Ventouris Enterprises Pty Ltd v Dib Group Pty Ltd (No 4)

The case of Ventouris Enterprises Pty Ltd v Dib Group Pty Ltd (No 4) involves a dispute over the recoverability of legal costs under a gross sum costs agreement, where counsel for the prevailing party had entered into a costs agreement in breach of statutory provisions. The case was heard in the Supreme Court of Victoria. The primary issue before the court was whether the fees of the prevailing party's counsel were recoverable on a quantum meruit basis, despite the counsel's failure to comply with statutory requirements concerning costs agreements. The court had to determine the appropriate approach to assessing a gross sum costs order, particularly in light of the fact that indemnity costs had already been awarded in relation to 75 per cent of the plaintiff's costs.

In addressing the issue, the court considered the statutory framework governing costs agreements and the principles governing the assessment of costs in civil litigation. The court noted that while the statutory provisions were designed to protect litigants, they did not necessarily preclude the court from ordering costs on a quantum meruit basis in appropriate circumstances. The court found that the prevailing party's counsel had indeed breached the statutory requirements, but held that this did not automatically render the gross sum costs agreement unenforceable. Instead, the court assessed the reasonableness of the fees claimed, taking into account the complexity of the case, the skill and experience of the counsel, and the overall outcome achieved. The court concluded that the fees were reasonable and that the prevailing party was entitled to recover the costs claimed under the gross sum agreement, subject to a reduction for the counsel's failure to comply with the statutory requirements.

The court's decision highlights the importance of strict compliance with statutory provisions governing costs agreements, but also recognises that the court retains a degree of discretion in assessing costs where such provisions have been breached. The court's approach to assessing a gross sum costs order in this case provides useful guidance for parties and their counsel when negotiating and entering into costs agreements. The court's final orders reflected its determination that the prevailing party was entitled to recover the costs claimed under the gross sum agreement, subject to a reduction of 20 per cent to reflect the counsel's failure to comply with the statutory requirements.