Banaszak and the Estate of Mr S Mandia and Anor

[2015] FamCA 145

FAMILY COURT OF AUSTRALIA

BANASZAK & THE ESTATE OF MR S MANDIA AND ANOR [2015] FamCA 145

FAMILY LAW – PROCESS AND PROCEDURE – Adjournment – Application to view solicitor’s files

Administration and Probate Act 1958 (Vic)
Family Law Act 1975 (Cth)

Prantage and Prantage (2013) 49 Fam LR 197

APPLICANT: Ms Banaszak

RESPONDENT: Estate Of Mr S Mandia

INTERVENOR: Mr H Mandia

FILE NUMBER: MLC 6072 of 2012

DATE DELIVERED: 27 February 2015

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Cronin J

HEARING DATE: 27 February 2015

REPRESENTATION

THE APPLICANT: In person

COUNSEL FOR THE RESPONDENT: Mr A. Strum

SOLICITOR FOR THE RESPONDENT: Marshalls & Dent

COUNSEL FOR THE INTERVENER: Ms Williams

SOLICITOR FOR THE INTERVENER: Kenna Teasdale Lawyers

Orders

1. That all outstanding applications are adjourned to 10.00am on 12 March 2015 for such interlocutory issues as the parties may require.

2. That the documents produced by the solicitors (B Solicitors) on 16 December 2014, are also to be viewed by the solicitors for the 2^nd respondent.

3. That the solicitors B Solicitors produce their entire file relating to these proceedings to the subpoena clerk of the Family Court of Australia forthwith and such file lie there for further determination on 12 March 2015.

4. That a copy of this order be provided to B Solicitors for the purposes of the foregoing order.

5. That B Solicitors be entitled to attend on 12 March 2015 for the purposes of being heard in respect of any issues arising out of the proposed application by the respondents for the release to them for inspection of the file on the grounds that the applicant has waived privilege.

6. That the reasons this day be transcribed.

7. That the application to review the Registrar’s decision to release the C Solicitors file filed 28 October 2014 is dismissed and the documents thus produced are released for inspection and copying.

8. That the applicant pay the costs of the 1^st respondent in the total sum of $5400 and of the 2^nd respondent in the sum of $4300 and subject to any issues associated with the grant of probate and the ability of the executors to administer the deceased’s estate, such costs be paid by the estate from the entitlement of the applicant under the will of the deceased.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Banaszak & the Estate of Mr S Mandia and Anor has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 6072 of 2012

Ms Banaszak

Applicant

And

Estate Of Mr S Mandia

Respondent

And

Mr H Mandia

Intervener

REASONS FOR JUDGMENT

1. Today was the return date of a discrete application in this court, in which the determination was to have been the jurisdiction under Part VIIIB of the Family Law Act 1975 (Cth) (“the Act”). This application was initiated in this court in 2012, and three years later, it is not much further advanced. I have had the matter before me for the best part of nine months, during which time I have had to determine a number of issues, the most recent of which related to the question of the waiver of legal professional privilege.

2. The one issue that permeated this case throughout 2014, and which I expressed concern about, was the parties’ cost, particularly by the applicant.  She came into the proceedings, let alone the relationship, owning an unencumbered unit, which now is significantly encumbered by virtue of having apparently spent at least $400,000 in legal costs to one firm of solicitors, in circumstances where that firm took over from at least one if not two other firms and significant legal costs had been incurred. 

3. The matter is complicated by the fact that the respondent to the proceedings died in 2013.  And, in addition to that, there is a third party who is the son of the deceased, who has consistently claimed that a particular property belongs to him. 

4. Today would have been the determination of the jurisdictional issue because, as a result of orders that I made for updated applications, that document was filed last September.  It was prepared by the solicitors who are no longer acting for the applicant.  That document caused no doubt a flurry of activity on the part of the respondents, but it caused me considerable concern, having regard to the amount of work that was being done by the lawyers at that time.  It raised a serious question to be tried, as to whether or not there was jurisdiction for the court.  The solicitors for the applicant responded by indicating that it was an error.  That gave rise to the order for the release of the solicitor’s file because of waiver of privilege.  I expressed disquiet then as to how such an error could have occurred, and how the most fundamental piece of evidence that would have probably shed some light on that error was missing.  It seems that it remains missing.

5. Having made the order for the release of the documents, the jurisdiction was to be determined today.  The solicitors who had been acting for the applicant filed a Notice of Ceasing to Act on 9 February 2015, and since that time, the applicant has been without legal representation. 

6. She has insisted today that I read a relatively short three-paged submission, to which there is attached a variety of documents.  A couple of matters need to be made clear.  The first is that the bulk of the submission is a complaint about not being told by her lawyers what they were doing, in circumstances where the costs were very, very significant.  She makes the complaint that she asked for numerous documents, and one of the attachments to the submission is a response by an employee solicitor who indicates that it was a very big job to get all of the documents off the firm’s computer system.  So, undeterred, the applicant provided them with the necessary equipment for that to occur.  Even today, the applicant still maintains that she has not got all of the documents. 

7. She has made in court today, an allegation against the solicitors, that they not only kept her in the dark but they forced her to sign documents.  One of the documents that was in evidence on the last occasion was an affidavit which the applicant swore.  I am not prepared to conclude that when she says she was forced to sign documents, she was not only forced to sign an affidavit but that she swore it too in front of a lawyer. 

8. The second issue that comes out of the submission is that the applicant says that she is currently seeking advice “given the current situation”.  Just exactly what that means is not clear, but I am told that, at best, the applicant has been to the Legal Services Commission and intends to seek legal aid.  It is not for me to decide who gets legal aid in this state, but I am obviously well-aware of the policy of Victoria Legal Aid, and that is to give priority to children’s matters and matters involving criminal activity. 

9. Ms Banaszak has some equity in a property but just how much is unclear.  Notwithstanding that, I am also aware that Mr Mandia died leaving a will, in which she was left a sizeable sum of money.  On that basis, notwithstanding she may not have cash, I could hardly find that she is impecunious.  

10. She has now applied for an adjournment.  She asked me to adjourn the matter for two months.  That is not practicable nor is it appropriate.  This case has wandered through the court system inappropriately, in my view, and needs a resolution.  It particularly needs a resolution because the very issue of jurisdiction is in issue.  On that basis, that question needs to be heard urgently. 

11. The issue of jurisdiction is not simple, and I appreciate that litigant in person would have some difficulty arguing it.  But as Kirby J once said legal representation in Australia is a privilege, not a right.  Absent legal representation, the court will do the best it can and hear the applicant in person.  It is not the function of the court to give legal advice or to run cases for people.  The object of the court is to provide a level playing field as best it can in the circumstances. 

12. This case has had numerous lawyers involved in it.  The last firm of solicitors seems to show that at least five lawyers were involved in this file.  Prior to that, two other well-known Melbourne law firms who deal with family law matters were involved.  The last firm of solicitors had briefed two members of counsel, one of whom is of Her Majesty’s counsel.  Thus, there has been a lot of work done on this file, if I presume that the sort of figures bandied around this morning are a clear indication of the amount of costs incurred. 

13. Needless to say, the case needs to have an expeditious resolution, so that the question of jurisdiction can be sorted out.  It is now somewhat more complicated by virtue of the fact that at the end of January 2015 the applicant, through her then solicitors, brought proceedings in the Supreme Court, which are unashamedly related to Part IV of the Administration and Probate Act 1958 (Vic).

14. In essence, what that application is about is the applicant seeking to be provided for, in circumstances where the deceased’s will did not adequately provide for her.  It has been put to me today that that is one and the same form of relief under a different guise, and I am not entirely convinced that is right, because this court would have to determine what interests in the assets of either the applicant or the respondent estate each had before any determination could be made under Part IV of the Administration and Probate Act 1958 (Vic).

15. Accordingly, I propose, over opposition from both of the respondents, to adjourn the proceedings, but only for a short period of time, and it means that a lawyer, if properly briefed, will have a very quick turnaround time to get on top of these matters.  

16. I observe that at this stage there is not formal arrangement between the court and the Victorian Bar, in relation to what is described as a pro bono scheme, but for Ms Banaszak’s benefit, if she is unable to get a lawyer to act for her, she can approach both the Law Institute and the Victorian Bar to ask whether they would be prepared to provide pro bono assistance. 

17. At this stage, having regard to the nature of the assets and what has gone on in the past, I certainly would not be prepared to put the court in a position where it requests a pro bono assistance.  I warn Ms Banaszak, however, that if she does not make the necessary attempts quickly to get legal representation, then she will find herself in a position on 12 March where she has to deal with the case herself. 

18. Making an application for legal aid, for example, is not an application associated with the proceedings themselves.  It is an application for funding.  Legal aid normally takes time to consider funding position because it requires people to provide necessary documents, not only as to their financial position but also to the merits of their case.  Thus, she needs to move expeditiously. 

19. I propose, therefore, to adjourn the matter to 12 March.  That gives rise to a number of other matters.  The first is that it is asserted by virtue of the submission – and I have to agree there is a very significant waiver of privilege by the applicant in relation to her more recent, let alone comprehensive, dealings with the firm of solicitors who are no longer on the record.  Normally, one would not have a problem about the issue of waiver, but I have some disquiet here because of the fact that the applicant is not legally represented today, nor when the submission was prepared – which was on 24 February – did she have the advice that she might otherwise have benefited from.  On that basis, I propose to order that the file of the firm of solicitors, B Solicitors, be produced to the subpoena clerk of the court, and that will be the first issue that I will deal with on 12 March. 

20. The next issue relates to the question of a similar dispute that arose in early 2014 that related to a subpoena addressed to C Solicitors, who had previously acted for the applicant.  For reasons that I had a significant disquiet about last year, when the subpoena was returnable, no one attended on behalf of the applicant.  I have no reason to think that they were not aware of the proceedings, because it is the very essence of the requirements of this court that a person who may be affected by a subpoena, let alone the other party to the proceedings, is given a copy of the subpoena, including the relevant return date.  That makes it all the more curious as to why no one attended on the return date.

21. Absent any attendance, the registrar, quite appropriately, ordered the release of the file.  Then followed a flurry of activity from the solicitors complaining about the fact that the documents were in the hands of the other parties, and to their credit – and I give significant weight and credit to this – they agreed not to look at them until the release of the documents issue was determined by the court.  That apparently activated a review of the registrar’s decision, but months went by, including attendances by senior counsel where the issue was never prosecuted. 

22. The current submission today, written by the applicant, makes it clear she has no objections to anyone finding out what happened at C Solicitors because, in her words, it was really about an application to VCAT.  VCAT issues were about the power of attorney that she held on behalf of the deceased.  What is unusual about that is that she says it is not relevant but, on the other hand, I think it clearly indicates that something was going on that may have affected the very jurisdiction of this Court.

23. In my view, a relevant issue and, on that basis, as the review has never been prosecuted, in my view, the registrar’s order should stand and I formally order that to the extent necessary, the documents can be released and inspected. 

24. Finally, that leaves the issue of costs. The applicant opposes any order for costs being made. In this jurisdiction, s 117 of the Act applies. It says that in proceedings under the Act each party shall bear their own costs unless there are circumstances that justify a departure from that principle. Section 117(2A) requires the court, when contemplating whether to make an order for costs or not, to consider a number of things.

25. The first of those is the question of the financial circumstances of the parties.  In reality, the only person whose interest should be considered there is the applicant herself.  As I said, she is entitled to at least $100,000 although she seems to be challenging in the Supreme Court whether or not that is an adequate amount but, on any view, I could find she is not impecunious.

26. The second matter that the court is required to contemplate is the conduct of the parties.  As the Full Court of this Court said in Prantage and Prantage (2013) 49 Fam LR 197, the conduct that is being contemplated is that of the litigant, not in relation to such things as parenting behaviour in a parenting dispute. In terms of the applicant’s conduct as a litigant, she obviously ended her association with her lawyers in early February and, on any view, knew that there was a hearing today and has done nothing about preparing for that hearing other than trying to get documents from her lawyers.

27. Indeed, the correspondence that she attached to her submission showed that they were prepared to cooperate in giving her what she wanted.  I so consider her conduct as a litigant has not been diligent.  Indeed, quite the opposite.  This case, as she would well know, has been on foot for a long time and it is time to bring it to an end. 

28. There are no legal aid considerations here because no grant has been made.

29. The court is entitled to therefore make an order of costs in this particular case. The rules of the Family Court, as prescribed in 2004, set out a process under which costs are determined.  As the Full Court also said in Prantage, it is a very big and unusual step to depart from the scale determined by the court as appropriate in proceedings in this court.  It is sometimes called “indemnity costs” but “indemnity” means different things to different people.

30. To depart from the principle that each party pays their own costs is one thing but it is a bigger step to depart from the amount determined by the rules.  It is confined to very unusual situations.  This seems to me to be one of those cases where the applicant is not only not prepared to proceed with her case today in circumstances where she has had months to get that in order but she has made very significant allegations against her lawyers, the truth of which I am not in a position to determine.  But to the extent that they have done something wrong, she can take that up in another place and include in any claims she may want to make the question of any costs that she incurs as a result of their conduct. 

31. It seems to me that costs should not be seen here as a punishment but rather as compensation for the fact that the respondents have had to participate unnecessarily and in a prolonged way.

32. Mr Strum and Ms Williams have both sought not only their daily fees which exceed those of the scale but they’ve also sought preparation time.  Having regard to the nature of the dispute here which is quite unusual, I think it justifies counsel setting aside the time to actually make the necessary research to determine the case.  That preparation will not be lost and, therefore, I propose only to grant the daily fee at this stage rather than the preparation time.  On that basis, it seems to me that it is appropriate that I order that the two members of counsel have their daily fee for today.

33. In addition to that the solicitor for the deceased estate has at least incurred two and a half hours of today’s time at the rate of $440 per hour which also exceeds the scale, but for the same reasons I have just articulated I see no reason why the estate should be out of pocket in circumstances where the adjournment today is entirely the fault of the applicant and entirely a waste of the court’s time.

34. On that basis, I propose to make an order for $4400 for the fees of counsel for the first respondent, $3500 for the second respondent and $1000 for the solicitors for the first respondent.  Counsel indicated that those could be offset against the applicant’s entitlement under the will.  It seems to me that she is entitled to that sum under the will, which is $500,000 in circumstances where, even if she has got a Part IV application before the Supreme Court, it is hardly likely that she is going to be going down rather than up.

35. On that basis, I see no reason why the estate should not be garnisheed in that sense to be able to pay forthwith -if it is practicable to do so because of the probate situation - to pay those costs, and I will make an order accordingly.  I will have these reasons transcribed.

I certify that the preceding thirty-five (35) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 27 February 2015.

Associate: 

Date:  11 March 2015