Barnes& Barnes & Anor

[2017] FamCA 554

FAMILY COURT OF AUSTRALIA

BARNES& BARNES AND ANOR [2017] FamCA 554

FAMILY LAW – COSTS - where 2^nd respondent was partially successful. Justification for an order found.

Family Law Act 1975 (Cth)

APPLICANT: Ms Barnes

RESPONDENT: Mr Barnes

INTERVENOR: Mr Harris

FILE NUMBER: MLC 4997 of 2016

DATE DELIVERED: 2 August 2017

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Cronin J

HEARING DATE: By way of written submissions

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Nedovic Lawyers

SOLICITOR FOR THE 2^ND RESPONDENT: Hall & Wilcox

Orders

1. That the wife pay 50 per cent of the costs of the third party Mr Harris by agreement and in default of agreement, as assessed.

Note: The form of the order is subject to the entry of the order in the Court’s records.

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

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 4997  of 2016

Ms Barnes

Applicant

And

Mr Barnes

Respondent

And

Mr Harris 

2^nd Respondent

REASONS FOR COSTS JUDGMENT

1. Mr Harris is the second respondent to proceedings between Ms Barnes (the wife) and Mr Barnes (the husband). Mr Harris, as a valuer, was appointed as a single expert witness to specifically value the other parties’ former home. He did so and the husband then retained it in a settlement with the wife.

2. The husband subsequently sold the home for a sum much higher than the figure determined by Mr Harris. That brought the current proceedings to the fore. The wife sought as against the husband to re-open the settlement and she joined Mr Harris alleging professional negligence in respect of his valuation.

3. The dispute that gave rise to the present issue concerns discovery. Mr Harris sought documents and the wife objected on the grounds claiming they were protected by legal professional privilege. I largely upheld that objection.

4. There was a second issue. When the substantive proceedings began, the wife said that she was going to bring an action against Mr Harris based on an allegation of “collusion” with the husband. That word disappeared from the wife’s language shortly thereafter and she set out her claim based on the grounds of negligence.

5. A registrar ordered the wife to pay the husband’s costs because of the abandonment of the collusion claim. The wife reviewed the registrar’s order and I upheld the order.

6. The present reasons arise out of my orders permitting any party leave to bring a costs application by written submission. Mr Harris and the wife filed written submissions and the husband did not.

7. In a rather long submission canvassing a number of matters, the solicitors for Mr Harris said that they also wanted the orders amended under chapter 17 of the Family Law Rules to reflect the intention of the Court having regard to the reasons given.

8. I do not consider that course was appropriate as the order I made only related to costs’ submissions. If there is an argument for an alteration of the orders, it should be by way of application in the usual way. I have therefore ignored that part of the submission.

9. None of the parties disputed the power of the Court to make costs orders notwithstanding Mr Harris is not a party to the marriage.

10. Mr Harris’s submission was that he was successful both in respect of the registrar costs’ order and also to certain of the categories of documents he pursued in discovery from the wife.

11. The wife’s submission was that there was no basis for a costs order (presumably by the registrar) “because no discrete Court appearance in relation to that specific issue ever occurred”.

12. In respect of the discovery dispute, the wife’s position was that each party was “partially successful”, the assumption being that the partial success meant there was no justification for an order for costs.

13. I reject the submission that as there was no court appearance, there could be no costs order. Section 117 of the Family Law Act provides that in “proceedings under this Act” each party shall bear their own costs unless one of the exceptions applies. The term “proceedings” is defined in s 4(1) of the Act as “…a proceeding in a court, whether between parties or not, and includes cross-proceedings or an incidental proceeding in the course of or in connexion with a proceeding”. The connection with the proceeding includes incidental matters such as correspondence and the other matters involving the parties; a connection must be seen. It has not been previously suggested that the statements about collusion were not made. At the time they were, there were proceedings on foot that involved the parties in anticipating the joinder of Mr Harris. There is no dispute that the wife made the allegation and both the husband and Mr Harris had to deal with it. I find Mr Harris and the husband were involved in legal proceedings and as a result of the wife’s allegations, incurred legal expenses.

14. The power of the Court to make any order for costs lies in s 117 but it also requires the Court to find there is a justification to depart from a principle that each party should pay their own costs. Mr Harris had to be involved in the proceeding before me for two reasons although that is not entirely clear from his practitioner’s submission. The first is that he had the benefit of an order for costs which was reviewed. He had to attend if that order was to be defended. I found his defence justifiable. The second matter is that he maintained that he did not know what it was that formed the basis of the wife’s thinking processes resulting in her consenting to orders that finalised matters with the husband. The wife said in her claim against Mr Harris that she had taken the valuation into account but he wanted to know more, including what she discussed with her lawyers at the mediation at which the matter resolved.

15. I am satisfied that the justifying circumstance here to depart from the principle in s 117 of the Act is that Mr Harris had little choice but to become involved in the discovery process because he considered that he was entitled to know what documents would indicate the basis of the wife’s assertion against him. He was unsuccessful in some matters but not others in proceedings in a court where the duty of disclosure is absolute and wide. I ruled that in respect of some matters, he was entitled to know the basis of the claim against him as can be seen from the orders made. That means that he did not need to be involved in that argument as at least those documents should have been provided.

16. There is a justification for departure from the principle in s 117(1) of the Act.

17. By reference to s 117(2A), there can be no argument (nor was any raised) about the financial circumstances of the parties. I have already observed that, to an extent, part of the proceedings was unnecessary. The wife disputed the registrar’s costs order and took her chance thereby incurring further costs for at least Mr Harris.

18. The Court is required to consider the public purse and there are no legal aid entitlements here.

19. An important issue is whether or not the applicant for costs has been wholly unsuccessful. Whilst he clearly has not been, neither has he been wholly successful. But, the court is entitled to take into account any other relevant matter and in my view, when parties join a third party removed from their relationship and bring a cause of action such as here, costs must be considered as a possibility.

20. I find there is a sufficient basis for the Court to make any orders for costs in favour of Mr Harris but having regard to his failed application on the legal professional privilege point which I consider was a major time consumption in the hearing before me, I propose only to allow half of his costs claimed on the relevant scale under the rules.

21. Specific details of the costs were not provided and accordingly, I shall order that in default of agreement, the costs be assessed taking into account the matters set out in paragraph [20].

I certify that the preceding Twenty One (21) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 2 August 2017.

Associate: 

Date:  2 August 2017