Charisteas & Charisteas

Case [2022] FedCFamC1A 160

Federal Circuit and Family Court of Australia

(DIVISION 1) APPELLATE JURISDICTION

Charisteas & Charisteas [2022] FedCFamC1A 160

Appeal from: Charisteas and Charisteas & Ors [2022] FCWA 88
Appeal number(s): NAA 109 of 2022
File number(s): PTW 4624 of 2006
Judgment of: ALSTERGREN CJ, MCCLELLAND DCJ & ALDRIDGE J
Date of judgment: 7 October 2022
Catchwords:

FAMILY LAW – APPEAL – PRACTICE & PROCEDURE – Appeal from orders dismissing the husband’s application to restrain the wife’s lawyers from acting for her – Whether a conflict of interest exists – Where the wife’s lawyers are also acting for the wife’s litigation funder – Where an application for costs has been made against the counsel for the wife upon a successful appeal to the High Court of Australia – Correct test to be applied is whether a fair-minded member of the public might conclude that proper administration of justice requires the restraints – Error established – Real or substantial possibility of a conflict of interest exists – Appeal allowed – Order restraining the wife from instructing the same lawyers who are acting for the litigation funder – Order restraining counsel for the wife from representing the wife in these proceedings.

FAMILY LAW – APPEAL – COSTS – Appeal from a dollar-for-dollar order against the appellant – Whether s 117 of the Family Law Act 1975 (Cth) (“the Act”) empowered the Court to make such an order – Where s 117 of the Act is a source of power to make dollar-for-dollar orders – Challenge to the exercise of discretion – Where the primary judge did not undertake the consideration of recoverability – Failure to take into account a relevant consideration – Appeal allowed – Application remitted for rehearing.

Legislation:

Family Law Act1975 (Cth) ss 79, 79A, 114, 117, 117(2A)

Supreme Court Act 1970 (NSW) s 76

Family Court Rules 2021 (WA) rr 7, 141

Legal Profession Conduct Rules 2010 (WA) r 14
Cases cited:

AB v FGH [2022] WASC 244

Atkins & Hunt (2018) 57 Fam LR 128; [2018] FamCA 14

Charisteas & Charisteas and Ors (2020) FLC 93-971; [2020] FamCAFC 162

Charisteas v Charisteas (2021) FLC 94-056; [2021] HCA 29

Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41; [1984] HCA 64

House v The King (1936) 55 CLR 499; [1936] HCA 40

Iphostrou & Iphostrou [2011] FamCA 20

John Alexander’s Clubs Pty Ltd v White City Tennis Club Ltd (2010) 241 CLR 1; [2010] HCA 19

Judd & Treasure [2018] FamCA 50

Kallinicos v Hunt (2005) 64 NSWLR 561; [2005] NSWSC 1181

Kooky Garments Ltd v Charlton (1994) 1 NZLR 587

Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar The Diocesan Bishop of Macedonian Orthodox Diocese of Australia and New Zealand (2008) 237 CLR 66; [2008] HCA 42

Mitchell v Burell [2008] NSWSC 772

Mumbin v Northern Territory of Australia (No 1) [2020] FCA 475

National Mutual Holdings Pty Ltd v Sentry Corporation (1989) 22 FCR 209

Nguyen v…

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AGLC
Charisteas & Charisteas [2022] FedCFamC1A 160
Case
[2022] FedCFamC1A 160
Decision Date

CaseChat Overview and Summary

In the case of Charisteas & Charisteas, the Federal Circuit and Family Court of Australia Appellate Division considered an appeal arising from complex family law proceedings. The appeal was brought by the husband against orders that dismissed his application to restrain the wife’s lawyers from representing her, and a dollar-for-dollar costs order that required him to contribute to the wife’s legal fees. The court was required to determine whether the primary judge erred in dismissing the husband’s application for injunctive relief against the wife’s legal representatives and whether the primary judge correctly exercised their discretion in making the dollar-for-dollar costs order.

The court found that the husband had established a ground of appeal concerning the primary judge’s decision to dismiss his application for restraints against the wife’s legal representatives. The court held that the primary judge should have concluded that a fair-minded, reasonably informed member of the public would consider that the proper administration of justice required the restraints. The court also found that the primary judge erred in making the dollar-for-dollar costs order as there was no consideration of the recoverability of costs, as required by section 117 of the Family Law Act 1975 (Cth). The appeal was allowed, and the orders were set aside, with the application for an interim costs order against the husband remitted for rehearing.

The court ordered that the husband is granted leave to appeal and that the appeal is allowed. The wife is restrained from instructing the same lawyers who are acting for the litigation funder, and Ms D, the junior counsel, is restrained from representing the wife in these proceedings. The orders concerning the interim costs application are set aside, and the matter is remitted for rehearing. The parties are required to confer in respect to costs and, if unable to reach an agreement, file written submissions on the appropriate costs order within 28 days.

Orders

Orders of the court

NAA 109 of 2022

PTW 4624 of 2006

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

DIVISION 1 APPELLATE JURISDICTION

BETWEEN:

MR CHARISTEAS

Appellant

AND:

MRS CHARISTEAS

First Respondent

MR BARTON (DECEASED) AND MS EADIE AS EXECUTORS OF THE ESTATE OF MR J CHARISTEAS

Second Respondents

XYZ PTY LTD (and others named in the Schedule)

Third Respondent

AF BUSINESS

First named Third Party

Ms D

Second named Third Party

order made by:

ALSTERGREN CJ, MCCLELLAND DCJ & ALDRIDGE J

DATE OF ORDER:

7 OCTOBER 2022

THE COURT ORDERS THAT:

1. The appellant is granted leave to appeal.

2. The appeal is allowed.

3. The first respondent shall not, in these proceedings, instruct the same lawyers who are instructed to act for AF Business.

4. Ms D shall not, in these proceedings, represent the first respondent.

5. Orders 12–16 made on 19 April 2022 are set aside.

6. The first respondent’s application for an interim costs order against the appellant is remitted for rehearing.

7. Within 14 days of the date of these orders, the parties are to confer in respect to costs and in the event an agreement is reached, the parties have liberty to approach the Western Appeals Registry with a proposed minute of consent orders.

8. In the event of the parties being unable to reach an agreement in respect to costs, within 28 days of the date of these orders, the parties are to file written submissions of no more than two (2) pages as to what costs order, if any, should be made in respect to the appeal.

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

Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).

Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.

Background

Background to the litigation

Ms D was junior counsel in the hearing that gave rise to the final orders the subject of the High Court appeal. The contact between Ms D and the trial judge led to the orders being set aside and the matter remitted for rehearing. XYZ Pty Ltd, the third respondent, has joined Ms D as a third party to the proceedings and seeks a costs order against her and the wife jointly or severally in relation to its costs of the trial in 2016. Background These proceedings have had a long and tortuous history which dates back to 2006. In total, there have been 22 judgments published in the Family Court of Western Australia, this Court and the High Court of Australia in this matter. The history of the dispute has been detailed in many of those published decisions, including those referred to at [1] of the reasons for judgment of the primary judge: Charisteas and Charisteas & Ors [2022] FCWA 88. For the purpose of this decision, is useful to note the following background facts which are primarily drawn from the decision of the High Court in Charisteas v Charisteas (2021) FLC 94-056, delivered on 6 October 2021, at [2]–[8]. In 2011, property settlement orders were made under s 79 of the Act (“the 2011 Property Orders”), which amongst other things, provided for the early vesting of an identified trust (“the Trust”). Upon its vesting and prior to any distribution, the husband’s mother, who was a general beneficiary of the Trust, was to receive a payment of $338,000 and following this, the trustee was to distribute the trust fund and income in accordance with the trust deed between the husband, the wife and their three adult children (“the Early Vesting Orders”). In April 2013, the Full Court of the Family Court of Australia (as it was then known) set aside the Early Vesting Orders on the basis that the husband’s mother had been denied procedural fairness. It was subsequently determined by a judge of the Family Court of Western Australia that the 2011 Property Orders were not final orders and that the Court retained jurisdiction to make property settlement orders under s 79 of the Act. After various procedural issues were litigated, in March 2016, the trial judge, who has since retired, listed the matter for final hearing on 3 August 2016 in respect to the question of what final property settlement orders should be made. For reasons which are not presently relevant, that trial was protracted, with the trial judge delivering judgment and making final orders under s 79 of the Act on 12 February 2018 (“the 2018 Property Orders”). That judgment was appealed for reasons which included alleged apprehended bias on the part of the trial judge. This was due to the contact between his Honour and Ms D, who was then junior counsel for the wife. Of concern was that the contact occurred during the course of the proceedings and in the period in which judgment was reserved. The appeal was dismissed by a majority judgment of the Full Court of the Family Court of Australia delivered on 10 July 2020: Charisteas & Charisteas and Ors (2020) FLC 93-971.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

As to the dollar-for-dollar order, the primary judge found that the wife could not afford to pay her lawyers and had exhausted all potential lenders of funds. On the other hand, whilst the husband’s position was that he could barely afford to make ends meet, he had significant income and was able to pay his own legal fees (at [79]). In those circumstances, her Honour was satisfied that it was appropriate to make the costs order as sought. Principles concerning an appeal from a discretionary judgment The appeal is in respect to orders arising from the exercise of discretionary power by the primary judge. In those circumstances, it is necessary for an appellant to establish a ground of appeal that falls within the principles identified by the High Court in House v The King (1936) 55 CLR 499 (“House v The King”) at 505 and Norbis v Norbis (1986) 161 CLR 513 at 539–540; that is, appellate intervention may be required where the primary judge:(a)Acts upon a wrong principle;(b)Allows extraneous or irrelevant matters to guide or affect the decision;(c)Mistakes the facts;(d)Fails to take into account some material consideration; or(e)Makes a decision that, upon the particular facts, is unreasonable or plainly unjust.Consideration Grounds 1 and 2: Application for restraints against legal representatives It is convenient to first deal with the husband’s challenge to the decision by the primary judge to dismiss his application for restraints against the legal advisors appearing for both the wife and the litigation funder. As noted by the primary judge at [10], the substance of the orders sought by the husband in that respect were that:10. …a)Firm Y and Mr P be restrained by injunction from representing the wife in these proceedings; andb)Ms D be restrained by injunction from representing the wife in these proceedings.(Footnote omitted) The husband’s argument Ground 1 asserts that the primary judge erred in dismissing the application for injunctive relief and contends that the primary judge should have concluded that:1. …(d)the interests of the Wife and AF do actually, or at least have the potential, to conflict with each other and that such conflict is irreconcilable;(e)whilst the formal position before the Court of the Wife and Ms D is closely aligned, their interests do not closely align and, as a matter of fact, conflict in circumstances where the Wife could potentially, if so advised, join in the claim for costs against Ms D;(f)Ms D has a professional and financial interest in the outcome of proceedings;(g)insofar as Ms D is concerned that she has an interest in the outcome of the proceedings and is likely to give evidence;(h)there was no, or insufficient, evidence before the Court that the Wife had given “informed consent” to the conflicts of interest or potential conflicts of interest between her interests and the interests of AF;(i)that a fair-minded reasonably informed member of the public would conclude that the proper administration of justice did require Firm Y, Mr P or Ms D be restrained from acting for the Wife;(As per the original)

Ratio Decidendi

Legal Principle Established

The appeal is in respect to orders arising from the exercise of discretionary power by the primary judge. In those circumstances, it is necessary for an appellant to establish a ground of appeal that falls within the principles identified by the High Court in House v The King (1936) 55 CLR 499 (“House v The King”) at 505 and Norbis v Norbis (1986) 161 CLR 513 at 539–540; that is, appellate intervention may be required where the primary judge:(a)Acts upon a wrong principle;(b)Allows extraneous or irrelevant matters to guide or affect the decision;(c)Mistakes the facts;(d)Fails to take into account some material consideration; or(e)Makes a decision that, upon the particular facts, is unreasonable or plainly unjust.Consideration Grounds 1 and 2: Application for restraints against legal representatives It is convenient to first deal with the husband’s challenge to the decision by the primary judge to dismiss his application for restraints against the legal advisors appearing for both the wife and the litigation funder. As noted by the primary judge at [10], the substance of the orders sought by the husband in that respect were that:10. …a)Firm Y and Mr P be restrained by injunction from representing the wife in these proceedings; andb)Ms D be restrained by injunction from representing the wife in these proceedings.(Footnote omitted) The husband’s argument Ground 1 asserts that the primary judge erred in dismissing the application for injunctive relief and contends that the primary judge should have concluded that:1. …(d)the interests of the Wife and AF do actually, or at least have the potential, to conflict with each other and that such conflict is irreconcilable;(e)whilst the formal position before the Court of the Wife and Ms D is closely aligned, their interests do not closely align and, as a matter of fact, conflict in circumstances where the Wife could potentially, if so advised, join in the claim for costs against Ms D;(f)Ms D has a professional and financial interest in the outcome of proceedings;(g)insofar as Ms D is concerned that she has an interest in the outcome of the proceedings and is likely to give evidence;(h)there was no, or insufficient, evidence before the Court that the Wife had given “informed consent” to the conflicts of interest or potential conflicts of interest between her interests and the interests of AF;(i)that a fair-minded reasonably informed member of the public would conclude that the proper administration of justice did require Firm Y, Mr P or Ms D be restrained from acting for the Wife;(As per the original) Additionally, by linking this with Ground 2, it was contended that the primary judge erred in determining that, in the event of the restraints being granted, there were “virtually no prospects of [the wife] being able to secure alternate legal representation”, in circumstances where the primary judge made a “dollar-for-dollar order” requiring the husband to contribute to payment of the wife’s legal fees.The wife’s argument