By Stephen Vardanega, Partner

Brydens Lawyers Pty Limited v Uin; Gerard Malouf & Partners Pty Limited v Brydens Lawyers Pty Limited [2024] NSWSC 124

Factual Background

The Plaintiff fell in a Coles supermarket in Penrith, NSW and commenced proceedings in the District Court for personal injury damages, retaining Gerard Malouf & Partners (“GMP”). The proceedings were later transferred to the Supreme Court and listed for hearing on 22 March 2022. A settlement conference on 16 November 2021 was unsuccessful. GMP ceased to act and gave notice to Coles of its lien over their file and an equitable charge over any settlement/judgment monies, to protect their fees. The hearing was vacated, and the Plaintiff instructed Brydens. GMP prepared a tripartite Deed between GMP, Brydens and the Plaintiff relating to transfer of its file and eventual payment of their fees. They sent a tax invoice totalling $288,267. The matter was settled before the hearing for $650,000 inclusive of costs. Consent judgment was entered. From the settlement, $25,075 was repayable to Medicare and $98,073 to Centrelink. Brydens claimed costs of $203,771. The Plaintiff disputed both firms’ costs. Based on these figures, the Plaintiff would be left with less than $35,000.

Legal Issue

GMP and Brydens commenced proceedings in relation to the disbursement of the settlement monies and payment of their costs. Coles’ solicitors were named as a defendant. Coles sought directions in relation to what they should do with the settlement funds.

GMP and Brydens accepted that their costs had to be the subject of formal costs assessments.

The Plaintiff’s position was that the settlement was too low and the solicitors’ fees too high. Her submission was that 25% of the settlement funds should go to the solicitors and 75% to her, out of which Centrelink and Medicare would be paid.

Decision

The Court declined to enter the debate regarding the adequacy of the settlement, noting the Plaintiff was represented by experienced senior counsel and a consent judgment was entered. Similarly, the suggestion that costs be apportioned on a random basis was rejected.

It was held that neither Coles nor its solicitors should  continue to be burdened with holding the funds in trust. Coles’ solicitors were ordered to pay the balance of the settlement funds into Court, after discharging Coles’ obligations to Medicare and Centrelink.

The case vividly illustrates the potential pitfalls for personal injury plaintiffs when changing legal representation.