Judge guts lawyers’ share of receivers’ costs claim

It was the receivers’ application but the lawyers’ fees that garnered the court’s attention and, as it turned out, its approbation.

“for the reasons set out in the Primary Reasons and given the amounts owed to the creditors of the Company and the Fund, being an initial debt of less than $6,000, the number of creditors (two) and the value of the estate (approximately $2 million), I do not consider the amount sought by the plaintiffs’ solicitors is proportionate, either individually (by item) or collectively.” Justice Jenni Hill.

Travis Kukura and Bruce Dudley obtained court approval for payment of their remuneration as liquidators and receiver managers of Ricon Super Pty Ltd in 2024.

What they didn’t obtain at the time was approval for payment out of the Ricon fund of their disbursements and of the fees of their lawyers from HWL Ebsworth.

That application had to wait on Justice Jenni Hill of the Supreme Court of West Australia who indicated at the remuneration hearing that she would exercise her discretion in respect of such claims.

As is shown in Ricon Super Pty Ltd (In Liquidation) (Receivers and Managers Appointed); Travis Kukura as joint and several liquidator of Ricon Super Pty Ltd [2024] WASC 484 Justice Hill may have meant exercising a discretion to excise, at least when it came to the amounts sought by HWL Ebsworth.

The RSM duo’s disbursement claim came to less than $32,000. The legal costs sought by HWL amounted to $212,437.84 (including counsel fees of $34,458.84). $160,000 of that related directly to disbursements and costs the application.

Having reviewed the work done her honour formed the view that the HWL Ebsworth claim disproportionate, slashing the $212,437.84 total down to a whippet-like $80,750.00.

“In assessing the reasonableness of the claim for legal costs, I have taken a broad-brush approach to the review of these costs,” she said.

“I have reviewed the time entries recorded in the spreadsheets annexed to Ms (Alison) Robertson’s affidavit, and, in relation to items 1 and 5, taken into account the relevant item in the Costs Determinations as well as the table of the Consolidated Practice Directions.

“From this, I have formed an impression as to the total amounts that have been claimed and what should be allowed.

“In this regard, it is notable that 22 separate legal practitioners have recorded time on the matter and that the costs of 15 separate legal practitioners are sought to be recovered.

“In respect of four of these practitioners, an amount of less than $1,000 has been sought to be recovered. While Ms Robertson has provided an explanation for this, the change in legal practitioners working on the matter is, in my view, likely to have led to an increase in the time recorded on the file as well as inefficiencies. I do not consider these costs should be borne by the Fund,” she said.

“It is also notable that costs in excess of $160,000 (inclusive of counsel fees) have been sought in relation to the present application.

“This amount far exceeds the maximum amount provided in item 10 of the Legal Profession (Supreme and District Courts) (Contentious Business) Determination 2024 (WA) of $23,430 (where senior counsel is briefed) or $15,840 (where counsel is briefed).

“While I accept a more useful comparison may be item 11 (motions and originating process), the maximum for this item is $67,870 (where senior counsel is briefed) or $44,400 (where junior counsel is briefed).

“…. for the reasons set out in the Primary Reasons and given the amounts owed to the creditors of the Company and the Fund, being an initial debt of less than $6,000, the number of creditors (two) and the value of the estate (approximately $2 million), I do not consider the amount sought by the plaintiffs’ solicitors is proportionate, either individually (by item) or collectively,” the judge concluded.