Debber and Dilnot and Anor

[2010] FamCA 624

FAMILY COURT OF AUSTRALIA

DEBBER & DILNOT AND ANOR [2010] FamCA 624

FAMILY LAW – COSTS – Joinder

Family Law Act 1975 (Cth)

B Pty Ltd and Ors & K and Anor (2008) FLC 93-380

APPLICANT: Ms Debber

RESPONDENT: Mr Dilnot

SECOND RESPONDENT: Ms Hemp

FILE NUMBER: MLC 11259 of 2009

DATE DELIVERED: 1 July 2010

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Cronin J

HEARING DATE: 1 July 2010

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms Younger

THE RESPONDENT: In person

SOLICITOR FOR THE 2^ND

RESPONDENT:

Mr Just

Orders

1. That Ms Hemp as the second respondent to the application filed on 31 March 2010, be discharged from the proceedings forthwith;

2. That Ms Debber, as the applicant, pay the costs of Ms Hemp fixed in the sum of $7000 within one month;

3. That the application as amended and filed on 31 March by the applicant and the response of the first respondent, now the only respondent, filed on 14 May be adjourned to 12 August at 12 noon at 10 am in the registrar’s list;

4. I will formally dismiss the application in the case filed on 22 June 2010.

IT IS NOTED that publication of this judgment under the pseudonym Debber & Dilnot is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 11259 of 2009

MS DEBBER

Applicant

And

MR DILNOT

Respondent

And

MS HEMP
2^nd Respondent

REASONS FOR JUDGMENT

1. This is an application by Ms Hemp, who is the second respondent, in proceedings that began in December 2009 for costs on the basis that agreement has been reached today with the applicant that Ms Hemp should be discharged from the proceedings.  I might say in passing that having regard to my inquiries of the parties today and back on 18 June I think that was a very wise course.  I say that, however, bearing in mind that it may very well be that Ms Hemp ultimately again becomes a party to the proceedings depending upon what instructions Ms Debber gives to her new lawyers.

2. The reason why I am prepared to make an order for costs in this particular case is the fact that Ms Hemp in my view was never properly made a party to the proceedings notwithstanding she was named on the application, because Ms Debber could not really establish the jurisdiction at this point in time to have Ms Hemp before the court.  In particular, I refer to the decision of B Pty Ltd and Ors & K and Anor (2008) FLC 93-380, which set out clearly the obligation in relation to joining third parties. Section 117 of the Family Law Act 1975 (Cth) (“the Act”) says that subject to subsection (2) each party pays their own costs. The exception to that rule is set out in subsection (2), which says that if there are circumstances that justify the court in so doing, it may, subject to subsection (2A), make an order for costs as it considers just.

3. The first point therefore is whether or not there are circumstances justifying a departure from the rule.  In my view the application, at least upon its face and what I heard on 18 June and again today, was misguided.  Who is responsible for that misguided approach is not clear.  I make no adverse reflection on anybody at this stage, but having regard to the fact that it seems the legal title to the property in dispute was in the name of Ms Hemp, and there was a caveat lodged by Ms Debber, which she ultimately withdrew as a result of a challenge in the Supreme Court of Victoria, one would question how the claim could possibly stand, but no doubt instructions will be taken on a proper basis and facts elicited.

4. Starting from the presumption therefore that there are circumstances here to make an order for costs. Subsection (2A) of s 117 of the Act requires me to consider a number of matters. I am required firstly to consider the financial circumstances of each of the parties to the proceedings. I have been told that Ms Debber has an interest in a property in Tasmania and that she is claiming an interest in the property of Mr Dilnot. In those circumstances I am entitled to start from the presumption that having engaged lawyers and begun the proceedings that she has sufficient financial circumstances to justify an order for the sort of costs I have in mind.

5. No one has suggested to me today that anyone is in receipt of assistance by Victoria Legal Aid and under those circumstances I am entitled to ignore that issue.  There is a consideration relating to the conduct of the parties to the proceedings which concerns me greatly.  I have been told this morning that Ms Debber thought certain things had occurred, all of which indicate to me that discovery and inspection of documents has not been undertaken.

6. The next matter for consideration is whether or not any party to the proceedings has been wholly unsuccessful in the proceedings.  As I said, I am not making any findings of fact at this point in time but the question is whether or not Ms Hemp should have been joined in the first place.  To the extent that the applicant in the proceedings is withdrawing the claim as against Ms Hemp, one can only conclude that she is being wholly unsuccessful as against Ms Hemp thus far.

7. In the circumstances I think it is appropriate to not only depart from the rule, but for a need to make an order for Ms Debber to pay Ms Hemp’s costs.  Costs are still discretionary.  As I have pointed out it is not the purpose of an order for costs to punish someone, it is designed to compensate the person who has been dragged into the proceedings unnecessarily as has occurred here on what I have been told.  In the circumstances the claim for costs by the third party, Ms Hemp, seems to me to be not unreasonable.  Mr Just very magnanimously offered his break-up of how those costs were incurred and Ms Younger, on behalf of Ms Debber points to the fact that there is a three hour claim in relation to research.

8. It has been traditionally viewed by this court as not a matter in which costs can be awarded for practitioners to update their knowledge in respect of a particular matter.  They can certainly make a claim against their own client for costs for researching, but it is not a matter in which the court should encourage practitioners to claim in respect of costs against another party.  Mr Just claimed 38 hours at $200 per hour.  The scale of costs is not quite $200 per hour and as I said, three hours was claimed for research.  I propose, therefore, to exercise my discretion and make an order for $7000 in total.  In addition to the $7600 claimed, Mr Just also claimed $255 for disbursements.  Normally, I probably would have allowed that amount, but having regard to the fact that he has claimed $200 per hour where the scale is less than that, I do not propose to go any further than the quantum fixed in the sum of $7000.

   RECORDED  :  NOT TRANSCRIBED

9. I am going to put a notation on the order, which will read as follows:

   The registrar is to examine whether, and if so, what, action the applicant has against the respondent, bearing in mind (a), the applicant, this day, has said she intends to “go bankrupt;” and (b), the major dispute relates to a real property which is not in the name of either the applicant or the respondent.

I certify that the preceding nine (9) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin

Associate: 

Date:  23 July 2010