Jingyi & Chao (No 3)
[2023] FedCFamC1F 841
•3 October 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Jingyi & Chao (No 3) [2023] FedCFamC1F 841
File number: SYC 3653 of 2021 Judgment of: AUSTIN J Date of judgment: 3 October 2023 Catchwords: FAMILY LAW – COSTS – Application by husband for costs against the wife and her solicitor following dismissal of the wife’s Application-Contempt – Where the husband contended the wife’s solicitor’s conduct was unreasonable and should be held personally liable for his costs – Where the wife’s solicitor’s conduct was not so unreasonable as to engage her liability for costs – Where the wife’s Application-Contempt was wholly unsuccessful – Order made for the wife to pay the husband’s costs on a party/party basis in a fixed sum. Legislation: Family Law Act 1975 (Cth) s 112 and s 117
Federal Circuit and Family Court of Australia Act 2021 (Cth) ss 35, 56, 67, 68, 76
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 12.15 and r 12.17
Cases cited: AZC20 v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2023] HCA 26
Beamish & Coburn (dec’d) (2021) FLC 94-005; [2021] FamCAFC 20
Cassidy v Murray (1995) FLC 92-633; [1995] FamCA 91
CDJ v VAJ (1998) 197 CLR 172; [1998] HCA 67
Northern Territory v Sangare (2019) 265 CLR 164; [2019] HCA 25
Re JJT; Ex parte Victoria Legal Aid (1998) 195 CLR 184; [1998] HCA 44
Sobey v Nicol and Davies (2007) 245 ALR 389; [2007] FCAFC 136
Z (a solicitor) & Limousin (2010) FLC 93-433; [2010] FamCAFC 59
Division: Division 1 First Instance Number of paragraphs: 35 Date of hearing: 3 October 2023 Place: Newcastle (via Microsoft Teams) Counsel for the Applicant: Mr Jackson Solicitor for the Applicant: JC Legal Practice Counsel for the Respondent: Mr Condon SC & Mr Southwood Solicitor for the Respondent: Juris Cor Legal ORDERS
SYC 3653 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS JINGYI
Applicant
AND: MR CHAO
Respondent
ORDER MADE BY:
AUSTIN J
DATE OF ORDER:
3 OCTOBER 2023
THE COURT ORDERS THAT:
1.The applicant shall pay the respondent’s costs of and incidental to the Application-Contempt, finalised on 22 August 2023, fixed in the sum of $13,500.
2.Otherwise, the Application in a Proceeding filed on 20 September 2023 and the Response to an Application in a Proceeding filed on 29 September 2023 are dismissed.
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.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Jingyi & Chao has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
EX TEMPORE
REASONS FOR JUDGMENTAUSTIN J:
Before the Court for consideration is the respondent’s application for costs arising from a judgment delivered on 22 August 2023 dismissing the Application-Contempt brought by the applicant against the respondent. It is resisted by the applicant and her solicitor.
For the reasons which follow, the respondent’s application for costs against the applicant succeeds, though the application brought against the applicant’s solicitor fails.
Adjournment application
The applicant filed an appeal from the judgment pronounced on 22 August 2023, which has not yet been heard, but likely will be heard within the next couple of months.
By an email sent to chambers in advance of the hearing, the applicant sought an adjournment of the hearing of the costs application until after her pending appeal is determined, which the respondent opposed, also by email (Exhibit A). The email adjournment request was denied. The adjournment application was not explicitly renewed at the hearing, but the applicant sought the “stay” of the costs application pending determination of the appeal as an alternative form of relief to the outright dismissal of the application. The adjournment (or stay) is refused and the hearing of the costs application proceeded for the following reasons.
Although not expressly stated, the adjournment and stay applications were motivated by the applicant’s expectation that her appeal will be successful. Of the 15 counts she prosecuted against the respondent, all were dismissed and she now challenges the dismissal of only one count in the appeal. Inferentially, she reasons that, if the appeal succeeds with her challenge against the dismissal of the single count and a remedial order is then made to sustain that particular count against the respondent, her contempt application will not ultimately have been “wholly unsuccessful” (s 117(2A)(e) of the Family Law Act 1975 (Cth) (“the Act”)) and so will tend against the grant of costs to the respondent.
However, the prospect of the applicant’s success in the appeal is but one consideration in relation to the costs incurred in the contempt proceedings. The applicant prosecuted the respondent with 15 separate contempt counts. The dismissal of 14 counts is uncontroversial, meaning her prosecution of those individual counts was wholly unsuccessful. If the applicant is dissatisfied with the outcome of the costs dispute, which is determined now, then she is at liberty to appeal from it. Administrative arrangements can be made for any appeal from the costs judgment to be consolidated for hearing with her substantive appeal.
Of course, contrary to the applicant’s expectation, the substantive appeal might be dismissed, in which event the proposed delay in hearing the costs application would have been pointless. The applicant apprehends that the success of her substantive appeal hinges upon her being granted leave to adduce further evidence pursuant to s 35(b) of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (“the FCFCA Act”). However, two obstacles stand in her way. First, the exercise of discretion under that provision is critically influenced by the subject matter of the proceeding with which the appeal is concerned (Sobey v Nicol and Davies (2007) 245 ALR 389 at [69]–[71]; CDJ v VAJ (1998) 197 CLR 172 at [53], [56], [108] and [186]) and the judgment from which her appeal lies determined a criminal prosecution in which she, as the prosecutrix, bore the strict burden of proof. It was not a discretionary civil judgment. Secondly, the further evidence she wishes to adduce in evidence could have been adduced, but she failed to adduce, at first instance.
Aside from the threshold issue of whether the further evidence the applicant wants to adduce ought be admitted in the appeal, there is another question as to whether the further evidence actually proves what the applicant thinks it does.
Those will be matters for the Full Court to ponder, but such considerations tend to militate against the delay which would be caused by the adjournment or stay of the costs dispute.
The costs application and evidence
The Application in a Proceeding filed on 20 September 2023, upon which the respondent moves, seeks this relief (in summary):
(a)procedural orders fixing the hearing several weeks ahead and setting a program for the parties to file written submissions (Orders 1 to 4);
(b)costs order against the applicant’s solicitor (Order 5);
(c)alternatively, costs order against the applicant (Order 6); and
(d)any other order the Court thinks appropriate (Order 7).
The Application was supported by an affidavit filed on 20 September 2023 by the respondent’s solicitor and by the respondent’s financial statement filed on 19 January 2023.
The applicant sought the relief set out in her Response to an Application in a Proceedings filed on 29 September 2023, in support of which she relied upon her financial statement filed on 13 December 2022 and her affidavit filed on 29 September 2023.
The applicant’s solicitor did not separately rely upon any evidence.
The respondent and the applicant both filed written submissions.
Procedural orders
The application for the procedural timetable is dismissed. The Application was fixed for hearing today and should be heard promptly today. The applicant and her solicitor were served with the application and supporting affidavit well in advance of the appointed hearing, so they were not surprised by the nature of the application or the evidence adduced in support of it. The parties were sufficiently prepared to have filed written submissions in readiness for the hearing, so the proposed timetable to do so was superfluous.
The Court is obliged to despatch its business as quickly, inexpensively and efficiently as possible, which objective the parties and their lawyers must help achieve (s 67 and s 68 of the FCFCA Act). The contempt proceedings were an adjunct to the financial cause still being litigated between the spouses under Pt VIII of the Act and this costs dispute is now an adjunct to the contempt proceedings, so it strays some distance from the central matrimonial cause and ought not be given a life of its own. Tails cannot be permitted to wag dogs (AZC20 v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2023] HCA 26 at [58]).
Costs against the applicant’s solicitor
The respondent’s principal application for costs was brought against the particular solicitor who represented the applicant (instructing counsel) in the contempt proceedings.
The solicitor on record for the applicant is an incorporated legal practice, not the individual solicitor against whom the costs application is brought. The respondent contended it was appropriate to bring the application against the solicitor personally rather than the incorporated practice vicariously, which proposition neither the applicant nor the solicitor disputed.
The applicant’s solicitor was not separately represented and did not apparently foresee any conflict of interest by instructing counsel to oppose the respondent’s application both personally and on behalf of the applicant.
The jurisdiction and power of the Federal Circuit and Family Court of Australia (Division 1) is relevantly regulated by the provisions of the FCFCA Act, which makes provision for the award of costs against a party’s lawyer in two ways.
The first is for the failure to help conduct the litigation in accordance with the overarching purpose of quick, inexpensive and efficient disposition of the litigation (s 68(2) and s 68(5)).
The second is for causing costs to be incurred or thrown away by reason of some form of unreasonable conduct (r 12.15 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”)). The Rules are made under the authority of the FCFCA Act (s 76) and regulate the Court’s practice and procedure (s 56(1)(b)).
The respondent submitted the power to order a solicitor’s personal liability for costs in one of those ways in the exercise of the Court’s supervisory function is supplementary, not subjugated, to the power to award costs under s 117 of the Act. The respondent supported the submission by reference to authority (Cassidy v Murray (1995) FLC 92-633 at 82,364–82,365). The applicant refuted the proposition, but without reference to any countervailing authority. While the issue was the subject of only limited debate, the respondent’s submissions are accepted. Using the power reposing within s 117 of the Act, the Court may undoubtedly make costs orders against third parties (Re JJT; Ex parte Victoria Legal Aid (1998) 195 CLR 184 at 189–190, 202, 207, 213, 220 and 226–229), including lawyers, but the FCFCA Act and the Rules empower costs orders against lawyers independently from the provisions of s 117 of the Act.
The respondent relied upon the applicant’s solicitor’s “unreasonable conduct” in prosecuting the contempt application to found the personal liability for his costs, relying upon r 12.15(1)(c) of the Rules, which provides:
12.15 Costs order against lawyer
(1)The court may make an order for costs against a lawyer if the lawyer, or an employee or agent of the lawyer, has caused costs to be incurred by a party or another person, or to be thrown away, because of:
…
(c) improper or unreasonable conduct …
Summarising the respondent’s submissions, he contended the applicant’s solicitor’s conduct was “unreasonable” because she prepared and prosecuted a contempt application which was found wanting in several technical and evidentiary respects.
However, I am not satisfied by such submissions that the applicant’s solicitor’s conduct was so unreasonable as to engage her liability for costs in the manner envisaged by r 12.15(1)(c) of the Rules. Such unreasonableness is only meant to capture, in quite unusual circumstances, seriously deficient conduct which is incompatible with proper professional performance (Beamish & Coburn (dec’d) (2021) FLC 94-005 at [7]; Z (a solicitor) & Limousin (2010) FLC 93-433 at [45]–[62]). Such form of professional dereliction is not evident simply from the dismissal of the contempt application in this instance.
Costs against the applicant
Costs as between the parties is governed by the provisions of s 117 of the Act. The orthodoxy is that each party pays his or her own costs of the proceedings (s 117(1)), though costs orders may be made if justified (s 117(2)), in which event certain prescribed considerations must be taken into account (s 117(2A)).
The Application-Contempt brought by the applicant against the respondent was wholly unsuccessful (s 117(2A)(e)), as all 15 counts of alleged contempt were dismissed. Even if the applicant’s appeal from one count succeeds, 14 of 15 counts were correctly dismissed and so 14 of 15 individual prosecutions were wholly unsuccessful (s 117(2A)(g)). Counts are prosecuted individually, even if comprised within the one application.
The contempt proceedings brought under s 112AP of the Act were quasi-criminal proceedings, thereby imposing upon the applicant a strict burden of proof, quite unlike the situation when parties bring applications for discretionary relief without bearing any burden to prove entitlement to the suites of discretionary orders for which they apply. When put to strict proof, the applicant’s case against the respondent collapsed. The manner in which many of the counts were pleaded was deficient and, in other respects, the evidence brought in support of the properly pleaded counts was incapable of proving the alleged acts of contempt. The conception, preparation and presentation of the prosecutions was regrettably poor (s 117(2A)(c)).
Neither party was legally-aided (s 117(2A)(b)) and, although the applicant submitted her financial circumstances are inferior to those enjoyed by the respondent, her more limited financial capacity is not a shield protecting her from the costs order as she is far from indigent (s 117(2A)(a)). Unmeritorious litigation is no less unmeritorious if pursued by a party of less fortunate financial circumstances (Northern Territory v Sangare (2019) 265 CLR 164 at [27]).
Commendably, the applicant’s counsel conceded it was “difficult” to resist the costs application. In all the circumstances, a costs order in the respondent’s favour against the applicant is justified, though not for the sum sought by the respondent.
The respondent quantified his costs in relation to the defence of the contempt application at $28,443.08, which comprised his solicitor/client (if not indemnity) costs for senior counsel, junior counsel, and instructing solicitor. When pressed the respondent conceded he was unable to pursue an application for indemnity costs.
Costs are payable on a party/party basis, unless the Court is persuaded to award assessed costs on some other basis (r 12.17(2)). No persuasive submission was offered by the respondent as to why his costs should be awarded on anything other than a party/party basis. He asked that his costs be fixed (r 12.17(1)(a)).
The contempt application was supported by one affidavit of the applicant, upon which she was not cross-examined, and the hearing, conducted by submissions, was completed within a few hours at most. The respondent tended some documents in his defence case, but his solicitor did not need to prepare any affidavit for him. Neither the technicality nor the complexity of the dispute required that senior counsel be briefed. Allowing for preparation and presentation of the defence case, the respondent’s costs are assessed at $13,500, which sum the applicant conceded was reasonable.
Costs
Neither party nor the applicant’s solicitor sought their costs of this dispute.
I certify that the preceding thirty-five (35) numbered paragraphs are a true copy of the Ex Tempore Reasons for Judgment of the Honourable Justice Austin. Associate:
Dated: 4 October 2023
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