Bartram and Ogden
[2018] FCCA 3195
•6 November 2018
FEDERAL CIRCUIT COURT OF AUSTRALIA
| BARTRAM & OGDEN | [2018] FCCA 3195 |
| Catchwords: FAMILY LAW – COSTS – Application for the legal representative of one party personally to pay the costs of the other party and the Independent Children’s Lawyer – application successful. |
| Legislation: Family Law Act 1975, ss.13C, 117 Federal Circuit Court Rules 2001, r.21.07 |
| Cases cited: Limousin and Limousin (Costs) [2007] FamCA 1178 Cassidy and Murray [1995] FamCA91; [1995] FLC 92-633 |
| Applicant: | MR BARTRAM |
| Respondent: | MS OGDEN |
| File Number: | BRC 4636 of 2015 |
| Judgment of: | Judge Lapthorn |
| Hearing date: | 23 April 2018 |
| Date of Last Submission: | 30 April 2018 |
| Delivered at: | Brisbane |
| Delivered on: | 6 November 2018 |
REPRESENTATION
| Counsel for the Applicant: | Ms Barnes |
| Solicitors for the Applicant: | A K Abbott & Co |
| Solicitors for the Respondent: | Ace Solicitors |
| Counsel for the Independent Children's Lawyer: | Ms Lyons |
| Solicitors for the Independent Children's Lawyer: | Legal Aid Queensland |
ORDERS
That within 60 days of today’s date the principal of the firm A Ace Solicitors personally pay to the solicitors of the father, A K Abbott & Co Solicitors the sum of $10,658 by way of costs;
That within 60 days of today’s date the principal of the firm A Ace Solicitors personally pay to Legal Aid Queensland the sum of $6,000 by way of costs.
IT IS NOTED that publication of this judgment under the pseudonym Bartram & Ogden is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT BRISBANE |
BRC 4636 of 2015
| MR BARTRAM |
Applicant
And
| MS OGDEN |
Respondent
REASONS FOR JUDGMENT
Introduction
On 23 April 2018, the court made final orders by consent in the contested parenting dispute between the parties. The Orders were made on the first day of trial in what had been anticipated to be a two day final hearing.
Following the making of the orders Ms Barnes of Counsel, who represented the father, and Ms Lyons of Counsel, who represented the Independent Children’s Lawyer (ICL), each sought leave to make an oral application for costs against the principal of A Ace Solicitors (“the firm”), the solicitors representing the respondent mother. In support of their respective applications, a number of documents were tendered into evidence[1] and I heard submissions from both Counsel. I granted the leave sought.
[1] Exhibit F1: Letter dated 18 April 2018 from A K Abbott & Co to Ace Solicitors;
In response Ms Ardelean, a solicitor in the employ of the firm sought an adjournment of the costs application in order for her principal to respond. The adjournment application was granted and the following directions made:
a)That the solicitor for the Applicant and the Independent Children’s Lawyer file and serve written submissions within seven (7) days.
b)That the principal of A Ace Solicitors file and serve written submissions in response by no later than 4:00pm on 11 May 2018.
c)That this matter be adjourned to the Chambers of Judge Lapthorn at 4:30pm on 11 May 2018 for the review of submissions.
d)That in the event there is no contest in relation to facts, judgment in relation to costs will be reserved on 11 May 2018.
e)That in the event there are contested facts the matter will be relisted for further hearing from chambers.
At the conclusion of the hearing Counsel for the father tendered written submissions by leave. Due to their prior preparation these submissions indicated that the father sought a costs order against the mother and her lawyers however the application in relation to the mother was not pursued. The ICL filed written submissions on 30 April 2018. The principal of the firm however has not complied with the orders of 23 April 2018 in that no written submissions have been filed from the firm. I am satisfied the principal of the firm would be aware of the orders as a solicitor from the firm was present in court when the orders were made on 23 April 2018.
Cost Orders Sought
The father’s application sought the respondent’s lawyers pay costs incurred from 25 May 2017 in accordance with the scale prescribed under the Federal Circuit Court Rules 2001. The total figure asserted in Annexure 2 of his submissions was $12,856, however that figure included provision for the second day of the hearing which was not necessary. I am satisfied the more appropriate figure would be $10,658.
The ICL sought costs in the sum of $6,000, which was said to be on an indemnity basis, or in the alternative in accordance with the Scale. Counsel for the ICL submitted in her written submissions that the figure for costs according to the Scale would be $17,119.50, however I am satisfied that she has doubled up the scale provision for solicitor and counsel. The more appropriate figure would be $9,109.50 which I note is a larger sum than that which was asserted as having actually been incurred. In my view, should a costs order be made, the appropriate figure would be $6,000. In a letter dated 20 April 2018, the principal of the firm was put on notice that the ICL would be seeking costs against the firm personally for the failure to prosecute their client’s case.
Chronology
By way of background the mother is 54 years of age and the father is 33. The parties commenced a relationship in 2009 and separated on 27 February 2015. The only child of their relationship, [X], was born on 2010. The father filed his Initiating Application for parenting orders on 26 May 2015. Interim orders were made on 6 August 2015 which provided for a form of shared care of the child. However, interim consent orders were made on 23 December 2015 providing for the child to live primarily with the father. Further interim orders were made on 11 April 2016 requiring the mother’s time to be supervised. On 12 August 2016 orders were made to uplift the supervision requirement and to gradually increase the mother’s time.
During these proceedings the mother was initially represented by Matthew Love Solicitors but a Notice of Withdrawal was filed by that firm on 21 December 2015 and the mother acted for herself until the firm was engaged in May 2017.
A family report was released on 9 February 2016. The father’s solicitor wrote to the mother on 1 February 2017 offering to settle the litigation in terms of the family report recommendations. The mother was not legally represented at the time and she did not respond to that offer. The firm filed a Notice of Address for Service on 25 May 2017 indicating that they were acting for the mother.
I made directions on 20 July 2017 for trial preparation. All parties were legally represented at the time. The father’s solicitors wrote to the firm on 17 October 2017 repeating the offer to settle on the same terms as the letter dated 1 February 2017. They did not receive a response.
The mother did not comply with the trial directions and in particular did not file her evidence in chief by 19 January 2018. The matter came before a special call-over on 13 February 2018. No solicitor from the firm appeared when called over but a solicitor from the firm was linked in by telephone. That person did not have the ordinary carriage of the file. The court ordered the parties to attend mediation but this could not be arranged due to the mother’s failure to engage in organising same. The solicitors for the father again wrote to the firm on 15 February 2018 offering to settle the matter on the original terms. Yet again they did not receive a response.
Each party was to file a Case Outline document by 16 April 2018 but the mother failed to do so. The first written communication from the firm to the father’s solicitors was dated 18 April 2018, five days prior to the first day of the trial. This correspondence was not sent to the ICL. The father’s solicitors forwarded a copy to the ICL. The correspondence indicated a change in the mother’s position but did not include her proposed orders. On the same date the father’s solicitors again sent an offer to settle to the firm on the same terms as previously communicated to them. They did not receive a response.
Legal Approach
Ordinarily, each party to proceedings under the Family Law Act would bear his or her own costs.[2] However, if the court is of the opinion that there are circumstances justifying a costs order, the court may make such order as it considers just.[3] The court also has power to make an order against the legal representative of a party in certain circumstances. Rule 21.07 of the Federal Circuit Court Rules 2001 provides:
[2] S.117(1)
[3] S.117(2)
Order for costs against lawyer
(1) The Court or a Registrar may make an order for costs against a lawyer if the lawyer, or an employee or agent of the lawyer, has caused costs:
(a) to be incurred by a party or another person; or
(b) to be thrown away;
because of undue delay, negligence, improper conduct or other misconduct or default.
(2) A lawyer may be in default if a hearing may not proceed conveniently because the lawyer has unreasonably failed:
(a) to attend, or send another person to attend, the hearing; or
(b) to file, lodge or deliver a document as required; or
(c) to prepare any proper evidence or information; or
(d) to do any other act necessary for the hearing to proceed.
(3) An order for costs against a lawyer may be made on the motion of the Court or Registrar, or on application by a party to the proceeding or by another person who has incurred the costs or costs thrown away.
(4) The order may provide:
(a) that the costs, or part of the costs, as between the lawyer and party be disallowed; or
(b) that the lawyer pay the costs, or part of the costs incurred by the other person; or
(c) that the lawyer pay to the party or other person the costs, or part of the costs, that the party has been ordered to pay to the other person.
(5) Before making an order for costs, the Court or Registrar:
(a) must give the lawyer, and any other person who may be affected by the decision, a reasonable opportunity to be heard; and
(b) may order that notice of the order, or of any proceeding against the lawyer be given to a party for whom the lawyer may be acting or any other person.
In Limousin and Limousin (Costs)[4] the Full Court of the Family Court said:
[53] In determining whether to make a personal costs order against a solicitor the Court must balance certain public interests. As was said in Ridehalgh v Horsfield [1994] 3 All ER 848 at 855 – 856:
… [L]awyers should not be deterred from pursuing their client’s interests by fear of incurring a personal liability to their client’s opponents; that they should not be penalised by orders to pay costs without a fair opportunity to defend themselves; that wasted costs order should not become a back-door means of recovering costs not otherwise recoverable by a legally-aided or impoverished litigant; and that the remedy should not grow unchecked to become more damaging than the disease. The other public interest, recently and clearly affirmed by Act of Parliament, is that litigants should not be financially prejudiced by the unjustifiable conduct of litigation by their or their opponent’s lawyers. The reconciliation of these public interests is our task in these appeals. Full weight must be given to the first of these public interests, but the wasted costs jurisdiction must not be emasculated.
[4] [2007] FamCA 1178
In the earlier Full Court decision of Cassidy and Murray[5] the court said:
[5] [1995] FamCA 91; [1995] FLC 92-633
Whereas some of the cases say that there must be "a serious dereliction of duty" by the solicitor before a costs order can be made against that solicitor, in our view the matters identified by the Master of the Rolls in Ridehalgh v. Horsefield accurately reflect the law, which, in its application to this jurisdiction, can be set out as follows:
1. Pursuant to s.117(2) Family Law Act, the Court has jurisdiction to make an order for costs against a solicitor or a non-party.
2. The court should not make such an order without giving the person to be affected by the order an opportunity to be heard.
3. The Court may make an order for costs against a solicitor without the necessity to establish that the solicitor has been guilty of serious professional misconduct.
4. The solicitor has a duty to the Court to promote the interests of justice whilst at the same time attending to the needs of the solicitor's client.
5. A mistake or error of judgment would not justify an order for costs against a solicitor. However, misconduct, default or negligence, any of which are found by a Court to be of a serious nature, may be sufficient to justify an order.
6. The jurisdiction is compensatory.
Whilst the English cases talk of the conduct needing to be "serious or gross", it adds nothing to set the threshold at "serious or gross", rather than at "serious", "gross" being a more extreme term than "serious". We think that this represents an appropriate balance between the competing public interests involved, namely, the concern that lawyers should not be deterred from pursuing their clients' interests for fear of being made personally subject to orders for costs, and the principle that innocent parties should not be occasioned costs, for which they would not otherwise be liable, as a result of the inappropriate conduct of solicitors.
It was submitted by both the father and the ICL that the conduct of the lawyers for the mother in failing to file documents as ordered and to communicate with the father’s solicitors and the ICL until just five days prior to the hearing, was such that they were put to unnecessary expense in preparing for trial.
In determining whether to make a costs order, the court is required to have regard to a number of the factors set out in section 117(2A). I will assess these factors in relation to the father, the mother’s solicitor and the Legal Aid Commission given neither the father nor the ICL sought costs against the mother.
Financial circumstances
The father is employed as a (occupation omitted) and earns a modest income. His counsel submitted that she and the father’s solicitor entered into an agreement with him for his legal fees to be paid by way of instalments. As per the orders made 23 April 2018, the child, [X] lives with the father and spends every second weekend and half school holidays with the mother. The mother, according to a letter from her solicitor to the father’s solicitor, is unemployed. I can only infer from that that the father would receive minimal financial assistance from the mother and would therefore bear the majority of the costs arising from the day to day care of [X].
No evidence was adduced by the firm as to its financial position. Accordingly, in the absence of such evidence, I am satisfied and proceed on the basis that the firm would be able to meet an order for costs.
Legal Aid
Neither the mother nor father was in receipt of a grant of legal aid. The ICL is however funded by Legal Aid Queensland.
The conduct of the parties to the proceedings
On the 20th of July 2017, the parties appeared for Trial Callover at which time trial directions were issued for the filing of affidavits and case outline documents. The mother was personally present in court on this date as was her solicitor, Mr Trace of the firm. I made orders for the parties to file their affidavit evidence by 19 January 2018 and Case Outline documents by 16 April 2018.
The parties attended a second Trial Callover conducted by their Honours Judge Jarrett and Judge Spelleken on 13 February 2018. On this date the parties were ordered to attend mediation pursuant to section 13C(1)(b) of the Family Law Act1975 with the costs of same to be shared equally. The matter remained listed for final hearing on 23 April 2018 and their Honours specifically noted at order 3 of the orders dated 13 February 2018 that “Orders 3 through to 9 of the Orders dated 20 July 2017 remain in place”. Those orders provided for the filing of affidavits and case outline documents. The father at this time had filed his affidavit material in accordance with the orders of 20 July 2017. The mother had failed to do so, her affidavit at this time was three weeks overdue.
The parties never attended mediation pursuant to the orders of 13 February 2018. It was submitted on the father’s behalf that this was due to a refusal by the mother to attend. The ICL simply submitted that the mother did not comply. Attached to the submission of the father is a letter dated 14 February 2018 from the ICL to the solicitors for each party. The letter provided a list of dates the ICL was available for mediation and urged both legal representatives to liaise with the mediator. Without any evidence to contradict the position of the ICL, I am satisfied that the mediation did not occur due to the failure of the mother and her solicitors to comply with orders.
Neither the mother, of her own accord, or her solicitors filed any affidavit material or case outline document for the final hearing. Indeed no material has ever been filed by the firm on the mother’s behalf since their filing of a Notice of Address for Service on 25 May 2017. The father and ICL complained that the solicitors for the mother would not respond to their communication.
Attached to the father’s submissions is a letter dated 18 April 2018 from the firm. This letter, which was the only one received from the firm, did not suggest it was responding to any earlier correspondence. It included the following:
“On the basis that our client is currently out of work and suffered an injury it is better that the child stay with the father.
Over the past two years your client has not complied with orders, however our client wants to start with a clean slate but will commence enforcement proceedings if the father does not comply with orders in the future.
We are prepared to settle on the basis that all handovers of the child between the parties are to take place at the McDonalds Restaurant at Town A and that the mother have telephone communication, Skype or Facetime twice per week Tuesday and Friday nights between 6:30pm and 7:30pm.
It is extremely important that both parties cooperate in the child’s best interest and this the reason why our client has decided to agree to these orders.”
This letter represented a polar shift in the mother’s position. Since the filing of her Response on 5 August 2015, she had pursued a change of residence case. The trial had been listed to commence on Monday 23 April 2018. The first the father’s solicitors and the ICL heard about the mother’s change in position was the Wednesday of the week before. By this stage the father’s legal team and the ICL were ready to proceed to trial. The mother’s letter did not include any proposed minute of order. Although the letter appeared to indicate that she was abandoning her case for the child to live with her, there was no proposal in relation to what time would be spent between the mother and child nor her position in relation to parental responsibility.
When I take these matters into account, I am satisfied that the father and ICL have been put to unnecessary expense in preparing for trial.
In Martin & Harris[6] [2010] Fowler J in considering an application for costs against the legal representative for one of the parties said:
[33]It would be assumed by me, in the absence of any evidence to the contrary (and none is adduced) that the solicitor was acting on instructions either general or particular in the way in which he conducted the case. He, however, can gain no comfort from that.
[34]A solicitor has an obligation to act competently and in accordance with his obligations as an officer of the court. There was regrettably in this case a failure in achieving that standard. A solicitor must not act for a client in a way which puts him in conflict with that duty, no matter how strongly insistent the client might be, nor how much the action is on specific instructions. In those circumstances, if there is a conflict of the proportions that arose in this case, the solicitor should inform the client that if he insists on so instructing then the solicitor will have to cease to act and then do so if the client continues to so insist.
[6] [2010] FamCA 239
It is not open for the court to make an order for costs by way of punishment for inappropriate professional behaviour but to compensate a party if they have incurred unnecessary costs as a consequence of the solicitor’s behaviour. Any order for costs must be limited to that compensation.[7]
Whether the proceedings were necessitated by the failure of a party to comply with previous orders of the court.
[7] Ibid at [36]-[37]
The substantive proceedings were not brought as a result of either party failing to comply with previous court orders and in any event, is not relevant to a consideration of the application for costs against the mother’s solicitor.
Whether any party has been wholly unsuccessful
The father was wholly successful in obtaining the orders he had been seeking throughout these proceedings.
Consideration of offers made in writing
The father’s solicitors made written offers to settle these proceedings to the mother’s solicitors on 17 October 2017 and again on 15 February 2018. The solicitors for the mother never replied to these offers. The father and the ICL had no option but to prepare for trial and incur the associated expense.
Conclusions as to whether a costs order should be made
I am satisfied that it is appropriate for the firm to pay the costs of the father and the ICL. The solicitors for the mother failed to properly communicate with the father’s solicitors and the ICL and failed to file any documents in support of their client’s case in accordance with the court’s directions. This conduct fell well short of the standard required of legal representatives in family law proceedings. As a consequence the ICL and the father were put to unnecessary expense in preparing for trial.
I respectfully agree with the following comments of Fowler J in Martin & Harris:[8]
[47]Solicitors generally, ……, must be aware that although their primary duty is to their client, that duty cannot be exercised other than in the context of their obligation to the Court and their obligation to uphold the administration of justice.
[48]To the extent that they fail in those obligations they should at a minimum bear the costs of those parties who suffer loss by reason of and to the ascertainable extent of that failure.
[8] ibid
Earlier in this judgment, I noted that the appropriate figure for any cost order according to scale for the father would be $10,658. I will order accordingly. I also indicated that the appropriate figure for the ICL’s costs would be $6,000 which I will also order.
For these reasons I make the orders set out at the commencement of this judgment.
I certify that the preceding thirty-six (36) paragraphs are a true copy of the reasons for judgment of Judge Lapthorn
Date: 6 November 2018
Exhibit F2: Letter dated 14 February 2018 from Legal Aid Queensland to Ace Solicitors;
Exhibit ICL 1: Letter dated 25 January from Department of Communities, Child Safety and Disability Services
Exhibit ICL 2: Letter dated 20 April 2018 from Legal Aid Queensland to Ace Solicitors; and
Exhibit ICL 3: Emailed dated 23 April 2018 from ICL to Counsel for the ICL annexing grants office grant.
Key Legal Topics
Areas of Law
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Civil Procedure
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Equity & Trusts
Legal Concepts
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Costs
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Injunction
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Fiduciary Duty
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