Pitt and Pitt

[2010] FamCA 134

FAMILY COURT OF AUSTRALIA

PITT & PITT [2010] FamCA 134

FAMILY LAW – COSTS – costs of agreed single experts – relevant considerations – capacity to pay

Family Law Act 1975 (Cth) s 117(2)
Family Law Rules 2004 r15.60 (1)(c)

APPLICANT: Ms Pitt

RESPONDENT: Mr Pitt

FILE NUMBER: SYC 2905 of 2007

DATE DELIVERED: 17 February 2010

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: The Hon. Justice Rose

HEARING DATE: 17 February 2010

REPRESENTATION

COUNSEL FOR THE APPLICANT:	D Dura
SOLICITOR FOR THE APPLICANT:	Slade Manwaring, Solicitors

SOLICITOR FOR THE RESPONDENT: Armstrong Legal

Orders

1. That by consent Orders are made in accordance with paragraphs 1(a) and 1(b) of the document entitled “Short Minute of Order Proposed by Wife” and set out hereunder:

   1.That the Husband and Wife do all acts and things and sign all documents necessary so as to cause the following amounts to be paid from the parties’ respective loan accounts:

   (a)$50,000.00 to the Wife on account of costs and disbursements in these proceedings from the Wife’s loan account;

   (b)$50,000.00 to the Husband on account of costs and disbursements in these proceedings from the Husband’s loan account….

2. That the wife cause and her solicitors take all necessary steps to ensure that the amounts of $8,398.50 outstanding to the single expert Mr LR and $17,435.08 outstanding to the single expert Ms D are paid from the trust account of Slade Manwaring, Solicitors on or before 5.00pm 24 February 2010.

3. That the wife pay the husband’s costs of the day assessed at $1,200.00 on or before 5.00pm 24 February 2010.

IT IS NOTED that publication of this judgment under the pseudonym Pitt & Pitt is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER:  SYC2905 of 2007

MS PITT

Applicant

and

MR PITT

Respondent

REASONS FOR JUDGMENT

Introduction

1. In these proceedings an interim issue has arisen in relation to payment of outstanding fees for the appointed agreed single experts as a result of the issue raised in correspondence sent to the solicitors for the parties, copied to my associate and brought to my attention.

2. The fees have been outstanding to the single experts for some months both prior and subsequent to the resumption of the hearing of expert evidence at the beginning of February 2010.

3. In accordance with the request made by the single experts, no doubt relying upon Family Law Rule 15.60(1)(c), I was asked to consider and determine the order, if any, that should be made to enable the outstanding fees to be paid.

4. The evidence in these proceedings has been completed.

5. Submissions are due to be made during March next by senior counsel for the parties.

6. A minute of order was sought by the wife in accordance with the document entitled “Short Minute of Order Proposed by Wife” which I have initialled and placed with the papers.

7. The orders sought in paragraphs 1(a) and 1(b) are consented to.  The essence of those orders are that each of the parties will receive $50,000.00 on account of costs and disbursements in these proceedings by way of debit to their respective loan accounts with the principal company.

8. The orders sought in paragraphs 1(c) and 1(d) are opposed.  Those orders provide for a further debit to the wife’s loan account in order that the outstanding fees payable to the single experts can be paid.

9. Essentially, the issue revolves around the capacity of the wife to make the payments.

Relevant matters

1. No issue has been raised in relation to the Court’s power to make an order, nor whether or not the merits of the case justify no order; or no payment being made by way of an order, or payment being made for an amount less than the amount sought to be paid.

2. Upon my making an enquiry of counsel for the wife, I was furnished with Exhibit 1.  Exhibit 1 contains correspondence passing between the wife’s solicitors and the husband’s solicitors enclosing a copy of the trust account ledger of the wife’s solicitors for the period 4 December 2009 to 3 February 2010.  As at 4 December 2009, $250,000.00 was held in trust.  There followed payments made by way of disbursements representing a combination of counsel’s fees, transcript fees, accountancy fees and other fees which, on the face of it, are payable including what is described as “experts fees” of $11,000.00 all of which are related to these proceedings.

3. There were negligible amounts paid by way of conduct money.  As at 3 February 2010 the balance remaining in the trust account was $62,635.03.  I was informed by counsel for the wife, and I accept, that on his instructions that amount has been further reduced due to additional disbursements having been met as a consequence of evidence given early this month.

4. Through no fault of counsel for the wife, he did not have a copy of the up-to-date trust account ledger.  However, he was instructed by a member of the firm representing the wife, and no doubt my intention would have been drawn to a lesser amount now held, which was insufficient to meet the outstanding single experts’ fees if indeed that was the situation.  However, no such submission was made. 

5. Consequently, I am proceeding on the basis that the amount held in trust is $62,635.03 less whatever unspecified amount has since been paid, but with a sufficient balance to meet the outstanding single expert’s fees which have been outstanding for some months.

6. It should not have escaped the attention of the solicitor in the firm representing the wife that not only the wife, but the firm was directly liable for payment of the single experts’ fees given the agreement signed by that particular solicitor on behalf of his firm.  That document has been furnished to me.

7. One might have thought in the circumstances that it would have been prudent to have immediately recognised the liability to the single experts and utilise the trust account upon, receiving appropriate instructions to do so, to meet the outstanding fees.  Regrettably, that did not occur.

8. I was informed by counsel for the wife that in the event of orders not being made as sought in paragraphs 1(c) and 1(d) this will necessitate a subsequent application for interim costs to be made on behalf of the wife.

9. In my view, if and when such an application is made, it will be dealt with on the merits.  In the meantime, I propose to deal with the issue before me rather than an issue which is not before me.

Conclusion

1. As a result, I have determined that there are ample resources available reflected in the trust account of the solicitors for the wife to enable payment to be made of the outstanding fees.

2. Those fees appear to be $8,398.50 to Mr LR and $17,435.08 to Ms D in her capacity as a member of a firm of chartered accountants at Newcastle.

Husband’s oral application for costs

1. An oral application was made on behalf of the husband for an order for costs of the day assessed at $1,200.00.

2. The general principle is that each party bears his or her own costs, subject to a circumstance having been established in accordance with s.117(2) which may lead to an order for costs being made.

3. In my view, a circumstance has been established, in that the position as submitted on behalf of the wife, when one considers all of the relevant facts, was simply untenable.

4. So far as relevant matters are concerned, two matters were raised.  One was that correspondence had been passing between the solicitors for the parties in an attempt to resolve the issue.  I have cited that correspondence which forms part of Exhibit 1.  In my view, it merely reagitates the position that has been the subject of valiant submissions made today by counsel for the wife.

5. The only other matter which is relevant, is the question of success or otherwise of one party in relation to the issue.

6. In that matter, the wife has been wholly unsuccessful.  With regard to her financial resources, on the evidence before me, albeit not up-to-date, there are sufficient funds in the trust account of the wife’s solicitors to have enabled payment to have been made without the necessity for this court event.

7. On their instructions they chose not to do that.  If, in fact, the funds now held are not only significantly less, but place in jeopardy her continued legal representation, then that is a matter that may need to be the subject of a subsequent application.  Again, with normal preparation for this morning, this point could have been illustrated by producing an up‑to‑date trust account ledger statement.  That was not done.

8. I have concluded that an order for costs will be made in favour of the husband.

9. There is no issue raised so far as the quantum is concerned.

10. My reasons are that the issue for argument today was quite unnecessary given that there had been funds held in the trust account of the wife’s solicitors since December.  The further debiting of loan accounts is not a simple panacea to resolve the issue, especially when funds of a considerable amount have been held in the trust account of the solicitors for the wife since December 2009.

11. It must have been clear to any experienced legal practitioner, whether experienced in litigation or not, that once the firm had committed itself to liability for payment of the single experts’ fees, apart from other relevant considerations, then priority should have been given to payment of those fees.  That did not occur.  The reasons why it did not happen are a matter for consideration by one or other of the partners of the firm in terms of whether this is a practice to which they subscribe.

I certify that the preceding thirty-one (31) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Rose

Associate: 

Date:  26 February 2010