Pilkvist & Coburn (Deceased)
[2020] FamCA 92
•19 February 2020
FAMILY COURT OF AUSTRALIA
| PILKVIST & COBURN (DECEASED) | [2020] FamCA 92 |
| FAMILY LAW – COSTS – Circumstances justifying order – Where the respondent to the substantive proceeding seeks costs be paid by the applicant and her legal representatives jointly and severally on an indemnity basis – Where there was no jurisdictional basis for the applicant’s claim and her application was wholly unsuccessful – Where the consistent sworn evidence of the applicant was that there was no breakdown of the de facto relationship and no order for costs is made against her – Where the solicitor and barrister for the applicant failed to ensure the Court had power to make the order sought and breached r 1.08(1)(a) of the Family Law Rules 2004 – Where the breach by the solicitor and barrister is serious – Where the solicitor commenced and continued the proceedings where there was no jurisdictional basis for such a claim – Where the failure of the solicitor and barrister to give proper, if any, consideration to the futility of the claim and/or failure to withdraw if their advice was not taken amounts to improper or unreasonable conduct – Where the wasted costs of the respondent are considerable – Where the circumstances justify a costs order in favour of the respondent and an award of costs on an indemnity basis is just – Where the solicitor and barrister are jointly and severally liable for the respondent’s costs fixed in the sum of $100,000. |
| Family Law Act 1975 (Cth) ss 4(1)(c), 44(5), 31(1)(aa), 90RD, 90RH, 90SM, 90SN, 117 Family Law Rules 2004 (Cth) rr 1.08, 19.08, 19.10, 19.18 |
| Cassidy & Murray (1995) FLC 92-633 Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 Ex Christmas Islanders Association Inc v Attorney-General (Cth) (No 2) (2006) 233 ALR 97 Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish (2005) 33 Fam LR 123 In the marriage of McAlpin (1993) FLC 92-411 In the marriage of Pagliarella (No. 3) (1994) FLC 92-460 Kohan and Kohan (1993) FLC 92-340 Lenova & Lenova (Costs) [2011] FamCAFC 141 Pilkvist & Coburn (Deceased) [2019] FamCA 635 Pilkvist & Coburn(Deceased) (No. 2) [2019] FamCA 803 Prantage v Prantage (2013) 49 Fam LR 197 Re Wilcox, Ex parte Venture Industries Pty Ltd (1996) 72 FCR 151 Z (a solicitor) & Limousin (2010) FLC 93-433 |
| APPLICANT: | Ms Pilkvist |
| RESPONDENT: | Mr Coburn (Deceased) by his legal personal representatives Ms Coburn and Mr E |
| FILE NUMBER: | BRC | 2525 | of | 2009 |
| DATE DELIVERED: | 19 February 2020 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | Carew J |
| HEARING DATE: | In Chambers – date of last submission 21 November 2019 |
REPRESENTATION
| FOR THE APPLICANT: | Self-represented |
| FOR THE RESPONDENT: | Peter J Sheehy, Solicitor |
it is ordered that:
The application by the respondent for the applicant to pay costs be dismissed.
Ms F and Ms B be jointly and severally liable for the costs of the respondent fixed in the sum of $100,000.
The names of the legal practitioners who are the subject of the Order are to be redacted from the reasons for judgment dated 19 February 2020 prior to any public dissemination.
The Senior Registrar of the Family Court of Australia is requested to provide the reasons for judgment dated 19 February 2020 to the Legal Services Commission, Queensland for their consideration.
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 Pilkvist & Coburn 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 BRISBANE |
FILE NUMBER: BRC2525 of 2019
| Ms Pilkvist |
Applicant
And
| Mr Coburn (deceased) by his legal personal representatives Ms Coburn and Mr E |
Respondent
And
Ms F
And
Ms B
REASONS FOR JUDGMENT
On 6 September 2019, I declared that a de facto relationship between the applicant and respondent (now deceased) never existed.[1] The applicant’s claim for a property settlement therefore failed. The legal personal representatives for the respondent now seek indemnity costs against the applicant and her legal representatives jointly and severally. With the consent of all interested parties, the application for costs has been determined in chambers after receipt of written submissions.
[1]Pilkvist & Coburn (Deceased) [2019] FamCA 635.
Brief background
A detailed background is included in my reasons for judgment dated 6 September 2019[2] and should be read with these reasons, but by way of summary, the applicant was engaged by the respondent as his ‘carer’ in 1993. At the time of her engagement it was agreed that she would live in the respondent’s house with him and would be provided with board and a weekly payment. This arrangement continued until 23 July 2014. The respondent died in mid-2019 at age 85 years.
[2] Ibid.
Despite his disability of quadriplegia, the respondent operated a number of businesses and by the time of his death had amassed a sizable estate worth approximately $11,000,000.
The applicant first made a claim for a property settlement based upon an alleged de facto relationship in 2009. Those proceedings were settled and on 20 October 2009, the applicant and respondent consented to a declaration by this Court that a de facto relationship never existed between them. A notation to the order recorded that the respondent was to provide the applicant with a lump sum payment of $400,000 “in full and final recognition of the past care that has been provided, as well as the mutual respect that the Applicant and Respondent have for each other”. The payment was made and the applicant and respondent thereafter continued with their previous arrangement. The applicant and respondent were each legally represented in 2009 and the matter settled as a result of a mediation conducted by Senior Counsel.
On 23 July 2014, the respondent was removed from the home by third parties (pursuant to a Power of Attorney) and admitted to hospital. On 26 July 2014, the applicant was initially evicted from the home by the third parties and on 29 July 2014, the respondent commenced to live in a nursing home. Despite being physically separated the applicant maintained that the relationship continued until the respondent’s death in May 2019 despite third parties keeping them apart at times.
On 29 June 2016, the applicant recommenced proceedings in this Court. The Initiating Application sought the following order on a final basis:
1.That this honourable Court set aside Court Orders before the Honourable Justice Murphy dated 20 October 2009 pursuant to s79A of the Family Law Act (Cth).
2.That this honourable Court declare that a de facto relationship exists between the parties.
3.That this honourable Court order an alteration of property interests pursuant to s79 of the Family Law Act 1975 (Cth) as the Court deems appropriate.
It is of course noteworthy that ss 79A and 79 of the Family Law Act 1975 (Cth) (“the Act”) had no application as they only apply to a married couple. Additionally, the order made on 20 October 2009 did not make any order for property settlement so there was no property order to set aside. The declaration sought was that a de facto relationship exists, despite the entitlement to apply for a property settlement as a de facto only arising after the breakdown of the relationship (see s 90 SM of the Act).
The Initiating Application, which contained a number of asserted facts, was signed by the applicant who confirmed that it contained only true and correct information. Consistent with the declaration sought i.e. that a de facto relationship exists, the applicant indicated with a cross at item 27 of the Application that the date of final separation was ‘not applicable’ and at item 55a the applicant indicated with a cross that the de facto relationship had not broken down on or after 1 March 2009.
On 3 August 2016, an Amended Initiating Application was filed in which the final order sought was amended to the following:
1.That the Orders made by the Family Court of 20 October 2009 be set aside and found invalid/voidable as it does not meet the requirements of section 31(1) of the Family Law Act 1975 (Cth).
2.That this honourable Court declare that a de facto relationship exists between the parties per section 90RD of the Family Law Act 1975 (Cth).
3.That this honourable court order an alteration of property interests pursuant to s.90SM of the Family Law Act 1975 (Cth) as the Court deems appropriate.
On the alternative
1.The Orders made by the Family Court of 20 October 2009 are set aside under s.90SN of the Family Law Act 1975 (Cth) in respect of the Declaration made in paragraph 2 of the Minutes of Consent which states: “It is declared pursuant to section 90RD(1) Family Law Act that a de facto relationship never existed between the Applicant and the Respondent”.
2.A declaration that a de facto relationship existed between the parties from 26 May 1994 until 17 July 2016.
3.Under s.90SM of the Family Law Act 1975 the Respondent is to pay to the Applicant an amount determined by the Court as it considers appropriate.
Section 31(1)(aa) of the Act does not provide a source of power to set aside any order and, as already noted, there was no property order made on 20 October 2009. The Amended Initiating Application (at least in the primary order sought) again sought a declaration that a de facto relationship “exists”. In the alternative, the applicant sought to set aside the declaration pursuant to s 90SN of the Act (it is s 90RH of the Act which provides very narrow grounds for a declaration to be set aside). The Amended Initiating Application also sought a declaration that a de facto relationship existed from 26 May 1994 until 17 July 2016. Despite an end date being included i.e. 17 July 2016, the information provided by the applicant in the Application and stated to be true and correct, namely, that there was no final separation, remained.
On 6 December 2016, a Further Amended Initiating Application was filed in which the final order sought was amended to the following:
1. That the Orders made by the Family Court on 20 October 2009 be set aside and found invalid/voidable as it does not meet the requirements of section 31(1)(aa) of the Family Law Act 1975 (Cth).
2.That this honourable Court declare that a de facto relationship exists between the parties post the declaration on 20 October 2009 until present pursuant to section 90RD of the Family Law Act 1975 (Cth).
3.That this honourable court order an alteration of property interests pursuant to s.90SM of the Family Law Act 1975 (Cth) as the Court deems appropriate.
On the alternative
1.The Orders made by the Family Court on 20 October 2009 are set aside under s.90SM of the Family Law Act 1975 (Cth) in respect of the Declaration made in paragraph 1 of the Minutes of Consent which states: “It is declared pursuant to section 90RD(1) Family Law Act that a de facto relationship never existed between the Applicant and the Respondent”.
2.A declaration that a de facto relationship existed between the parties from 26 May 1994 until October 2009.
3.Further that the court declare that a de facto relationship exists between the parties post declaration on 20 October 2009 until present pursuant to section 90RD of the Family Law Act 1975 (Cth).
4.Under s.90SM of the Family Law Act 1975 the Respondent is to pay the Applicant an amount determined by the Court as it considers appropriate.
My observations in relation to the two previous iterations of the Initiating Application remain apposite.
On 10 April 2019, a Further Further Amended Initiating Application was filed in which the final order sought was amended to the following:
1.That this honourable Court declare that a de facto relationship exists between the parties from 9 October 2009[3] to 6 December 2016.
[3] The Case Outline relied at trial refers to 20 October 2009.
2.That this Honourable Court order an alteration of property interests pursuant to s.90SM of the Family Law Act 1975 (Cth) 35% to the Application of the property pool or as the Court deems appropriate.
Although not fatal, the commencement date for the alleged de facto relationship precedes the declaration already made on 20 October 2009, namely, that there was no de facto relationship, and despite the declaration being sought that the de facto relationship existed to 6 December 2016, the information contained in the Application remained the same i.e. there had not been a final separation.
Ms F is noted to have prepared each iteration of the Initiating Application. Ms B was retained in the matter from at least 2 April 2019 and represented the applicant at trial.
The applicant’s evidence in chief at trial did not depose to a breakdown in the relationship and, when cross-examined, the applicant confirmed that she and the respondent remained in a relationship up to the date of his death in 2019 despite their physical separation.
The applicant now acts for herself and is impecunious.
On 31 October 2019, I referred the applicant’s former legal representatives to the Legal Services Commission in relation to their conduct of this matter.[4]
how costs applications are determined
[4]Pilkvist & Coburn (Deceased) (No. 2) [2019] FamCA 803.
Although each party generally bears their own costs in this jurisdiction (s 117(1) of the Act) the Court has a broad discretion to make such order as to costs as the Court considers just where there are circumstances that justify it in doing so (s 117(2)). It is not in contention that costs can be awarded against a non-party.[5]
[5] In the marriage of McAlpin (1993) FLC 92-411 at 80,215; see also Cassidy v Murray (1995) FLC 92-633 at 82,365, In the marriage of Pagliarella (No. 3) (1994) FLC 92-460 at 80,756 (citing the High Court in Knight v FP Special Assets Ltd (1992) 174 CLR 178 at 192 – 193).
In the exercise of the discretion to award costs, regard must be had to the factors set out in s 117(2A) of the Act, so far as they are relevant.
Those factors are as follows:
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.
It is sufficient for one factor in s 117(2A) to be present.[6]
[6] Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish and Anor (2005) 33 Fam LR 123.
Rule 19.10(1) of the Family Law Rules 2004 (Cth) (“the Rules”) provides that a person may apply for an order 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.
Rule 19.10(2) permits the Court to make an order, including an order that the lawyer:
a)not charge the client for work specified in the order;
b)repay money that the client has already paid towards those costs;
c)repay to the client any costs that the client has been ordered to pay to another party;
d)pay the costs of a party; or
e)repay another person’s costs found to be incurred or wasted.
Rule 1.08(2) creates a responsibility for lawyers to ensure that any orders sought are reasonable in the circumstances of the case and that the Court has the power to make those orders (see r 1.08(1)(a)).
In Cassidy v Murray[7] the Full Court of this Court considered a number of authorities in various jurisdictions relating to the circumstances in which a court might order costs against a lawyer and identified the following principles:
a)The discretion to order costs against a lawyer should be exercised with caution;
b)There is a need to balance the competing public interests involved, namely, the concern that lawyers should not be deterred from pursuing their clients’ interests for fear of being made personally subject to orders for costs, and the principle that innocent parties should not be occasioned costs, for which they would not otherwise be liable, as a result of the inappropriate conduct of lawyers;
c)The Court may make an order for costs against a lawyer without the necessity to establish that the lawyer has been guilty of serious professional misconduct;
d)The lawyer has a duty to the Court to promote the interests of justice whilst at the same time attending to the needs of the lawyer’s client;
e)A mistake or error of judgement would not justify an order for costs against a lawyer. However, 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; and
f)The jurisdiction is compensatory not punitive.
[7] (1995) FLC 92-633.
Subsequent to Cassidy v Murray[8] the Rules were amended and while incorporating some of the principles identified in that case, the amendments also extended the potential liability of lawyers to costs thrown away during a case for reasons including the lawyer’s failure to comply with the Rules or the lawyer’s improper or unreasonable conduct (see r 19.10).
[8] (1995) FLC 92-63.
In Z (A Solicitor) & Limousin[9] the Full Court dismissed a solicitor’s appeal against a personal costs order. The case provides a comprehensive overview of the jurisprudence in this and other jurisdictions and considers the substantial amendments made to the Rules in 2004 including the addition of objects, principles, and responsibilities imposed on parties to litigation as well as their lawyers. The Full Court noted that the amended Rules include a ‘main purpose’, namely, “to ensure that each case is resolved in a just and timely manner at a cost to the parties and the court that is reasonable in the circumstances of the case” and that r 19.10 exposes lawyers to a personal costs order if they do not comply with the Rules or if they engage in improper or unreasonable conduct. The Full Court adopted the principles extracted from a number of cases by French J (as his Honour then was) in Ex Christmas Islanders Association Inc and Others v Attorney-General (Cth) (No 2)[10] including the following:[11]
a)The need for caution when legal professional privilege has not been waived and the Court does not know the details and circumstances of a client’s instructions;
b)While no comprehensive definition of ‘unreasonable’ conduct is possible it must be more than acting for a client who has little or no prospect of success. There must be something akin to an abuse of process e.g. having an ulterior motive for the proceedings or commencing or pursuing proceedings without any, or any proper, consideration of the prospects of success;
c)Lawyers have a duty to their client and to the Court to be “competent in their conduct of legal business”.
[9] (2010) FLC 93-433.
[10] (2006) 233 ALR 97.
[11]Limousin (supra) at 84,704.
Importantly, the Full Court adopted the principle that a failure to give any, or any proper, consideration to the prospects of success does not require demonstration of any collateral or ulterior purpose.[12]
[12]Limousin (supra) at 84,704.
A court will not lightly make an order for costs to be paid on an indemnity basis. There needs to be some circumstance of an exceptional kind to justify that course.[13]
[13] Kohan and Kohan (1993) FLC 92-340 at 79,614; Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 at 233.
Rule 19.08(3) requires the terms of any costs agreement to be disclosed when indemnity costs are sought.
In Re Wilcox, Ex parte Venture Industries Pty Ltd[14] the Full Court of the Federal Court per Cooper & Merkel JJ said:
[14] (1996) 72 FCR 151 at 156 – 157.
The issue whether costs should be ordered on a party and party basis or on an indemnity basis has acquired increasingly greater significance as the gap between the two bases appears to have grown.
The gap has highlighted the conflict between two seemingly irreconcilable objectives. The first is protecting access to justice by only exposing an unsuccessful litigant in the usual course to an order for scale costs on a party and party basis. The second is relieving a successful litigant from the burden of costs which that litigant should not have been required to incur. These and other policy factors have been considered by the courts over a very long period in order to arrive at the principles which govern the undoubted discretion of courts to depart from ordering costs on a party and party basis and ordering costs on an indemnity basis. The principles were stated by Sheppard J in Colgate-Palmolive Co v Cussons Pty Ltd [1993] FCA 536; (1993) 46 FCR 225.
The Full Court (per Cooper and Merkel JJ) went on to restate the principles from Colgate-Palmolive as follows: [15]
[15] Ibid at 156 – 157.
(a)the Court ought not to depart from the rule that costs be ordered on a party and party basis unless the circumstances of the case warrant the Court in departing from the usual course;
(b)the circumstances which may warrant departure from the usual course arise as and when the justice of the case so requires or where there may be some special or unusual feature in the case to justify the Court in departing from the usual course;
(c)whilst the circumstances in cases in which indemnity costs have been ordered offer a guide, the question must always be whether the particular facts and circumstances of the case in question warrant the making of an order for costs other than on a party and party basis.
While the categories of cases in which an indemnity cost order may be awarded are not closed, indemnity costs may be ordered where a case was pursued with “wilful disregard of known facts or clearly established law”.[16]
The explanatory guide to the Rules provides a useful definition of costs on an “indemnity basis”, namely: [17]
[A]n entitlement to costs, including costs under a costs agreement, for all costs incurred, other than costs that are unreasonable in amount or that have been incurred unreasonably.
[16]Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 at 233.
[17]Prantage v Prantage (2013) 49 Fam LR 197 at 200.
Rule 19.18 empowers the Court, when awarding costs, to make an order for costs:
a)of a specific amount;
b)as assessed on a particular basis (e.g. lawyer and client, party/party or indemnity);
c)to be calculated in accordance with the method stated in the order; or
d)for part of the case, or part of an amount assessed in accordance with Schedule 3.
In considering what specific order should be made the same rule provides that the Court may consider any of the following factors:
a)the importance, complexity or difficulty of the issues;
b)the reasonableness of each party’s behaviour in the case;
c)the rates ordinarily payable to lawyers in comparable cases;
d)whether a lawyer’s conduct has been improper or unreasonable;
e)the time properly spent on the case, or in complying with pre-action procedures; and
f)expenses properly paid or payable.
Discussion
The respondent contends that costs are appropriate because the applicant was wholly unsuccessful in her application. It is submitted that if it be determined that the applicant knew or ought to have known that there was no jurisdictional basis for her claim (because the de facto relationship had not broken down)[18] this is an exceptional circumstance warranting an award of indemnity costs.
[18] See s 90SM(1) of the Act.
In relation to the claim against the applicant’s solicitor and barrister, it is submitted by the respondent that the best that can be said for the applicant’s legal representatives is that they were ignorant of the law, but ignorance is no defence to a claim for costs, particularly in circumstances where the jurisdictional requirement, namely, a breakdown of the de facto relationship, was brought to the attention of the legal representatives during a case management hearing on 2 April 2019. The conduct of the legal representatives on that occasion led to the expression of a concern that the legal representatives may have been attempting “to fashion the evidence to create a jurisdictional basis for a claim that did not, in fact, exist”.[19] It is submitted that a finding on that issue is not necessary to found a costs order against the legal representatives. I agree.
[19] Pilkvist & Coburn (Deceased) [2019] FamCA 635 at [74].
The applicant resists any costs order but her submissions substantially contain challenges to the findings made at trial and reference to material not in evidence. I note, however, that the applicant’s former counsel, Ms B describes the applicant as “a person of low average intelligence with minimal education from Country Q who speaks and understands English, but has no real understanding of the legal process. She only understood that by going to trial, she was applying for an amount of money greater than what she agreed to accept and signed a consent order after a mediation”. I note also that the applicant is impecunious and the costs disclosure notice provided at trial disclosed that the applicant had incurred legal costs in these proceedings of $186,280. Impecuniosity does not of itself preclude a costs order being made.[20]
[20]Lenova & Lenova (Costs) [2011] FamCAFC 141.
Ms F, the applicant’s former solicitor, resists any costs order on the basis that she has “not defaulted or was (sic) negligent”. Ms F submits that she “conducted this matter what (sic) is expected of a diligent and competent solicitor”. Ms F submits that she sought advice from counsel and of senior solicitors of “Legal Assist of the Queensland Law Society”. Ms F then descends into a challenge of the findings made at trial and includes in her written submissions expressions such as feeling “violated” by publication of her name in the judgment. (As was pointed out to the interested parties during oral submissions at a previous hearing, the published anonymised version redacted the names of the legal representatives).[21] Ms F takes umbrage at the respondent’s submission that she was ignorant of the law and refers to the fact that she has practised in family law for 14 years. Ms F suggests that the failure to indicate on the various iterations of the Initiating Application that there was a final separation was an “error”. Ms F does not explain this “error”, in circumstances where the information in the Applications is consistent with the applicant’s evidence at trial.
[21]Pilkvist & Coburn (Deceased) [2019] FamCA 635; Pilkvist & Coburn (Deceased) (No. 2) [2019] FamCA 803.
Ms B, the applicant’s former counsel, filed written submissions well after the due date but I have nevertheless considered them.
Ms B refers to an attachment to her submissions described as “my updated agenda for a conference with the solicitor and the client”. Ms B submits that on an unspecified date it was “clearly established with the client that the de facto relationship ended when [the respondent] was removed from his home to [the] Nursing home”. I note that the respondent was removed by third parties from his home on 23 July 2014 and taken to hospital. He was moved to a nursing home on 29 July 2014.
When Ms B appeared before me at the show cause hearing (as to why she should not be referred to the Legal Services Commission) she was granted leave to give oral evidence and confirmed that her former client had not waived legal professional privilege. It is arguable that her written submissions are in breach of legal professional privilege, although she does not actually reveal what her former client said to support the conclusion she reached. It is a very fine line.
In any event, it is curious, given Ms B’s submission as to when the end of the relationship was “clearly established”, that the applicant’s evidence in chief was not corrected at the commencement of the trial to reflect that. It is also curious that when Ms B sought to amend the Initiating Application at the end of the trial it was to state that the end of the relationship was the 26 July 2014 i.e. not the date when the respondent was removed from the home nor the date he commenced to live in a nursing home. The application for leave was not granted as it was contrary to the applicant’s evidence. I further note that when the matter was before me for a case management hearing on 2 April 2019, Ms B initially submitted that the relationship was still ongoing as at 2 April 2019 and moments later (when it was brought to her attention by opposing counsel that the Court would have no jurisdiction if the relationship were ongoing) submitted that the parties separated on 6 December 2016 i.e. five months after the proceedings were commenced. When asked by me what happened on 6 December 2016, Ms B said that was when separation occurred. Nothing in the applicant’s evidence at trial supports the submission that the parties separated on 6 December 2016 and no attempt to clarify her representations to the Court on 2 April 2019 were forthcoming from Ms B.
Ms B’s written submissions conclude with the following submission:
I submit that my conduct shows no evidence of negligence, there was no improper conduct on my part, nor was there other misconduct or default that would merit an order against me. I had no knowledge that the client would give completely different evidence at the trial.
(emphasis added)
A difficulty with Ms B’s submission is that the applicant’s oral evidence during cross-examination at trial was consistent with her evidence in chief and consistent with her statements in each of the four iterations of the Initiating Application i.e. there was no final separation. In other words the applicant did not give “completely different evidence at trial”.
Conclusion
In circumstances where the sworn evidence of the applicant (in the various iterations of the Applications, her affidavit, and her oral evidence) consistently conveyed that there had been no final separation, I am not persuaded that costs should be awarded against the applicant personally. In coming to this conclusion I also take into account, in favour of the applicant, the factors of special disadvantage identified by Ms B. In my view, properly advised, the proceedings should not have been commenced let alone continued. If the applicant insisted on the proceedings continuing, despite advice, her legal representatives had the option to withdraw. A failure to do so leaves them vulnerable to costs.
A costs order can be made against a lawyer where they have failed to comply with the Rules or where their conduct has been improper or unreasonable. There is no requirement for a finding of negligence or professional misconduct or default. Of course, not every failure to comply with the Rules would warrant a costs order. In my view, it would only be in cases where the failure is clear and the consequences serious that costs against a lawyer would be warranted. Likewise, not every example of a lawyer acting improperly or unreasonably would necessarily warrant a costs order. The discretion to award costs should be exercised with caution bearing in mind the competing public policy interests. I am also mindful that the applicant has not waived legal professional privilege and in those circumstances, not every relevant fact may be known to me.
However, the Initiating Applications in their various iterations do not establish an entitlement to advance the claim at law. I do not accept that this fundamental deficiency can be excused as a mere error when the evidence in chief of the applicant also failed to establish the legal entitlement to advance the claim. The applicant’s evidence did not change during the proceedings. To the contrary, it remained consistent.
I find that Ms F’s failure to ensure that the Court had the power to make the order sought was a breach of r 1.08(1)(a) and is serious. The many iterations of the Initiating Application resulted in the respondent incurring unnecessary costs, including a trial. I also find that Ms F failed to give proper consideration (or any consideration at all) to the essential jurisdictional fact that had to be established. In the first line of s 90SM of the Act the jurisdictional fact is apparent i.e. “In property settlement proceedings after the breakdown of a de facto relationship…”. (see also the definition of ‘de facto financial cause’ in s 4(1)(c) and s 44(5)) Even if it were the case that Ms F was ignorant of the relevant jurisdictional fact at the commencement of the proceedings, the deficiency in the case was brought to her attention on 2 April 2019. The commencement and continuation of the proceedings in these circumstances amounts to improper or unreasonable conduct. If Ms F gave appropriate advice to the applicant which was not accepted she should have withdrawn.
I have no evidence about Ms F’s financial circumstances other than the fact that she has been a lawyer practising in this jurisdiction for 14 years.
I find that this is a case where costs against a lawyer is warranted and the particular circumstances, as described, are exceptional and justify an award of costs on an indemnity basis.
Ms B was not retained (as far as I know) at the time of commencement of the proceedings but she was involved in the case on 2 April 2019 at a case management hearing before me. Ms B’s conduct during the case management hearing on that day was troubling and the circumstances of that hearing are set out in my earlier reasons for judgement which should be read with these reasons.[22] Ms B has never adequately explained the conflicting statements she made on that date. While I am conscious that the applicant has not waived legal professional privilege and therefore approach this matter with some caution, the submissions made by Ms B on 2 April 2019, namely, that the parties separated on 6 December 2016 were not consistent with the applicant’s evidence at trial. The applicant’s evidence at trial was however consistent with the first version submitted by Ms B on 2 April 2019, namely, the relationship was still intact.
[22] Pilkvist & Coburn (Deceased) [2019] FamCA 635 at [64] – [75]; see also Pilkvist & Coburn(Deceased) (No. 2) [2019] FamCA 803.
In Ms B’s written submissions dated 21 November 2019 she submits that “it was clearly established” on an undisclosed date during a conference with the solicitor and client that the de facto relationship ended when the respondent “was removed from his home to [the] Nursing Home”. The applicant’s evidence was not consistent with that submission. In any event, the respondent was removed from the home on 23 July 2014 and commenced to live in the nursing home on 29 July 2014 yet at the end of the trial Ms B suggested the date of separation was 26 July 2014 (when her client was initially evicted from the home), a date inconsistent with what Ms B now says was “clearly established” prior to trial.
Although Ms B submits that she considered withdrawing during the trial, it could not be said that her attempts to do so were made within a reasonable time, given what she knew or ought to have known at least as early as 2 April 2019, namely, that the Court did not have the power to make the order sought. The fact that Ms B decided not to withdraw because she contends that Ms F swore at her and threatened to sue her for negligence does little to commend her or indeed Ms F’s (if accurately portrayed) professionalism. Ms B also incorrectly submits that the applicant’s case changed during the trial. As already noted, the applicant’s evidence as contained in her trial affidavit, her statements on each of the four iterations of the Initiating Applications, and her oral evidence remained consistent.
Ms B’s breach of the duty imposed by r 1.08(1)(a) to ensure that the Court had the power to make the order sought was serious. Ms B’s failure to give proper consideration (or any consideration at all) to the futility of the claim or, if she did, to withdraw from the proceedings if her advice was not taken, amounts to improper or unreasonable conduct. The circumstances as they involve Ms B are of an exceptional kind and warrant an award of costs on an indemnity basis.
I have no evidence about Ms B’s financial circumstances but note she was called to the Queensland Bar in 1987.
The wasted costs of the respondent are considerable, including $21,915.74 for valuations. The costs claimed are in the vicinity of $128,000. I note that the applicant’s legal costs of the proceedings were in the vicinity of $186,000. This is a case where the proceedings should never have been brought or at least, once brought, should have been discontinued by at the latest 2 April 2019. On one view there has been a “wilful disregard for known facts and established law.” If the client rejected advice to discontinue, her legal representatives should have withdrawn.
While neither Ms B nor Ms F cavil with the quantum claimed by the respondent whether that be on an indemnity or some other basis, I take into account that the respondent did see some advantage in obtaining the declaration ultimately granted. This is so notwithstanding the limitation placed upon such a declaration by s 90RD, namely, that it is for the purpose of s 90SM proceedings. Whether or not an issue estoppel arises despite the limitation expressed in the relevant section is not a matter for me to determine. If the Initiating Application had been discontinued, it seems that the Court would not have had jurisdiction to make the declaration sought by the respondent, which can only be made when proceedings for a property settlement order (or other specified relief) are on foot. I also note that some of the costs claimed by the respondent relate to the period after the judgment including relating to the applicant’s appeal and the show cause hearing relating to Ms F and Ms B.
The circumstances of this case justify a costs order in favour of the respondent and an award of costs on an indemnity basis is just. No submissions were made by either Ms F or Ms B that, in the event of a costs order, either of them should be liable for a greater or lesser proportion. In my view, Ms F and Ms B should be jointly and severally liable for the respondent’s costs fixed in the sum of $100,000.
I certify that the preceding fifty-six (56) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Carew delivered on 19 February 2020.
Associate:
Date: 19.02.2020
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