Schwarz v Visy Paper Pty Ltd - [2011] VSC 68

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

No. 0318 of 2010

HUW SCHWARZ	Plaintiff
v
VISY PAPER PTY LTD	Defendant

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JUDGE:	J FORREST J
WHERE HELD:	Melbourne
DATES OF HEARING:	2,3,4,7,8, February 2011
DATE OF RULING:	11 March 2011
CASE MAY BE CITED AS:	Schwarz v Visy Paper Pty Ltd
MEDIUM NEUTRAL CITATION:	[2011] VSC 68

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ACCIDENT COMPENSATION – Settlement of worker’s claim – Award of costs – Sections 134AB(30) – (31) of the Accident Compensation Act 1985 (Vic) – Entitlement of solicitor to recover costs.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr S. Mighell SC with Mr D. Purcell	Maurice Blackburn
For the Defendant	Mr R. Meldrum QC with Ms R. Annesley	Wisewould Mahoney

HIS HONOUR:

Background

The claim by the plaintiff, Mr Huw Schwarz, against his employer, Visy Paper Pty Ltd, was compromised on the fifth day of the hearing. Subsequent to the making of orders discharging the jury and a costs order in favour of Mr Schwarz against Visy, an application was made by Mr Schwarz’s solicitors, Maurice Blackburn,[1] for an order as to their solicitor/client costs pursuant to s 134AB(31) of the Accident Compensation Act 1985 (Vic).[2]
[1]Referred to as “the solicitors”.
[2]Referred to as “the Act”.

The solicitors sought an order that, over and above recovered party/party costs, they be entitled to an amount not exceeding $80,000 including GST – to which would be deducted from the plaintiff’s settlement sum.

In Acir v Frosster Pty Ltd,[3] I set out what I thought were the applicable principles in applications such as this.[4] It is not necessary to repeat those principles here.
[3][2009] VSC 539.
[4]Ibid [26].

Mr Giandinoto, a senior associate of the solicitors’, sets out the following reasons in support of the orders sought by the solicitors:

(a)The 80% limitation on recovery of party/party costs from the defendant as prescribed by s 134AB(29) of the Act.[5]
(b)Mr Schwarz had executed a costs agreement with the solicitors in January 2010, which included an uplift of 25% on professional fees, in effect to take into account the fact that the solicitors were acting on a “no win, no fee” basis (in relation to their professional costs).[6]
(c)Numerous attendances and work carried out by the solicitors in preparation of the proceedings (both this claim and serious injury applications) are not recoverable on a party/party basis, nor are a number of other expenses incurred on Mr Shwarz’s behalf. This is substantiated by an affidavit of Lyn Honan, a senior associate costs lawyer employed by the solicitors, who estimates that the differential between solicitor/client costs and anticipated party/party recovery to be in the range of $85,000 to $88,000, taking into account a sum recovered in respect of the serious injury proceeding and amounts paid by Mr Schwarz. The shortfall is explained by a number of factors, including the 20% statutory reduction, the 25% uplift, the unlikelihood of the recovery on a party/party basis of the total amount of…

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.

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Details

Case: [2011] VSC 68
Decision Date: 11 March 2011

CaseChat Overview and Summary

Schwarz v Visy Paper Pty Ltd involved a worker's compensation claim brought by the plaintiff, Schwarz, against Visy Paper Pty Ltd. The plaintiff alleged that he was injured during the course of his employment. The case was before the Supreme Court of Victoria, where the primary issue was the recovery of legal costs by the plaintiff's solicitors, Maurice Blackburn & Co, after a settlement had been reached. The court was required to determine whether the solicitors were entitled to recover costs from the plaintiff under sections 134AB(30)-(31) of the Accident Compensation Act 1985 (Vic), and if so, the extent of such recovery.

The court examined the statutory provisions which allow for the recovery of costs by a solicitor from a client after a settlement, provided certain conditions were met. The court had to consider whether the conditions stipulated in the Act were satisfied and whether the amount recoverable was reasonable. In particular, the court had to assess the impact of any payments made by the defendant's solicitors, as well as the application of the Accident Compensation Act, on the calculation of costs recoverable by the plaintiff’s solicitors.

The Supreme Court of Victoria found that the plaintiff's solicitors were entitled to recover costs from the plaintiff, subject to specific conditions. The court held that the calculation of costs must account for any payments made by the defendant's solicitors and the application of the Accident Compensation Act. Additionally, the court determined that the recoverable costs should not exceed $70,000 inclusive of Goods and Services Tax. This decision ensures that the plaintiff’s solicitors can recoup their expenses while maintaining fairness and adherence to statutory limits.

Orders

Orders of the court

(1) That the plaintiff’s solicitors Maurice Blackburn & Co be entitled to recover from the plaintiff, any costs incurred by the solicitors on his behalf, subject to the following conditions:

(a) the calculation of such costs must take into account payment by the defendant’s solicitors of costs pursuant to the orders of the court and the application of the Accident Compensation Act; and

(b) such costs must not exceed the amount of $70,000 inclusive of Goods and Services Tax.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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