Federal Court of Australia

Luke v Aveo Group Limited [2022] FCA 925

ORDERS

THE COURT ORDERS THAT:

1.    Pursuant to s 56 of the Federal Court of Australia Act 1976 (Cth) and the inherent jurisdiction of the Court, the Applicants are to provide the Respondent with security in the sum of $1,100,000 in respect of the Respondent’s costs from 1 March 2022 to 5 August 2022.

2.    The security referred to in paragraph 1 is to be provided by payment into Court of cleared funds within 28 days of this Order.

3.    If the security referred to in paragraph 1 is not provided in accordance with paragraph 2, the proceeding is stayed without further order unless and until the security is provided.

THE COURT NOTES THAT:

4.    The Respondent reserves its right to request from the Applicants further security for its costs of the further stages of the proceeding.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

ANDERSON J:

APPLICATION

1    The Respondent (Aveo) applies for a seventh tranche of security for costs in the sum of $1,494,410, by way of cash payment into Court, for the period of 1 March 2022 to 5 August 2022 (Stage 7). Order 10 of the orders made by Justice Murphy on 29 April 2022 provided that any application for security by Aveo be constituted by a short submission of no more than three pages (without any affidavit material in support).

2    By written submissions dated 27 May 2022, Aveo set out the basis for the quantification of the sum it seeks for security for costs for Stage 7.

3    The Applicants by their written submissions dated 3 June 2022 accept that security should be provided for Stage 7, but contend that the amount of security for costs should be fixed in the sum of $1,100,000.

4    The breakdown of the costs claimed by Aveo are as follows:

5    Aveo has applied a 35% reduction to Arnold Bloch Leibler’s (ABL) professional fees and a 15% reduction to counsel fees in arriving at the amount which Aveo seeks for security in the sum of $1,494,410.

6    The Applicants dispute the quantum of three items: further discovery, lay evidence and the interlocutory application hearing on 2 June 2022.

Item 3 – further discovery

7    Aveo’s claim for discovery costs is on the basis that the vast majority of the work will be undertaken by junior counsel rather than employees of ABL. The charge out rate for junior counsel is stated at $380 per hour inclusive of GST. The charge out rate for a lawyer at ABL is $350 per hour, $280 per hour for a graduate and $160 per hour for a paralegal (all inclusive of GST). While some supervision by a senior lawyer may be appropriate, the vast majority of the discovery may be undertaken by more junior staff at ABL.

8    In addition, Aveo estimates that the further discovery will comprise 270 days of work. That estimate does not appear to be realistic in circumstances where the discovery orders contemplated by Annexure A to the orders of Justice Murphy made 21 April 2022 comprise just 20 categories of discovery, of which 13 seek only a single document, or a limited number of documents, being categories 5-16 and 19. Category 20 expressly does not require searches to be undertaken. As to the balance of categories of discovery (1-4, 17 and 18) it appears from the affidavit of John Mitchell dated 24 February 2021, that documents have already been collated in category 1. Categories 3, 4, 17 and 18 are targeted as:

(a)    Category 4 pertains to documents related to an issue in a particular village produced to Aveo’s board or senior management on particular issues (categories 3 and 18) or its policies on a limited issue (category 17). This will require some searching but the searches are unlikely to unearth a significant number of documents.

(b)    Category 2 replicates a previous discovery order made by Justice Murphy on 14 March 2018.

9    Making an allowance for the above matters, I will make a substantial discount to the amount sought by Aveo for further discovery.

Item 4 – lay evidence

10    Aveo claims security in the sum of $400,000 for preparing lay evidence for Stage 7. Aveo seeks approximately 100 days’ work in preparing that evidence before even seeing the evidence put on by the Applicants. In the circumstances, a substantial discount is appropriate as Aveo has indicated that it will be claiming a further sum for lay evidence in its Stage 8 security claim.

11    I therefore propose to make a substantial reduction to the amount of security for lay evidence.

Item 6 – interlocutory hearing application

12    The Respondent seeks $78,800 for the interlocutory hearing listed on 2 June 2022. The interlocutory hearing involved three issues: discovery, sample group member points of claim and the opt out notice. The first two issues were resolved by the parties and for the third issue, the opt out notice, security is provided for in Item 1 of Aveo’s table of security for costs. In addition, the hearing took no more than two hours. In the circumstances, a substantial discount is required to that claimed by Aveo.

13    I therefore propose to make a substantial reduction to the amount of security for the interlocutory application hearing.

disposition

14    I am of the opinion that a substantial discount to the amount of security claimed for further discovery, lay evidence and the interlocutory hearing application is warranted for the reasons which I have identified above. In the circumstances, I am of the view that the amount of security proffered by the Applicants for Stage 7 in the sum of $1,100,000 is appropriate. I will order the Applicants pay $1,100,000 into Court as security for Stage 7.

Associate:

Dated:    12 August 2022

SCHEDULE OF PARTIES