Lestari & Hidayat (No 2)

[2022] FedCFamC1F 320

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Lestari & Hidayat (No 2) [2022] FedCFamC1F 320

File number(s):	SYC 585 of 2016
Judgment of:	REES J
Date of judgment:	12 May 2022
Catchwords:	FAMILY LAW – COSTS – Where the respondent wife and second respondent were represented by the same counsel and solicitor at trial – Counsel’s inability to tell the Court whether there was a conflict of interest amounts to ‘improper and unreasonable conduct’ in accordance with r 12.15(1)(c) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) – Counsel and solicitor for the respondents to pay the husband’s costs thrown away.
Legislation:	Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 12.15(1)(c)
Division:	Division 1 First Instance
Number of paragraphs:	40
Date of last submission/s	11 May 2022
Date of hearing:	In chambers
Place:	Sydney
Applicant:	Litigant in person
Counsel for the Respondents:	Ms Ingenito
Solicitor for the Respondents:	Savage Solicitors

ORDERS

SYC 585 of 2016

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:

MR LESTARI

Applicant

AND:

MS HIDAYAT

First Respondent

MS LIPARI

Second Respondent

ORDER MADE BY:	REES J
DATE OF ORDER:	12 MAY 2022

THE COURT ORDERS:

1.That the costs of the husband in the sum of $7,750 be paid by Ms Chauntelle Ingenito and Savage Solicitors within 30 days of the date of this Order.

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 the Lestari & Hidayat pseudonym has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

REASONS FOR JUDGMENT

REES J:

1. These are proceedings relating only to financial matters between Mr Lestari (“the husband”), Ms Hidayat (“the wife”) and Ms Lipari (“the second respondent”) who is the wife’s mother.

2. The proceedings were commenced by the husband in 2016 after the husband and the wife separated in November 2015.

3. The wife is in control of the entirety of the assets of the marriage and lives in the former matrimonial home which is the most significant asset. She also earns rental income from tenanting parts of the home.

4. A significant issue in the proceedings has been the valuation of the former matrimonial home which the wife wished to keep. A succession of orders has been made for valuation by a single expert valuer to value the property and by a single expert surveyor to provide evidence as to the costs of a proposed subdivision on 6 November 2017; on 1 May 2018 and on 9 July 2018.

5. In November 2019, the matter was transferred to the Family Court of Australia (as it then was) and on 15 January 2020 further directions were made about valuation.

6. The wife filed an application on 9 October 2020, seeking that the second respondent be joined as a party and seeking a declaration that the second respondent is the beneficial owner of the former matrimonial home.

7. The matter came before me for directions on 4 August 2021. The parties were directed to file trial affidavits by 24 September 2021 and yet another set of orders was made for the appointment of single experts to ascertain the value of the former matrimonial home. When the matter was listed for callover and the allocation of hearing dates on 8 October 2021, the directions relating to the valuation had not been complied with and the parties could not agree on the letters of instruction.

8. On 30 November 2021, I heard submissions and settled the letters of instruction.

9. The matter was listed for callover again on 28 February 2022 and both parties gave assurances that the matter was ready for hearing.

10. The matter was listed for three days commencing on 9 May 2022.

11. At the commencement of the three day trial, an application was made for an adjournment of the trial so that a litigation guardian could be appointed for the wife who is the first respondent in the substantive proceedings. In support of that application, an affidavit was filed by the wife’s solicitor which annexed a letter from the wife’s treating psychiatrist, Dr B, dated 4 May 2022.

12. Dr B stated:

    Currently [the wife] is finding it very difficult to employ the strategies that she learned in hospital due to the stress she is under. She has the support of her mother who has flown from [Country C] to be with her during the court case and to give evidence. The main thing that will help her stay relatively healthy is do [sic] not have to attend court in person and be cross examined which is extremely stressful for her.

    …

    Currently, the stress of the final hearing does not impact her comprehension of English. However, that is likely to be affected when in the court itself under cross examination.

    …

    In my opinion, she does not have the capacity to attend court for three days. Compelling her to do so would be quite dangerous and deleterious to her mental health and would risk the need for re hospitalisation and increase her risk of suicide.

    …

    In my opinion, she does not have the capacity to give evidence as a witness at that hearing because stress is likely to impair her judgement and communication.

13. None of those matters is relevant to the application for the appointment of a litigation guardian. Arrangements had already been made for the wife to attend upon the hearing from a remote location in the company of her solicitor and no objection was raised to the wife’s mother also being with her remotely when the matter resumed after lunch on the first day.

14. Relevantly to the issue of the appointment of a litigation guardian, Dr B, asked if the wife was capable of instructing her lawyers, wrote:

    Currently, she is able to represent her own interests.

15. Having regard to Dr B’s evidence, and the lengthy history of the proceedings, I declined to adjourn the hearing to allow an application to be made for the appointment of a litigation guardian.

16. No potential litigation guardian had been nominated. There was no affidavit by a proposed litigation guardian in accordance with the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”). There was no suggestion that, for example, if a litigation guardian were appointed, the matter could resume on the next day.

17. The issue of the wife’s mental health did not recently arise. There were discussions in 2020 about whether, potentially, a litigation guardian might be needed. The wife in her affidavit deposed to having been hospitalised because of mental illness in 2013; 2016; 2017; 2019 and 2020. Her most recent hospitalisation concluded with her discharge on 11 March 2022.

18. Nothing in Dr B’s report suggested that, if the trial were postponed, the wife’s capacity to give evidence in cross-examination would be in any way altered from its present position.

19. Notwithstanding the wife’s mental health, her solicitors prepared her trial affidavit which she swore on 24 September 2021 and an Amended Response to Initiating Application in the substantive proceedings which was filed on 27 September 2021. The solicitor also prepared the affidavit of the second respondent sworn on 24 September 2021 and her Amended Response filed on 27 September 2021. The orders sought by each of the wife and the second respondent were identical.

20. On 28 February 2022, when the wife was presumably in hospital, her solicitor appeared at the callover and told the Court that the matter was ready to proceed.

21. The application to vacate the hearing was refused.

22. Counsel for the wife then sought time to speak to her client and the matter resumed at 2.15 pm.

23. Counsel for the wife then renewed her application to vacate the hearing or, in the alternate to adjourn the proceedings to the following day.

24. Having unsuccessfully attempted to revisit the adjournment for the appointment of a litigation guardian, counsel for the wife sought to vacate the hearing, or in the alternate adjourn it until the next day on a different basis.

25. It is to be noted that the same counsel was briefed to appear for both the wife and the second respondent. At the commencement of the proceedings, counsel had confirmed that the wife and the second respondent sought applications in identical terms.

26. Counsel told the Court that she could no longer say that she had no conflict of interest appearing for both parties as she needed to ascertain whether the wife wished to change her application. Counsel was unable to tell the Court what changes were to be made in the wife’s position; whether those changes were minor and could be accommodated if the matter proceeded; whether in fact any changes would be made or, with any certainty, whether on the morrow, that position would have changed.

27. The applicant is in a parlous financial position. He has represented himself from time to time throughout the proceedings. His expenses exceed his income. He has debts of about $158,000. In his affidavit opposing the adjournment of the trial, he deposed that he had raised $15,000 to instruct counsel to appear at the trial but that he could not raise another $15,000 if the trial were adjourned.

28. The adjournment is caused because counsel for the wife, having accepted briefs to appear for two separate parties, was unable to tell the Court, on the first day of the hearing, what one of her client’s instructions are and whether she has a conflict of interest.

29. I indicated that there would be an order for the payment of the costs of the husband which were thrown away and gave counsel and her instructing solicitor the opportunity to file any written submissions addressing my suggestion that those costs should be paid by the wife’s counsel and solicitor. Those submissions were to be filed by 4.00 pm on 11 May 2022.

30. Written submissions have been provided by counsel and by the solicitor, albeit that the solicitor’s submissions were filed at 1.56 pm on 12 May 2022.

31. I accept that r 12.15(1)(c) of the Rules provides that a legal practitioner can be required to pay costs thrown away because of “improper or unreasonable conduct”.

32. I reject the submission of counsel that she was obliged to seek an adjournment because she had formed the view that the wife was not capable of giving instructions when that was clearly not the evidence of the wife’s treating psychiatrist.

33. In any event, that application was refused.

34. The wife had been released from hospital on 11 March 2022. Had any application which was considered necessary been made in a timely way, the adjournment of the trial might have been avoided, although, having regard to the evidence of Dr B, the result might not have been different.

35. Counsel in her submissions stated:

    I … acknowledge that the [husband] has no doubt suffered prejudice in that there will be costs incurred by him that will have been thrown away by the adjournment. I do not suggest that those costs should not be borne by the [wife].

36. It was not the responsibility of the first respondent, the wife, to ensure that counsel and her instructing solicitor did not have a conflict of interest in acting for both parties. That responsibility was theirs alone. That they were not able to tell the Court on the first day of the substantive hearing whether or not there was a conflict of interest is sufficient to constitute “improper and unreasonable conduct”.

37. I reject the submission of the solicitor that the adjournment was necessitated by the husband’s tardy or inadequate response to correspondence from the solicitor. That was not the basis upon which the application was made.

38. Nor do I accept that by sending an email to my associate on 4 May 2022, attaching a copy of a letter from the wife’s psychiatrist, the solicitor adequately addressed the issue, which was not that an adjournment was unsuccessfully sought, but rather that the solicitor had not satisfied herself that there was no conflict of interest in acting for both the wife and the second respondent.

39. I interpolate that the practice which has arisen of legal representatives communicating directly with judge’s chambers in relation to the proposed conduct of a matter is wholly inappropriate and particularly so in circumstances where the consent of the other parties has not been sought for such communication. It is wholly insufficient to state that the other parties have been provided with a copy of the correspondence at the same time as it was sent to chambers.

40. Counsel and the solicitor for the wife and second respondent will be jointly and severally liable to pay the husband’s costs thrown away of $7,750.

I certify that the preceding forty (40) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Rees.

Associate:

Dated:       12 May 2022