Roberts and Roberts (No.2)
[2009] FMCAfam 1065
•19 October 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| ROBERTS & ROBERTS (No.2) | [2009] FMCAfam 1065 |
| FAMILY LAW – Costs – husband’s application for indemnity costs against wife and/or wife’s counsel arising from the failure of the wife and the wife’s counsel to appraise the court and the husband’s solicitors as to his client’s instructions regarding paternity issues – costs order made against wife’s counsel on an indemnity basis. |
| Federal Magistrates Court Rules 2001, r.21.07 |
| Cohen & Cohen (1993) FLC 92-340 Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46-225 Yunghanns & Others & Yunghanns (2000) FLC 93-029 C & C & Anor [2006] FMCAfam 229 |
| Applicant: | MR ROBERTS |
| Respondent: | MS ROBERTS |
| Intervenor: | CGU PROFESSIONAL RISKS INSURANCE |
| File Number: | CAC 1325 of 2008 |
| Judgment of: | Bender FM |
| Hearing dates: | 9 & 10 July, 7 August 2009 |
| Date of Last Submission: | 7 August 2009 |
| Delivered at: | Melbourne |
| Delivered on: | 19 October 2009 |
REPRESENTATION
| Counsel for the Applicant: | Ms Haughton |
| Solicitors for the Applicant: | Elrington Boardman Allport |
| Counsel for the Respondent: | Mr Ryan |
| Solicitors for the Respondent: | Last and Maxwell Solicitors |
| Solicitors for the Independent Children’s Lawyer: | Mr Stagg – Legal Aid Office (ACT) |
| Solicitors for the Intervenor: | Watts McCray McGuinness Eley |
ORDERS
Counsel for the wife, Mr Christopher Ryan, 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 professional disciplinary body, relevant material from the Court file for the purpose of investigating the conduct of Counsel for the wife, Mr Christopher Ryan, during proceedings before the court.
IT IS NOTED that publication of this judgment under the pseudonym Roberts & Roberts (No.2) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT CANBERRA |
CAC 1325 of 2008
| MR ROBERTS |
Applicant
And
| MS ROBERTS |
Respondent
REASONS FOR JUDGMENT
Introduction
The matter of Roberts came before me for final hearing in relation to parenting issues in the Canberra Registry of the Federal Magistrates Court of Australia on 9 and 10 July, and 7 August 2009.
During the running of the matter, evidence was led in relation to an interim hearing that was conducted before Federal Magistrate Brewster on 16 December 2008. This was the third interim hearing of this matter before Federal Magistrate Brewster, in which His Honour was making orders progressively increasing the time that the parties’ two children, [X] born in 2001 (“[X]”) and [Y] born in 2003 (“[Y]”), were spending with their father.
By way of background, [X] and [Y] had not spent any time with their father for most of 2008, until the matter came before His Honour on 17 November 2008 and orders were made for that time to recommence. [X] immediately started spending overnight time with her father. [Y], who suffers from autistic spectrum disorder, initially spent supervised time with his father and that time was being increased. It is apparent from the transcript of the proceedings on 16 December 2008 that it was Federal Magistrate Brewster’s intention to make orders that would have increased the time that [Y] spent with his father to overnight time. The wife was strongly opposed to any such orders being made.
On an evening shortly prior to 16 December 2008, the parties had an argument in which the issue of [Y]’s paternity was raised. It was the wife’s evidence that the husband called her a “slut”, to which she responded heatedly with words to the effect:
“Well if I’m a slut [Y] can’t be your son so why do you want to see him?”
It was the husband’s evidence that the wife said words to the effect:
“How do you know [Y] is even yours? So why do you want to spend time with him?”
to which the husband’s response was to call her a “slut”.
In the running of the final hearing of this matter, I made no finding as to which version of the argument unfolded, as it was clear that whatever the circumstances of the exchange, the possibility of the husband not being [Y]’s father arose between the parties.
During the wife’s evidence in the substantive matter, she was
cross-examined in relation to this incident and she gave evidence that there was no doubt as to [Y]’s paternity and that she had told her Counsel this on 16 December 2008.
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 [Y]’s father and that the issue of paternity was never in dispute from her perspective.
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 [Y].
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 [Y]’s best interests to make orders extending the time that [Y] spent with his father until that issue had been settled by way of DNA testing.
His Honour made it quite clear that, but for that issue, he would have made orders extending [Y]’s time with the husband to overnight time.
Mr Ryan 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.
In light of the wife’s evidence at the final hearing of this matter that she had instructed her Counsel on 16 December 2008 that she did not dispute paternity, Counsel for the husband flagged the potential difficulty that this may cause the wife’s Counsel. The wife left the courtroom and the husband’s Counsel made a formal application that the court consider whether the wife and/or her Counsel should pay the husband’s costs, on an indemnity basis, arising from Federal Magistrate Brewster’s order for paternity testing in circumstances where it was known that such testing was not needed and where the husband and/or his legal representatives had not disclosed this to either the court or the husband’s legal representatives until the final hearing.
The issue as to whether Mr Ryan should continue to appear on behalf of the wife was also raised. The matter was stood down whilst Mr Ryan took instructions and as a result of those instructions, it was agreed that he would continue to appear on behalf of the wife and that the costs issue would be dealt with as a discrete matter at the conclusion of the substantive proceedings.
The substantive matter was adjourned part-heard and when it resumed some month later, Mr Eley appeared on behalf of Mr Ryan’s indemnity insurer. Orders were made by me on that occasion for Mr Ryan and the wife to file affidavit material as to 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 fourteen days of the delivery of the judgment in the substantive matter before the court. An order was also made for the applicant to serve the respondent and the intervenor (being Mr Ryan’s indemnity insurer) with an itemised bill of costs in relation to the costs claimed.
The law
The court has power to order costs against a lawyer and that is set out in Rule 21.07 of the Federal Magistrates Court Rules 2001.
Rule 21.07 provides as follows:
Order for costs against lawyer
(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.
In C & C & Anor [2006] FMCAfam 229 at paragraph 7, Chief Federal Magistrate Pascoe succinctly summarised the extensive case law that exists in relation to the court’s discretion to award costs against parties, and in particular lawyers, as follows:
7. The Court’s jurisdiction and its discretion to award costs against a non-party is not limited (Knight v FP Special Assets Ltd (1992) 107 ALR 585 at [589], per Mason CJ and Deane J (with whom Gaudron J agreed) and affirmed in Da Souza v Minister for Immigration, Local Government and Ethnic Affairs (1993) 114 ALR 708 at [712], per French J; MZWOR v Minister for Immigration [2005] FMCA 845, at [25], per Riethmuller FM). The primary object of the Court in ordering costs against a lawyer is not to punish the lawyer but to protect the party who has suffered loss or injury (Myers v Elman [1940] AC 282 at [289], per Viscount Maugham and at [319], per Lord Wright; Cassidy v Murray (1995) 124 FLR 267 at [281-2], per Fogarty, Kay and Hase JJ; White Industries (Qld) Pty Ltd v Flower & Hart (a firm) (1998) 156 ALR 169 at [229], per Goldberg J). The discretion of the Court to order costs against a lawyer will generally be exercised in circumstances where there is some misconduct on the part of the lawyer or a serious dereliction of duty or gross negligence (Edwards v Edwards [1958] 2 All ER 179 at [186], per Sachs J; Harley v McDonald [1999] 3 NZLR 545 at 564-5), per Tipping J; R & T Thew Ltd v Reeves (No 2) [1982] QB 1283 at [1285-6], per Lord Denning MR; Ridehalgh v Horsefield [1994] 3 WLR 462 at [482], per Sir Thomas Bingham MR). It is not, however, necessary to establish mala fides or other obliquity on the part of the lawyer, though it may be that if mala fides is established that might turn the scale in a particular case (Edwards (supra)), however the Court’s discretion must be exercised sparingly and with care and only in exceptional cases (Da Souza (supra)) particularly where the order sought is indemnity costs (Deputy Commissioner of Taxation v Levick (1993) 43 ATR 621 at [627], per Hill J; McKewins Hairdressing and Beauty Supplies Pty Ltd (in liq) v Deputy Commissioner of Taxation (2000) 34 ACSR 92 at [133], per Gummow J; Re Yunghanns (2000) 26 Fam LR 331 at [339-40], per Lindenmayer and Holden JJ). Evidence of particular misconduct causing loss of time to the Court and to other parties may in some circumstances justify an order for indemnity costs (Tetijo Holdings Pty Ltd v Keeprite Australia Pty Ltd (French J, Federal Court, 3 May 1991, unreported) and affirmed in Colgate Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 at [233], per Sheppard J). However there must be some special or unusual feature in the case to justify the Court in making an order an indemnity basis (Colgate (supra); Preston v Preston [1982] All ER 41 at [58], per Brandon LJ; Re: Wilcox; Ex parte Venture Industries Pty Ltd (No 2) (1996) 72 FCR 151 at [152], per Black CJ; John S Hayes & Associates Pty Ltd v Kimberly-Clark Australia Pty Ltd (1994) 52 FCR 201 at [203], per Hill J; Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd and Others (1989) 81 ALR 397 at [400], per Woodward J).
The husband’s application is that not only should the costs incurred by him arising from the order for the paternity testing be paid by either the wife or her Counsel, but that such costs should be paid on an indemnity basis rather than on a party-party basis.
That the court has the power to make an order in relation to costs on an indemnity basis is quite clear. The Full Court in Cohen & Cohen (1993) FLC 92-340 considered an application for indemnity costs and held:
“This court has power to order costs to be paid on an indemnity basis.”
In Yunghanns & Others & Yunghanns (2000) FLC 93-029, the court again considered its powers to make orders as to costs. The Full Court quoted with approval the statement of Heppard J in Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46-225 at page 233 as follows:
“It will suffice to say that the categories of circumstances which enliven the discretion to award indemnity costs are not closed…it is not a condition precedent to the exercise of the discretion that some collateral purpose or species of fraud be established against the party against whom such an order is sought. All that is required is that the court asked to exercise the discretion be satisfied that some particular facts and circumstances of the case in question warrant the making of an order for the payment of costs other than on a party and party basis.”
This matter was heard by Federal Magistrate Brewster on the morning of 16 December 2008. His Honour heard evidence by telephone from the child [Y]’s treating paediatrician after which he took submissions in relation to what orders should be made on an interim basis for the time the children, and in particular [Y], were to spend with his father. It was at this time that the issue of paternity was first raised. Having taken those submissions, His Honour indicated his determination and at 11.23 am concluded the hearing, having pronounced his determination and having asked Counsel to prepare minutes that reflected that determination.
In the affidavit of the wife sworn 14 September 2009 and filed
17 September 2009 as to the issue of the application for costs and the circumstances of the order for paternity testing, the wife deposed as follows:
9.I did not set out to the (sic) mislead the court about the need for paternity testing of [Y].
10. I did not attend court in Canberra on 16 December 2008.
11.I rang Mr Ryan at 1:40pm on the 16th December and said to him words to the effect of:
“There is no need for a paternity test, [Mr Roberts] was calling me a slut but even he knows there’s no way he’s not the kids’ dad.”
12.When I got the court orders to do the paternity test, I assumed that Mr Ryan had told the court the test wasn’t needed, but that the Applicant wanted to go ahead with it anyway.
I accept the wife’s evidence that she did tell her Counsel that paternity testing was not necessary and that she accepted their advices that as it had been ordered by the court, it needed to proceed as ordered. The concerns I had in relation to her not disclosing this information prior to the final hearing of the matter many months later are addressed at length in my judgment as to the substantive issues before the court.
In his affidavit sworn 11 September 2009 and filed 14 September 2009, Mr Ryan, the wife’s Counsel, deposed that he had a telephone conversation in Chambers with his client at or about 1.30 pm. This was the first time he spoke to his client that day and it was the first time that he sought any instructions from her in relation to the issue of paternity.
It was his evidence that the wife did instruct him that there was absolutely no doubt as to [Y]’s paternity and that the issue had been raised as a result of an argument between herself and the husband some two or three days earlier over the telephone.
The issue to my mind is therefore what obligations did Mr Ryan have as an officer of the court to advise either the court or the legal representatives of the husband that his client did not dispute paternity?
On this issue, Mr Ryan deposes in his affidavit as to the following:
25.I recall advising Ms Roberts with words to the effect, “As the paternity issue has been raised, the court has to make orders for testing.” I did not seek instructions from
Ms Roberts whether or not I was to inform His Honour about her telling me that paternity was not in doubt.
26.My opinion on the facts and medical evidence given in evidence was that it was proper to frame my advice to my client on the law as it related to paternity testing as I did. My interpretation of the situation was that I was a practitioner retained to provide relevant advice to my client in a matter involving the best interests of the children, in particular the boy. I believe my advice was in the best interests of the boy.
27.My experience, appearing before His Honour in various family law matters, led me to form the opinion that His Honour would not have changed his orders for paternity testing if he had been informed of what my client told me on the afternoon of 16 December 2008.
28.I was of the opinion that paternity was vitally important because of the medical condition of the young boy who had had very limited contact with Mr Roberts to 16 December 2008.
29.I did not known and I was aware that the court did not known, in the scientific or definitive meaning of “know”, whether the boy was the son of Mr Roberts. I knew only what Ms Roberts told me concerning why she raised doubt in the mind of Mr Roberts. I knew that only paternity testing would put the matter to rest.
30.I knew my client’s position was as expressed in her affidavit of 11 December 2008. I had formed the view that it had not been a happy marriage from at least mid-2003 and possibly prior to that. I thought it possible that there may have been circumstances resulting in Mr Roberts not being the father.
31.My training and experience in litigation thus far has lead me to adopt the practice that matters should not trouble a court unnecessarily and that lawyers are retained to keep matters from unnecessarily going to a court for decision.
32.I had formed the view that the court should leave the paternity testing order in place.
33.I believed that I had discharged my duty to the court and to my client.
There is little doubt that Mr Ryan believes he discharged his duty to his client in that the outcome achieved on 16 December 2008, whereby there was no order made for [Y] to spend time overnight with his father was in accordance with her instructions.
In not advising his client of her duty to immediately disclose the truth, Mr Ryan left the wife open to the negative inferences drawn by me as to her failure to disclose this information sooner. This does not in my mind equate with providing his client with the proper objective advice it is his duty to provide. I also take issue with Mr Ryan’s statement that he discharged his duty to the court.
In the face of his client’s very clear instructions that no one other than the husband could be [Y]’s father, it is completely unacceptable of him to say, as he does in paragraph 30 of his affidavit:
“I thought it possible that there may have been circumstances resulting in Mr Roberts not being the father.”
As noted earlier in this judgment, Federal Magistrate Brewster was very clear that, but for the issue of paternity, he was going to order overnight time between [Y] and the husband. Whatever Mr Ryan may well have thought as to whether that was in [Y]’s best interests, His Honour had clearly formed the view that it would be in [Y]’s best interests for overnight time to commence at that time. It was not for Mr Ryan to impose his opinion as to [Y]’s best interests over that of His Honour.
Upon being appraised of paternity not being an issue from the perspective of his client, I am of the view that, at a very minimum,
Mr Ryan had a positive obligation, as an officer of the court, to contact the legal representatives of the husband to convey to them that he now had instructions from his client that she did not dispute paternity and her clear instructions were that there was no way anyone other than the husband could be [Y]’s father.
Once seized of that information, the husband’s legal representatives could then have sought the husband’s instructions as to whether he wished to pursue the issue of paternity, and subject to those instructions, sought to bring the matter back before Federal Magistrate Brewster on the afternoon of 16 December 2008 to ventilate the matter in light of those instructions.
It cannot be known whether the husband would have still pursued the issue of paternity, but that he was never given that opportunity is as a direct result of Mr Ryan’s failure to conduct himself as an officer of the court.
On 16 October 2009, an affidavit sworn 15 October 2009 was filed by the husband’s solicitor Clare Grogan in response to the affidavit of
Mr Ryan. In that affidavit Ms Grogan deposes at paragraph 4 the following:
4.In relation to paragraph 35 I do not recall any such conversation with Mr Ryan. If I had had such a conversation my advice to my client with respect to the future course of the matter from the date of being told would have been different. I only became aware of Mr Ryan’s instructions that paternity was not in doubt during the mother’s evidence at final hearing on 10 July 2009. When the court next adjourned, Mr Ryan, Ms Haughton of counsel, Mr Ryan’s instructor and myself met in a meeting room and Mr Ryan said words to the effect:
“I had instructions prior to the order being made.”
Ms Haughton said words to the effect:
“You’ve got a problem with the transcript then.”
Whilst I have not had any opportunity to test the conflicting evidence of Mr Ryan and Ms Grogan, it seems most unlikely that in the event Ms Grogan had been advised by Mr Ryan on or about 27 January 2009 that “Ms Roberts said paternity is not in doubt” that she would not have advised her client of this and pursued this further before Federal Magistrate Brewster when the matter came back before him on
16 February 2009.
If the comments of Mr Ryan in the conversation that took place between Ms Grogan, Ms Haughton of Counsel and Mr Ryan in July 2009 as set out in Ms Grogan’s affidavit are true, in that Mr Ryan did have instructions that paternity was not disputed by his client before Federal Magistrate Brewster made the paternity testing orders on
16 December 2008, then Mr Ryan not only deliberately mislead the court on that day, but he has also placed false evidence before me in relation to this application.
I am of the view that Mr Ryan’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 Ryan’s “improper conduct” and as such those costs should be paid by Mr Ryan.
That leaves the issue as to whether those costs should be payable on an indemnity basis or a party-party basis. Neither Mr Ryan nor his indemnity insurer have sought to address the court on that issue which is entirely a matter for them.
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 Ryan on an indemnity basis.
I have perused the itemised account submitted by the husband’s solicitors with respect to the DNA testing. As the matter was listed for hearing on 16 December 2008 in relation to the ongoing interim matters between the parties, it is not appropriate that the costs of that day should be made payable by the husband’s solicitors. Similarly, costs incurred in the preparation of the matter for final hearing after the subsequent interim hearing on 16 February 2009 are costs the husband would have incurred in the proper preparation of this matter for final hearing. Accordingly, those costs as set out in the itemised account have not been allowed.
Finally the “improper conduct” of Mr Ryan as set out in this judgment is such that I have formed the view that his conduct should be referred to the appropriate disciplinary body for investigation and I have so directed the Registrar of the Federal Magistrate Court to forward the relevant material accordingly.
I certify that the preceding forty-three (43) paragraphs are a true copy of the reasons for judgment of Bender FM
Associate: Sarah Hession
Date: 19 October 2009
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