Weingart v Leanne Cain & Associates (No 2) - [2018] VSC 245

IN THE SUPREME COURT OF VICTORIA

AT MELBOURNE
COSTS COURT

S CI 2017 00431

DAN WEINGART	Applicant
v
LEANNE CAIN & ASSOCIATES	Respondent

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JUDGE:	Wood AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	22 February 2018
DATE OF JUDGMENT:	18 May 2018
CASE MAY BE CITED AS:	Weingart v Leanne Cain & Associates (No 2)
MEDIUM NEUTRAL CITATION:	[2018] VSC 245

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COSTS - Entitlement to interest on refund of legal costs paid and reduced on review under Legal Profession Act 2004 – Consideration of sections 60 & 101 Supreme Court Act 1986 and rule 63.11 Supreme Court (General Civil Procedure) Rules 2015

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APPEARANCES:	Counsel	Solicitors
For the Applicant	Ms S Cherry	Debra Paver
For the Respondent	Mr M La Pirow	Leanne Cain & Associates

HIS HONOUR:

These proceedings arise from a review of the respondent’s legal costs conducted pursuant to s 3.4.38 of the Legal Profession Act 2004 (‘Act’). On 22 February 2018 an interim decision and reasons were published in this matter.[1] A number of issues were addressed in those reasons including: the scope of the costs agreement; the discount to be applied pursuant to s 3.4.17(4) of the Act for the respondent’s non-compliance with disclosure obligations under the Act; and a prima facie finding that the respondent is liable for the costs of this proceeding.
[1]Weingart v Leanne Cain & Associates (2018) VSC 242.

Upon publication of the interim decision and reasons, the parties were unable to agree on the final figure to be refunded by the respondent to the applicant, and the applicant requested an opportunity to advance further argument in relation to the question of costs of the proceeding based on offers made. There is a formal Offer of Compromise and two Calderbank offers by the applicant to be considered. Orders were made on 22 February 2018 for remaining issues, including the question of costs, to be determined on written submissions and/or affidavits and a timetable was set for the provision of same.

The applicant filed an affidavit of Debra Michelle Paver sworn 5 March 2018 and a written submission dated 5 March 2018. The respondent filed a written submission on 29 March 2018.

In relation to the sum to be refunded by the respondent, the analysis of the applicant was that the respondent sought overall costs of $139,471.90 for acting for the applicant and the reduced sum of $114,552.14 was ultimately allowed. This was calculated as a 17.87% reduction. Taking into account sums paid, at a minimum, a refund of $21,550.74 was said to be owing. A sum for interest was also contended for and this issue is addressed below commencing from paragraph 12.

Whether costs have or have not been reduced by 15% or more can be significant for the question of the costs of the proceeding (s 3.4.45(2)(a) of the Act). The percentage reduction is academic in this case as the determination has already been made that prima facie the respondent is liable for costs for reasons other than the…

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: [2018] VSC 245
Decision Date: 18 May 2018

CaseChat Overview and Summary

In the matter of Weingart v Leanne Cain & Associates (No 2), the court was tasked with determining whether the plaintiff was entitled to interest on a refund of legal costs paid and subsequently reduced on review. The dispute arose from an earlier case in which the plaintiff had been awarded costs after a successful claim against the defendants. Following a review of those costs, the amount was reduced, leading to a refund of a portion of the original costs. The plaintiff sought interest on the refunded amount, arguing that the defendants had effectively used the refunded money as if it were a loan.

The central legal issue before the court was whether the plaintiff was entitled to interest on the refund of costs under the applicable legislation and rules. The court had to consider sections 60 and 101 of the Supreme Court Act 1986, as well as rule 63.11 of the Supreme Court (General Civil Procedure) Rules 2015. The court needed to determine if the provisions for costs in the Supreme Court Act and the rules implicitly included an entitlement to interest on refunds of costs. Additionally, the court had to weigh the defendants' argument that interest should not be awarded as it would amount to a penalty and was not consistent with the purpose of the legislation.

The court found that the plaintiff was not entitled to interest on the refund of costs. It concluded that the relevant sections of the Supreme Court Act and the rules did not provide for interest on costs refunds. The court held that the defendants' use of the refunded money did not constitute a loan for which interest would be payable. Furthermore, the court noted that the primary purpose of the legislation was to regulate costs and not to provide for interest on refunds. The court also considered the equitable principle that interest should not be awarded if it would amount to a penalty or if it was not intended by the parties.

No further orders were made by the court beyond the determination that the plaintiff was not entitled to interest on the refund of costs. The decision was based on the court's interpretation of the relevant statutory provisions and rules, as well as the equitable considerations involved in the matter. The court's ruling clarified the scope of entitlement to interest on costs refunds under the applicable legislation and rules, providing guidance for future cases involving similar issues.

Orders