAW DIVISION | Revised Not Restricted Suitable for Publication |
| GENERAL LIST |
Case No. CI-17-04420
| ABDUL QAYOM | Plaintiff |
| v | |
| KYLAMANDA INVESTMENTS PTY LTD (trading as XANADU PLAYCENTRE & CAFÉ) | Defendant |
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JUDGE: | HER HONOUR JUDGE MORRISH | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 11 December 2018 | |
DATE OF RULING: | 11 December 2018 | |
CASE MAY BE CITED AS: | Qayom v Kylamanda Investments Pty Ltd | |
MEDIUM NEUTRAL CITATION: | [2018] VCC 2064 | |
RULING ON COSTS
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Subject:INDEMNITY COSTS
Catchwords: Whether counsel’s fees under costs agreement relevant to the amount awarded for counsel’s fees on indemnity basis – whether amount claimed for counsel’s fees unreasonable
Legislation Cited: Supreme Court Scale of Costs – County Court Scale of Costs – County Court Civil Procedure Rules 2008
Cases Cited:Qayom v Kylamanda Investments Pty Ltd (trading as Xanadu Playcentre & Café) [2018] VCC 1675; Singleton and Anor v Macquarie Broadcasting Holdings Ltd (1991) 24 NSWLR 103
Ruling: Costs agreement relevant but not determinative. Fees claimed by counsel not unreasonable.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr J Mighell QC with Mr P Lamb | Zaparas Lawyers Pty Ltd |
| For the Defendant | Ms R Annesley QC with Ms R Kaye | Barry.Nilsson Lawyers |
HER HONOUR:
Background
1 On 19 October 2018, I handed down my Reasons for Judgment in this matter.[1] In the proceeding, the plaintiff Abdul Qayom sued Kylamanda Investments Pty Ltd, trading as Xanadu Playcentre and Cafe (Xanadu), seeking damages arising from an injury he sustained whilst at Xanadu on 23 November 2014 when he fell from equipment.
[1]Qayom v Kylamanda Investments Pty Ltd (trading as Xanadu Playcentre & Café) [2018] VCC 1675
2 In addition to a claim alleging negligence on the part of Xanadu, the Amended Statement of Claim also alleged that the defendant had breached its duty under Australian Consumer Law.
3 It was not until after the hearing before me commenced that the defendant finally admitted liability in both negligence and under Consumer Law. That left the assessment of damages as the only issue to be determined at trial.
4 The question of liability or damages arising under Consumer Law barely featured in the trial. The parties’ final submissions did not address the question of damages under Consumer Law.
5 In the principal judgment I assessed the plaintiff’s damages as follows:
· Pain and suffering damages $265,000.00
· Loss of earning:
- Past $270,684.40
- Future $782,758.00
· Medical and like expenses:
- Past $7,146.00
- Future $11,652.47
· Gardening assistance $8,963.43
· Gratuitous care $26,029.50
Total: $1,372,233.80
6 Immediately after delivering my judgment to the parties I invited counsel to address me on the question of costs. The parties agreed that because the plaintiff had obtained judgment in terms more favourable than an offer of compromise made in accordance with Rule 26.08(2)(a) of the County Court Civil Procedure Rules 2008, the plaintiff is entitled to an order for costs in his favour on an indemnity basis.
7 The parties informed me that they hoped to reach agreement about costs, but reserved their rights to return to argue the question of costs before me. The matter was listed for hearing today so that the question of costs could be determined.
8 Apart from the question of counsels’ fees, the parties have reached agreement more generally about costs. The present costs application therefore only concerns certification of counsels’ fees.
9 At trial, both parties were represented by both senior and junior counsel. The parties agree that the matter justified the attendance of two counsel.
The Application
10 The plaintiff seeks costs orders in the following terms:
“1. The Defendant pay the Plaintiff’s costs of the claim, including reserved costs, on an indemnity basis, to be taxed in default of agreement.
2. Certify for two counsel, with senior counsel’s fee on brief at $8,800 per day and $880 per hour, and junior counsel’s fee at 50% of the same, for:
a.Seven days of hearing;
b.Three days of preparation;
c.Eight hours of special conferences;
d.Two hours to receive judgment;
e.One day to appear on costs application (including submissions).
3. The proceeding is otherwise dismissed.”
11 The claim for counsels’ daily and hourly fees reflects the terms of costs agreements entered into between each counsel respectively and the plaintiff’s solicitors.
12 The defendant opposes the amounts claimed by counsel, asserting that the appropriate fees should be certified as follows:
“(a) $6,600/day and $660/hour for Senior Counsel and half of each of those figures for Junior Counsel;
(b) Certification for 7 days of trial;
(c) Certification for two days of preparation for trial;
(d) Certification for five hours of special conferences;
(e) Certification for two hours to receive judgment (as per 2(d) of the Plaintiff’s proposed orders);
(f) Certification for costs argument – 2 hours if only written submissions are required; one day if written submissions plus appearance are required (the latter as per 2(e) of the Plaintiff’s proposed orders).”
Applicable principles
13 The parties agree that just because indemnity costs are ordered it does not mean that a total indemnity will be granted. The concepts of “reasonableness” or “unreasonableness” remain a governing constraint.[2]
[2]Singleton and Anor v Macquarie Broadcasting Holdings Ltd (1991) 24 NSWLR 103
14 In Singleton and Anor v Macquarie Broadcasting Holdings Ltd,[3] a solicitor had entered into a time-based costs agreement with his client. The solicitor sought certification of his fees on an indemnity basis in accordance with the terms of that costs agreement. In holding that it was open to the solicitor and client to enter into such a costs agreement, Rogers CJ Comm D observed:
“It is up to the client whether to submit to whatever the legal advisor, whether solicitor, or counsel, may nominate is the retainer. Indemnity remains constrained by reasonableness in contrast to extravagance.”[4]
[3]ibid
[4](Ibid) at 107
15 The parties agree that this principle is applicable to the present case. The plaintiff submits that the amounts claimed for counsels’ fees are not unreasonable in all the circumstances. The defendant submits that they are.
16 The parties agree that Rule 63A.30.1 also has application. That rule provides:
“63A.30.1 Indemnity basis
(1)Subject to paragraph (2), on a taxation on an indemnity basis all costs shall be allowed except in so far as they are of an unreasonable amount or have been unreasonably incurred.
(2)Any doubt which the Costs Court may have as to whether the costs were unreasonably incurred or were unreasonable in amount shall be resolved in favour of the party to whom the costs are payable.”
Are the amounts claimed by counsel unreasonable?
17 In assessing whether the amounts claimed by counsel are unreasonable, there are many factors to be considered. I now turn to consider those factors:
Scale of fees
18 According to the current Supreme Court Scale of Costs, senior counsel’s daily fees are noted as $8,539. Junior counsel’s daily fees are $5,693. These fees are exclusive of GST. The hourly fees for counsel generally are $854 for senior counsel and $569 for junior counsel, or ten per cent of the daily fees. The hourly fees are also exclusive of GST. I observe that in the present case, counsel’s hourly fees were set at ten per cent of their respective daily fees.
19 Scale fees are not fixed. Under the scale, the Court retains a discretion to allow fees in excess of the scale, taking account of the following criteria:
“(3)In allowing a fee to Counsel, the Costs Court shall have regard to the following criteria—
(a) all criteria in item 17; and
(b) the other fees and allowances to Counsel in the matter; and
(c) payments made for interlocutory work where that work has reduced the work which would otherwise have been necessary in relation to the brief; and
(d) the standing of Counsel.”
20 Item 17 provides:
“17. SKILL, CARE AND RESPONSIBILITY
An additional amount may be allowed, having regard to the circumstances of the case, including—
(a) the complexity of the matter;
(b) the difficulty or novelty of the questions involved in the matter;
(c) the skill, specialised knowledge and responsibility involved and the time and labour expended by the legal practitioner;
(d) the number and importance of the documents prepared and perused, regardless of length;
(e) the amount or value of money or property involved;
(f) research and consideration of questions of law and fact;
(g) the general care and conduct of the legal practitioner, having regard to the instructions and all relevant circumstances;
(h) the time within which the work was required to be done;
(i) allowances otherwise made in accordance with this Scale (including allowances for attendances in accordance with item 1);
(j) any other relevant matter.”
21 The County Court Scale of costs is fixed at 80 per cent of the Supreme Court Scale.[5] This Court may also fix counsels’ fees in excess of that scale, taking account of the factors I have listed above that are found in the Supreme Court Scale.
[5]Rule 1.13 County Court Civil Procedure Rules 2008
22 The amounts claimed by counsel in this case are inclusive of GST. For senior counsel the daily fee represents a pre-GST fee of $8,000, and for junior counsel, $4,000. Senior counsel’s fees are close to 94 per cent of the Supreme Court Scale. Junior counsel’s fees are approximately 70 per cent of the Supreme Court Scale. 80 per cent of Supreme Court Scale for senior counsel amounts to $6,831 plus GST, totals $7,514. 80 per cent of Supreme Court Scale for junior counsel amounts to $4,554 plus GST, totals $5,009. Obviously enough, senior counsel’s claimed fees are in excess of County Court Scale. Junior counsel’s fees are within the scale.
23 In determining whether to award above scale and more generally on the question of whether the fees claimed by counsel are unreasonable, I take account of the following factors referred to in Items 19 and 17 of the Supreme Court Scale:
The standing of counsel
24 Mr Mighell QC, who was leading counsel for the plaintiff at the trial, is an experienced member of the Victorian Bar. The quality of his work and his reputation for honesty and integrity as a member of the profession are not in doubt.
25 Mr Lamb, who appeared as junior counsel for the plaintiff at trial, is also experienced in the field of personal injury work. His standing as a member of the profession is not in issue.
26 I now turn to the factors listed in item 17 of the Scale:
(a)The complexity of the matter, and (b), the difficulty of the questions involved
27 The plaintiff contends that the matter involved a degree of complexity, as the plaintiff claimed damages both in negligence and under breach of a duty owed pursuant to Consumer Law.
28 The defendant denied liability under both heads claimed, and pleaded contributory negligence.
29 The plaintiff submits that preparation for trial and appearance at trial were undertaken on the basis of all issues raised in the parties’ pleadings.
30 On the other hand, the defendant submits:
(a)“There were no complex legal issues or arguments – the law was straightforward and easily applied to the facts;
(b)There was a single Defendant;
(c)The issues were clear and relatively narrow;
(d)There were no complex accounting/actuarial calculations required for loss of earnings/earning capacity – the case did not require expert accounting/actuarial evidence;
(e)There was no expert evidence on liability;
(f)Contributory negligence was not relied upon as a defence at trial;
(g)Although liability was originally in issue, ultimately the case was run as an assessment of damages only;
(h)Included within the 7 hearing days allowed was almost a full day for preparation of written submissions (from 11.45am onwards on 2 October 2018).”[6]
[6]Defendant’s written submissions on costs dated 2 November 2018, paragraph 8
31 I consider that there was a level of complexity involved, given the issues raised in the pleadings. As is evident from the plaintiff’s written submissions on costs, counsel were required to review the issues arising under Consumer Law and to assess the impact of a statutory cap on the award of damages.
32 Counsel could not know before the first day of the trial that the defendant would admit liability in negligence and under Consumer Law and also abandon the defence of contributory negligence. That said, I am still unclear why the decision was made to amend the Statement of Claim on 11 August 2018, a matter of days before the trial, to include what was essentially a back‑up cause of action that would likely involve reliance on the same facts as the claim in negligence.
33 Had liability not been admitted, and had contributory negligence not been abandoned, I daresay the trial would have run longer than the seven days of hearing that it occupied. Had breaches under Consumer Law been pressed, I apprehend it would not have been a straightforward case.
34 What started out as a complex matter ended up with fewer legal questions to be determined; however, that does not get away from the fact that when counsel were first retained to advise and then to appear at trial, all issues were in dispute.
(c)The skill, specialised knowledge and responsibility involved
35 As mentioned earlier, counsel for the plaintiff are experienced in this field of law. That counsel were able to present the case in a relatively simple and straightforward manner, when it might otherwise have been a complex and convoluted case, attests to their professional skill and judgment as advocates. The ability of a good advocate to present disputed facts and complex questions of law in a logical, straightforward and coherent manner, so that it all seems easy, is sometimes overlooked. In the present case, counsel on both sides demonstrated this skill.
(d)The number and importance of the documents prepared and perused, regardless of length
36 The plaintiff’s counsel state that their brief comprised of some four or five folders of materials.
37 The defendant does not dispute this.
38 As part of their preparation for trial and for conferences, the plaintiff’s counsel note that their work included:
“a. Reviewing the facts of the claim and the law generally;
b. Reviewing issues under the Australian Consumer Law eg statutory caps on damages;
c. Conferring with the Plaintiff (on three occasions from 7 September 2018 onwards), his wife, and his former supervisor Rocco Vinci;
d. A detailed written advice to the Plaintiff, dated 12 September 2018;
e. A view of the relevant premises, in Hallam, on 21 September 2018 (and, given the distances involved, this took around half a day in itself);
f. Drawing updated and amended particulars of special damages (around five versions were ultimately served, as the evidence evolved);
g. Preparing detailed submissions to the Court, outside ordinary court hours, in support of the Plaintiff’s assessment of the claim.”[7]
(e)The quantum of damages claimed
[7]Plaintiff’s written submissions on costs dated 29 October 2018, paragraph 8
39 As the principal judgment explains, the plaintiff’s total claim for damages was in the vicinity of $1.5m:
Damages Amount Pain and suffering $250,000 - $300,000 Loss of earnings (past) (including loss of superannuation) $262,000 - $269,455 Loss of earning capacity (future) (including loss of superannuation) $782,758 - $928,110 Medical and like expenses (past) (AGREED) $7,146 Medical and like expenses (future) ($7,170.75
+ $35,157.15 + $8,365.88 + $11,951.25
= $62,645.03 less between 20% and 25%)$46,984 - $50,116 Gratuitous care (past only) $53,097 TOTAL $1,401,985 - $1,607,924
40 On the other hand, the defendant submitted the appropriate range for damages to be between $461,390 and $511,390:
Damages Amount Pain and suffering $100,000 - $150,000 Loss of earnings (past) (including loss of superannuation) $189,259 Loss of earning capacity (future) (including loss of superannuation) (after deduction of 25%) $149,331 Medical and like expenses (past) (AGREED) $7,146 Medical and like expenses (future) ($3,334 + $2,858 less 25%) $4,644 Gardening (past) - Gardening (future) ($4,764 less 25%) $3,573 Gratuitous care (past only) $7,437 TOTAL $461,390 - $511,390
41 As is evident, the parties were $1m apart in their respective arguments about damages.
(f)Research and consideration of questions of law and fact
42 I have already mentioned the fact that counsel were required to prepare for a trial that had the added complexity of the allegation of breach of Consumer Law and the applicability of statutory caps on damages allowed.
(g)General care and conduct having regard to the instructions and all relevant circumstances
43 The parties made no specific submission under this heading, although this factor forms part of the more general submissions.
(h)The time within which the work was required to be done
44 The plaintiff’s counsel have referred to the fact that some of the work was done under pressure of time.
(j)Any other relevant matter
45 The plaintiff contends that the Court should pay regard to the fact that first, they entered into a costs agreement with their instructing solicitors, and second, that the agreement provided for “no win no fee”, meaning that if the plaintiff lost his case, counsel would not be entitled to claim any fee for services provided to the plaintiff. The agreement provided for an uplift of 25 per cent to be claimed at the discretion of counsel in the event of a win. Counsel do not seek the 25 per cent uplift premium.
46 I consider it was open to counsel and their instructing solicitors to strike such a bargain to reflect the risk that counsel took on, namely that they might end up working for a number of weeks for no financial reward, but the uplift is irrelevant to the question of whether the fees claimed are unreasonable. The issue is whether the unsuccessful defendant should be made to assume responsibility to pay the fee struck in the “no win no fee” costs agreement.
47 After considering the relevant authorities, in Singleton, Rogers CJ Comm D answered the question:
“[Question] 3. Whether a taxing officer may tax costs awarded on an indemnity basis according to a costs agreement between the successful party and his solicitor rather than in accordance with Schedule G.[8]
[The applicable scale of costs.]
[Answer] 3. Yes, unless he is satisfied that to do so would in all the circumstances be unreasonable.”[9]
[8](Supra), page 105
[9](Supra), page 115
48 In terms of the present case, a question arises as to whether it is unreasonable in all the circumstances to order that the defendant pay the plaintiff’s counsels’ fees as per their respective costs agreements.
49 The plaintiff did not place much weight on the agreement; rather, counsel rely on the contention that the fees are not unreasonable.
50 It must first be observed that although high, the daily fee claimed by senior counsel is not extravagant. Although it exceeds County Court Scale, it does not exceed the Supreme Court Scale.
51 That the plaintiff elected to issue proceedings in the County Court and not in the Supreme Court is a relevant factor to be considered; however, the preparation and presentation of the case would have been no different if run in the Supreme Court according to the plaintiffs’ counsel.
52 The daily fee claimed by junior counsel can hardly be thought to be extravagant or unreasonable when it falls beneath County Court Scale.
Preparation
53 The plaintiff’s counsel stated how many days were involved in preparation. The defendant correctly notes that preparation does not include allowance for conferences, as there is separate provision for conferences in the scale.
54 Whilst the defendant claims this was not a case involving voluminous medical and other material, the defendant cannot know what material was contained in the plaintiff’s counsels’ brief. I accept counsels’ assurance that the brief comprised of four or five folders of materials.
55 Counsel provided a written advice dated 12 September 2018, and assisted with drawing documents filed in the proceedings.
56 Counsel were also required to provide written submissions in support of their case at trial.[10]
[10]Exhibits U and V at trial
Conferences
57 The plaintiff’s counsel claim for eight hours of special conferences. They assure me that these conferences did not occur on a day of hearing.
58 Counsel state that they conferred with the plaintiff on three separate occasions from 7 September onwards. They also conducted conferences with the plaintiff’s wife and with his former work supervisor, Rocco Vinci.
59 In addition, counsel attended the premises at Xanadu to conduct a view on 21 September 2018. They claim that, given the distances and travel involved, the view took half a day to conduct. The Court conducted a view at the request of the parties. I note that this view also took one half a day.
Attendance for judgment
60 This is not in dispute.
Findings
61 On the question of counsels’ fees, turning first to junior counsel, the daily fee claimed is within scale and is not unreasonable. The hourly fee is 10 per cent of the daily fee, and that is not unreasonable. Senior counsel’s fees are high, but I doubt whether they are unreasonable. Applying Rule 63A.30.1(2), I must resolve that doubt in favour of the plaintiff. Accordingly, I allow the daily fee claimed of $8,800 and the hourly fee at 10 per cent of the daily fee.
Conclusion and orders
62 For the reasons stated above, I certify senior counsel’s fee on brief at $8,800 per day for:
· Seven days of hearing (that is not in dispute);
· One day of preparation is in dispute. Three days are claimed. There is no reason to doubt that the preparation was done and that it was necessary. That preparation translated into an efficient trial. Accordingly, I allow three days of preparation;
· Eight hours of special conferences were claimed. The defendant was arguing over three hours. There is no reason to doubt that the conferences were held and that they were necessary. I allow eight hours of special conferences;
· Two hours to receive judgment (that is not in dispute);
· One day to appear on the costs application (including the provision of written submissions) (that is not in dispute).
63 I certify junior counsel’s fee on brief at $4,400 per day for:
· Seven days of hearing;
· Three days of preparation;
· Eight hours of special conferences;
· Two hours to receive judgment.
64 The proceeding is otherwise dismissed.
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