Jarbin and Yabes (Costs)

[2017] FCWA 73

JURISDICTION : FAMILY COURT OF WESTERN AUSTRALIA

ACT: FAMILY COURT ACT 1997

LOCATION: PERTH

CITATION: JARBIN and YABES (COSTS) [2017] FCWA 73

CORAM: O'BRIEN J

HEARD: 1 MAY 2017

DELIVERED : 12 JUNE 2017

FILE NO/S: PTW 2015 of 2016

BETWEEN: MS JARBIN

Applicant

AND

MR YABES
Respondent

Catchwords:

COSTS - where the Respondent seeks an order for costs in the sum of $55,183 - where the substantive proceedings were dismissed for want of jurisdiction - where it is conceded that circumstances exist justifying an order for costs - where it is conceded that the commencement of the proceedings in the wrong jurisdiction was on advice and that any costs order in favour of the Respondent should be paid by the solicitors for the Applicant - where no steps were taken by the Respondent to foreshorten the proceedings - where costs incurred by the Respondent after an early stage in the proceedings were accordingly not reasonably incurred - costs ordered in a fixed sum of $7,763.

Legislation:

Family Court Act 1997 (WA), s 205X, s 205ZG, s 237
Family Court Rules 1998 (WA), r 1.04, r 1.08, r 13.26, r 19.18
Legal Profession Conduct Rules 2010 (WA), r 23

Category: Not Reportable

Representation:

Counsel:

Applicant: Mr J Kitto

Respondent: Mr J Hedges

Solicitors:

Applicant: Kitto & Kitto

Respondent: Kavanagh Lawyers

Case(s) referred to in judgment(s):

Alsop v Lord Oxford (1833) 39 ER 794

B & Associates (a firm of solicitors) and Bloomfield (2003) FLC 93-155

Braithwaite v Braithwaite [2007] FamCA 468

Deutsch v Deutsch (No 2) [2013] VSC 15

Idaport Pty Ltd v National Australia Bank Limited [2007] NSWSC 23

Nada and Nettle (Costs) (2014) FLC 93-612

Oshlack v Richmond River Council (1998) 193 CLR 72

Re Felton (1942) 60 WN (NSW) 16

Tang & Keats [2016] FamCA 99

WORDS IN SQUARE BRACKETS REPLACE WORDS USED IN THE ORIGINAL JUDGMENT - PARTIES’ NAMES AND IDENTIFYING DETAILS HAVE BEEN CHANGED

Background and relief sought

1On 19 April 2016, [Ms Jarbin] (“the applicant”) commenced proceedings seeking the alteration of property interests and interim maintenance. Her application was grounded in her claim that she and [Mr Yabes] (“the respondent”) had been in a de facto relationship.

2The respondent sought the dismissal of the application, on the basis that this Court did not have jurisdiction to determine it. He asserted that the relationship of the parties was not one that could properly be characterised as a de facto relationship as defined in s 13A of the Interpretation Act 1984 (WA).

3The application sought various orders pursuant to the powers granted to the court by Div 2 of Pt 5A of the Family Court Act 1997 (WA) (“the Act”).

4Section 205X of the Act is in the following terms:

205X. People to whom this Part applies — connection with WA

Despite section 36(5), before making an order under [Div 2 of Pt 5A] a court must be satisfied —

(a)that one or both of the parties to the application were resident in Western Australia on the day on which the application was made; and

(b)that —

(i)both parties have resided in Western Australia for at least one third of the duration of their de facto relationship; or

(ii)substantial contributions of the kind referred to in section 205ZG(4)(a), (b) or (c) have been made in the State by the applicant.

5The matter having been listed for a four day trial on the issue of jurisdiction, the attention of the solicitors for the applicant was drawn to the provisions of s 205X shortly prior to the status hearing listed of the court’s own motion on 8 February 2017. At that hearing, counsel for the applicant conceded that this Court did not have jurisdiction to determine his client’s substantive application, as neither of the criteria in s 205X(b) were met.

6The applicant nevertheless applied for the transfer of the proceedings to the Family Court of Australia, to be determined pursuant to the provisions of the Family Law Act 1975 (Cth) (“FLA”) and heard by me in my capacity as a Judge of that Court, albeit sitting in Perth. That application was heard by me on 15 February 2017 and was dismissed. Given the concession made by counsel for the applicant at the status hearing, the substantive application filed on 19 April 2016 was also dismissed.

7The matter remaining for determination is the respondent’s application for costs.

8The relief sought by the respondent is set out at paragraph 16 of the written submissions filed on his behalf as follows:

The Respondent seeks orders that the Applicant and/or her lawyers:

(a)Pay the Respondent’s costs of the hearing of 15 February 2017 in the amount of $2,763 (scale) within 28 days;

(b)Pay the Respondent’s costs for the preparation of written costs submissions in the amount of $2,420 (scale amount) within 28 days; and

(c)Additionally make a contribution to the Applicant’s overall costs fixed in the amount of $50,000 within 28 days.

For the avoidance of all doubt the respondent seeks total costs orders in the amount of $55,183.00.

9As costs were sought in the alternative against the applicant and her lawyers, I raised with counsel for the applicant the question of whether the interests of his firm might conflict with those of his client, such that it would be inappropriate for his firm to continue to act.

10Counsel addressed that question firstly by advising that he had facilitated the provision to the applicant of independent legal advice in relation to the question of costs. More importantly, and in my view properly, he acknowledged that the responsibility for any order for costs made in favour of the respondent should rest with his firm and not with his client.

11Counsel gave an undertaking to the court that any order for costs I might make against the applicant would be paid by his firm. He confirmed that he had the authority of his firm to bind it by the giving of that undertaking.

12In those circumstances, there was no conflict between the interests of the applicant and the interests of her solicitors such as would make it inappropriate for those solicitors to continue to represent her in relation to the costs application.

13Counsel for the applicant conceded that a costs order should be made in favour of the respondent in relation to the ill-conceived application for transfer of the substantive proceedings to the Family Court of Australia. He conceded also that a costs order should be made in favour of the respondent to reflect his reasonable costs incurred in seeking advice upon the substantive application. He contended, however, that the quantum of such costs should be limited to the amount that would have been reasonably incurred by the respondent up to and including, in effect, the first return date of the substantive proceedings. The basis for that contention is set out in more detail later in these reasons.

The law

14Section 237 of the Act is in the following terms:

237. Costs — FLA s. 117

(1)Subject to subsection (2) and sections 205SB and 242, each party to proceedings under this Act is to bear the party’s own costs.

(2)If, in proceedings under this Act, the court hearing the proceedings is of the opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (3), (5), (6A) and (6) and in accordance with any relevant rules, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court thinks just.

(3)In considering what order (if any) should be made under subsection (2), a court must have regard to —

(a)the financial circumstances of each of the parties to the proceedings; and

(b)whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party; and

(c)the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters; and

(d)whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of a court; and

(e)whether any party to the proceedings has been wholly unsuccessful in the proceedings; and

(f)whether a party to the proceedings has made an offer in writing to another party to the proceedings to settle the proceedings and the terms of any such offer; and

(g)such other matters as the court considers relevant.

…

15Section 237 is identical in its terms to s 117 of the FLA. Authority which would be binding on me in any consideration of s 117 of the FLA is binding on me in any consideration of s 237 of the Act.

16Costs are not to be awarded as a means to punish an unsuccessful party; rather they are compensatory in nature: Braithwaite v Braithwaite [2007] FamCA 468; Tang & Keats [2016] FamCA 99.

17A solicitor has a duty to advise and protect a client against unnecessary expense: Alsop v Lord Oxford (1833) 39 ER 794.

18In B & Associates (a firm of solicitors) and Bloomfield (2003) FLC 93-155 at p. 78,549, the Full Court, after referring to that duty, cited with approval the observation of Maxwell J in Re Felton (1942) 60 WN (NSW) 16 at [21] where His Honour said:

The essence of the rule is that the client must be protected; he is embarking upon a field which – it can invariably be assumed – is completely strange to him, and which is or must be taken to be familiar to the solicitor. It is therefore the duty of the solicitor to place his client in a position where he can so far as possible be able to fully appreciate the nature and extent of his financial liabilities in the course of litigation.

19The long-standing position at common law is reflected in the Family Law Rules 2004 (Cth) (“the Rules”). The relevant provisions of the Rules are adopted without amendment in the Family Court Rules 1998 (WA).

20Rule 1.04 states the main purpose of the rules in the following terms:

The main purpose of these rules is to ensure that each case is resolved in a just and timely manner at a cost to the parties and the court that is reasonable in the circumstances of the case.

21Rule 1.08 states the responsibility of parties and their lawyers to assist the “just, timely and cost-effective disposal of cases”.

22Those rules and the authorities referred to above are of particular relevance in this case. More obviously, their relevance is acknowledged by the concession made by counsel for the applicant and the undertaking given by him on behalf of his firm to the effect that any costs awarded against the applicant will be paid by her solicitors and not by her.

23Perhaps less obviously, but no less importantly in this case, those principles are applicable to the conduct of the proceedings by the solicitors for both parties.

24The applicant’s submission that the amount of costs to be awarded to the respondent should be modest is based on the contention that the solicitors for the respondent themselves had a duty to identify at an early stage of the proceedings the issue presented by s 205X of the Act and to take appropriate steps to limit the costs of both parties by drawing that issue to the attention of her solicitors.

25That submission is presented in alternative forms, as outlined in more detail below, but the central theme is consistent.

26It is trite that if costs are to be awarded they can be reflective only of costs reasonably incurred by the respondent. The applicant argues that the vast bulk of the costs incurred by the respondent were unreasonably incurred, given the steps she asserts his solicitors should have taken at an early stage of the proceedings. Put another way, if it is accepted that an award of costs is compensatory and not punitive then there is an obligation on the part of the person seeking costs to take reasonable steps to mitigate his or her loss.

Matters not in issue

27Apart from the matters already referred to above, there were other matters not in issue.

28Properly, it was conceded on behalf of the applicant that there are in this case circumstances such as to justify the making of an order for costs. The dispute is not as to whether an order for costs should be made; rather, the dispute is as to what order for costs is just.

29It was also conceded on behalf of the applicant that, given the undertaking that any costs awarded would be paid by her solicitors, any impecuniosity on the part of the applicant could not properly be used as a shield against a costs order. Again I regard that concession as appropriate; in any event the Full Court has made it clear that alleged impecuniosity on the part of the person against whom costs are sought will not of itself preclude the making of a costs order: Nada and Nettle (Costs) (2014) FLC 93-612.

Non-contentious matters required to be considered pursuant to s 237(3) of the Act

30The proceedings were not necessitated by the failure of either party to comply with previous orders of the court. Neither party is in receipt of Legal Aid.

31The applicant was wholly unsuccessful in the substantive proceedings. Those proceedings were commenced in the wrong court, in the wrong State, and under the wrong legislation. Against that background, the applicant’s concession that circumstances exist which justify an order for costs, while properly made, was an acknowledgment of the inevitable.

32The financial circumstances of the applicant are modest and certainly inferior to those of the respondent.

33The applicant has paid her solicitors $68,115.00 in fees. Negotiations between the applicant and her solicitors as to the reimbursement or partial reimbursement of those fees are ongoing; counsel for the applicant informed me on behalf of his firm that an offer had been made to reimburse 75 per cent of paid fees to the applicant if she wishes to be repaid in cash, or alternatively to do further work for her to the value of the full amount already paid, without requiring further payment. He told me also that further fees billed to the applicant but not yet paid have been written off.

34Counsel for the respondent informed me that the respondent has paid his solicitors $41,500.00 and that the further amount of $60,000.00 has been billed but not yet paid. Any discussions between the respondent and his solicitors as to possible reimbursement of fees already paid, or the writing off of any fees billed but not yet paid, are to await the outcome of the present application.

35Those arrangements between the parties and their solicitors inform the exercise of my discretion only in so far as they reflect the present financial circumstances of the parties, which I am required by the legislation to consider. I do not propose to otherwise take them into account.

36Nothing more need be said about the financial circumstances of the parties, given the appropriate concession made by counsel for the applicant in relation to that aspect of the matter.

37The more contentious matters required to be considered pursuant to s 237(3) of the Act are:

1.The making of any offer in writing to settle the proceedings, and the terms of any such offer;

2.The conduct of the parties in relation to the proceedings; and

3.Such other matters as I consider relevant.

Offers of settlement

38The respondent made a written offer to settle the proceedings on 18 July 2016. While denying that there was ever a de facto relationship between the parties, he offered to settle the matter by the payment of $10,000.00 to the applicant to avoid “costly and protracted litigation”. The proposed payment was intended to dispose not only of the dispute as to jurisdiction, but any substantive claim the applicant might suggest she had.

39That offer was rejected by the applicant.

40On 13 October 2016, by which time she had incurred legal costs in excess of $60,000.00, the applicant offered to settle the jurisdictional dispute only. She proposed that the respondent concede that this Court had jurisdiction to determine her substantive application and that he pay her $10,000.00 in full satisfaction of her legal costs incurred to that date.

41That offer was rejected by the respondent.

42The applicant submits that her rejection of the respondent’s offer was not unreasonable. That submission, however, is couched in somewhat unusual terms. It is correctly pointed out on her behalf that all the relevant facts and circumstances must be considered in determining whether the rejection of the offer was unreasonable, but the submission also says the following at [73] and [74]:

If at the date of the offer (18 July 2016) the Applicant and the Respondent were aware of the 205X Issue, then the Applicant’s rejection of the offer would clearly be unreasonable, and would attract a costs order for subsequent legal work.

But neither party were so aware, and the question of whether the Applicant unreasonably rejected the offer must be considered in its factual context at the time because assessment of the unreasonableness is to be made at the time it is made, and without the benefit of hindsight. It was the Respondent’s prospects of success, assessed as at the date of the offer, that must be considered.

43If I understand correctly, that submission appears to be contending that had both parties been alive to the issue presented by s 205X at the time the relevant offer was made, the applicant’s rejection of the offer would “clearly be unreasonable”; but that because the applicant contends that neither was so aware, the rejection of the offer was not unreasonable.

44The first observation to be made is that counsel for the respondent stated in response to other submissions on behalf of the applicant, to which I will refer below, that the respondent had been aware at all times of the issue presented by s 205X. That factual assertion, having been made by counsel for the respondent in circumstances where he would have personal knowledge of its accuracy, was accepted by counsel for the applicant.

45Even had that assertion not been made and accepted, I have difficulty in following the proposition that ignorance on the part of the respondent might somehow render the applicant’s rejection of an offer reasonable.

46I have even more difficulty in following the proposition that the applicant’s rejection of the offer would have been “clearly unreasonable” if at the time of the rejection she had been properly advised as to the legal position, but that the rejection of the offer should somehow be excused (to the detriment of the respondent) because her lawyers had missed the obvious point. As I observed in my judgment at [74] on the application for transfer of the proceedings:

The satisfaction of the geographical requirements set out in s 205X of the Act is a fundamental aspect of any application to this Court for alteration of property interests between parties to a de facto relationship. It is a matter to which attention might reasonably be expected to be turned in the very first meeting between client and solicitor, whether the client is the proposed applicant or the proposed respondent.

47The inadequacy of the advice received by the applicant in relation to the offer can properly go only to the question of by whom any costs should be paid, rather than whether any order for costs in favour of the respondent is justified. Were it otherwise, the submission would support a proposition that an applicant for costs might be denied those costs because the other party had received poor advice. While there might conceivably be some circumstances in which such a proposition would be sustainable in the exercise of what is a very broad discretion, and against the background of s 237(1), this is not such a case.

48That said, it must be observed that the respondent’s offer was conditional on acceptance finalising any substantive claim the applicant might have against him. Because of the jurisdictional issue, no determination has been made as to the merits or otherwise of any such substantive claim.

49The offers made do not, in my view, influence a determination of what order for costs is just.

The conduct of the proceedings – the applicant’s submissions

50The written submissions filed on behalf of the applicant assert that “the Respondent’s and Applicant’s solicitors were equally negligent in the conduct of the litigation before 6 February 2017” and that a review of the parties’ actions “leads to the irresistible inference that both parties’ lawyers overlooked s 205X until 6 February 2017”. As a result, it is argued that the respondent’s lawyers are “just as culpable for failing to bring the proceedings to an end at an early stage and…he should be looking to them for redress”.

51The applicant argues in the alternative that, if the respondent’s lawyers were alive to the issue at the outset, they had an obligation to draw it to the attention of her lawyers and to invite a dismissal of the action by consent. She argues further that even if agreement could not be reached in that manner, there were steps properly open to the respondent to, in effect, bring the matter to a head at an early stage in the litigation and that those steps should have been taken.

52The applicant argues further that, if the respondent’s lawyers were in fact alive to the issue from the outset and chose for strategic or other reasons not to raise it, then by adopting such a course of action they were in breach of their professional obligations both to the court and to the applicant. The proposition was tentatively put, but not pursued, that in those circumstances the applicant could properly look to the respondent and his solicitors for payment of at least some of her costs.

The conduct of the proceedings – the respondent’s submissions

53The submissions filed on behalf of the respondent deny any suggestion that he and his solicitors were not alive to the issue presented by s 205X from the outset of the proceedings. As already noted, counsel who appeared for the respondent expressly stated that he had been involved in the advice given to the respondent at the commencement of the proceedings and that he and his instructor were both alert to the issue presented by s 205X at that time.

54Counsel for the respondent explained the reluctance of the respondent and his lawyers to raise the issue directly with those representing the applicant by referring to what he described as the vague and somewhat changeable nature of the applicant’s evidence and by reference also to both components of s 205X(b).

55He pointed out that the required connection with Western Australia (“WA”) could have been established either by the applicant proving that both parties had resided in this State for at least one third of the duration of their de facto relationship or by her satisfying the court that she had made substantial contributions of the kind referred to in s 205ZG(4)(a), (b) or (c) in WA. He submitted that in those circumstances it was legitimate for the respondent and his lawyers to refrain from raising the potential issue with those advising the applicant, lest she then take steps to clarify her evidence or lead additional evidence to address identified “gaps”. He submitted that it was not until the applicant had committed to her evidence for the purposes of trial that it was strategically safe for the respondent to raise the issue.

56Before addressing the merits and propriety of such an approach in more general terms, it is appropriate to review the evidence submitted at the early stages of the litigation and consider whether the submission bears scrutiny against that review.

Section 205X(b)(i) - the requirement that both parties resided in WA for at least one third of the duration of their de facto relationship

57In his written outline of submissions filed on 28 April 2017, counsel for the respondent submitted that a consideration of all the available evidence suggested that the requirements of s 205X(b)(i) were or could reasonably have been “made out [by the applicant] until very late in the proceedings”.

58The period of time for which both parties need to reside in WA for that residence to amount to at least one third of the duration of their de facto relationship is directly proportional to the length of that relationship. To assess the merits of the respondent’s submission that he and those advising him perceived a real risk that the applicant might meet the requirements of s 205X(b)(i), therefore, it is appropriate to consider the applicant’s evidence as to residence in WA at its highest and her evidence as to the overall duration of the alleged relationship at its lowest; if even on that analysis the relevant threshold is not crossed, the perceived risk is illusory.

59The respondent submits that the applicant’s evidence was inconsistent and contradictory and that on various interpretations of her evidence her case might have been:

(a)that the relevant relationship began as early as 2000 or as late as 2009;

(b)that the relevant relationship ended as early as 2013 or as late as April 2015;

(c)that she and the respondent both lived in WA from 2000 to 2006; and

(d)that she has lived in WA since 2012, and the respondent has lived in WA since March 2014 – with the appropriate effect of that fact on the calculation of the proportion of the relationship spent in this State.

60There are a number of difficulties with those submissions.

61Firstly, the applicant’s evidence as to the commencement of the relationship as contained in her affidavit filed at the commencement of the proceedings on 19 April 2016 was as follows:

[Mr Yabes] and I began an online, sexual relationship when I was 13. We remained in contact online and over the phone until I turned 18.

In 2005 (when I was 18), [Mr Yabes] and I commenced a sexual relationship. I saw [Mr Yabes] at least once a month and we would speak to each other (on the phone or by text message) frequently, at times, almost every day.

In 2006, I moved to Melbourne. [Mr Yabes] moved to Sydney for work at around the same time.

Whilst [Mr Yabes] was residing in another state, he employed an agent in Melbourne to “watch over me”… [Mr Yabes] and I were in regular contact during this time, by phone and online.

Further, [Mr Yabes] would fly to Melbourne once a month (or pay for me to fly to Sydney) so that we could spend time together. On these occasions, [Mr Yabes] would hire a hotel room, where we would spend the weekend together.

In 2008, I returned to Perth briefly. In late 2008, [Mr Yabes] told me that it was time for us to live together so I made the decision to move to Sydney.

In January 2009, I moved to Sydney and [Mr Yabes] and I began cohabiting in his Sydney apartment at [address].

62In her Form 1 application filed simultaneously with that affidavit, in answer to the question posed by the form as to the date the parties commenced living together, the applicant identified the relevant date as 1 January 2009.

63During the hearing of the costs application, counsel for the respondent conceded that he could not sensibly contend that the respondent or those advising him ever thought that the applicant was seeking to argue that a de facto relationship between the parties commenced in 2000 when (on her case) the parties began their online sexual relationship at a time when she was 13 years of age. On the applicant’s case the parties did not physically meet until five years later when she turned 18. That was consistent with her evidence in proceedings in the Magistrate’s Court on the competing applications of the parties for violence restraining orders (“the VRO proceedings”).

64Counsel conceded further that it could not sensibly be argued that the respondent or those advising him perceived any risk of the applicant contending that a de facto relationship between the parties commenced during the period between what she alleged was the commencement of their sexual relationship in 2005, and her move from Perth to Melbourne in 2006. On the applicant’s case, again confirmed in her evidence in the VRO proceedings, the parties were “dating” during that period and spending weekends together approximately once a month.

65Those two concessions having been made, at its highest the risk perceived by the respondent could only have been that the applicant would seek to establish that a de facto relationship between the parties commenced in 2006 (when the parties began spending one weekend a month together in either Sydney or Melbourne). The fact that both parties lived in WA from 2000 until 2006 is accordingly conceded to be irrelevant.

66The respondent moved back to WA in March 2014. Even if the applicant’s evidence that the relationship between the parties continued after that date was accepted, that would go no further than to establish that the parties spent 13 months of their alleged de facto relationship in WA. Even that risk would fall to be considered in the context of the applicant’s evidence that the only contact between the parties from the time she moved back to Perth in 2012 until April 2015 was by email and telephone, that they did not see each other or have any physical contact, and that she was unaware that the respondent had moved back to Perth himself until she discovered his deception in that regard in April 2015.

67If the duration of the alleged de facto relationship was taken at its lowest on the applicant’s case, the relationship commenced when the parties began living together in Sydney in January 2009, leading to a relationship of some 75 months. Even if the applicant had modified the position set out in her Form 1 application to subsequently suggest that a de facto relationship commenced in 2006 when the parties began spending one weekend a month together, the duration of the relationship alleged would have been longer, but without any additional time being spent in WA. If she amended her position to contend that the relationship ended when she returned to WA, then no component of the altered de facto relationship was in this state.

68Accordingly, at no time could the respondent or his lawyers have properly perceived a risk that the applicant could establish that the parties had resided in WA for at least one third of the duration of their de facto relationship, on any interpretation of her evidence, and even if that evidence was accepted in full.

69It follows that there could be no legitimate reason related to the provisions of s 205X(b)(i) for the respondent to refrain from either raising the issue of the requisite connection with WA, or taking any of the steps provided in the Rules to formally narrow the issues. The respondent could, for example, easily have issued a request for answers to specific questions pursuant to r 13.26. Even more simply, he could have served a notice to admit facts calling upon the applicant to admit that at no time during the alleged de facto relationship other than the period March 2014 to April 2015 did the respondent himself reside in WA.

70Had those or other steps been taken, an early application for summary dismissal could readily have been grounded, absent any difficulty or perceived difficulty arising from the provisions of s 205X(b)(ii).

Section 205X(b)(ii) - whether substantial contributions of the kind referred to in s 205ZG(4)(a), (b) or (c) were made in WA by the applicant

71In rejecting the proposition that he should have taken steps at an early stage to seek the summary dismissal, or withdrawal by consent, of the substantive application, the respondent argues that he and his lawyers perceived a risk that the applicant might be able to satisfy the criteria for connection with WA set out in sub-s 205X(b)(ii) even if she could not establish that both parties had resided in WA for at least one third of the duration of the alleged de facto relationship.

72Given that the parties never lived together in WA, did not have children and did not at any stage jointly own property or intermingle their finances, the basis upon which the respondent and those advising him might have perceived a risk that the applicant could establish that she had made contributions of the relevant kind, let alone that those contributions might properly be characterised as “substantial”, is not readily apparent.

73Counsel for the respondent identified the relevant allegation on the part of the applicant as being her evidence that at the behest of the respondent she had [provided massage therapy for others] and had given to him the money she earned from doing so.

74He submitted that the evidence of the applicant, both in the proceedings in this Court and in the VRO proceedings, left open the possibility that she would contend that the alleged massage therapy and payments to the respondent occurred in WA and thus argue that she had made substantial contributions of the relevant kind in this State.

75A review of the evidence given by the applicant in both courts does not support that submission. To the contrary, her clear evidence was that she worked as a [massage therapist] in New South Wales and gave her earnings to the respondent at a time when on her case they were living together in that State. At no stage did she suggest any of that activity took place in WA.

76Indeed, in her affidavit filed with her initiating application under the heading “Financial Contributions during the Relationship” the applicant referred only to working as a [massage therapist] for the respondent between 2009 and 2012 in Sydney. Under the heading “Non-Financial Contributions during the Relationship” she referred only to domestic tasks allegedly undertaken by her “whilst living with [the respondent] in Sydney”.

77Contrary to the assertion made by counsel for the respondent in submissions, nothing in the transcript of the VRO proceedings contradicted or expanded upon that evidence in any way that might reasonably give rise to an apprehension that substantial contributions in WA were to be alleged.

78It follows that I reject the submission made on behalf of the respondent that it was reasonable for him, and those advising him, to perceive a risk that the applicant might succeed on the second limb of s 205X(b) and on the basis of that perception, to refrain from taking any steps to foreshorten the proceedings.

The second limb of the determination required – what order for costs is just?

79Having made those findings, it remains to consider what order for costs is just.

80Counsel for the applicant roundly criticised the conduct of the respondent’s lawyers.

81Having initially submitted that the evidence supported an irresistible conclusion that the respondent’s lawyers had been no more alive to the issues posed by s 205X than those advising the applicant, he accepted the assurance to the contrary given by counsel.

82In those circumstances, he submitted that the failure of those advising the respondent to take early steps to foreshorten the proceedings represented either a conscious decision taken for inappropriate tactical purposes designed to force the applicant to incur legal costs she could ill afford, or an inexcusable failing in their professional obligations.

83The first of those contentions is readily dismissed. There is no evidence to support any inference that the respondent or his lawyers refrained from taking what would otherwise have been appropriate steps in the litigation with the intended purpose of causing the applicant to incur additional expense.

84In support of the submission that those advising the respondent failed in their professional obligations, counsel for the applicant referred firstly to the provisions of the Legal Profession Conduct Rules 2010 (WA) (“LPCR”).

85Rule 23 provides as follows:

23. Another practitioner’s error

A practitioner who observes that another practitioner is making or is likely to make a mistake or oversight which may involve the other practitioner’s client in unnecessary expense or delay —

(a)must not do or say anything to induce or foster the mistake or oversight; and

(b)must draw the attention of the other practitioner to the mistake or oversight if —

(i)doing so is unlikely to prejudice the interests of the first-mentioned practitioner’s client; or

(ii)the first-mentioned practitioner’s client consents.

86Counsel for the applicant referred also to the judgment of McHugh J in Oshlack v Richmond River Council (1998) 193 CLR 72 in support of the proposition that “it is the conduct of the successful party, and not the conduct or motives of the unsuccessful party, which is relevant to the exercise of the costs discretion”. With due respect to counsel, it is readily apparent from the judgment at [80] that the costs discretion to which His Honour referred was that to be exercised when starting “with the proposition that a successful party to litigation… can usually expect to receive a costs award in its favour unless its own conduct disentitles it from the benefit of the discretion”. The starting proposition in proceedings under the Act, of course, is precisely the opposite.

87Counsel for the applicant referred also to the decision of the Supreme Court of Victoria in Deutsch v Deutsch (No 2) [2013] VSC 15. It is sufficient for the purpose of these reasons to observe that the decision in that case, which was in any event a decision at first instance, turned on its own facts.

88It is unnecessary to consider whether the assertion on the part of the applicant that the respondent’s lawyers breached their duties under the LPCR is made out.

89That is so as in any case a party applying for costs can only be entitled to recover reasonable costs, reasonably incurred.

90For the reasons outlined above, there was no reasonable basis for the respondent or his lawyers to perceive the asserted risk in taking steps to foreshorten the litigation at an early stage. That risk, however, was not the only basis on which the respondent argued that his failure to take those steps was justified.

91It was submitted on behalf of the respondent that an application for summary dismissal grounded in s 205X could not sensibly be pursued before a determination by the court of the question of whether the alleged relationship could properly be characterised as a de facto relationship.

92In his written outline of submissions, counsel for the respondent said at [20] to [21]:

It is not argued that an application for summary dismissal on the sole issue of s 205X could not have been brought by the Respondent. However, it was unlikely to be entertained by the Court because s 205X was and is not the first consideration in a de facto jurisdictional case.

It is argued, that the correct approach to a de facto jurisdictional case requires that the first issue to be determined is whether a de facto relationship existed between the parties. Sections 205X and 205Z only arise after the existence of a de facto relationship is determined (emphasis added).

93The only authority cited in support of that proposition as to the “correct approach” was an obiter comment of a Family Law Magistrate sitting at first instance. At the hearing before me, counsel for the respondent properly conceded both that the comment cited did not in fact purport to define the “correct approach” and that there is nothing in the legislation itself to support the contention.

94I reject the submission that it was not open to the respondent to seek the dismissal of the substantive proceedings by reference to s 205X unless and until the existence of a de facto relationship had been conceded or determined.

95It follows that there was no reasonable basis for the expressed reluctance on the part of the respondent and his lawyers to pursue at an early stage an application for summary dismissal, had any attempt at conferral failed to persuade the applicant to abandon the proceedings.

96I therefore conclude that the costs incurred by the respondent in the substantive proceedings beyond the point at which it would have been reasonable and appropriate for steps to be taken to foreshorten the litigation were not reasonably incurred. It follows that it cannot be just to make an order requiring the applicant to contribute to those costs.

97It is, however, just to make an order that the applicant contribute to those parts of the respondent’s costs that were reasonably incurred.

98It is conceded on behalf of the applicant that an order should be made in respect of the costs associated with the hearing on 15 February 2017 of her unsuccessful application for transfer of the primary proceedings. Those costs were quantified in the respondent’s submissions at $2,763.00 and no argument was raised against that figure.

99The next question to be determined is the quantification of the contribution to be made by the applicant to the respondent’s costs of the primary proceedings.

100It is open to the court, and often desirable, to make an order for costs in a specific amount without formal assessment or taxation, so as to avoid further delay and expense to the parties. Rule 19.18(1) makes express provision for orders for costs in a specific amount. The power to make such orders need not be exercised in any “scientific or formulaic manner”: Idaport Pty Ltd v National Australia Bank Limited [2007] NSWSC 23 at [10].

101It was reasonable, in my view, for the respondent to incur the costs of his lawyers reviewing the initiating documents filed on behalf of the applicant, considering the application of s 205X and taking the necessary steps to cut short the litigation at an early stage.

102It may be, as counsel for the applicant would contend, that a sensible approach would have been immediately adopted by the applicant had the issue been raised by conferral; that said, a review of the conduct of the litigation overall, including the pursuit of the misconceived application for a transfer of the proceedings and the content of the trial affidavit material filed on behalf of the applicant, does not lead to a high degree of confidence in that regard. I consider it more likely that the respondent would have incurred a degree of expense either in persuading the applicant to abandon the proceedings, or in bringing an application for summary dismissal.

103For obvious reasons, I consider it both appropriate and for the benefit of both parties to fix the sum payable in that regard, without formal assessment. In my view, an amount of $5,000.00 is appropriate.

104The respondent seeks also an order that the applicant pay his costs for the preparation of written costs submissions in the amount of $2,420.00. Given the matters canvassed above, and that the respondent has been largely unsuccessful in the contested aspects of his application for costs, I decline to make that order.

Orders

105Noting the undertaking of counsel for the applicant that the law firm Kitto & Kitto will pay on behalf of the applicant any costs ordered to be paid by her:

1.The Applicant pay the Respondent’s costs fixed in the sum of $7,763.00 within 28 days from the date of these orders.

2.All outstanding applications and responses otherwise be and are hereby dismissed.

I certify that the preceding [105] paragraphs are a true copy of the reasons for
judgment delivered by this Honourable Court

Associate
12 June 2017