Login
Firm that claimed entire $11m class action settlement to appeal order to slash amount
The law firm slammed for racking up avoidable costs in a class action and claiming the entirety of an $11 million settlement was granted leave to appeal a decision to reduce that amount by over $1 million.
Naomi Neilson
Stewart Levitt. Credit: Levitt Robinson
Last December, Justice Bernard Murphy of the Federal Court criticised Levitt Robinson for its “serious lack of expedition and efficiency” during a class action against the operator of retirement communities, which prolonged the matter by months.
Justice Murphy slashed that figure by $1,334,864, based on an expert report from an experienced costs consultant and took a further $1,141,078 away for the legal costs found to be avoidable.
Appearing in the Federal Court this month, Levitt Robinson requested leave to appeal the avoidable costs order on an undertaking it would not seek to recover costs of the application or any appeal and would front the costs for a contradictor.
The proceedings against Aveo Group were filed in September 2017 on behalf of 2,700 residents who alleged changes to property contracts meant they received less from the sale of their units.
Levitt Robinson also alleged Aveo failed to disclose this.
The settlement offer was made when court documents filed in the days before the March and April 2023 trial found the applicant’s ability to establish loss was “seriously damaged”.
In his reasons, Justice Murphy found Levitt Robinson’s failure to obtain an expert report from a property valuer within the five years it conducted the class action was “seriously derelict”.
“It beggared belief that Levitt Robinson would have run up such huge costs when it did not have a proper basis for understanding whether it could establish loss, or the approximate quantum of any loss that it could establish,” Justice Murphy said.
He went on to say Levitt Robinson did not act with expedition “and showed serious inefficiency” between November 2021 and July 2022, when pretrial timetables required the filing of expert evidence.
Justice Murphy said the contents of those reports were “pivotal” to the settlement and “it is likely both the applicants and Aveo would have filed their respective expert evidence … prior to the mediation in December 2022” if Levitt Robinson acted efficiently.
Had the firm filed the reports earlier, Justice Murphy said the matter would have been settled during the December 2022 mediation.
In its appeal submissions, Levitt Robinson said Justice Murphy erred in finding that Levitt Robinson did not act expeditiously between November 2021 and July 2022 and finding that the case would have settled at mediation in December 2022 if it had done so.
Stewart Levitt, the firm’s senior partner, argued he should have been joined as a party to the proceedings, which he submitted would have meant the firm could have the appeal “as a right”.
The firm also submitted the group members’ interests would not be prejudiced by an appeal because even if they succeed, the avoidable costs figure of $1,141,078 should never have been deduced “so as to be available in the settlement distribution”.
Justice Yaseen Shariff found force in both submissions.
He was also satisfied that “at an impressionistic level” there was an arguable case to be made on both grounds of appeal.
“It would not be appropriate for me to express any view as to the merits of these arguments, other than to state that I am satisfied that they are, at reasonably impressionistic level, sufficiently arguable,” Justice Shariff said.
Justice Shariff said he would grant leave to appeal, but with a “degree of hesitation” given the length of time that has passed since the matter was first filed in the court back in September 2017.
The undertaking provided by the firm also went a long way in addressing Justice Shariff’s concerns “about the ongoing costs of the continuation of the proceedings”.
The matter was allocated to the national judicial registrar to determine if it is possible to be listed during the Full Court’s next appellate sitting period.
Lawyers Weekly will host its inaugural Partner Summit on Thursday, 20 June 2024, at The Star, Sydney, at which speakers will address the range of opportunities and challenges for partners and partners-equivalent, provide tips on how they can better approach their practice and team management, and propel their businesses towards success. Click here to book your tickets – don’t miss out! For more information, including agenda and speakers, click here.
Naomi Neilson
Naomi Neilson is a senior journalist with a focus on court reporting for Lawyers Weekly.
You can email Naomi at:
