Pascoe v Boensch and Anor (No.10)
[2010] FMCA 141
•3 March 2010
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| PASCOE v BOENSCH & ANOR (No.10) | [2010] FMCA 141 |
| PRACTICE AND PROCEDURE – COSTS – Application for indemnity costs by Second Respondent – where original costs order contained a grammatical error – whether Second Respondent’s offer to enter submitting appearance that was rejected was sufficient to qualify her for a special order – whether application under the “slip rule” should have been made – costs of the application for costs assessed. |
| Federal Magistrates Court Rules 2001 |
| Pascoe v Boensch & Anor (No 9) [2009] FMCA 769 Re: Wilcocks (No 2) (1996) 72 FCR 151 at 152 Ragata Developments Pty Limited v Westpac Banking Corporation (1993) 217 ALR 175 Mandarin International Developments Pty Limited v Growthcorp (Australia) Pty Limited (1998) 143 FLR 408 MGICA (1992) Limited v Kenny & Good Pty Limited (No 2) (1996) 70 FCR 236 Vlissaris v Fitzgerald [2008] VSCA 15 |
| Applicant: | SCOTT DARREN PASCOE |
| First Respondent: | FRANZ BOENSCH |
| Second Respondent: | SABINE BOENSCH |
| File Number: | SYG 1995 of 2006 |
| Judgment of: | Raphael FM |
| Hearing date: | 9 February 2010 |
| Date of Last Submission: | 12 February 2010 |
| Delivered at: | Sydney |
| Delivered on: | 3 March 2010 |
REPRESENTATION
| Counsel for the Applicant: | Mr J Johnson |
| Solicitors for the Applicant: | McLean & Associates |
| Counsel for the Second Respondent: | Mr C Lawrence |
| Solicitors for the Second Respondent: | Shanahan Tudhope Lawyers |
ORDERS
The order of 13 August 2009 be vacated and in its place there be an order that Applicant to pay the Respondents’ costs of the proceedings including any reserved costs, such costs to be taxed or assessed at 80% of the Federal Court scale.
Application dismissed.
Second Respondent pay the Applicant’s costs of the Amended Application in a Case assessed in the sum of $1,750.00.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 1995 of 2006
| SCOTT DARREN PASCOE |
Applicant
And
| FRANZ BOENSCH |
First Respondent
| SABINE BOENSCH |
Second Respondent
REASONS FOR JUDGMENT
On 17 September 2009 the second respondent, Sabine Boensch, filed an application seeking costs against the applicant. At the hearing on 9 February 2010 I allowed an Amended Application in a Case to be filed which sought firstly that the applicant pay the second respondent’s costs of the proceedings on a solicitor/client basis and then as an alternative that the applicant pay the second respondent’s costs of the proceedings. The application was supported by two affidavits of Jonathon Corlett, the first being sworn on 17 December 2009 and the second on 8 February 2010.
Mrs Boensch is the former wife of Franz Boensch, a bankrupt. At the time of the dissolution of their marriage Mrs Boensch was a joint owner of the matrimonial home. Pursuant to the orders of the Family Court she transferred her right, title and interest in the home to Mr Boensch in consideration of a payment by him of some $50,000.00. A transfer was prepared and signed but was never registered. In 2005 Mr Boensch became bankrupt. In 2007 the trustee commenced proceedings to set aside a declaration of trust in which Mrs Boensch had joined declaring that the matrimonial property was held on trust for the Boensch children. Her inclusion in the document, which was not prepared by a legal practitioner was made “for abundant caution”. It is, I believe, accepted that Mrs Boensch was a proper party to the proceedings that were commenced by the trustee as she was still one of the registered proprietors of the land which may had to have been vested in the trustee. However, she had no interest in the proceedings as she held her interest as bare trustee for Mr Boensch either as proprietor in his own right or as trustee for his children. When the proceedings were commenced Mrs Boensch’s solicitors wrote to those acting on behalf of the trustee suggesting they be permitted to enter a submitting appearance. On 29 August 2006 her solicitors wrote to those acting for the trustee stating:
“As discussed, our client is considering entering a submitting appearance. To consider this option further, our client would like to know if your client will agree not to pursue her for costs if she does so and your client is then successful on the application.
We note the usual practice is that a party is not liable for costs after entering a submitting appearance but seek express agreement from your client for abundant caution.”
The trustee did not agree not to seek costs against Mrs Boensch in the event that a submitting appearance was entered and so her solicitors entered an appearance and took a very minimal part in the proceedings. The proceedings were protracted. There were two applications which were of no interest to Mrs Boensch. The first related to whether certain documents were privileged and the second related to an application for security for costs. I am of the view that whilst it was necessary for Mr Corlett to accept service of the proceedings, consider them and attend on the first day he should immediately have requested to be excused and I do not think that any order for costs that I might make should cover his further attendance in relation to those applications.
The remaining case proceeded and a preliminary question was determined by me in favour of Mr Franz Boensch on 6 December 2007. I made an order in respect of the costs of the first respondent and reserved the costs of the second respondent. On 23 January 2008 I gave a judgment in respect of the costs of the second respondent ordering that:
“The applicant pay the second respondent’s costs limited to the daily hearing fee and part fees contained in Schedule 1 of the Federal Magistrates Court Rules 2001 for those days upon which her solicitor attended the hearing of the separate issue.”
Unfortunately the hearing of the separate issue did not end the proceedings. They continued until August 2009 when I gave judgment in relation to an application to amend pleadings and a cross application to dismiss the claim; Pascoe v Boensch & Anor (No 9) [2009] FMCA 769. Mrs Boensch remained a party to the proceedings. A solicitor attended at the commencement of the hearing on 23 July but was excused thereafter. When I determined not to allow the amendment of the pleading and to allow Mr Boensch’s application for summary judgment I made an order that:
“The applicant pay the respondent’s costs of the proceedings including any reserved costs, such costs to be taxed or assessed at 80% of the Federal Court Scale.”
That was the form of order that was made with the apostrophe before the “s” in respondents. There were at all times two respondents to the proceedings. Although Mrs Boensch took a little part in the proceedings and in particular in the application which was the subject of the decision Pascoe v Boensch & Anor (No 9) [2009] FMCA 769 her solicitors were required to do certain work in receiving copies of the applications and the evidence and advising her as to the position she should take in respect of them. I am satisfied that there was a slip in the orders and that the apostrophe should have been placed after the “s” and not before it so that to the extent that the general costs order made was not inconsistent with previous costs orders Mrs Boensch would be entitled to her costs of all the proceedings in which she had taken part.
At the hearing on 9 February 2010 the parties accepted this situation but those appearing for Mrs Boensch argued that as she had not been present when the costs orders were made and handed down she had not had an opportunity to argue for solicitor/client costs and she should be allowed to reopen the matter for that purpose. It was explained, through the affidavit of Mr Corlett, that even though the proceedings had been concluded in my judgment of 13 August 2009 a notice of discontinuance was later filed by the trustee in respect of Mrs Boensch. This added to the confusion caused by the slip in the order so that Mrs Boensch considered that there might not be an actual order for costs in her favour; hence the application.
At the end of the short hearing on 9 February the situation was that the trustee accepted that Mrs Boensch was entitled to her costs of the proceedings but resisted the claim for solicitor/client costs and that he should be required to pay the costs of the application. Mrs Boensch’s claim in respect of solicitor/client costs was contained in her counsel’s written submissions which were provided to me at the hearing and I gave leave for Mr Johnson, who appeared on behalf of the trustee, to file his written submissions in respect of that application (of which he only had notice on the previous day).
Indemnity Costs
Mrs Boensch argues that:
“(i)It was unreasonable for the Applicant to reject the Second Respondent’s offer to file a submitting appearance at the outset of the proceedings.
(ii)The Applicant unreasonably commenced or maintained the proceedings as against the Second Respondent. At the very latest the proceedings ought to have been discontinued following the determination of the separate/preliminary question on the valid existence of a trust.
In these circumstances, Mrs Boensch should be compensated for her legal expenses.”
As Counsel for the respondent notes in his helpful written submissions a special costs order of the type requested should only be made if the case exhibits “some special or unusual feature” Re: Wilcocks (No 2) (1996) 72 FCR 151 at 152 per Black CJ, at 156 per Cooper and Merkell JJ or in “special circumstances”, Ragata Developments Pty Limited v Westpac Banking Corporation (1993) 217 ALR 175 at 177 per Davies J so that it is set apart from the normal case; Mandarin International Developments Pty Limited v Growthcorp (Australia) Pty Limited (1998) 143 FLR 408 at 423 per Santow J. The applicant submits that in order for the court to make a special costs order the second respondent must show that there has been a relevant delinquency, abuse of process or ulterior purpose or unreasonableness; MGICA (1992) Limited v Kenny & Good Pty Limited (No 2) (1996) 70 FCR 236 at 240-1 per Lindgren J and that the conduct complained of must be conduct in connection with the litigation deserving of criticism, Vlissaris v Fitzgerald [2008] VSCA 152 at [20] per Maxwell P and Mandie J. I am unable to say that the conduct of the trustee vis a vis the second respondent in these proceedings was such as to raise the implied criticisms referred to in the cases cited. Mrs Boensch was at all times one of the two registered proprietors of the property in question. Failure to have her removed as a registered proprietor was that of Mr Boensch and not of the trustee. True it is that she offered to file a submitting appearance and that the trustee did not give her the absolute assurance she sought with regard to her costs. The trustee would argue that it was at all times probable that Mrs Boensch would appear as a witness in the proceedings. In those circumstances her credit might be damaged in a way that would permit costs against her even though her part in resisting the orders was small. Her advisors acted with appropriate diligence in protecting her interests and she should certainly have her costs but not, I believe, on any basis than the normal one of party and party. This is not one of those cases which is suitable for an order that costs be assessed under Schedule 1 of the Federal Magistrates Court Rules 2001, it is more appropriate that Mrs Boensch’s costs be taxed and paid at 80% of the Federal Court scale.
There is also a dispute about the costs of the application which Mrs Boensch took out to seek costs. I have found that there was an error in the original order for costs by the transposition of the apostrophe. I believe this is the type of error that could easily have been dealt with under the slip rule. If the trustee had objections then there would have to be a hearing and then if his objections were not sustained he would have to pay the costs. Mrs Boensch should have applied under the slip rule. Her application, insofar as it claimed indemnity costs, has failed and so the orders that the court makes are:
(i)The order of 13 August 2009 be vacated and in its place there be an order that Applicant to pay the Respondents’ costs of the proceedings including any reserved costs, such costs to be taxed or assessed at 80% of the Federal Court scale.
(ii)Application dismissed.
(iii)Second Respondent pay the Applicant’s costs of the Amended Application in a Case assessed in the sum of $1,750.00.
I certify that the preceding eleven (11) paragraphs are a true copy of the reasons for judgment of Raphael FM
Associate:
Date: 3 March 2010
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