R (A Barrister) & Anor and Roberts & Anor
[2010] FamCAFC 147
•17 August 2010
Family Court Of Australia
| R (A BARRISTER) AND ANOR & ROBERTS AND ANOR | [2010] FamCAFC 147 |
| FAMILY LAW - APPEAL– Error of law – Where neither appellant was given an opportunity to be heard before the orders of the Federal Magistrate were made – Where the Federal Magistrate did not give an opportunity to test the conflicting evidence FAMILY LAW - COSTS CERTIFICATES – Whether appropriate to grant costs certificate – Certificates awarded as the preconditions established by Kirby J in Cramer v Davies (1997) 72 ALJR 146 were satisfied – Whether the rehearing of the application is “a cause of a civil nature” as required by s 8(1) of the Federal Proceedings (Costs) Act 1981 (Cth) – Costs certificates granted |
| B & B (Costs Certificate) (2007) FLC 93-339 Black and Kellner (1992) FLC 92-287 Caboulture Park Shopping Centre Pty Limited (In liq) v White Industries (Qld) Pty Ltd (1993) 117 ALR 253 Cassidy v Murray (1995) FLC 92-633 Collins and Collins (1985) FLC 91-603 Commissioner of Police v Thanos (1958) 98 CLR 383 Cramer v Davies (1997) 72 ALJR 146 International Finance Trust Co Ltd v NSW Crime Commission (2009) 240 CLR 319 JJT and Ors: Ex parte Victoria Legal Aid (1998) FLC 92-812 Knight and Anor FP Special Assets Ltd and Ors (1992) 174 CLR 178 McAlpin and McAlpin (1993) FLC 92-411 Murray v Legal Services Commissioner (1999) 46 NSWLR 224 Ridehalgh v Horsefield (1994) 3 All ER 848 |
| Family Law Act 1975 (Cth) – s 117(2) Family Law Rules 2004 – r 19.10, r 19.11 |
| FIRST APPELLANT: | R (a barrister) |
| SECOND APPELLANT: | X Insurance |
| FIRST RESPONDENT: | Mr Roberts |
| SECOND RESPONDENT: | Ms Roberts |
| FILE NUMBER: | CAC | 1325 | of | 2008 |
| APPEAL NUMBER: | EA | 140 | of | 2009 |
| DATE DELIVERED: | 17 August 2010 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | May, O’Ryan & Strickland JJ |
| HEARING DATE: | 16 August 2010 |
| LOWER COURT JURISDICTION: | Federal Magistrates Court |
| LOWER COURT JUDGMENT DATE: | 19 October 2009 |
| LOWER COURT MNC: | [2009] FMCAfam 1065 |
Representation
| COUNSEL FOR THE FIRST AND SECOND APPELLANT: | Mr G Stretton SC |
| SOLICITOR FOR THE FIRST AND SECOND APPELLANT: | Watts McCray McGuinness Eley Lawyers |
| COUNSEL FOR THE FIRST RESPONDENT: | Ms Haughton |
SOLICITOR FOR THE FIRST RESPONDENT: | Elrington Boardman Allport |
COUNSEL FOR THE SECOND RESPONDENT: | Mentioned by consent by the Appellants |
| SOLICITOR FOR THE SECOND RESPONDENT: | Last & Maxwell |
Orders
It is ordered by consent:
The appeal be allowed.
Order 1 and Notation A made by Federal Magistrate Bender on 19 October 2009 in proceedings number CAC 1325 of 2008 be discharged.
The application be remitted for rehearing before a Federal Magistrate other than Federal Magistrate Bender.
And it is further ordered:
The Court grants to the First Appellant and the Second Appellant a costs certificate pursuant to the provisions of s 9 of the Federal Proceedings (Costs) Act1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the appellants in respect of the costs incurred by them in relation to the appeal against the order of Federal Magistrate Bender made on 19 October 2009.
The Court grants to each of the Respondent Husband and the Respondent Wife a costs certificate pursuant to the provisions of s 6 of the Federal Proceedings (Costs) Act1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the Respondent Husband and the Respondent Wife in respect of the costs incurred by them in relation to the appeal against the orders of Federal Magistrate Bender made on 19 October 2009.
The Court grants to each party a costs certificate pursuant to the provisions of s 8 of the Federal Proceedings (Costs) Act1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to each party in respect of such part as the Attorney-General considers appropriate of any costs incurred by each party in relation to the new hearing granted by these orders.
IT IS NOTED that publication of this judgment under the pseudonym R (a barrister) & X Insurance & Roberts & Roberts is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY |
Appeal Number: EA 140 of 2009
File Number: CAC 1325 of 2008
| R (a barrister) |
First Appellant
And
| X Insurance |
Second Appellant
And
| Mr Roberts |
First Respondent
And
| Ms Roberts |
Second Respondent
Reasons For Judgment
Introduction
Before us for hearing is an appeal by Mr R (a barrister) (“the First Appellant”) and X Insurance (“the Second Appellant”) against orders made by Federal Magistrate Bender on 19 October 2009.
The First Respondent to the appeal is Mr Roberts (“Respondent Husband”). The Second Respondent is Ms Roberts (“Respondent Wife”)
Federal Magistrate Bender made the following order and notation:
THE COURT ORDERS THAT:
1. Counsel for the wife, [Mr R] , pay the respondent husband's costs arising from the orders made for paternity testing on 16 December, 2008 on an indemnity basis, fixed in the sum of $5,071.96.
AND THE COURT NOTES THAT:
A. The court directs that the Registrar of the Federal Magistrates Court to forward to the appropriate disciplinary body, relevant material from the court file for the purpose of investigating the conduct of counsel for the wife, [Mr R], during proceedings before the court.
In the notice of appeal filed 12 November 2009 there are four grounds of appeal, namely:
1. The Appellants were denied natural justice by not being given a reasonable opportunity to be heard as required by Rule 21-07(5) of the Federal Magistrates Court Rules and the Common Law.
2. The Learned Federal Magistrate, having denied the Appellants the right to be heard before handing down Judgment ordered indemnity costs against them, wrongly justifying this in part on the basis that the Appellants had not sought to address the Court on that issue.
3. The Learned Federal Magistrate had before her conflicting Affidavit evidence from the Appellants and [Ms G] on an important issue yet wrongly denied the Appellants the opportunity to cross-examine [Ms G], instead indicating a preference for [Ms G]’s evidence.
4. The Learned Federal Magistrate wrongly failed to consider or make necessary findings in relation to the fundamental issue of whether the husband would have sought to proceed with paternity testing in any event if the applicant had informed the husband’s legal representative of the wife’s instructions as soon as he received them.
In the notice of appeal, the Appellants seek, in the event the appeal is successful, that:
1. That the Appeal be allowed.
2. The Orders and Directions made by the Learned Federal Magistrate on 19 October 2009 be set aside.
3. The Respondent [sic] pay the Appellants’ costs of and incidental to the appeal.
Background
There were parenting proceedings between the Husband and the Wife. During the parenting proceedings an issue arose as to the paternity of a child of the Husband and the Wife who was born in May 2003.
On 16 December 2008 Federal Magistrate Brewster made the following orders:
1. THAT the parties shall forthwith do all things necessary to ensure that each of the parentage testing procedures in accordance with the Regulation 21C of the Family Law Regulations (“the Regulations”) are carried out in relation to [the child], born … 2008 (“the child”) for the purposes of obtaining information to assist in determining the parentage of the child.
2. THAT for the purpose of the above mentioned Order the parties shall arrange for the paternity procedure to be conducted in accordance with the requirements of Part IIA of the Regulations.
3. THAT the parties shall each co-operate in relation to the parentage testing procedures and in particular:-
(a)The parties and the child shall each provide bodily samples as required;
(b)The parties shall provide a recent photograph of themselves and of the child as required;
(c)[The Wife], before her sample is withdrawn for testing, shall complete an affidavit as required by Regulation 21F(1);
(d)[The Husband], be before his sample is withdrawn for testing, shall complete an affidavit as required by Regulation 21F(1);
(e)[The Wife], before the sample of [the child] is withdrawn for testing, shall complete an affidavit as required by Regulation 21F(1);
(f)The parties shall do all other things as are necessary or convenient to be done for the purpose of the parentage testing procedure.
4. THAT the parties shall arrange for the preparation of a report in relation to the information ascertained as a result of the carrying out of those procedures, bey [sic] a person agreed between the parties being a person approved by the Attorney-General under Regulation 21N of the Regulations.
5. THAT in order to obtain the report [the Husband] and [the Wife] shall share the cost of carrying out the parentage testing procedures and the preparation of a report equally but if the tests verify the applicant is not the child’s father, the respondent to reimburse the applicant for the money paid in relation to the procedure.
6. THAT this matter is adjourned to 27 January 2009 at 10.00am.
7. THAT pending the adjourned date the [Husband] spend time with the children as follows:
(a)With [the child] on 23 December 2008, from 11.00am until 3.00pm:
(i)The [Wife] or her agent shall deliver [the child] to McDonald’s [C] at 11.00am and pick [the child] up from the same place at 3.00pm.
(b)On 29 December 2008, from 9.00am until 3.00pm:
(i)The [Wife] or her agent shall deliver [the child] to McDonald’s [C] at 9.00am and the [Husband] shall deliver [the child] to [N] at either the [Wife]’s residence or a mutual friends house to be nominated by the [Wife].
(c)Thereafter from 9.00am until 5.00pm on 2 January 2009 and 17 January 2009.
8. THAT the child [X] spend time with the [Husband] from the time that the [Husband] spends time with [the child] until 5.00pm the following day on the occasions when he is spending time with [the child].
It transpires that the Wife did not dispute the Husband’s paternity of the child. Federal Magistrate Bender observed at [7] of her reasons that the Wife was cross-examined and “she gave evidence that there was no doubt as to [the child’s] paternity and that she told her Counsel this on 16 December 2008”. The Federal Magistrate also observed at [8] that it was conceded by the Wife “during her sworn evidence at the final hearing of this matter that this was the first time she had formally advised the husband and the court that there was no possibility that anyone other than the Husband was [the child’s] father and that the issue of paternity was never in dispute from her perspective”.
Federal Magistrate Bender also said:
9. When the matter came before Federal Magistrate Brewster on 16 December 2008, a minute of orders proposed by the husband were handed to His Honour. Amongst the orders sought was one for paternity testing in relation to [the child].
10. Following perusal of the minute, His Honour then indicated to Counsel representing the parties that if paternity was genuinely in dispute, he did not believe that it would be in [the child]’s best interests to make orders extending the time that [the child] spent with his father until that issue had been settled by way of DNA testing.
11. His Honour made it quite clear that, but for that issue, he would have made orders extending [the child]’s time with the husband to overnight time.
12. [Mr R] of Counsel, who was appearing for the wife on 16 December 2008, submitted to Federal Magistrate Brewster that he had instructions from his client to oppose any orders for overnight time and that he otherwise had no instructions in relation to the issue of paternity.
Federal Magistrate Bender also said at [39]: “I am of the view that [Mr R]’s conduct in relation to the manner in which he conducted himself at and after the making of the order for the paternity testing is such that it falls within the definition of Rule 21.07(1) of the Federal Magistrates Court Rules 2001, in that the husband has incurred costs because of [Mr R]’s ‘improper conduct’ and as such those costs should be paid by [Mr R]”.
Federal Magistrate Bender said at [41]:
There is no doubt that the husband has incurred costs because the issue of paternity remained live. There was an additional court appearance necessitated, considerable correspondences exchanged between the legal representatives for the parties as well as the actual cost of the paternity testing, all of which, to date, have been borne by the husband. I am satisfied in the exercise of my discretion that it is appropriate that the costs be paid by [Mr R] on an indemnity basis.
On 7 August 2009 Federal Magistrate Bender made the following orders:
1. [Mr E] have leave to intervene on behalf of the wife’s Counsel’s insurers.
2. The legal representative for the wife’s Counsel’s insurers file a Notice of Address for Service this day.
3. The respondent and her legal representatives file all affidavits upon which they seek to rely on the issue of the applicant’s claim for indemnity costs arising from the orders for paternity testing made by Federal Magistrate Brewster on 16 December 2008 within 14 days of the delivery of the judgment in the substantive matter before the court.
4. The applicant serve the respondent and the intervenor with an itemised bill of costs in relation to the costs claimed by them by 21 August 2009.
AND THE COURT NOTES THAT:
A. The parties shall be advised of the further listing/hearing of the matter by the Chambers of Federal Magistrate Bender upon receipt of all affidavit material.
Pursuant to the orders made on 7 August 2009 an itemised costs account was filed by the solicitors representing the Husband. Mr R filed an affidavit sworn on 11 September 2009 and the Wife filed an affidavit sworn on 14 September 2009. As well, Ms G, the solicitor for the Husband, filed an affidavit sworn on 15 September 2009.
On 19 October 2009 Federal Magistrate Bender pronounced the judgment which is the subject of the appeal.
We have the benefit of written summaries of arguments from the Appellants and the Husband.
It was submitted by the Appellants that on 7 August 2009 Mr E was granted leave to appear on behalf of the Second Appellant and that his desire to have counsel attend to make submissions was made plain to the Federal Magistrate.
It was submitted by the Appellants that neither appellant was given an opportunity to be heard before the orders of 19 October 2009 were made.
It was submitted by the Appellants that the Federal Magistrate acknowledged at [37] that she had not had the opportunity to test the conflicting evidence of the First Appellant and the solicitor for the Husband, but despite this indicated that the evidence of the solicitor for the Husband was more likely to be correct and that if so, “[Mr R] not only deliberately mislead the court on that day, but he also placed false evidence before me in relation to this application”.
It was submitted by the Appellants that despite having not provided the Appellants with the opportunity to be heard, the Federal Magistrate then commented at [40] that neither party had sought to address the court on whether costs should be payable on a party/party basis or an indemnity basis and appeared to weigh this as a strong discretionary factor in awarding indemnity costs.
It was submitted by the Appellants that the Federal Magistrate, despite having denied the First Appellant the right to be heard and despite clear “common law authority, referred the ‘improper conduct’ of [Mr R] to the appropriate disciplinary body for investigation”.
It was submitted that the judgment was infected with errors, compromises a substantial miscarriage of justice and should be set aside.
The Federal Magistrate referred to r 21.07(5) of the Federal Magistrates Rules 2001. It was submitted by the Appellants that it is a basic common law principle that before anyone can be punished or prejudiced in his/her personal property by way of any judicial or quasi-judicial proceedings they must be afforded an opportunity of being heard: see Murray v Legal Services Commissioner (1999) 46 NSWLR 224 at 67 per New South Wales Court of Appeal (Sheller JA with whom Priestly JA and Stein JA agreed); Commissioner of Police v Thanos (1958) 98 CLR 383 at 395-6 per Dixon CJ and Webb J; and International Finance Trust Co Ltd & Anor v New South Wales Crime Commission& Ors (2009) 240 CLR 319.
In the written submissions filed on behalf of the Husband a number of admissions were made. The order sought by the Appellants that the appeal be allowed was supported by the Husband. The order sought by the Appellants that the orders made on 19 October 2009 be set aside was supported by the Husband on the basis that the matter be dealt with by way of a hearing de novo.
The order sought by the Appellants that the Husband and the Wife pay the costs of and incidental of the appeal was opposed by the Husband. The Husband indicated in his written submissions that he sought a certificate pursuant to s 6 of the Federal Proceedings (Costs) Act 1981 (Cth).
The order sought by the Appellants that in the event that the matter was remitted to the Federal Magistrates Court for redetermination that the rehearing be before a judicial officer other than Federal Magistrate Bender was also supported by the Husband.
By facsimile transmission dated 13 August 2010 from the solicitors for the Appellants and the solicitors for the Husband, the Court was advised that at the hearing before us on 16 August 2010, the Court would be asked to make the following orders by consent. First, that the appeal be allowed. Second, the matter be remitted for rehearing before a Federal Magistrate other than Federal Magistrate Bender. Third, that there would be submissions in relation to costs certificates and costs in general.
In the facsimile transmission of 13 August 2010 it was also said that counsel for the Appellants would mention the matter for the Wife. When the matter came before us on 16 August 2010 senior counsel for the Appellants mentioned the matter on behalf of the Wife. The Wife did not appear before us and nor did she file any written submissions. However, the Wife does not oppose the orders sought by the Appellants.
During the hearing before us on 16 August 2010 an application was also made by the Appellants, and also by the Husband, that all parties be granted a certificate pursuant to s 8 of the Federal Proceedings (Costs) Act with respect to the rehearing. However, senior counsel for the Appellants advised that he was uncertain, for reasons we will shortly explain, as to whether or not, in the circumstances of this case, such an order could be made.
In relation to the proposed order in relation to a rehearing, counsel for the Appellants submitted that it was appropriate the rehearing be before Federal Magistrate Brewster given that he had made the orders on 16 December 2008 in relation to paternity. Counsel for the Husband, however, indicated that the Husband’s position with respect to such a referral was ambivalent.
Legal Principles
Section 9 of the Federal Proceedings (Costs) Act is in the following terms:
(1)Subject to this Act, and in particular without limiting section 6, where:
(a)a Federal appeal referred to in paragraph (d), (j), (ja) or (k) of the definition of Federal appeal in subsection 3(1) succeeds on a question of law; and
(b)in accordance with section 117 of the Family Law Act 1975 , each party to the appeal bears his or her own costs;
the court that heard the appeal may, on the application of the appellant to the appeal, grant to the appellant a costs certificate in respect of the appeal.
(2)The certificate that may be granted under subsection (1) by a court to an appellant to a Federal appeal is a certificate stating that, in the opinion of the court, it would be appropriate for the Attorney‑General to authorize a payment under this Act to the appellant in respect of the costs incurred by the appellant in relation to the appeal.
Section 6 of the Federal Proceedings (Costs) Act provides:
(1)Subject to this Act, where a Federal appeal succeeds on a question of law, the court that heard the appeal may, on the application of a respondent to the appeal, grant to the respondent a costs certificate in respect of the appeal.
(2)Subject to this Act, where a Federal appeal in relation to the amount of damages awarded by a court succeeds, the court that heard the appeal may, on the application of a respondent to the appeal, grant to the respondent a costs certificate in respect of the appeal.
(3)The certificate that may be granted under subsection (1) or (2) by a court to a respondent to a Federal appeal is a certificate stating that, in the opinion of the court, it would be appropriate for the Attorney‑General to authorize a payment under this Act to the respondent in respect of:
(a)the costs incurred by the respondent in relation to the appeal; and
(b)any costs incurred by an appellant in relation to the appeal that have been, or are required to be, paid by the respondent to the appellant in pursuance of an order of the court, not being costs to which a costs certificate granted under section 7 relates.
In B & B (Costs Certificate) (2007) FLC 93-339 the Full Court (Finn, May and Boland JJ) observed at 81,821 that in Cramer v Davies (1997) 72 ALJR 146, Kirby J, sitting as a single Justice of the High Court:
… identified the following three preconditions for the grant of a costs certificate under s 6:
·the existence of a “federal appeal”;
·the necessity to establish that the appeal has succeeded on a question of law;
·the requirement that the court concerned should have heard the appeal.
31. As to the first matter, being the existence of a “federal appeal”, his Honour concluded:
[15]… Having regard to the terms of the definition in par (d) of s 3(1) of the [Federal Proceedings (Costs) Act], it is clear that the proceedings before the Family Court of Australia and before this Court were federal appeals.
32. As to the second matter, being the necessity to establish that the appeal has succeeded on a question of law, his Honour said:
[15]… Certainly, the appeal to this Court succeeded. It succeeded by virtue of the orders of this Court based upon the consent of the parties expressed to be with the concurrence of the separate representative.
[16]The facts which I have earlier set out, being the foundation of the grant of special leave to appeal and of the appeal to this Court, suggest that the basis of the “success” was a recognition by all parties that an error of law had occurred at trial in the Family Court. At least in proceedings such as are described, it is an error of law where a judge does not conform to the requirements to procedural fairness (natural justice).
33. It was, however, the third precondition which his Honour acknowledged to be “the critical question”, saying (emphasis added):
… Therefore, the critical question is whether the third precondition to the application of the Act is made out. That requires that the court concerned should have “heard the appeal”. Only where the court has heard the appeal may it, on the application of the respondent, grant to the respondent the costs certificate in respect of the appeal which is sought. Can there be a “hearing of the appeal” for this purpose where the orders disposing of the proceedings are made by consent and without full argument?
34. His Honour then set out the following arguments in favour of “a narrow construction” of the word “heard”, being that “a full hearing on the merits” was required:
As to the second matter, we observe that in B & B the Full Court at 81,824 observed:
47.We return now to the second precondition, being that the appeal has to have succeeded on a question of law. It seems to us with respect that it is more difficult for a Court exercising the appellate jurisdiction of this Court to be satisfied regarding the existence of this precondition than it would be for the High Court which has the benefit of the special leave procedure as was referred to by Kirby J in his discussion (in paragraph 16 of his reasons) of the second precondition.
48.Whether a court exercising the appellate jurisdiction of this Court will be able to be satisfied that an appeal which has been allowed by consent and without the Court having heard full argument can be said to have “succeeded on a question of law” will in each case depend on the material which the Court has before it.
49.In some cases an error of law asserted by the grounds of appeal may be clear on the face of the orders or the reasons for judgment of the trial Judge. In other cases there maybe some indication given by the trial Judge subsequent to the making of his or her orders, that there is an error in those orders or in the supporting reasons for judgment which cannot be remedied by an application of the slip rule and would amount to an error of law. In other cases it may be necessary to consider the orders or supporting reasons for judgment in the light of the written outline of argument of the appellant, and if available, that of the respondent (in which, it is always possible, the error of law may be conceded).
50.It is obviously impossible to state exhaustively the ways in which this Court could satisfy itself sufficiently that an error of law has been made which would provide the basis for the success of the appeal and thus the grant of costs certificates. It can only be said that in reaching such a conclusion, the Court will always need to be conscious of the implications of its conclusion for the public purse.
As to the third matter, in Cramer v Davies Kirby J set out the arguments in favour of a narrow construction of the word “heard”, being that “a full hearing on the merits” was required and the arguments in favour of a broader interpretation. The Full Court observed in B & B at 81,822: “However his Honour then expressed his preference for a broader construction as contended for by the Respondent Husband, being that ‘a “hearing” means no more than having the matter listed before the court so that it may dispose of the appeal in a public and formal way’”.
We also note that in B & B at 81,823 the Full Court observed:
39. We would add here that the pre-conditions which [Kirby J] identified for the grant of certificates under s 6 (and s 8) would also apply to the grant of a certificate under s 9 (that is, to a successful appellant), although there is an additional requirement in s 9 which is relevant for present purposes, that being, that each party to the appeal bears his or her costs in accordance with s 117 of the Family Law Act.
Section 8 of the Federal Proceedings (Costs) Act provides:
(1) Subject to this Act, where, in a Federal appeal that succeeds on a question of law, the court that heard the appeal grants a new trial in a cause of a civil nature, the court may, on the application of a party to the cause, grant to the party a costs certificate in respect of the new trial. (emphasis added)
(2) Subject to this Act, where, in a Federal appeal, being a Federal appeal against a conviction (whether on indictment or otherwise) or a Federal appeal in a sequence of appeals which includes an appeal against a conviction (whether on indictment or otherwise), that succeeds on a question of law, the court that heard the Federal appeal grants a new trial of an accused person, the court may, on the application of the accused person, grant to the accused person a costs certificate in respect of the new trial.
(3) The certificate that may be granted under subsection (1) or (2) to a party to a cause or to an accused person, as the case may be, by a court that has granted a new trial is a certificate stating that, in the opinion of the court, it would be appropriate for the Attorney‑General to authorize a payment under this Act to that party or accused person in respect of such part as the Attorney‑General considers appropriate of any costs incurred by that party or accused person in relation to the new trial.
The submission of senior counsel of the Appellants was that the rehearing of the application by the Husband for an order for costs against the First Appellant may not be “a cause of a civil nature” as required by s 8(1) of the Federal Proceedings (Costs) Act. No authorities were cited to us in support of this proposition. We have been unable to locate any authorities that support this approach.
Given the paucity of the submissions that were made in relation to whether or not the rehearing would be “a new trial in a cause of a civil nature” for the purposes of the Federal Proceedings (Costs) Act, we shall only make some brief observations.
Section 117(2) of the Family Law Act 1975 (Cth) (“the Act”) confers power to make orders against persons other than parties to the proceedings: Knight and Anor FP Special Assets Ltd and Ors (1992) 174 CLR 178 per Mason CJ and Deane J at 193 with whom Gaudron J agreed at 205. See also JJT and Ors: Ex parte Victoria Legal Aid (1998) 195 CLR 184 per High Court; and McAlpin and McAlpin (1993) FLC 92-411 at 80,215 per Full Court (Nicholson CJ and Maxwell J: Baker J dissenting).
It has been accepted that the power to order a lawyer of one party to pay costs incurred by the other party is an exception to the general rule that a person who is not a party to the proceedings cannot be ordered to pay the costs of the proceedings. In Collins and Collins (1985) FLC 91-603 the Full Court (Evatt CJ, Pawley and Barblett SJJ) said at 79,878-879 that the power to make an order for costs directly and personally against a lawyer arises at common law from an inherent jurisdiction of the court over lawyers in their capacity as officers of the court and from the duty of the lawyer to conduct litigation with propriety. The Full Court said that the jurisdiction has been held of be “both punitive and compensatory in nature”.
In Cassidy v Murray (1995) FLC 92-633 the Full Court (Fogarty, Kay and Hase JJ) said at 82,361-2:
There is undoubted power in this court to order a legal practitioner to pay the costs of one or all of the parties in certain circumstances. The source of that power and the circumstances in which such an order ought to be made have been the subject of considerable discussion in the cases over the years, and was recently addressed by the High Court in Knight and Anor v FP Special Assets Limited and Or (1992) 174 CLR 178 where Mason CJ and Deane J said at 188:
“…it is artificial to attribute the orders for costs against solicitors to an exercise of the disciplinary power rather than to an exercise of the jurisdiction to award costs of the proceedings.”
After consideration of a decision of the Full Court of the Federal Court in Caboulture Park Shopping Centre Pty Limited (In liq) v White Industries (Qld) Pty Ltd (1993) 117 ALR 253, and other authorities, the Full Court said at 82,362: “In the light of those decisions, and the decisions of the Family Court to which we shall refer shortly, in our view it is now settled law that power to award costs against solicitors in proceedings is contained in s 117(2) of the Family Law Act”.
In Cassidy v Murray the Full Court also set out the principles relevant to the exercise of the jurisdiction to award costs against a lawyer under the Act. The Full Court referred with approval to the decision of the Master of the Rolls, Sir Thomas Bingham, in Ridehalgh v Horsefield (1994) 3 All ER 848 at 855 and said at p 82,365:
1. Pursuant to s 117(2) Family Law Act, the court has jurisdiction to make an order for costs against a solicitor or a non-party.
2. The court should not make such an order without giving the person to be affected by the order an opportunity to be heard.
3. The court may make an order for costs against a solicitor without the necessity to establish that the solicitor has been guilty of serious professional misconduct.
4. The solicitor has a duty to the court to promote the interests of justice whilst at the same time attending to the needs of the solicitors clients.
5. A mistake or error of judgment would not justify an order for costs against a solicitor. However, misconduct, default of negligence, any of which are found by a court to be or a serious nature, maybe sufficient to justify an order.
6. The jurisdiction is compensatory.
We observe that r 21.07 of the Federal Magistrates Court Rules provides:
(1) The Court or a Registrar may make an order for costs against a lawyer if the lawyer, or an employee or agent of the lawyer, has caused costs:
(a) to be incurred by a party or another person; or
(b) to be thrown away;
because of undue delay, negligence, improper conduct or other misconduct or default.
(2) A lawyer may be in default if a hearing may not proceed conveniently because the lawyer has unreasonably failed:
(a) to attend, or send another person to attend, the hearing; or
(b) to file, lodge or deliver a document as required; or
(c) to prepare any proper evidence or information; or
(d) to do any other act necessary for the hearing to proceed.
(3) An order for costs against a lawyer may be made on the motion of the Court or Registrar, or on application by a party to the proceeding or by another person who has incurred the costs or costs thrown away.
(4) The order may provide:
(a) that the costs, or part of the costs, as between the lawyer and party be disallowed; or
(b) that the lawyer pay the costs, or part of the costs incurred by the other person; or
(c) that the lawyer pay to the party or other person the costs, or part of the costs, that the party has been ordered to pay to the other person.
(5) Before making an order for costs, the Court or Registrar:
(a) must give the lawyer, and any other person who may be affected by the decision, a reasonable opportunity to be heard; and
(b) may order that notice of the order, or of any proceeding against the lawyer be given to a party for whom the lawyer may be acting or any other person.
We also observe that r 19.10 of the Family Law Rules 2004 provides as follows:
(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.
(2) The court may 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.
The terminology and format of r 19.10 of the Family Law Rules largely reflect the principles approved by the Full Court in Cassidy v Murray.
Rule 19.11 of the Family Law Rules provides:
(1) Before making an order for costs against a lawyer or other person who is not a party to a case, the court must give the lawyer or other person a reasonable opportunity to be heard.
(2) If a party who is represented by a lawyer is not present when an order is made that costs are to be paid by the party or the party’s lawyer, the party’s lawyer must give the party written notice of the order and an explanation of the reason for the order.
Under r 19.11 of the Family Law Rules if a costs order is sought against a lawyer, the lawyer is entitled to procedural fairness and the court must give the lawyer a reasonable opportunity to be heard. This is an extension of the natural justice principle recognised in Black and Kellner (1992) FLC 92-287 at 79,134 per Full Court (Nicholson CJ, with whom Ellis J and Cohen J agreed)
In our view, it is instructive to consider what the Full Court said in Cassidy v Murray at 82,365-366 in relation to the compensatory nature of an order:
The order in this case is not appropriately seen as made for the purpose of punishing the appellant, but rather as protecting the respondent from loss. We think that though the effect of any costs order is obviously punitive in one sense, and though the order in this case was made only because of conduct of which the Court disapproved, the rationale behind the making of the order is the requirement that the innocent party be compensated for expenses caused by a solicitor.
The case of Latoudis v. Casey (1990) 170 CLR 534 raised the issue whether a successful defendant in summary proceedings could receive an order for costs against the informant. Though those circumstances are fundamentally different from the ones with which we are concerned, the nature of the costs order is essentially the same. Mason CJ said at 543:
“If one thing is clear in the realm of costs, it is that, in criminal as well as civil proceedings, costs are not awarded by way of punishment of the unsuccessful party. They are compensatory in the sense that they are awarded to indemnify the successful party against the expense to which he or she has been put by reason of the legal proceedings: Cilli v. Abbott.”
In the same case, McHugh J said at 567:
“The rationale of the order is that it is just and reasonable that the party who has caused the other party to incur the costs of litigation should reimburse that party for the liability incurred. The order is not made to punish the unsuccessful party. Its function is compensatory.”
Reflecting that proposition, a Court would not make an order for costs against a solicitor who had been guilty of seriously negligent conduct if that conduct caused no loss to another.
In Ridehalgh v. Horsefield, Bingham M.R. said at 866:
“As emphasised in Re a Barrister (wasted costs order) (No 1 of 1991) [1992] 3 All ER 429, [1993] QB 293, the court has jurisdiction to make a wasted costs order only where the improper, unreasonable or negligent conduct complained of has caused a waste of costs and only to the extent of such wasted costs. Demonstration of a causal link is essential. Where the conduct is proved but no waste of costs is shown to have resulted, the case may be one to be referred to the appropriate disciplinary body or the legal aid authorities, but it is not one for the exercise of the wasted costs jurisdiction.”
We think that confusion may arise from the fact that it is reproachable conduct by the solicitor which leads to the order against him or her. The confusion subsides, however, once that requirement is seen in context.
Almost any act done by a solicitor in connection with proceedings gives rise to costs, which are generally to be borne by one, some or all of the parties to proceedings — that is expected by parties who engage solicitors. Where those costs are appropriately incurred in the performance of a solicitor's responsibilities, the solicitor cannot fairly be called upon to meet them.
It is only when there is something relevantly inappropriate about the incurring of those costs that it will be proper to attach liability to the solicitor. It is for that reason that the conduct of the solicitor is called into issue. It is not that the Court seeks to punish the solicitor for his or her conduct. Whether the appellant's conduct in this case could constitute a contempt of court is not a matter upon which we express a view, but any question of punishment would more appropriately be addressed by proceedings of that nature.
In cases of this type, causation alone cannot be the test of whether a solicitor should be held liable for parties' expenses. Only the solicitor's improper conduct can provide a ground for the making of such an order against him or her. But the basis of the order is the concern that the innocent party should not bear costs which arise only out of the improper conduct of the solicitor, and not the improper conduct itself.
In our view it was clearly open to the trial Judge to order that the appellant pay the husband's costs on an indemnity basis. In our view this appeal should be dismissed, and the appellant should pay the husband's costs of the appeal on the same basis as the appellant is to pay the husband's costs as ordered by Gee J.
In all the circumstances, we do not propose to undertake any or any detailed analysis of the relevant rules of court and in particular r 21 of the Federal Magistrates Rules. In our view, the rules do not alter the existing common law. The jurisdiction to make an order for costs directly and personally against a lawyer, either arising at common law from the inherent jurisdiction of the court over lawyers, or pursuant to s 117(2) of the Act, in our view, is a cause of a civil nature and as such it may be appropriate to grant a costs certificate to the parties pursuant to s 8 of the Federal Proceedings (Costs) Act in respect of the costs incurred in relation to a rehearing.
Conclusion
We are satisfied that the necessary three preconditions for the exercise of the discretion to grant a costs certificate to the Appellants under s 9 of the Federal Proceedings (Costs) Act and to the Respondent Husband and the Respondent Wife under s 6 of that Act are satisfied, as also is the further precondition required under s 9 that each party is to bear his or her own costs. We are further satisfied that this is an appropriate case in which to exercise that discretion.
We are also of the opinion that this is an appropriate case in which to exercise the discretion to grant a costs certificate to the Appellants and the Respondent Husband and the Respondent Wife under s 8 of the Federal Proceedings (Costs) Act in respect of the rehearing.
I certify that the preceding fifty-two (52) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court May, O’Ryan & Strickland JJ.
Associate:
Date: 17 August 2010
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