Federal Court Justice Bernard Murphy reduced the costs that Sydney law firm Levitt Robinson claimed in its class action against retirement village provider Aveo.
In May last year, Levitt Robinson and Aveo agreed that the introduction of the Aveo Way contract was lawful and in accordance with industry standards. Aveo agreed to pay $11 million in full and final settlement to bring the matter to a conclusion after six years of needless legal action, said Aveo.
Justice Murphy said it was in his view "seriously derelict" for Levitt Robinson to run the case for five years before obtaining evidence from a property valuer and charging over $1 million in avoidable costs.
"To my mind it beggars belief that Levitt Robinson would have run up such huge costs, including by fighting off an attempt to have loss decided as a separate question, 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 ruled the legal firm should only receive $8.5 million in legal costs, settlement approval costs of $94,538 and administration costs of $186,000 plus GST, from the approved settlement.
Levitt Robinson had sought about $11 million.
"It is more likely than not that the case would have settled earlier had the firm (Levitt Robinson) complied with its professional obligations, and the $1.141 million in costs which the firm ran up in the immediate lead up to the trial were avoidable," said Justice Murphy.
The class action was financed by United States-based firm Galactia Litigation Partners. At a hearing in November 2022, the Federal Court was told that 6,200 people were covered by the class action, but 2,372 had pulled out of the case.
Levitt Robinson staged multiple advertising campaigns across capital city radio stations and newspapers, as recently as January last year, to drum up residents to participate.
The actions of Aveo and its CEO Tony Randello saved the retirement living sector, which is now enjoying record demand.
