May and Longley and Anor (Costs)
[2016] FamCAFC 261
•9 December 2016
FAMILY COURT OF AUSTRALIA
| MAY & LONGLEY AND ANOR (COSTS) | [2016] FamCAFC 261 |
| FAMILY LAW – APPEAL – COSTS – Where the respondents seek their costs on an indemnity basis with such costs to be paid by the appellant and/or the appellant’s lawyers – Where there are circumstances justifying an order for costs against the appellant but not against her lawyers – Where although there is no evidence that the proceedings were commenced or continued for an ulterior purpose, or with disregard of any proper consideration of the prospects of success, it is still incumbent on a legal practitioner to provide fearless advice to the client as to the prospects of success – Where there are exceptional circumstances enlivening the discretion to award indemnity costs – Where the appeal and the amended application in an appeal were doomed to fail from the outset – Where the appeal lacked utility given the child the subject of the appeal was aged 17 years at the time of the filing of the Amended Notice of Appeal and the hearing of the appeal – Where the respondents should not have to bear any of their legal costs incurred in responding to the appeal and the amended application in an appeal – Where the charges specified in the costs agreements before the court are not unreasonable relative to the family law costs scale – Costs ordered in favour of the respondents to be calculated on an indemnity basis. |
| Family Law Act 1975 (Cth) – s 117 Family Law Rules 2004 (Cth) – r 19.10(1) |
| Cassidy v Murray (1995) FLC 92-633 Colgate-Palmolive Company v Cussons Pty Limited (1993) 46 FCR 225 Kohan and Kohan (1993) FLC 92-340 Munday v Bowman (1997) FLC 92-784 Lemoto v Able Technical Pty Ltd [2005] NSWCA 153 White Industries (Qld) Pty Ltd v Flower & Hart (a firm) (1998) 156 ALR 169 Yunghanns v Yunghanns (2000) FLC 93-029 |
| APPELLANT: | Ms May |
| FIRST RESPONDENT: | Mr Longley |
| SECOND RESPONDENT: | Ms Mann |
| FILE NUMBER: | MLC | 1151 | of | 2008 |
| APPEAL NUMBER: | SOA | 59 | of | 2015 |
| DATE DELIVERED: | 9 December 2016 |
| PLACE DELIVERED: | Adelaide |
| JUDGMENT OF: | Strickland J |
| HEARING DATE: | By written submissions |
| LOWER COURT JURISDICTION: | Federal Circuit Court of Australia |
| LOWER COURT JUDGMENT DATE: | 27 July 2015 |
| LOWER COURT MNC: | [2015] FCCA 2252 |
REPRESENTATION
| THE APPELLANT: | In person |
| COUNSEL FOR THE RESPONDENTS: | Ms Carter |
| SOLICITOR FOR THE RESPONDENTS: | Pearce Webster Dugdales |
Orders
The appellant pay the costs of the first and second respondent of and incidental to the Amended Notice of Appeal filed on 9 November 2015, the amended application in an appeal filed by the appellant on 2 December 2015 and the application in an appeal filed by the first and second respondents on 23 November 2015, such costs to be calculated on an indemnity basis and assessed in default of agreement.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym May & Longley and Anor has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
|
Appeal Number: SOA 59 of 2015
File Number: MLC 1151 of 2008
| Ms May |
Appellant
And
| Mr Longley |
First Respondent
And
| Ms Mann |
Second Respondent
REASONS FOR JUDGMENT
Introduction
On 14 September 2016 I delivered reasons for judgment and made orders in relation to an application in an appeal brought by Mr Longley and Ms Mann (“the respondents”) seeking the summary dismissal of an appeal by Ms May (“the appellant”) against orders made by Judge Burchardt on 27 July 2015 and against certain paragraphs of his Honour’s reasons for judgment in making an order for costs on 30 September 2015.
Pursuant to my orders I dismissed the appeal and provided for the respondents to file written submissions in support of their application:
(a)for the costs of and incidental to that part of the said Amended Notice of Appeal seeking to appeal against certain paragraphs of the reasons for judgment in relation to the order for costs made on 30 September 2015;
(b)for the costs of and incidental to the order made on 4 December 2015 dismissing the Amended Application in an Appeal filed on 2 December 2015; and
(c)for the costs of and incidental to the Application in an Appeal filed on 23 November 2015.
The appellant then had 14 days to respond and the respondents had seven days to reply.
On 4 October 2016 the respondents filed their submissions, on 14 October 2016 the appellant filed a response and an affidavit in effect comprising her submissions, on 18 October 2016 the solicitors for the appellant filed a submission on their own behalf, and on 24 October 2016 the appellant filed a Notice of Address for Service.
On 4 November 2016 the solicitor for the respondents advised that the respondents did not intend to file a reply, but, for some inexplicable reason the solicitor sent to the court a letter received by the adult child the subject of the orders made by the trial judge on 27 July 2015. The court has returned that letter to the solicitor for the respondents; it was plainly inappropriate for the solicitor to send that letter to the court.
As can be seen there are three subjects of the costs application, and they can be explained as follows. First, an appeal can only be brought against orders, not reasons for judgment, yet here the appellant did not appeal against the order for costs made on 30 September 2015 and instead challenged some of the reasons given for making that order. It was on that basis that that part of the appeal was dismissed, and in any event, it was out of time and no application for an extension of time was made. Secondly, on 2 December 2015 the appellant filed an amended application in an appeal seeking, in effect, leave to adduce further evidence in the appeal, and on 4 December 2015 I dismissed that application and reserved the question of costs. Thirdly, there is the issue of the costs of the application in an appeal seeking summary dismissal.
The legislation
Section 117 of the Family Law Act 1975 (Cth) (“the Act”) relevantly provides as follows:
(1)Subject to subsection (2), subsection 70NFB(1) and sections 117AA, 117AC and 118, each party to proceedings under this Act shall bear his or her own costs.
(2)If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4), (4A), and (5) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.
(2A)In considering what order (if any) should be made under subsection (2), the court shall have regard to:
(a)the financial circumstances of each of the parties to the proceedings;
(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;
(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;
(d)whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
(e)whether any party to the proceedings has been wholly unsuccessful in the proceedings;
(f)whether either party to the proceedings has made an offer in writing to the other 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.
Discussion
The respondents seek an order for costs in relation to all three matters, calculated on an indemnity basis, against “the [a]ppellant and/or her lawyers”. In the alternative they seek that the order for costs be on a party/party basis.
I note that on whichever basis the costs are calculated, the respondents seek that the costs be “in a sum to be calculated by a date fixed by this Honourable Court”. Frankly, I do not understand what this means, but if it is suggested that I fix the amount of the costs, then I can say that that will not be happening. I am not a taxing officer, and in any event, there is no bill of costs provided.
The application for an order for costs against the appellant
The first question here is whether a costs order should be made at all given the terms of ss 117(1) and (2) of the Act. There needs to be circumstances present that justify an order for costs, and here, the respondents rely on the appellant being wholly unsuccessful (s 117(2A)(e)) and her conduct of the proceedings (s 117(2A)(c)).
Plainly, in respect of all three matters the appellant has been wholly unsuccessful, and that is as far as I need go in finding justifying circumstances. That does not mean though that there will be an order for costs, and I will need to take into account any other relevant factors arising under s 117(2A) of the Act, before that conclusion is reached.
As to the conduct of the proceedings by the appellant, the respondents rely on a number of matters including:
a)The initial grounds of appeal being “incomprehensible” and leading to an Amended Notice of Appeal being filed.
b)The Amended Notice of Appeal being filed out of time requiring an extension of time.
c)The appellant seeking to appeal against certain paragraphs of the reasons for judgment of the trial judge in support of an order for costs when it was not open to do so.
d)The amended application in an appeal filed on 2 December 2015 being doomed to fail from the outset.
e)The appellant continuing the appeal despite its apparent lack of merit.
f)The appellant continuing the appeal despite it being clearly futile given the age of the child the subject of the proceedings. He was 17 years of age when the Amended Notice of Appeal was filed and when the hearing of the appeal took place.
All of those matters also provide justifying circumstances for an order for costs being made.
Pausing there, and turning to the submissions of the appellant, the first point to note is that they were prepared by her without the assistance of her previous solicitors; she had dispensed with their services. Secondly, I can say that those submissions are of little or no assistance. They sought to revisit the issues that had been determined against the appellant by the trial judge, and I take no notice of that part of the submissions.
The appellant then inexplicably seeks an order for costs in her favour calculated on an indemnity basis. That application is completely without foundation and I can say categorically that there will be no order for costs in her favour.
The only relevant submissions made by the appellant in relation to the question of whether there should be an order for costs at all are first, where she provides her reasons for persisting with the appeal, and secondly, her brief summary of her financial circumstances. However, as to the former, they fail to establish a reasonable basis for pursuing the appeal, and as to the latter, there is insufficient information provided to justify there being no order for costs. This is also put into sharp relief in the submissions of the respondents, where it is pointed out that the appellant had sufficient funds to pay their costs of $15,738.59 pursuant to the order of the trial judge made on 30 September 2015, and to instruct solicitor and counsel, not only for the trial, but for the appeal.
The application for an order for costs against the appellant’s solicitors
Before considering the question of on what basis an order for costs against the appellant should be calculated, I want to address the application against the solicitors.
It is beyond doubt that such an order can be made, and the authorities establish that “misconduct, default or negligence, any of which are found by a court to be of a serious nature, may be sufficient to justify an order” (Cassidy v Murray (1995) FLC 92-633, at 82,365).
There is also sub-rule 19.10(1) of the Family Law Rules 2004 (Cth) (“the Rules”) which provides as follows:
COSTS ORDERS AGAINST LAWYERS
19.10(1)A person may apply for an order under subrule (2) against a lawyer for costs thrown away during a case, for a reason including:
(a)the lawyer’s failure to comply with these Rules or an order;
(b)the lawyer’s failure to comply with a pre-action procedure;
(c) the lawyer’s improper or unreasonable conduct; and
(d) undue delay or default by the lawyer.
However, as much as one may be concerned at what advice was given to the appellant on the issue of whether she should pursue an appeal and/or bring an application seeking to adduce further evidence, there is no basis established here for an order for costs to be made against the appellant’s solicitors. For example, it is not open to submit (as the respondents do) that it was the fault of the solicitors that the Amended Notice of Appeal was filed out of time, or that the appellant filed an unmeritorious appeal, or an application in an appeal that was doomed to fail. Absent evidence to the contrary, I have to proceed on the basis that at all times the solicitors were acting on the instructions of the appellant, and here there is nothing to say otherwise. Further, in Lemoto v Able Technical Pty Ltd [2005] NSWCA 153, McColl JA said this (at [92]):
…A legal representative is not to be held to have acted improperly, unreasonably or negligently simply because he or she acts for a party who pursues a claim or a defence which is plainly doomed to fail…
And at [105] her Honour quoted approvingly from Goldberg J’s judgment at first instance in White Industries (Qld) Pty Ltd v Flower & Hart (a firm) (1998) 156 ALR 169, at 236:
The authorities do not support the proposition that simply instituting or maintaining a proceeding on behalf of a client which has no or substantially no prospect of success will invoke the jurisdiction. There must be something more namely, carrying on that conduct unreasonably. It is not clear what is encompassed by “unreasonably” initiating or continuing proceedings if they have no or substantially no chance of success. It seems to me that it involves some deliberate or conscious decision taken by reference to circumstances unrelated to the prospects of success with either a recognition that there is no chance of success but an intention to use the proceeding for an ulterior purpose or with a disregard of any proper consideration of the prospects of success.
Expressing the principle this way accommodates the competing principle that a party is entitled to have a practitioner act for him or her even in an unmeritorious case…
There is no evidence here that the proceedings were commenced or continued for an ulterior purpose, or with disregard of any proper consideration of the prospects of success.
A final word, and to revisit a comment made earlier in these reasons. Although the solicitors in their written submissions, and the appellant in hers, stressed that the solicitors were acting at all times on the instructions of the client, it is still incumbent on a legal practitioner to undertake a reality check and provide fearless advice to the client as to the prospects of success. Here it is of concern that the solicitors in their written submissions indicate that they were “genuinely of the view that when considering the best interests of the child, there was merit in our client’s application (and subsequent appeal) and there was more than a reasonable chance of success”. It puzzles me on what basis such a view could have been formed, because that clearly was not an accurate view.
The application for costs to be calculated on an indemnity basis
The ordinary rule is that an order for costs is calculated on a party/party basis, and to depart from that rule and award indemnity costs, exceptional circumstances must be demonstrated (e.g., see Kohan and Kohan (1993) FLC 92-340, at 79,614).
In Colgate-Palmolive Company v Cussons Pty Limited (1993) 46 FCR 225 Shepherd J provided some examples of circumstances that might justify the awarding of indemnity costs, and usefully, Holden CJ in Munday v Bowman (1997) FLC 92-784, at 84,660, drew from his Honour’s decision those examples:
(a)Where it appears that an action has been commenced or continued in circumstances where a party properly advised should have known that he had no chance of success. In such cases the action must be presumed to have been commenced or continued for some ulterior motive or because of some wilful disregard of the known facts…
(b)Making allegations of fraud, knowing them to be false, and the making of irrelevant allegations of fraud…
(c)Evidence of particular misconduct causing loss of time to the court and to other parties…
(d)The making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions…
(e)An imprudent refusal of an offer to compromise.
(Reference to authorities omitted)
Of course though, it is also well recognised that the categories of circumstances which enliven the discretion to award indemnity costs are not closed (Yunghanns v Yunghanns (2000) FLC 93-029, at [31]), but here it is readily apparent that the circumstances are precisely those identified in (a) above.
The appeal and the amended application in an appeal were doomed to fail from the outset, and properly advised the appellant should have known that. In my reasons for judgment in relation to the appeal, I found that Ground 1 was misconceived and had no reasonable prospect of success, Grounds 2 – 4, and 6 – 8 were entirely without merit, Ground 5 was a confusing and confused ground and had no merit, and part of Ground 10 was incomprehensible and the balance of the ground had no merit at all.
As for the amended application in an appeal, the evidence sought to be led, if admitted, failed to demonstrate that the orders under appeal were erroneous.
However, to find exceptional circumstances is not the end of the matter. Costs are always in the discretion of the court, and the existence of exceptional circumstances does not oblige the court to make an order for indemnity costs. The relevant factors in the exercise of that discretion are again the matters arising under s 117(2A) of the Act, as well as the terms of any costs agreement between the party seeking the order and his or her legal representatives (Kohan at 79,611).
Here the costs agreements are before the court, as they are required to be, and I find that the charges specified therein are not unreasonable relative to the family law costs scale that would apply otherwise. Indeed, there is nothing in those costs agreements that would militate against the awarding of indemnity costs.
As to other relevant factors, there is of course the conduct of the appellant in the proceedings, the financial circumstances of the parties, and the lack of success by the appellant, but I need not repeat what I have said earlier in these reasons about these factors. I do highlight though the lack of utility in the appeal given the age of the child at the time of the filing of the Amended Notice of Appeal and the hearing of the appeal. That matter looms large in a consideration of indemnity costs. In any event, because of these factors, the respondents should not have to bear any of their legal costs incurred in responding to the appeal and the amended application in an appeal, and I propose to make an order for the costs to be calculated on an indemnity basis.
I certify that the preceding thirty (30) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Strickland delivered on 9 December 2016.
Associate:
Date: 9 December 2016
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