Cuperus and Marshall and Anor (No.2)
[2011] FMCAfam 338
•18 April 2011
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| CUPERUS & MARSHALL and ANOR (No.2) | [2011] FMCAfam 338 |
| FAMILY LAW – Property – substantial application dismissed – costs against solicitor. |
| Family Law Act 1975, ss.44(4), 117, 117(A) Federal Magistrates Court Rules 2001, rr.4.05, 21.07 |
| Z (A Solicitor) & Limousin [2010] FamCAFC 59 Stead v State Government Insurance Commission (1986) 161 CLR 141 Re F: Litigants in person guidelines (2001) 27 Fam LR 517; FLC 93-072 |
| Applicant: | MS CUPERUS |
| First Respondent: | MR MARSHALL |
| Second Respondent: | [COMPANY X] |
| File Number: | BRC 4947 of 2008 |
| Judgment of: | Coates FM |
| Hearing date: | 11 April 2011 |
| Date of Last Submission: | 11 April 2011 |
| Delivered at: | Brisbane |
| Delivered on: | 18 April 2011 |
REPRESENTATION
| Solicitors for the Applicant: | John-Paul Mould, Solicitors |
| Solicitors for the Respondents: | Barry & Nilsson, Solicitors |
ORDERS
That solicitor Mr John-Paul Mould pay the husband’s costs of and incidental to these proceedings fixed in the sum of $2,480.00 within
28 days.
IT IS NOTED that publication of this judgment under the pseudonym Cuperus & Marshall and Anor is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
BRC 4947 of 2008
| MS CUPERUS |
Applicant
And
| MR MARSHALL |
First Respondent
| [COMPANY X] |
Second Respondent
REASONS FOR JUDGMENT
I delivered judgment in this matter on Monday 11 April 2011, dismissing the wife’s application for leave to proceed out of time for an alteration of property interests.
I also dismissed a concurrent application to restrain the husband’s alleged company, [Company X], from pursuing an action against the wife allegedly relating to marital property which was filed in the Supreme Court of Queensland.
The husband never filed a response to the application, but did file a Notice of Address for Service, on the basis that the wife had not met the evidential requirements to show she had a case.
In dismissing the wife’s leave to proceed application, I held that no evidence of hardship was produced, a crucial element required for leave to be given.
In dismissing the restraining order application, I held that no evidence that the matter was within the jurisdiction of the Family Law Act 1975 (the Act) was put before me.
I anticipated that a costs application was inevitable given the manner in which the combined matters were run.
I did not anticipate that the costs application, made orally, would be in the alternative seeking orders that the wife’s solicitor indemnify the wife for costs or that a costs order be made against him.
In seeking orders against the solicitor, Mr Cooper for the husband relied on r.21.07 of the Federal Magistrates Court Rules 2001 which states:
“21.07 Order for costs against lawyer
(1) The Court or Registrar may make an order for costs against a lawyer if the lawyer, or an employee or agent of the lawyer, has caused costs:
i)to be incurred by a party or another person; or
ii)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)…
(b)…
(c) to prepare any proper evidence or information; or
(d) to do any other act necessary for the hearing to proceed.”
Costs are sought pursuant to the Court’s schedule in the sum of $2,480.00 for:
a) The hearing on 29 March 2011: Stage 1 - Opposition to an Application at $1,760.00, plus a short mention at $240.00 with an advocacy loading of 50 percent being $120.00; and
b) On 11 April 2011: Stage 6 - Taking judgment being $240.00 and an advocacy loading of 50 percent being $120.00 for costs submissions.
Mr Cooper referred to my judgment at paragraphs 37 to 48 where I held that there was no evidence addressing the element of hardship as required for any application bought under s.44(4) of the Act, the operative provision when seeking leave to file an application for property orders out of time.
He also submitted that the onus to produce evidence lay with the wife.
The crux of his argument was that having produced no evidence of hardship or in fact delay in filing the application, the matter should never have come into court and it would be negligent of a solicitor to advise the wife that she had a case.
Mr Mould for the wife began to state what appeared to me was his legal advice, although I warned him that his client was not present and perhaps he needed instructions that she was prepared to forego legal professional privilege.
That the wife was not present would appear on the submissions to be at the advice of Mr Mould who said he attended merely to receive judgment.
He then proceeded to submit that he had given advice and was given instructions to proceed with the matter.
It is apparent that the advice he gave was not before me, nor was the advice called for although such would have focussed the submissions on whether waiver of legal privilege would need to be traversed.
Mr Mould’s submissions, apart from the one that he had given advice and had instructions to proceed, were divorced from the costs issue at hand.
By way of example, he stated his belief that the wife’s application would allow an existing Supreme Court action to be brought into the Federal Magistrates Court.
As I had given reasons for dismissing that part of the application, I did not comprehend the submission or most of the submissions as having relevance to the costs issue.
When Mr Mould appeared to finish his submissions I reminded him he had not addressed the application for a costs order against him, as I must do under the r.21.07(5)(a). In doing so I note the rule requires that a lawyer be given reasonable opportunity to be heard, but it does not specify that an adjournment is necessary and none was sought. That is against the background that Mr Cooper initially sought an adjournment to make written submissions about costs against the practitioner, with Mr Mould stating he was in a position to deal with the application on the day. Mr Mould as a lawyer is taken to know the law, but even if, for whatever reason, he did not seek to address the application for costs against him, I am satisfied that I extended natural justice as required by the rule.
Section 117 of the Act pertains to costs stating the usual rule is that parties bear their own costs but should a court form the view that costs are justified then pursuant to consideration of s.117(2A), a costs order may be made.
Putting aside for the present the issue of whether a costs order ought to be made against the solicitor, I am satisfied that a costs order is justified having made findings that there was no evidence whatsoever produced of hardship or delay as required by s.44(4) of the Act and no evidence to show why the second respondent ought be restrained from pursuing the Supreme Court action.
I must consider the financial circumstances of the parties to the proceedings and although there is not much evidence before me, both parties are funding their legal costs and the wife stated in her evidence that she has regular employment and at least $300,000.00 equity in the marital home. That is against the setting, as referred to in the previous judgment, that the wife would be entitled to any money left over once the Commonwealth bank sells the marital property pursuant to a default judgment it has against the wife and husband. The evidence was brief.
I was not informed that any party had obtained legal aid.
There was no issue that the proceedings were necessitated by a failure of a party to comply with previous orders.
There was no evidence of any offers between the parties.
The wife was wholly unsuccessful in her application.
Mr Cooper based his costs submissions on the conduct of the wife in not supplying any evidence relevant to the applications in terms that it was negligent of her and her solicitor in bringing the matter into Court.
I could be satisfied that the wife ought to pay costs – her case was a complete waste of the court’s time because she produced no evidence to support her claims, but I will comment further on this below.
I now return to the submission that the solicitor ought to indemnify or pay the costs and this also was a question of his conduct both in the substantial application and in this costs application.
The submissions in the substantive matter and the costs matter were below standard and by that I do not refer to the oral address or an inability with regard to expression.
I mean they were below an acceptable standard in that:
a)There was no evidence of hardship;
b)There was a lack of understanding of the decided cases on hardship and in fact no useful reference to them at all;
c)There was reliance in submission on issues, I could not call them alleged facts, which bore no relevance to the legal questions of hardship and delay;
d)There was a lack of proper and sufficient evidence about the Supreme Court proceedings which would enable me to determine whether or not it was related to marital property;
e)During the substantive matter the wife’s solicitor constantly had to be brought back to the evidence before the Court;
f)The solicitor had informed his client, the wife, that she did not need to be present in Court to receive judgment on her application;
g)The solicitor made submissions without instructions during the costs hearing;
h)The solicitor submitted that he gave advice and was given instructions to proceed, without producing evidence of such advice and evidence of instructions in circumstances where such was required;
i)The solicitor did not seek to adjourn the matter to obtain proper instructions and evidence; and
j)During the costs hearing, the solicitor made a submission to the effect that he thought the Supreme Court matter would be brought into the Federal Magistrates Court for adjudication, after I indicated in the judgment that the wife may have a defence to the Supreme Court matter if it pertained to marital property within terms of the Family Law Act 1975. I used the term defence in the sense of a bar to the action, but in light of the submission that was ignored by the solicitor despite the matter having been dealt with.
As Mr Mould stated the evidence presented was the only evidence available, I needed to be informed of the form and basis of the wife’s instructions to make the applications, to confirm she had been properly advised.
That there was no application for an adjournment to traverse the issue of legal privilege, to have opportunity of putting before the Court the legal advice which I was told was provided but with clear instruction to proceed, is of concern to me.
It is not unknown that some clients will give instruction to proceed even after being informed that there is no case and a costs order will probably be then made against them, but the advice and evidence of instructions, which would usually be written instructions, would confirm the submission.
The situation was simple, an adjournment should have been sought to put before the Court clear and unambiguous instructions that the application should proceed without persuasive evidence.
That poor state of the wife’s evidence then coincided with the poor state of the submissions.
As to the submission in the costs hearing of Mr Mould’s belief that the wife’s application would result in the Supreme Court matter being brought into the Federal Magistrates Court, no power to make or effect such an order was referred to so it became a submission without basis.
Although he submitted that courts should be slow in awarding costs against a lawyer who was just representing a client, such slight submission does not address this Court’s rules regarding costs against a solicitor and the array of reasons for which the rules exist.
Under r.21.07 (1), the test for a costs order against a lawyer for causing costs to another party is whether I am satisfied there had been “undue delay, negligence, improper conduct or other misconduct or default”.
The simple meaning of negligence, according to the Concise Oxford Dictionary means “lack of proper care or attention, (piece of) carelessness…” That appears to be the case here, although the use of the word negligence in r.21.07 may also refer to the legalistic definitions of a negligence action, involving:
a)A duty of care to the client;
b)A breach of that duty, and
c)Damage because of that breach.
In this case that would mean that the husband has suffered damage, being the costs of being forced to answer proceedings which are baseless.
Because there was no evidence of the advice given, I would not extend negligence that far in this case if such a course was otherwise open.
However, at the very least the simple meaning appears to be applicable, in that the wife’s case was filed and presented in a negligent manner when I take into account the facts mentioned in paragraph 32 above.
The negligence is also perceived upon a consideration of r.4.05 which requires that an application must state the orders sought and be accompanied by an affidavit “stating the facts relied on”.
The implicit and imperative duty and onus contained in those five words “stating the facts relied on” is that the affidavit evidence must
a)Be relevant;
b)Relate to the orders sought, and
c)Address the elements of the action or the orders sought.
In plain language, the rule itself requires that the applicant must make out a case. It is a mandatory rule which cannot be ignored because an application casts a legal duty on a respondent to respond.
While the duty or onus is on the applicant, where an officer of the court advises and drafts material, then one of the higher duties which falls on the lawyer, which is a duty to the Court and encompasses the duty to the client, is to avoid negligence.
At this point I will refer to a particular submission from Mr Mould during the costs hearing when referring to my finding that the wife had not provided a copy of the Claim and Statement of Claim from the Supreme Court proceedings, important in my view to determining whether the Supreme Court matter related to marital property. His submission had the meaning that there was not much or there was no more evidence to put before me. I have to accept that at face value. It also confirms that there was no evidence linking the Supreme Court matters to an application which by law should be brought in a court invested with jurisdiction under the Family Law Act 1975.
In the analysis of costs in Z (A Solicitor) & Limousin) [2010] FamCAFC 59, the Full Court of the Family Court referred to the High Court decision in Stead v State Government Insurance Commission (1986) 161 CLR 141 at 145 where Mason, Wilson, Brenan, Deane and Dawson stated:
“The general principle applicable in the present circumstances was well expressed by the English Court of Appeal (Denning, Romer and Parker L.JJ) in Jones v National Coal Board, in these terms:
‘There is one thing to which everyone in this country is entitled, and that is a fair trial at which he can put his case properly before the judge…No cause is lost until the judge has found it so; and he cannot find it without a fair trial, nor can we affirm it’.
That general principle is, however, subject to an important qualification which Bollen J plainly had in mind in identifying the practical question as being: Would further information possibly have made any difference? That qualification is that an appellate court will not order a new trial if it would inevitably result in the making of the same order as that made by the primary judge at the first trial. An order for a new trial in such a case would be a futility”.
Mr Mould’s submission then is that there was no further evidence and I had already determined that there was insufficient evidence to determine whether the Supreme Court action was related to marital property.
It may even be the case, as submitted by Mr Cooper, that the wife’s application had an ulterior purpose, to prevent another action in the Supreme Court, although I do not have enough evidence on that to make such a finding.
Further, r.21.07(2)(c) and (d) refer to a lawyer’s possible default if a hearing does not proceed conveniently if there is a failure to prepare proper evidence or do necessary act’s for the hearing to proceed.
One meaning of the word convenience, according to the Concise Oxford Dictionary is suitable, a meaning which applies under the rules. It is not suitable, or a suitable way to act by not presenting evidence.
Nevertheless, the matter was pursued in this Court without evidence. That can only mean that it has been run negligently within the simple definition or meaning of negligence according to the Oxford dictionary and in terms of the rules.
It may be the case that the rules allow for a costs order against a solicitor without reference to s.117 of the Act. However, if the rules allowing for such a costs order require a consideration of s.117, then Mr Mould put nothing before me relating to s.117(2A).
A solicitor is taken to know the law, so there is no requirement that I assist a solicitor in alerting him to the law as I would assist an unrepresented litigant as required by Re F: Litigants in person guidelines (2001) 27 Fam LR 517; FLC 93-072. Further, Mr Mould practices in the family law so it cannot be said he was accidentally taken by surprise.
I would assume then that his financial state is not one of poverty.
It is apparent he is not in receipt of legal aid.
Although it is not the case that he has not complied with an order, his conduct is that he has failed to comply with the rules relating to applications and evidence when seeking orders for his client.
His client was completely unsuccessful on his representation.
I was not told of any offers.
My conclusion is that the solicitor has been negligent in bringing the matter into Court without any prospect of success and without evidence of his instructions to do so. That being the case, he should pay for the costs of the husband.
That he proceeded without his client present and without seeking leave to bring her into Court is of concern and on that basis I would not make a costs order against her, as she has not been afforded natural justice.
The schedule costs as presented by Mr Cooper are not unreasonable, so I will make the order in the sum of $2,480.00, to be paid within 28 days.
I certify that the preceding sixty-five (65) paragraphs are a true copy of the reasons for judgment of Coates FM
Date: 18 April 2011
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