Schmid v Skimming (No 2)
[2020] VSC 573
•8 September 2020
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
MAJOR TORTS LIST
S CI 2016 05027
| MICHAEL KARL SCHMID | Plaintiff |
| v | |
| ROGER JAMES SKIMMING (and others according to the Schedule attached) | Defendants |
---
JUDGE: | FORBES J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | Hearing 21 July 2020 further material filed 4 September 2020 |
DATE OF JUDGMENT: | 8 September 2020 |
CASE MAY BE CITED AS: | Schmid v Skimming & Ors (No 2) |
MEDIUM NEUTRAL CITATION: | [2020] VSC 573 |
---
PRACTICE AND PROCEDURE – Group proceedings – Whether uplift fee in conditional costs recoverable – Uplift fee of 25% recoverable for administration of settlement – Approval of outstanding fees and disbursements, calculation of fees for settlement administration.
---
| APPEARANCES: 21 July 2020 | Counsel | Solicitors |
| For the Plaintiff | Mr T. Tobin QC and Mr A. Fraatz | Maddens Lawyers |
| For the Defendant | Mr G. Ioannides | Hall & Wilcox |
| For the Fourth Defendant | Mr L. Macdonald | Hall & Wilcox |
HER HONOUR:
On 17 August 2020 I approved the settlement of a group proceeding brought by Mr Schmid for injury, loss and damage arising from a bushfire in Scotsburn on 19 December 2015.[1] At that time I also approved a substantial part of the costs and disbursements claimed by the plaintiff’s solicitors. The costs and disbursements as approved are to be paid from the settlement sum of $10,500,000 prior to distribution to group members. In my reasons of 17 August 2020 (the ‘earlier reasons’) I directed that further material be provided in order to deal with a number of outstanding matters.
[1]Schmid v Skimming & Ors [2020] VSC 493 (‘Schmid v Skimming & Ors’).
Those matters were:
(a) Outstanding disbursements between 26 February 2020 and to 21 July 2020;
(b) Fees in conducting the proceeding claimed between 26 February and 21 July 2020; and
(c) Incurred and anticipated fees and disbursements in administering the scheme.
The plaintiff provided further material as directed in relation to the outstanding matters. I received a confidential affidavit of Kathryn Amy Emeny sworn 1 September 2020 (the ‘1 September affidavit’), a confidential affidavit of Kathryn Amy Emeny (unsworn) (the ‘7 September affidavit’) and a third expert report of Ms Catherine Dealehr dated 1 September 2020. As a result of that further material, and allowing that some matters that were estimates in the earlier material are now able to be quantified rather than estimated, the costs now claimed have been recalculated.[2] These reasons should be read with the earlier reasons.
[2]Ibid [7].
Outstanding disbursements to 21 July 2020
Dealing first with Dr Barter’s outstanding fees I have now been provided with the bundle of invoices upon which the amount is based. They demonstrate that Dr Barter’s involvement spanned the period from December 2017 to November 2019. Within that time frame Dr Barter undertook work within seventeen different months. That work included various research elements as well as scientific testing and the preparation of technical drawings. As well as report preparation it included conferences with Counsel and solicitors and preparation for giving concurrent evidence at the forthcoming trial. The detailed material demonstrates the breadth of work undertaken by Dr Barter over a lengthy period of time. I approve Dr Barter’s fees in the sum of $205,211.00.
In respect of Everlaw document hosting, the 1 September affidavit describes Everlaw as “a document hosting platform that enables multiple users to view, search, categorise, code (according to issue) and comment on word searchable pdf documents”[3]. Ms Emeny described a benefit as having a central repository that can be accessed by all working on the case, including Counsel and that this mechanism of document management results in time efficiencies. The amount of data hosted was said to be approximately 5GB. The amounts involved are, from the invoices, monthly hosting fees based upon the quantity of data together with variable consulting fees for work undertaken by Everlaw at the request of Maddens. Ms Emeny deposed that Everlaw was engaged at a time when the volume of documents to be produced or discovered was not known but that based on experience she considered it could involve a significant number.
[3]Confidential Affidavit of Kathryn Amy Emeny dated 1 September 2020 [11].
I accept that at the time Everlaw was engaged, based on Ms Emeny’s belief, it was reasonable to incur the expense of electronic document management in August 2017 and to retain it for the purpose of trial preparation until such time as the deeds of settlement were received. There was an error in the calculation of the invoices so the total incurred after 26 February 2020 is $1,497.62. In total I approve Everlaw disbursements at $21,600.02.
The remaining variations in disbursements incurred to the approval hearing on 21 July 2020 related to Counsel’s fees and express postage. An estimate of Junior Counsel’s fees on an hourly basis was made at $6,600 and approved in that sum. Counsel’s actual time spent was available to Ms Dealehr by the time of her third report. Ms Dealehr assessed as reasonable the actual time spent. The tasks undertaken in preparation for the settlement approval hearing were detailed by Counsel. I accept Ms Dealehr’s opinion that the time spent was reasonable and will allow the amount as claimed. That results in an increase to $11,495.00 as invoiced. Having approved the estimate of $6,600 previously[4] I now approve an additional $4,895.00. I also approve the amount of $474.00, assessed by Ms Dealehr as reasonable fees for registered express postage.[5]
[4]See Schmid v Skimming & Ors (n 1) [83].
[5]Confidential affidavit of Kathryn Amy Emeny (unsworn) [13].
Fees in conducting the proceeding between 26 February and 21 July 2020
I did not previously approve the fees incurred by Maddens after 26 February 2020 as I directed that work done in obtaining the settlement approval and the fees associated with the administration of that settlement be separately identified[6]. Ms Dealehr’s third report undertakes this exercise.
[6]Ibid [119].
At the time of her second report, dated 14 July 2020, Ms Dealehr had of necessity estimated the work done between 15 July 2020 and 21 July 2020. In her third report she calculates the actual fees for that period. Ms Dealehr did so using the same methodology as that used to calculate fees up to 14 July as described in my earlier reasons.[7] This revised the estimate of $13,761.00 to a figure of $14,352.20. I accept this total represents a fair and reasonable figure for the work done, calculated according to scale prior to the application of any scale loading or conditional uplift.
[7]Ibid [72 – 79].
Adding this to the figure generally arrived at for professional fees between 26 February and 14 July 2020 of $176,992.15 gives total fees for that period of $191,344.35 (without GST, scale loading or conditional uplift applied).
In separating work done towards approval of the settlement from work directed at administration of the settlement scheme, Ms Dealehr was provided with Maddens’ categorisation of work into one or other category based upon its dominant purpose and work categorised as being for dual purposes. Where work was for dual purposes, Ms Dealehr made an equal allocation of 50% of the work to each purpose. This led to an allocation of 68% to settlement approval work and 32% to administration of the settlement scheme.[8] On this basis the sum of $129,818.97 is arrived at for work done on the settlement approval. Application of a 12% scale loading and 25% uplift for the conditional nature of the fee agreement are to be applied to this figure in accordance with my earlier reasons. I will allow a further $182,000 (exc GST) for work done after 26 February 2020 in securing approval of the settlement.
[8]Both figures rounded to the nearest whole.
In addition disbursements not claimed previously which were associated with the approval hearing, namely court book preparation ($1,641.53) and transcript fees ($573.54) are approved. The cost of Ms Dealehr’s first two reports were included in the costs already approved. I approve the cost of the third report.[9]
[9]The amount as adjusted by Ms Dealehr and its calculation are set out at paragraph 15 of the third report.
Incurred and anticipated fees in administering the scheme
The fees incurred in administering the settlement scheme are in anticipation of orders appointing Ms Emeny as the scheme administrator. I will do so. There is good sense in appointing someone familiar with the claims, methodology and subject matter of the individual group members.
Fees incurred in administering the scheme prior to the approval hearing were assessed on the basis of the Supreme Court Scale of costs, as was the work done in conducting the proceeding. That work accounted for 32% of the work done between February and July 2020 at a total of $67,071. Ms Dealehr allowed no reductions for non-claimable work but deductions for discounts for multiple activities and the other factors identified at Step 5 of her methodology arriving at a total figure of $61,525.38. It would be appropriate to apply the scale loading of 12% to this figure which would bring it to $68,908. However it would not be appropriate to apply the conditional fee uplift to this work which is done in administering the approved settlement. The third report also recalculated the estimated cost of the settlement administration work done prior to 21 July 2020 as identified based on the proposed hourly rates at $88,236.47.
In the second report the future work in administering the scheme was not calculated based upon the Supreme Court scale of costs but upon hourly rates for time spent. These future costs are calculated based upon three applicable hourly rates: that of the administrator, a senior lawyer and a legal assistant, with an estimated percentage of time spent by each category. In total 227.6 hours was estimated by Maddens at a cost of $121,737. Ms Dealehr then applied adjustments to Maddens’ estimate and arrived at $119,004.42 as the total amount estimated. I accept the methodology is appropriate in arriving at a fair and reasonable sum.
In my view it is appropriate to assess all work done in administering the scheme, whether before or after approval was obtained, on a consistent basis. I will approve an amount based upon the calculations and estimates applicable to hourly rates and not scale calculations ($88,236 and $119,004). In round terms I will approve the sum of $210,000 for the fees associated with fund administration past and anticipated.
In summary I will approve the following further fees and disbursements:
(a) Further disbursements totalling $238,395;
(b) Further fees in conducting the proceeding in the sum of $182,000, in addition to fees already approved;
(c) Fees in administering the settlement scheme in the sum of $210,000.
SCHEDULE OF PARTIES
BETWEEN:
| MICHAEL KARL SCHMID | Plaintiff |
| and | |
| ROGER JAMES SKIMMING | First Defendant |
| MAUREEN LYNETTE JOHNS | Second Defendant |
| AUTO AND GENERAL INSURANCE COMPANY LIMITED (ACN 111 586 353) | Third Defendant |
| EL MINING SOLUTIONS PTY LTD (ACN 151 983 603) AND BETWEEN: | Fourth Defendant |
| AUTO AND GENERAL INSURANCE COMPANY LIMITED | Plaintiff by Counterclaim |
MICHAEL KARL SCHMID | Defendant by Counterclaim |
0