Sleep v Graincorp Operations Ltd

[2011] VSC 357

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT WARRNAMBOOL

COMMON LAW DIVISION

No. S CI 2009 00347

BETWEEN

RAYMOND LAURENCE SLEEP	Plaintiff
and
GRAINCORP OPERATIONS LTD	First Defendant
and
PACIFIC NATIONAL trading as FREIGHT AUSTRALIA	Second Defendant

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JUDGE:	CAVANOUGH J
WHERE HELD:	Melbourne
DATE OF HEARING:	Application on the papers
DATE OF JUDGMENT:	3 August 2011
CASE MAY BE CITED AS:	Sleep v Graincorp Operations Ltd & Anor
MEDIUM NEUTRAL CITATION:	[2011] VSC 357

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COSTS – Accident compensation – Claim for common law damages for workplace injury settled at trial – Application by plaintiff’s solicitor for leave to recover costs from plaintiff pursuant to section 134AB(30) Accident Compensation Act 1985 – Relevant considerations – Where first defendant the plaintiff’s employer and second defendant not the plaintiff’s employer – Where solicitor’s claim for costs included costs of plaintiff’s weekly payments claim, impairment claim under section 98C Accident Compensation Act 1985 and serious injury application as well as common law damages proceeding – Whether section 134AB(30) regulates costs incurred outside common law damages proceedings – Application granted subject to conditions – Accident Compensation Act 1985 ss 134AB(29), (30), (31) – Legal Profession Act 2004 ss 3.4.9, 3.4.27.

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APPEARANCES:

This application was made “on the papers” by Stringer Clark, the plaintiff’s solicitors, on their own behalf.

HIS HONOUR:

1. In this proceeding the plaintiff claimed damages in respect of an injury sustained at work due to the alleged negligence of the first defendant as his former employer and/or the alleged negligence of the second defendant as the occupier or operator of the premises where the events in question occurred. The proceeding came on before me for trial with a jury on 31 May 2011 at Warrnambool. After some brief preliminary submissions the case was settled on agreed terms. I made orders by consent dismissing the proceeding and requiring the defendants to pay the plaintiffs’ costs, including reserved costs, to be taxed in default of agreement. I also made an order reserving leave to the plaintiffs’ solicitors to make an application under s 134AB(30) of the Accident Compensation Act 1985 (“the Act”) in respect of the costs sought to be recovered by them from their client.

1. Subsequently, the plaintiffs’ solicitors have made an ex parte application on the papers pursuant to the leave reserved. The application is not a matter that concerns either defendant. However the scope of the application needs to be considered as well as its merits and the appropriate form of any order. For those purposes it is desirable to set out both subsection (30) and subsection (31) of s 134AB of the Act:

“(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. These provisions were given careful consideration by J Forrest J in Acir v Frosster Pty Ltd[1] and the principles set out in that case have been accepted and applied in several subsequent cases.[2]  In substance, I would likewise accept and apply them in this case, to the extent that they are applicable, subject to certain questions of construction of s 130AB(30) to which I will come.

   [1][2009] VSC 539.

   [2]Hancock v Riverend Park Pty Ltd [2010] VSC 39 (Beach J); Bosnali v Bartter Enterprises Pty Ltd [2010] VSC 360 (Osborn J); James v City of Port Melbourne [2010] VSC 91 (Ross J); Schwartz v Visy Paper Pty Ltd [2011] VSC 68 (J Forrest J); Bounds v Rostjazz Pty Ltd & Anor [2011] VSC 283 (J Forrest J).

1. As is shown by Acir and the cases which have followed it, the general purpose of subsections (30) and (31) is to ensure a degree of court supervision of the costs which may be payable personally by the worker.[3]

   [3]Acir [2009] VSC 539 at [7], [26(d)]; James v City of Port Melbourne [2010] VSC 91 at [4].

1. The fact that the defendants included a non-employer does not obviate or diminish the need for the solicitors to obtain an order under s 130AB(30) before they may recover costs from their client. The whole of the proceedings are and remain “proceedings under this section” within the meaning of s 134AB(30) notwithstanding that one of the defendants was not an employer of the plaintiff.[4] Unlike subsections (27) and (28) of s 134AB, subsections (30) and (31) do not contain any provisions that cannot sensibly operate or apply where one of the defendants is a non-employer.[5]

   [4]See and compare Spotless Services Australia Ltd v Herbath (“Spotless”) [2009] VSCCA 285 at [46]; Kidman v Sefa [1996] 1 VR 86.

   [5]Compare Spotless at [47], [49]; Fassbender v HW & MTA Bohlmann (t/a Seymour Freight Lines and Caravans) [2010] VSCA 204 at [69].

1. In the present case, the defendants have agreed to pay to the plaintiff as damages the sum of $520,000, being a net settlement amount after the reduction required by s 134AB(25) of the Act for past weekly payments of compensation. They have also agreed to pay legal costs.[6]  Indeed, as already mentioned, I have made a consent order against them for costs.

   [6]See further below.

1. On the day of the settlement the plaintiff signed and provided to his solicitors a written settlement authority in which he stated that he understood that if he accepted the defendants’ offer:

“After deduction of solicitor/client (gap) costs (being the legal costs not paid by the Authority/self insurer) agreed in the sum of $55,000.00 inclusive of GST, I will receive the sum of $465.000.00 clear to myself.”

1. The affidavit material filed in support of the present application indicates that the solicitors are, in effect, seeking an order from this Court which will enable them to put this agreed arrangement into effect by deducting the sum of $55,000.00 from the damages which have been or are to be paid, through them, to the plaintiff. 

1. However, and notwithstanding some infelicity in the language of the last paragraph of the relevant solicitor’s affidavit of 27 June 2011,[7] it is clear from the material as a whole that the solicitors recognise that the plaintiff’s agreement to the figure of $55,000.00 for “gap” costs does not preclude the plaintiff from contesting that aspect or any other aspect of the solicitors’ charges.  Thus the draft order proffered by the solicitors contains in “Other Matters” an undertaking by the relevant solicitor “that in the event taxation of the Plaintiff’s costs results in a solicitor/client amount of less than $55,000.00 any surplus will be repaid to the Plaintiff”.  Further, the operative provisions of the solicitors’ draft order recognise that the figure of $55,000.00 is a maximum, not a fixed amount.  Those provisions are expressed as follows:

   [7]In that paragraph the solicitor requests an order “that the Plaintiff pay to Stringer Clark Solicitors Solicitor/Client costs in the sum of $55,000.00 inclusive of GST”.

“THE COURT ORDERS THAT:

1.The Plaintiff’s Solicitors, Stringer Clark, be entitled to receive from the Plaintiff, Raymond Laurence Sleep, any costs incurred by those Solicitors on his behalf subject to the following conditions:

(a)that the calculation of such costs should 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 1985; and

(b)that such Solicitor/client costs irrecoverable from the Defendant not exceed the amount of $55,000.00 inclusive of Goods and Services Tax.

2.Liberty to apply.”

1. In Acir[8], J Forrest J said:

   [8][2009] VSC 539 at [26]-[27].

“26In determining an application by a solicitor to recover costs from a worker under s 134AB(30), the following principles apply:

(a)A solicitor cannot recover solicitor/client costs from a client in proceedings under s 134AB (whether a claim for damages or a serious injury application) absent compliance with the provisions of s 134AB(30). In practice, this means, unless there is an interlocutory order, no entitlement to such costs arises until judgment or settlement.

(b)That entitlement is only enlivened by an order of the Court or where the section mandates that the worker’s costs are payable in accordance with s 134AB.

(c)A Court may make an order for costs on a solicitor/client basis under sub-s 30. In doing so, it has a general discretion as to the form of the order.  It may order costs on a solicitor/client basis, or fix costs payable up to a certain level, or attach any other condition it sees fit.  It is not limited to fixing the amount of such costs.

(d)In considering whether to make an order for solicitor/client costs (and, if so, in what form), a Court may, without limiting its general discretion, take the following matters into account:

•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 Taxing Master.

27In Qualma,[9] Gillard J regarded the retainer of the solicitor by the worker 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.  In Loveday,[10] Hedigan J considered the risks to the solicitor in taking on the case on a no win, no fee basis and the necessary incurring of non-recoverable costs allied with advice given to the worker concerning such costs, sufficient to justify an order for solicitor/client costs.”

[9]Qualma v Toll Transport Pty Ltd [2004] VSC 81.

[10]Loveday v Lloyds Tree Care Pty Ltd [2000] VSC 204.

1. It will be noted that in Acir[11], J Forrest J observed, in a parenthetical remark, that the requirement for a solicitor to comply with s 134AB(30) before recovering costs from the client extended to the costs of a serious injury application. However that point did not actually arise for decision in Acir or, as far as I can tell, in any of the subsequent cases.  It seems that in none of them was approval expressly sought or expressly given to recover costs incurred outside the common law proceeding in which the application under s 130AB(30) was being made.  In the present case, however, the plaintiff’s solicitors’ application is sought to be supported by material relating to costs incurred (and costs partly recovered or recoverable) not only in pursuing the common law proceeding in this Court but also in pursuing three earlier related applications (including a serious injury application), none of which reached any court.  I will come to the detail of those matters in a moment.

   [11]At para 26(a) – See esp the words in parentheses.

1. It is true that the broad phrase “any proceedings under this section” is used in s 134AB(30) and that, in general parlance, a serious injury application, especially one made to a court under s 134AB(16)(b), could be so described. It is also true that certain other provisions of s 134AB use language that more clearly confines the operation of the particular provision to permitted common law proceedings than does s 134AB(30): see, for example, s 134AB(28). However there is no real consistency of usage of language within s 134AB. Thus although the phrase “in accordance with this section” (as distinct from the phrase “under this section”) is often used where the intention is to refer only to the permitted common law proceedings, the expression “proceeding brought under this section” is used in s 134AB(23) where the context plainly demonstrates that the intention is to refer to common law proceedings only.

1. In any event it seems to me that the use of the expression “the court” in s 130AB(30) implies that Parliament intended to target costs incurred in or in relation to court proceedings only.  “[T]he court” referred to in the subsection can only be the court which is hearing the “proceedings under this section”.  If there be no relevant court proceedings, there can be no court that would answer the description “the court” in s 130AB(30).  The same applies in relation to the expression “The court” in s 130AB(31).

1. Not all “serious injury applications” reach a court. (The present case is an example: see below.) The colloquial expression “serious injury application” is used in two senses in the present context. It may refer to an application under s 134AB(4). Such an application, accompanied by detailed evidence, must be lodged with the Victorian WorkCover Authority or the relevant self-insurer. It is not made in any court. Alternatively, the expression may refer to an application under s 134AB(16)(b). Such an application is made by issuing an originating motion in a court (usually, the County Court). It can only be made after the Authority or the self-insurer has determined the application made to it under subsection (4). On the reasoning set out in the previous paragraph, there would be no forum for the hearing of an application under s 134AB(30) in relation to the costs of an application to the Authority or the self-insurer under s 134AB(4). Those costs may be considerable. Further, authorisation under s 134AB(30) of the recovery of costs incurred in a curial serious injury application would only be able to take place in “the court” that has heard that serious injury application (usually, the County Court).

1. At least as a matter of symmetry, it might be thought to follow that Parliament did not intend by s 134AB(30) to regulate the solicitor-client costs of any aspect of the “serious injury process” at all, even the curial aspects. Further support for that view might be gained by a consideration of s 134AG of the Act, which empowers the Governor-in-Council to make a “legal costs order” specifying “the legal costs that may be recovered by a legal practitioner acting on behalf of a worker in respect of any claim, application or proceedings under section 134AB … “. In the present case, an order made under s 134AG – the WorkCover Legal Costs Order 2006 – was in operation at the relevant time. It has been held at County Court level that under s 134AG a legal costs order may be made “to cover the entire spectrum of legal costs orders or some of them only”, and that the WorkCover Legal Costs Order 2006 purported to cover party-party costs only.[12]

   [12]Tomlinson v Kilkenny Cleaning Services Pty Ltd (No 2), County Court of Victoria, Judge Morrish, 23 July 2010 at paras [24]-[26].

1. Section 134AB(30) requires that there be no recovery of costs by the worker’s lawyers unless an award of costs has been made by the Court or the costs are “payable in accordance with this section by the worker”. This latter part of s 134AB(30) is of no present relevance. Costs that are recoverable under the WorkCover Legal Costs Order 2006 are not recovered “in accordance with this section [s 134AB]” but rather in accordance with s 134AG. In any event they represent costs payable to the worker (or his legal representatives), not costs payable by the worker. As to the intended operation of this part of s 134AB(30), see Hancock v Riverend Park Pty Ltd.[13]

   [13][2010] VSC 39, [9]-[13].

1. I have not called for or heard any argument on these questions of construction of s 134AB(30). In all the circumstances I do not think it is necessary to put the plaintiff or his solicitors to the expense of calling for submissions on them. I do not need to decide the construction questions finally. Whatever be the correct interpretation of s 134AB(30), the practical effect of my decision on this application would not be different. I intend to make an order which, in its practical effect, will be substantially in accordance with the relief sought by the solicitors. However the legal questions do bear on the proper form of the order. Stringer Clark’s draft order is ambiguous as to the costs it would cover. Further, the draft order provides that the calculation of the costs to be recovered from the plaintiff should take into account “… the application of the Accident Compensation Act 1985.” Similar wording has been used in orders made by the Court in previous cases. However, for the sake of clarity and safety, and in view of the doubt about whether s 134AB(30) regulates the recovery of costs incurred in serious injury applications (or in any proceedings other than the permitted common law proceedings), I will use different language in my proposed order. I will frame the order on the basis that the court cannot, under s 134AB(30), directly regulate what legal practitioners may recover from their clients in respect of work done outside the common law proceedings.

1. On the other hand, it was held in Acir, correctly in my opinion, that an order under s 134AB(30) may be made on conditions. A common condition is the imposition of a maximum or ceiling on the amount that may be recovered by the solicitors from the client as “gap” costs. If the solicitors themselves have offered to be subjected to an overall maximum or ceiling figure for the recovery of costs from the worker, and if the court is satisfied -

(a)that the figure proposed by the solicitors might well be justified as “gap” costs in relation to the common law proceedings alone; and

(b)that at least some of the solicitors’ claims for costs in relation to other, related matters appear to have a reasonable basis; and

(c)that the worker consents to the proposal and is fully conversant with his or her rights to challenge any or all the solicitors’ charges,

then, as it seems to me, those circumstances in combination can legitimately be taken into account by the court in deciding whether or not to make an award under s 134AB(30) and, if so, on what conditions. Moreover, I consider that the court could properly refer in its order to the existence of the solicitors’ (subsumed) claims for additional costs. As will be seen, I think that the present is just such a case.

1. The plaintiff’s proceeding in this Court was commenced on 13 August 2009.  However the plaintiff’s solicitors, Stringer Clark, have been acting for the plaintiff, on a “no win – no fee” basis, in relation to his workplace injury since at least 23 May 2006, and possibly since 22 December 2005,[14] pursuant to a single retainer and conditional costs agreement. They have done work for the plaintiff thereunder in relation to a weekly payments dispute, a permanent impairment claim under s 98C of the Act and a serious injury application under s 134AB(4) of the Act. In due course the Victorian WorkCover Authority granted serious injury certificates for both economic loss and pain and suffering. Stringer Clark’s claims against the plaintiff for costs appear to include claims in respect of all, or at least most, of this work, none of which was done in any court. On the other hand it appears that either the plaintiff or his solicitors have a statutory entitlement to some recompense (either $15,000 or $12,000)[15] from the employer or from the Victorian WorkCover Authority under s 134AG of the Act and the WorkCover Legal Costs Order 2006 (called in the costs consultant’s certificate the “Ministerial Directions”) in relation to the costs of the serious injury application.

   [14]This date is referred to in a relevant certificate by a costs consultant: see below.

   [15]$15,000 is referred to in one of the costs consultant’s certificates and $12,000 in another.

1. According to the affidavit of the relevant solicitor, the first defendant terminated the plaintiff’s employment on 17 May 2006 on the basis of his injury. The solicitor received instructions from the plaintiff on 23 May 2006 to represent him “in relation to a weekly payments claim, his potential impairment claim (pursuant to Section 98C of the Accident Compensation Act 1985), and in relation to a personal injuries claim (pursuant to Section 134AB of the Accident Compensation Act), arising out of his employment”. As mentioned above, the solicitor agreed to act on a “no win – no fee” basis. Accordingly, on the same day, the plaintiff signed a “conditional costs agreement” pursuant to s 3.4.27 of the Legal Profession Act 2004 and was given a disclosure statement pursuant to s 3.4.9 of that Act. As permitted by the Legal Profession Act, the conditional costs agreement provided for a 25% uplift fee to compensate the solicitors for the risks incurred by them in agreeing to act on a “no win – no fee” basis.

1. Unfortunately both the conditional costs agreement and the disclosure statement appear to be in a standard form, rather than being tailored to the circumstances of the plaintiff’s matter(s).  Neither specifies what instructions had been given or what work was to be done, although there is a reference in the disclosure statement to “the complexity and intricacies of personal injury law” and a reference to the policy of the Victorian WorkCover Authority in relation to seeking costs against workers who make unsuccessful serious injury applications.

1. Further, the estimate of legal costs set out in the disclosure statement proved to be a long way off the mark.  True, it was stated that “[g]iven the complexity and nature of your claim, it is not reasonably practicable to provide you with a precise estimate of your total legal costs”; and numerous major variables were then set out.  However the document then proceeded:

“The Legal Profession Act requires us to give you an estimate of the likely legal costs. The range various enormously between cases and professional fees may be only $1,000.00 to $2,000.00. In other matters professional fees may be as high as $20,000, and in exceptional matters, $30,000 or more”.

1. I have seen nothing to indicate that this was an “exceptional” matter, and it was settled on the first day of the trial, yet on 26 May 2011, in a written certificate, the solicitors’ costs consultant estimated “the total Solicitor/Client charges for the period 22 December 2005[16] up to and including 1^st day of hearing … at $161,796.25 (exclusive of all disbursements)”.  He estimated the “minimum disparity” between party/party and solicitor/client costs at $87,131.52.

   [16]The material does not explain the discrepancy between this date and the date of 23 May 2006 referred to in the relevant solicitor’s affidavit.

1. The solicitor explains in his affidavit that the original costs estimate assumed that the matter would resolve at a conference under s 134AB(12) of the Act after the granting of a serious injury certificate. However that may be, the affidavit indicates that as the matter progressed the plaintiff was informed from time to time about the growing “gap”. Thus on or about 29 June 2009, in connection with the statutory offer process, the plaintiff was reminded of his potential personal liability. As I have said, this proceeding was commenced on 13 August 2009. On or about 20 August 2010, at a mediation, the plaintiff was informed of the costs consultant’s then estimate that total professional fees at the time were $72,089.00 and that the “disparity” was $40,910.54. No offer was made by the defendants at the mediation. At a further mediation some nine months later, on 12 May 2011, the plaintiff was offered $465,000 plus party-party costs and was told that his solicitors would still only charge $40,000 as “gap” costs if he accepted the offer. The plaintiff rejected the offer. On 25 May 2011, the solicitor told the plaintiff that the shortfall between chargeable costs and disbursements and recoverable costs and disbursements was in the range of $70,000. This was confirmed in writing on 30 May 2011. On 31 May 2011 the defendants offered $520,000 (plus “retention” plus costs). The plaintiff was provided with the written estimates that had been prepared by the costs consultant on 26 May 2011 showing an estimated shortfall of $87,131.52 as at the first day of trial. He was told that the solicitors would limit their “gap” charge to $55,000.00, leaving the plaintiff to receive the sum of $465,000 clear to himself. As already indicated, the plaintiff agreed to this proposal and signed an authority to settle accordingly.

1. There is nothing before me to indicate that the plaintiff has ever expressed concern about the low level of the original costs estimate.  Indeed he has sworn an affidavit[17] supporting his solicitors’ present application.  He swears that he is aware of the amount of $55,000 (inclusive of GST) claimed by his solicitors; that he understands “that party/party costs recoverable from the First Defendant are limited to 80% of the Scale fees and the party/party costs of the Second Defendant are at Scale rates”;[18] that he is aware of his entitlement to seek a bill of costs in taxable form which can be taxed by the Taxing Master if required; that he is aware of his right to initiate a dispute resolution process through the Legal Services Commissioner in relation to any dispute about costs; that he is aware of his entitlement to obtain independent legal or costing advice regarding the Solicitor/Client costs charges; that he is aware that the Court may determine the amount of costs to be awarded to his solicitors for acting on his behalf; and that he “consents to the Court making the Order as requested, subject to my rights in relation to reviewing the amount of costs listed above”.

   [17]Dated 24 June 2011.

   [18]The costs consultant and everyone else concerned, including the second defendant and its solicitors, are presently proceeding on the basis that the second defendant, unlike the first defendant employer, could not claim the 20% reduction for which s 134AB(29) provides in relation to the scales of costs applicable on a taxation. However it seems to me that it is perhaps arguable (I say no more than that) that, absent agreement to the contrary, even a non-employer defendant may be able to take advantage of that provision in a common law proceeding authorised by s 134AB: see and compare Spotless Services Australia Ltd v Herbath [2009] VSCA 285 at [46] – [49]; Fassbender v HW and MTA Bohlman (t/a Seymour Freight Lines and Caravans) [2010] VSCA 204 at [69]. If that were so, the disparity or “gap” in the present case would be higher to that extent, and the solicitors’ present application would be further strengthened accordingly.

1. This case is distinguishable from Schwartz v Visy Paper[19] heard by J Forrest J, in which his Honour would have allowed a ceiling of $80,000 for “gap” costs but for a clause in the conditional costs agreement which read:

“As advised in clause 7.2 of Section B, you will have to pay us legal costs from your settlement amount in an amount of between $10,000 and $70,000 for the legal costs that cannot be recovered from the unsuccessful party.”

Because of that clause, J Forrest J regarded himself as obliged to impose a ceiling of $70,000.  In the present case, although the solicitors’ original costs estimate was, on the face of it, unduly low to an even greater extent than the estimate in Schwartz (which J Forrest J also criticised), there was no actual agreement at any time that would preclude Stringer Clark from charging, at this stage, “gap” costs up to $55,000.00.  Nevertheless I have taken into account the low original estimate in considering whether I should impose a lower ceiling, or impose any other conditions or restrictions, on the proposed award of costs.

[19][2011] VSC 68.

1. There is no bill of costs before me nor any other detailed analysis of the costs in question. I do not say that such a thing is necessarily or even usually required in an application under s 134AB(30), though the position may possibly be different in an application under s 134AB(31) for the fixing of a definite sum.[20] However, because the matter settled at the outset of the trial, I cannot, from my own observations, derive a detailed picture as to how much work was done, or was necessary or appropriate to be done, by the solicitors. On the other hand the costs consultant, Mr De La Rue, has sworn a relevant affidavit. He has 36 years experience as a costs consultant. He produces the written estimates to which I have referred. Similar estimates by costs consultants have satisfied other judges in applications under s 134AB(30).[21]  Further, Mr De La Rue says that he will be retained by Stringer Clark to conduct all negotiations in relation to maximising recovery of party-party costs and disbursements and will thereafter be required to prepare a detailed report.  In the event that there is any need to make any adjustment to the shortfall he will be authorised to do so.  In addition, he swears that in his experience “there is no prospect that the disparity between chargeable costs and disbursements and recoverable costs and disbursements will be less than the $55,000.00 agreed between the plaintiff and Stringer Clark”.

   [20]Cf Qualma v Toll Transport Pty Ltd [2004] VSC 81 at [4], [24]; Acir [2009] VSC 539 at [21], [31]-[32].

   [21]See, eg, Acir [2009] VSC 539 at [32].

1. Initially I had some concern about the treatment of disbursements in the costs consultant’s certificates.  However the relevant solicitor swears that he understands that disbursements will be recovered in full from the defendants.  He further swears that “[i]n the event of a disparity between the disbursements claimed and the amount recovered, this will not be passed on to the Plaintiff”.  I assume that the solicitor is referring to all disbursements, including counsel’s fees, commencing from the date of the original retainer. 

1. As I have mentioned, it seems from the affidavit material, and especially from the costs consultant’s certificates, that the costs consultant has included in his assessment of the total chargeable amount (exclusive of disbursements) of $161,796.25 – and also in the “recoverables” – items that long pre-date the commencement of this proceeding on 13 August 2009. On the other hand, the serious injury application was a necessary precursor to the common law proceeding, and the same might probably be said about the permanent impairment claim under s 98C,[22] if not about the weekly payments claim.

   [22]There are relevant links between ss 98C, 104B and 134AB of the Act, but it is not necessary to delve into them here.

1. I gather that Stringer Clark have not previously rendered any bill at all to the plaintiff, whether in relation to his weekly payments claim, his s 98C claim or his serious injury application. I take this into account in the solicitors’ favour. The solicitors suggest that the maximum “gap” recovery be fixed at $55,000. Experience indicates that, even in relation to the common law phase alone, a “gap” of $55,000 would not be unusual in comparable cases. Here, in effect, the ceiling is even lower because, by the consent of everyone concerned, it will be required to accommodate all of the solicitors’ charges from the very beginning of the retainer.

1. In the result, having regard to the affidavit material in this case, to the relevant consents and to the principles and the figures referred to in previous cases, it seems to me that it is reasonable and proper to make an order having substantially the same effect as the order proposed by Stringer Clark. 

1. I see no need to receive an undertaking from the relevant solicitor. Any such undertaking would in any event need to be reworded to reflect my provisional views about the proper construction of s 134AB(30) and the proper form of the order, and this would cause undue delay and expense. It goes without saying that Stringer Clark will be required to refund to the plaintiff any surplus that may hereafter be revealed upon any successful challenge by the plaintiff to the solicitors’ charges. However I will give a direction today that the solicitors serve a copy of these reasons for judgment on the plaintiff as soon as practicable.

Form of order

1. I have already explained why I propose to frame the order differently from Stringer Clark’s draft.  I will make an order today but I will stay my order for 14 days to give the solicitors and/or the plaintiff an opportunity to apply for an order revoking or varying the order after reading these reasons.  The order will be as follows (omitting formal parts):

“THE COURT ORDERS THAT:

1.The plaintiff’s solicitors, Stringer Clark, be entitled:

(a)to recover costs from the plaintiff in respect of this proceeding;

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

(c)to deduct those costs from the settlement sum paid or agreed to be paid by the defendants to the plaintiff as damages,

on condition that the total amount of costs and disbursements recoverable by Stringer Clark from the plaintiff, both in respect of work done in relation to this proceeding and in respect of all other work done by Stringer Clark for the plaintiff referred to in the affidavits filed in support of Stringer Clark’s application (including work done in respect of the plaintiff’s weekly payments claim, his impairment claim under s 98C of the Act and his serious injury application) shall not, after allowance is made for the amounts paid or payable by relevant third parties (including the Victorian WorkCover Authority and the defendants) in respect of the plaintiff’s legal costs and disbursements in relation to all such work, exceed $55,000.00.

2.Nothing in this order precludes the plaintiff from exercising his rights to challenge, by way of taxation or otherwise, the fees and charges of Stringer Clark for any or all of the work referred to in paragraph 1 of this order.

3.The plaintiff’s solicitors serve on the plaintiff a copy of the Court’s reasons for judgment in this matter as soon as practicable.

4.Paragraph 1 of this order is stayed until 4.00 pm on 17 August 2011.

5.The plaintiff’s solicitors and the plaintiff have liberty to apply generally.”