Owens and Benson
[2016] FamCA 932
•4 November 2016
FAMILY COURT OF AUSTRALIA
| OWENS & BENSON | [2016] FamCA 932 |
| FAMILY LAW – PRACTICE AND PROCEDURE – Review of Registrar’s decision – Where the Registrar granted an extension of time to the respondent to serve an itemised costs account – Where the delay is adequately explained – Where to not grant the extension of time would deprive the respondent of the benefit of a costs order made by the Full Court – Application dismissed – Order made granting an extension of time. |
| Family Law Act 1975 (Cth) Family Law Rules 2004 (Cth) rr 1.41(1), 18.08, 18.10 19.21, 22.53(4) |
Crawford & Crawford [2008] FamCAFC 30
Ettich & Ettich [2007] FamCA 1656
Greetham & Greetham [2010] FamCA 246
| APPLICANT: | Ms Owens |
| RESPONDENT: | Mr Benson |
| FILE NUMBER: | SYC | 1552 | of | 2011 |
| DATE DELIVERED: | 4 November 2016 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | McClelland J |
| HEARING DATE: | In chambers by way of written submissions |
REPRESENTATION
| FOR THE APPLICANT: | Ms Owens on her own behalf |
| SOLICITOR FOR THE RESPONDENT: | Mr Etherington of Etheringtons Solicitors |
Orders
The Application in a Case filed 23 December 2015 is dismissed.
The time for the applicant, Mr Benson, to serve an itemised costs account on the respondent, Ms Owens, in respect of costs claimed pursuant to the order of the Full Court in EA114/2013 on 22 December 2014 is extended to close of business on 11 November 2016.
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 Owens & Benson 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).
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYC 1552 of 2011
| Ms Owens |
Applicant
And
| Mr Benson |
Respondent
REASONS FOR JUDGMENT
Introduction
This matter concerns an Application for Review pursuant to r 18.08 of the Family Law Rules 2004 (Cth) (“the Rules”), seeking a review of Order 3 of orders made by Registrar McNamara on 25 November 2015. Order 3 reads:
3. That the time for the Applicant to serve an Itemised Costs Account on the Respondent in respect of the costs claimed pursuant to the order of the Full Court in EA114/2013 on 22 December 2014 is extended to 2 December 2015.
The costs order, referred to by Registrar McNamara, arose from an appeal filed by Ms Owens (“the applicant”) against a declaration made by Judge Walker on 19 July 2013 that a de facto relationship existed between the applicant and Mr Benson (“the respondent”) from January 2005 until January 2010. That declaration was made pursuant to s 90RD of the Family Law Act 1975 (Cth) (“the Act”).
The order for costs made by the Full Court on 22 December 2014, in its judgment dismissing the appeal,[1] was as follows:
(3) The appellant shall pay the respondent’s costs of and incidental to the appeal on a party/party basis in the sum agreed or assessed in default of agreement.
[1] See Owens & Benson [2014] FamCAFC 243.
The judgment of Austin J, referring to the issue of costs, which was supported by the other members of the Full Court (Finn and Strickland JJ) was as follows:
Conclusion and costs
91. Given that there is no merit in any of the grounds of appeal the appeal must be dismissed.
92. At the conclusion of submissions on costs the appellant conceded costs should follow the event if the appeal failed. The appellant must therefore pay the respondent’s costs of and incidental to the appeal.
93. It was not submitted the costs should be payable on other than a party/party basis or that costs should not be as assessed in default of agreement. The orders should so provide.
Background
On 14 March 2011 the respondent to these proceedings filed an Initiating Application in the Federal Circuit Court seeking property settlement orders.
On 19 July 2013 Judge Walker made a declaration pursuant to s 90RD of the Act that a de facto relationship existed between the parties from January 2005 to January 2010.
On 15 August 2013 the applicant filed a Notice of Appeal seeking leave to appeal against the declaration.
On 22 December 2014 the Full Court (Finn, Strickland and Austin JJ) dismissed the applicant’s appeal.
The office of the respondent’s solicitors was closed for the Christmas break from 24 December 2014 until 8 January 2015.
On 19 January 2015 the solicitors for the respondent wrote to the applicant’s former solicitors informing them:
We are instructed to put an offer of costs to you in respect to our client’s costs of the appeal shortly, in order to avoid the assessment process and additional costs.
On 29 January 2015 the solicitors for the applicant advised the solicitors for the respondent that they had ceased acting for her.
On 12 February 2015 the applicant filed a Notice of Address for Service indicating that she was representing herself in the first instance proceedings before the Federal Circuit Court.
On 19 March 2015 the solicitors for the respondent instructed C Lawyers to prepare an itemised costs account for service on the applicant.
On 18 May 2015 the solicitors for the respondent received an itemised costs account prepared by C Lawyers.
On 26 May 2015 the itemised costs account was served on the applicant by letter and email.
The Law
At the time the costs order was made by the Full Court, r 19.21 of the Rules provided that:
Service of lawyer's itemised costs account
(1) A person entitled to party and party costs must serve an itemised costs account on the person liable to pay the costs within 28 Days after the end of the case.
Note: A person entitled to costs may serve an itemised costs account even if the person liable to pay the costs has not requested it.
(2) For party and party costs, the person entitled to costs must serve a costs notice at the same time as the itemised costs account is served under subrule (1).
Although not relevant to my consideration of this application, it is of note that on 21 December 2015, the Rules were amended so that the period of time specified in r 19.21 was extended from twenty-eight days to four months.
Rule 1.14(1) allows a party to apply to the Court to shorten or extend a time that is fixed under the Rules or by a procedural order. Rule 1.14(2) provides that a party may make an application under sub-r 1.14(1) for an order extending a time to be made even though the time fixed by a rule or an order has passed.
Rule 18.08 of the Rules enables a party to apply for a review of an order made by a Registrar.
Rule 18.10 sets out the power of the Court on review which is by way of a hearing de novo:
Power of court on review
(1) A court must hear an application for review of an order of a Judicial Registrar, Registrar or Deputy Registrar as an original hearing.
Note: In an original hearing, the court rehears the whole matter and does not simply review the decision of the original court.
(2) The court may receive as evidence:
(a) any affidavit or exhibit tendered in the first hearing;
(b) any further affidavit or exhibit;
(c) the transcript (if any) of the first hearing; or
(d) if a transcript is not available, an affidavit about the evidence that was adduced at the first hearing, sworn by a person who was present at the first hearing.
The Rules make it clear that the hearing of an Application for Review of an order made by a Registrar is a hearing de novo. That means I am required to rehear the whole matter. My task is not one of ascertaining whether, in the making of the order, there was an error on the part of the Registrar.
Principles for an extension of time
As noted, the decision that I am required to review is the order of the Registrar granting an extension of time for the respondent to serve an itemised costs account.
The principles in respect to the grant of an extension of time are well known. In Greetham & Greetham [2010] FamCA 246, Strickland J provided the following useful summary of relevant authorities:
49. The principles with respect to the grant of an extension of time, are well settled (see Gallo v Dawson (1990) 93 ALR 479, In the marriage of McMahon (1976) FLC 90-038 and In the marriage of Tormsen (1993) FLC 93-392). Gallo v Dawson is, of course, a High Court decision, and McMahon and Tormsen are two Full Court decisions of this Court.
50. The authorities mainly address extensions of time in the context of appeals. However, the principles are also largely applicable to applications for an extension of time to seek a review of the exercise of Registrar’s powers. In Tormsen (supra) the Full Court said at 80,017 that:
“[t]he fundamental issue in application for extension of periods of time prescribed by rules of court is whether this will enable the court to do justice between the parties …[and that a] failure to explain the delay adequately can certainly lead to a conclusion that justice demands that the application be dismissed.”
However, the Full Court did indicate that:
“…in appropriate cases the interests of justice may outweigh the absence of an adequate explanation.”
In Ettich & Ettich [2007] FamCA 1656 O’Reilly J said that:
In order to determine whether the Rules will work an injustice it is necessary to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation and the consequences for the parties of the grant or refusal of the application. (See Gallo v Dawson (1990) 93 ALR 479 at 480-1 per McHugh J; Prowse v Prowse (1995) FLC 92-557 at 81,568 to 81,573 but in particular 81,572-3; and Morrison v Morrison (1995) FLC 92-573 at 81,674.)
Contentions of the Applicant
Regrettably, the extensive contentions of the applicant contained within her written submissions were barely germane to the issues I have to consider and, rather than being of assistance, took a considerable amount of time to read and re-read in an attempt to comprehend them.
By way of summary, the applicant submitted that:
a)The respondent is not entitled to serve an itemised costs account under r 19.21 as the time “has not yet arisen” because the “case” remains on foot and has not yet come to an end.
b)The reasons provided by the Registrar are in error.
c)The respondent’s submissions do not address matters that were raised by the applicant.
d)The Registrar should have determined that various paragraphs of Ms B’s affidavits were objectionable and ought to be struck out.
e)The respondent failed to put sufficient admissible evidence before the Court to persuade the Court to exercise its discretion and no admissible evidence was placed before the Court by the respondent, notwithstanding that:
i)Mr Etherington was on notice of what the applicant regarded as the nature, effect and operation of r 19.21 of the Rules;
ii)Mr Etherington was at all times, the firm’s principal and the supervisor of Ms B;
iii)Mr Etherington was the solicitor for the respondent and author of the respondent’s submissions filed 18 November 2015; and
iv)Etheringtons Lawyers (including Ms B as an employed solicitor) hold themselves out as experienced family lawyers.
f)Evidence should have been provided by Mr Etherington as principal of the firm instead of Ms B.
g)The Registrar failed to have regard to the following correspondence:
i)The applicant’s letter to the respondent dated 10 July 2015;
ii)The respondent’s reply dated 31 July 2015 to the applicant’s letter of 10 July 2015;
iii)The applicant’s letter in reply to the respondent’s letter dated 31 July 2015;
iv)The applicant’s letter to the respondent dated 1 October 2015;
v)The applicant’s letter to the respondent dated 30 October 2015; and
vi)The applicant’s letter to the respondent dated 5 November 2015.
h)In considering the issue of hardship, the Registrar failed to give consideration or proper consideration to paragraphs 5 to 15 of the applicant’s affidavit filed 10 November 2015.
i)The Registrar failed to have regard to or proper regard to:
i)The possibility that:
(1)The applicant might succeed in having the respondent’s claim against her dismissed with costs;
(2)The applicant might succeed in her claim that the respondent pay her the sum of $150 000 with costs;
(3)In which case the applicant would, at the end of the “case”, be entitled to set off the amount of the costs she is obliged to pay to the respondent for the appeal against any amount which the Court orders the respondent to pay to her with costs.
ii)Accepting as the Registrar did, for the sake of argument, the applicant’s contention that the respondent’s entitlement to serve an itemised costs account under r 19.21 had not yet arisen, the Registrar failed to appreciate the prejudice and injustice to applicant in being obliged to pay these costs at any time prior to the end of the “case”, contrary to the operation of r 19.21 of the Rules.
j)The respondent will not suffer an injustice if an extension of time is not granted because payment of the respondent’s costs would go to the respondent’s solicitors and not the respondent personally.
Consideration
The applicant’s submissions are wholly irrelevant to the extent that they refer to the Registrar being in error. As noted, an Application for Review is heard de novo. My role is not to determine whether there has been an error on the part of the Registrar.
I will, however, endeavour to extract from the applicant’s submissions, in respect to error on the part of the Registrar, any factual contentions that I consider to be of some relevance to the matters that I am required to determine.
Jurisdictional issue
The applicant’s contention that there is no power to grant an extension of time for the respondent to serve an itemised costs account, because the time for that to occur has not yet arisen, is without merit. Sub-rule 22.53(4) provides that where the Court orders costs to be paid in respect to an appeal, “the court may set a time for payment of the costs that may be before the appeal is finished”.[2]
[2] Emphasis added.
The rule does not make it mandatory for the Court to set a time for the payment of costs. Moreover, even if the applicant’s argument was correct, it does not preclude the respondent serving an itemised costs account at a point in time prior to the costs becoming payable. Logic suggests that must necessarily occur. The appeal was finalised by way of orders of the Full Court being made on 22 December 2014. That was when the appeal was “finished” for the purposes of sub-r 22.53(4) and the “end of the case” for the purpose of activating the requirements of r 19.21. This included the time for serving an itemised costs account.
History of proceedings
In considering the history of the proceedings, I note that the order for costs was made in the context of the Full Court finding that there was “no merit in any of the grounds of appeal” contained in the Notice of Appeal filed by the applicant.
I further note that in the course of the proceedings before the Full Court the applicant, through her senior counsel, conceded that “costs should follow the event if the appeal failed”.
In terms of the nature of the litigation, it is to be noted that the parties are involved in proceedings before the Federal Circuit Court in respect to an application for a property settlement filed by the respondent arising out of the parties’ de facto relationship. In the ordinary course of family law proceedings, there is a presumption that each party will bear their own costs (s 117(1) of the Act). However, these proceedings arise out of an appeal in which the provisions of s 117 including s 117(2A) were considered by the Full Court.
Appeals require the application of considerable resources by the Court and by parties. A litigant bringing an unmeritorious appeal should be aware of the very real prospect that they will be ordered to pay the other party’s costs. Indeed, that appeared to be accepted by the applicant during the appeal.
Conduct of the parties / reasons for delay
I have referred to the conduct of the applicant in bringing an unmeritorious appeal which resulted in the Full Court ordering that the applicant pay the respondent’s costs. It is also necessary to examine the conduct of the respondent, or more specifically the respondent’s solicitors, in considering the reasons for the delay in the preparation and service of the itemised costs account.
In considering whether there are adequate reasons for delay, I have had regard to the affidavits of Ms B filed 21 August 2015 and 18 November 2015 respectively. Ms B is the solicitor with the conduct of the respondent’s matter in the employ of Etheringtons Solicitors. The evidence set out in paragraphs 22 – 24 of her affidavit filed 21 August 2015 is that Ms B was not aware of the time limit set out in r 19.2.1 until it was raised by the applicant in her letter dated 12 June 2015. Ms B stated that the time limit was subsequently confirmed by advice she received from C Lawyers, who were engaged to prepare the itemised costs account. That advice from C Lawyers was provided on 18 June 2015.
Ms B further stated that, upon being made aware of the relevant time limit, she took steps to remedy the situation, including seeking the applicant’s consent to an extension of time to file the itemised costs account. When consent was not obtained, Ms B made an application for an extension of time.
It is also relevant that the delay in Ms B preparing an itemised costs account occurred in circumstances where the judgment of the Full Court was delivered on 22 December 2014, shortly before the Christmas and New Year break.
It is also of relevance that, by letter dated 19 January 2015, Etheringtons Solicitors wrote to the solicitors then on the record for the applicant, informing them that it was their intention “to put an offer to you in respect of our client’s costs of the appeal…in order to avoid the assessment process and additional costs”. While it is the case that the applicant subsequently withdrew instructions from those solicitors, they were, at that time, the solicitors on the record for the applicant and the address of the firm was identified as the address for service for the applicant.
Ms B also stated, in her affidavit, that her lack of appreciation of the time limit set out in r 19.21 occurred in circumstances where her previous experience in litigation involved proceedings in the Supreme Court where there is no time restriction in respect to the service of a bill of costs.
I have earlier referred to the submissions of the applicant in respect to this issue. I will address each of those.
In respect to the assertion that Ms B’s supervising partner should have presented evidence to the Court, it is entirely a matter for the respondent’s legal representatives as to what evidence they submit to the Court to explain the reasons for the delay. It is not necessary that the evidence is presented by any particular person or persons. If the evidence is inadequate then the respondent, of course, risks the Court failing to find the explanation for the delay to be persuasive or of merit. In this case I have found that Ms B has adequately explained the reasons for the delay.
The fact that the respondent’s solicitors represent that they have expertise in family law does not detract from the veracity or genuineness of the explanation as to why the delay occurred.
In that context, in Crawford & Crawford [2008] FamCAFC 30 at [26], Boland J noted that the delay in making an application for an extension of time had been of a relatively short duration and her Honour applied the reasoning of Hayden J expressed Mackey v Mackey [2007] HCA Trans 271 (28 May 2007) where his Honour said:
While these events are regrettable, they are the kind of events which can easily happen in professional practice. They are not events which the husband was personally responsible.
I find, in this case, that the delay was of relatively short duration, it was adequately explained and while the delay was regrettable, it occurred in circumstances where the solicitors for the respondent clearly put the applicant on notice that it was their intention to pursue costs. Indeed, they indicated their preparedness to engage in good faith discussions with a view to resolving the issue of costs without incurring additional costs arising from the assessment process.
Consequence for the parties
The Court does not necessarily prioritise any of the considerations referred to in Ettich & Ettich (supra). Clearly, however, the consequences for the parties are an important consideration in determining whether the respondent’s application for an extension of time should be granted.
In that context, if the Court dismisses the respondent’s application for an extension of time, the respondent will be deprived absolutely of the benefit of the order for costs made by the Full Court on 22 December 2014.
On the other hand, in the proceedings before the Full Court, the applicant conceded, through her senior counsel, that costs should follow the event if the appeal failed, as it did.
In making that concession, it is to be inferred that the applicant considered that an order for costs in those circumstances would be appropriate. Further, the primary submission of the applicant is not that she should not be required to pay the costs as ordered by the Full Court but rather, that the time for payment of those costs (including an assessment of those costs) has not arisen.
I have had regard to paragraphs 5 through to 15 of the applicant’s affidavit filed 10 November 2015 in considering the consequences for the applicant if an order is made extending the time for the respondent to serve an itemised costs account.
Paragraph 11 appears to summarise the applicant’s contention in respect to injustice as follows:
I say that if this Honourable Court grants the orders sought by the [respondent] and I am forced to pay the costs of the appeal before the end of this case contrary to Rule 19.21 of the Family Law Rules 2004 I will be significantly prejudiced and suffer a grave injustice.
The applicant provides greater detail of that claim in paragraphs 5 through to 10 of her affidavit.
Contrary to the assertions contained in paragraphs 5 and 6 of the applicant’s affidavit, there was no obligation on the legal representatives of the respondent to seek that the Full Court’s order be framed so that the costs be paid within a particular time. I do not accept that the applicant has suffered an injustice as result of the fact that such an application was not made. The injustice referred to appears to be in respect to what the applicant perceives as a lost opportunity to set off the costs ordered by the Full Court against costs that may be ordered after the final hearing of the property proceedings. Whether such a costs order will be made at that time is merely speculative. Moreover, I am concerned with the time for service of an itemised costs account and not time for payment.
In paragraph 7 of her affidavit, the applicant expresses her opinion that the respondent’s claim in the family law proceedings is “unmeritorious and bellicose”. Leaving aside the question of appropriateness of language, but accepting for the purposes of argument that proposition, it does not alter the fact that the applicant was ordered to pay costs as result of bringing an appeal that was wholly without merit.
In paragraphs 8 and 10 of her affidavit, the applicant explains that the amount of legal costs she has incurred in these proceedings is causing her “substantial financial hardship” and that she is no longer able to retain legal representatives. My role, in respect to this application, is not to consider the merits of the parties’ respective claims in the substantive family law proceedings and whether costs have or have not been justifiably incurred. I repeat, my role is limited to determining whether I should grant an extension of time for the respondent to serve an itemised costs account on the applicant in respect to the applicant’s unsuccessful appeal.
In respect to paragraph 9 of her affidavit, the applicant contends that the respondent “is still able to afford to instruct solicitors in this matter”. That fact is irrelevant to my consideration of this matter.
Paragraphs 12 through to 15 of the applicant’s affidavit refer to correspondence in which the applicant claims that there has been inadequate discovery and production of documentation on the part of the respondent. Paragraph 15 refers to the principal of Etheringtons Solicitors being in attendance during the course of the applicant’s appeal. Having read, and indeed re-read those paragraphs, I cannot, with respect, ascertain any relevance to the matters that I am required to consider.
I have also read the correspondence referred to in paragraph 55 of the applicant’s written submissions and, once again, save in respect to the matters to which I have earlier referred, there is nothing in that correspondence that assists me in the consideration and determination of this application.
In summary, I find that the detrimental consequences for the respondent of not granting an extension of time to serve an itemised costs account far outweighs the detrimental consequences for the applicant. The consequence for the respondent of being deprived of the benefit of the order for costs would, in my opinion, work an injustice upon him.
Conclusion
Accordingly, I am satisfied as to the following:
a)The order for costs made by the Full Court occurred in circumstances where they found that the applicant’s appeal was wholly without merit and in circumstances where the applicant, through her senior counsel, conceded that it was appropriate for an order for costs to follow the event.
b)The reasons for the delay have been adequately explained and, while regrettable, the respondent was not personally responsible for that delay.
c)The respondent would suffer an injustice if an extension of time was not granted because he would be wholly deprived of the benefit of the order for costs made by the Full Court on 22 December 2014.
Accordingly, I make the following order:
a)The time for the applicant, Mr Benson, to serve an itemised costs account on the respondent, Ms Owens, in respect of costs claimed pursuant to the order of the Full Court in EA114/2013 on 22 December 2014 is extended to 11 November 2016.
I certify that the preceding sixty-one (61) paragraphs are a true copy of the reasons for judgment of the Honourable Justice McClelland delivered on 4 November 2016.
Associate:
Date: 4 November 2016
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