Sebastian & Sebastian (No 6)

[2013] FamCA 225

FAMILY COURT OF AUSTRALIA

SEBASTIAN & SEBASTIAN (NO. 6) [2013] FamCA 225

FAMILY LAW – COSTS – Costs application – Compliance by husband with court orders and filing directions – Non-compliance by wife and her solicitors – Unavailability of wife’s Senior Counsel – Application for extension of time or leave to file costs application out of time – Overall considerations of a just and equitable outcome – Exercise of discretion – Indulgence to wife and her solicitors – What is a reasonable explanation for non-compliance – Leave granted.

Family Law Act 1975 (Cth) s 117

APPLICANT: Mr Sebastian

RESPONDENT: Ms Sebastian

FILE NUMBER: MLC 6522 of 2010

DATE DELIVERED: 8 April 2013

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Young J

HEARING DATE: 8 April 2013

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr North SC

SOLICITOR FOR THE APPLICANT: Moores Legal

COUNSEL FOR THE RESPONDENT: Mr Geddes QC with him Ms Johns

SOLICITOR FOR THE RESPONDENT: Taussig Cherrie Fildes

Orders

IT IS ORDERED:

1. THAT leave be granted to the wife’s solicitors to file on her behalf an Application in a Case and therein to seek an order that the husband pay her costs of and incidental to the final hearing of this matter as and from 14 August 2012 to 27 February 2013 (inclusive), as agreed or failing agreement as assessed.  

2. THAT otherwise all applications for costs for both the husband and wife are to be referred to his Honour Justice Cronin for further case management orders and directions and for listing before a Judge of this Court for hearing at an appropriate date and time.

3. THAT contemporaneously with the payment by the husband to the wife of the lump sum cash payment as was identified in paragraph 3 of the Orders dated 28 March 2013 the wife then pay to the husband’s solicitors a sum of $9,000 being the costs of the hearing this day thrown away.

4. THAT the extempore reasons for judgment be transcribed, and when settled, be placed upon the Court file and be made available to both parties.

5. THAT two (2) days prior to the further listing of this matter both parties are to file an updated letter of costs in compliance with Family Law Rule 19.04.

IT IS CERTIFIED

1. THAT pursuant to Rule 19.50 of the Family Law Rules this matter reasonably required the attendance of Counsel including Senior Counsel for each of the husband and wife.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Sebastian & Sebastian has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER:  MLC 6522 of 2010

Mr Sebastian

Applicant

And

Ms Sebastian

Respondent

REASONS FOR JUDGMENT

1. On 28 March 2013, on the day immediately prior to the commencement of the Easter holiday break, I delivered Reasons for Judgment and made final s 79 orders in this matter.  The Judgment was substantial and that reflected the length of hearing, the lengthy affidavits and the documents annexed and tendered, the financial and contribution issues, s 75(2) factors and add-backs which, though not strictly complex, were nevertheless detailed and substantial in documentation and issue. 

2. In my Orders pronounced 28 March 2013, I ordered as follows:

   30.That all questions of legal costs and expenses of and incidental to these proceedings be reserved for hearing to Monday 8 April 2013 at 10.30 am. 

   31. That any such costs application be filed and served by 1 pm on Thursday 4 April 2013, and be accompanied by a written summary of legal argument of not more than two pages in length.

   32.If no such application is filed by that time, the hearing date of 8 April 2013 be vacated.

3. The final day of hearing of the property proceedings was 27 February 2013, and I worked upon, concluded and delivered the Judgment and pronounced orders within one month thereof. 

4. That was done first for the convenience of the parties and so that they would know the outcome of their case.  Secondly, I was conscious of my forthcoming retirement from the Court.  And thirdly, I was conscious of endeavouring to hear and conclude any costs issues that might arise as a result of my Orders. 

5. I was aware, because it was disclosed during the hearing, and is on the Court record, that Senior Counsel for the husband was unavailable from 10 April 2013 for some period, the duration of which I have no knowledge.  I therefore determined to list and hear in my short remaining time any costs issues that arose in a timely manner, so that I could, consistent with my reasons delivered in the Judgment, hear and conclude finally all issues concerning the property and financial aspects of the Sebastian family.

6. As it transpired, on 4 April 2013 the solicitors for the husband filed an Application in a Case, supported by an affidavit of Mr Oliver and the required two-page summary of legal argument.  Those documents were filed in compliance with order 31 of my earlier Orders and sought costs orders. 

7. The wife’s solicitors filed no such Application, nor any written summary of legal argument, by that day.  What transpired, and I have no court documents or indeed any letter or other correspondence to document this, was that a telephone call was made by the wife’s solicitor to my associate requesting an extension or variation of the timetable in which to file documents.  That is an admitted fact.

8. When being told of such telephone call I directed my associate to ring both solicitors and to list the matter in open Court for mention the following morning.  It was on that basis that the matter came to be listed before me on Friday 5 April at 10.00 am and I stood aside my other three matters that I had also listed to deal with this matter as a priority mention. 

9. Mr Oliver initially appeared for the husband, who was in Court.  Ms Sanders appeared for the wife, who was not in Court.  I ascertained from her that the wife had given instructions to her solicitor to oppose the costs orders sought by the husband, but not to file any costs application herself. 

10. The issue that immediately arose that Friday morning was as to the listing of the matter and whether it could be heard as I had earlier ordered on Monday 8 April at 10.00 am, or at any other time, and specifically on Tuesday 9 April at 10.00 am or 2.15 pm. 

11. Ms Sanders explained to the Court, and not on affidavit, that her Senior Counsel who had been intimately involved in all of the preparation for the hearing and the lengthy hearing itself was on holiday in Japan.  He had not been forwarded a copy of the Reasons for Judgment and therefore had not read it.  She further explained that Junior Counsel had a copy of the Judgment, had read the Judgment, and was in her detailed second reading of it, but had been unavailable. 

12. The focus of that mention was as to when the husband’s Application for costs could or should be heard.  It was only after a clear assurance was given to the Court by Ms Sanders that no costs orders were sought by her client that Mr Oliver sought to have the matter stood down.  He contacted his Senior Counsel who subsequently came to Court.  I stood the matter down for some little time to allow that to occur and then I heard further submissions both from Ms Sanders and from Mr North SC. 

13. The matter raised on behalf of the husband was that it would be wholly inconvenient and inappropriate to list the matter on Tuesday 9 April, as Mr North was otherwise engaged with a brief which he said he could not and should not be required to return, and otherwise from 10 April 2013, he was unavailable.  Ms Sanders explained that Mr Geddes was returning from Japan on Sunday 7 April, and that he needed time to read, consider and give advice on the Reasons for Judgment and any matter arising therefrom.  It was on that basis that I made further Orders facilitating a filing by 1 o’clock today of any documents in response by the wife to the husband’s application and listing the matter for hearing at 2.15 pm this day on the husband’s cost Application only. 

14. I most certainly understood that was to be a hearing only as to whether the husband was or was not to be awarded any sum of costs pursuant to his Application, being the only such document then filed in the property and financial proceedings of recent times.  That understanding was based upon Ms Sanders’ submissions in Court that the wife would not be filing any costs Application.

15. To better understand the background I should also explain that when I delivered the Reasons for Judgment I placed a temporary embargo on its email transmission.  I did so because it had not been anonymised, and it contained the very substantial personal and quite private details of the lives of the parties, their financial affairs and personal behaviour and made particular reference to the children.  That was explained in open Court and I understand that, without that embargo, it may have been more readily communicated to Mr Geddes whilst he was overseas.   As it transpired, that Judgment has now been anonymised, and is on the various court and legal websites, but that is only of the last day or so. 

16. The Court was not notified until after 1 o’clock today of any such intended cross-application or leave being sought to file any costs Applications on behalf of the wife.  That said I now have before me an affidavit of Ms Sanders that has been filed this day and the document records that it was sealed at 12.54 pm.  I have also the written submissions which were filed at 1.17 pm, some 23 minutes after the filing of the affidavit, which are both a Response to the husband’s cost Application in paragraphs 11-18 thereof and in support of the wife’s proposed costs Application in paragraphs 1-10 (inclusive) thereof.

17. What was not filed and was not accepted for filing by the wife was an Application in a Case.  In that document which has been handed to me, the wife foreshadowed that she would seek orders as follows:

    (i)that the husband’s cost application be dismissed;

    (ii)that all necessary times be extended to enable her to file an application for costs;

    (iii)that the husband pay the wife’s costs of, and incidental to, the final hearing of this matter as and from 14 August 2012 to 27 February 2013, inclusive and as agreed, or failing agreement, as assessed;

    (iv)that the husband pay the wife’s costs of, and incidental to, this application;

    (v)such further or other orders as this Honourable Court deems appropriate.

18. As I stated, that application was not accepted by the Court for filing and it remains unfiled. 

19. The primary focus of the submissions of Mr Geddes is that, notwithstanding my earlier case management orders, that I should now grant leave to permit the filing of this Application.  If and when filed it would mean that the issues before the Court as to costs for determination are effectively cross-applications by the husband as applicant and by the wife as respondent, each seeking payment of their own costs and disbursements for the periods identified by each of them and otherwise opposing any award of costs in favour of the other party. 

20. I have had oral argument from both Senior Counsel on whether I should grant leave to permit this document to be filed.  Before I address those submissions, there is a stark reality in this case.  It is that my retirement is publicly known at this time and my farewell ceremony is next Thursday, 18 April 2013.  It means that any submissions and argument of this case and determination to be made by me would have to be heard, concluded and handed down prior to that date. 

21. Mr North emphasised other practical considerations, they being that he is otherwise briefed tomorrow and I am presently delivering these ex tempore reasons at 3.44 pm and that he is not available tomorrow.  I also disclosed to both solicitors that I am not in the Registry tomorrow morning and my original proposal had been to fix this matter for hearing at 2.15 tomorrow to allow one hour to each party to make their submissions.  Finally, the other consideration that I have already identified is that there had been timely disclosure by Mr North of his unavailability, and indeed, as I understand, his departure from the State of Victoria as and from 10 April for holiday purposes. 

22. The convenience of Counsel and of the Court are matters of some relevance.  Certainly, my limited hearing time and the conclusion of my commission as a Judge of the Family Court of Australia are matters of primary importance.  To complete the history of the convenience of Counsel, Mr Geddes has highlighted that he was overseas from about the time of the delivery of the Reasons for Judgment and did not have a hard or soft copy of the Reasons with him and he returned from Japan on Sunday, 7 April, that is, yesterday.  He has conferred with his client today.  He and his Junior Counsel have prepared a two and a half page document by way of submissions, both to support a costs argument and to respond to the husband’s case. 

23. Turning to the submissions, Mr Geddes asserted that it is just and proper that his client have the proper time and opportunity to have his advice on the matter as he has been Senior Counsel at all relevant times prior to and during the hearing.  He has emphasised that he was wholly unavailable, that he has attended to the matter and given advice as promptly as possible and that his Junior Counsel was otherwise unavailable at various periods. What his client wanted was said to be his advice and not the opinion of others.

24. He sought to explain Ms Sanders’ submission that the wife was not seeking costs on the basis that it was either somewhat spontaneous or without proper reflection or without the input of Senior Counsel.  He does not challenge the position that I and others heard in Court, but to explain them.  More particularly, his overriding submission is that it is the justice of the case that must be the guiding light for the Court.  His client cannot and should not be denied an opportunity to make submissions for her costs and in particular, he highlighted the various paragraphs of my Judgment, which are identified in paragraph 4 of his written submissions, which he said were supportive of the merit of the Application.  It was said that a very substantial sum could be involved.

25. That, of course, was and should have been known to others and should have been earlier reflected upon.  Ultimately, what I draw from his submission is that whatever was said in Court, whatever lack of compliance was highlighted by the wife’s failure to instruct her solicitors to file documents or to maintain a reserved position on costs pending his return, they should all be balanced within the wider concept of what is a just and equitable outcome.  That is, in the context of the earlier, but very separate, considerations that form part of the s 79 orders all costs issues are important and substantially affect the overall outcome.  Ultimately I have agreed with that submission.

26. Mr North vigorously opposed any leave being granted for the filing of an Application by the wife to seek costs rather than to only oppose the husband’s costs.  He first cited that there would be an injustice to his client if such leave were granted.  Secondly, he highlighted the resources of the Court, the time and cost burden that would be imposed upon the Court and its remaining Judges in the context of an adjourned hearing, or indeed, a transferred hearing to another Judge to hear and determine the costs matters.  There is much merit in that application which I have considered and balanced.  He strongly identified that his client had a right to the legal representation of his choice and left it in no doubt that his client wanted him to argue any application and that the matter should not come on another time when Mr North was unavailable, be it tomorrow or be it at any other future time. 

27. Finally, and very much the focus of Mr North’s submissions, were that his solicitor and client had complied with court orders and the timetable of the Court and the wife and her solicitors had simply ignored or flouted the orders of the Court to their personal timetable or convenience.   

28. I have a limited choice in terms of available options.  It is now 3.50 pm.  Little can be done in the balance of today in terms of any defended hearing.  Mr North foreshadowed strongly not only his objection to the granting of leave for the filing of the costs Application but that it would necessitate an adjournment for some time (and until he was back in the jurisdiction) because he submitted he should not be expected to proceed without having had the opportunity to read the recently filed submissions and cross-reference them to my Reasons for Judgment and prepare an argument opposing the costs sought by the wife. 

29. Again, there is both merit and understanding in that position.  I certainly do understand that Mr North and his solicitor and client attended Court today to argue for their costs and to meet the reasons that would have been advanced for such costs to be rejected.  It was my intention to hear and conclude these costs arguments today.  Certainly as of the mention last Friday, 5 April, there was nothing said or done in this case by, or on behalf of, the wife that would have given rise to any other scenario. 

30. The decision as to whether or not I grant leave to file the wife’s Application is first required, and if so, that Application could then be filed and a subsequent hearing date fixed.  It is unreasonable in the 15 minutes remaining today or now, given the time, to expect any other brief to be returned today for the matter to be listed tomorrow.  The necessary and unavoidable consequence would be that I would not and could not hear the competing costs Applications.  If I were to grant such an indulgence to the wife to allow the filing of the Application, the matter could only be listed at a time that is reasonably convenient to Mr North, given the instructions of the husband to retain him as his Senior Counsel.

31. Ultimately my decision is a matter of considered and balanced discretion.  I am more than a little concerned over what I was told last week by the wife’s solicitor, presumably on the instruction of the wife, and without input of Senior Counsel, and the way the matter was managed for hearing, knowing my need to conclude this matter and not leave the issues to another Judge, and the very, very onerous and almost unreasonable burden that places upon another judge.  I am inclined to think it is almost, but not quite, an outrageous situation in the particular circumstances of this case. 

32. However, that is not the test.  Ultimately, it is a question of affording justice to both parties.  The Family Law Act1975 (Cth) in terms of its property jurisdiction is founded on the concept of justice and equity and indeed, any costs order can only be made in circumstances where it is just. The factors identified in s 117(2A) do not quite envisage the various scenarios that I now have before me.

33. Finally, I am acutely aware of the divisible property of the parties, my orders in this case and of the enormous costs that both parties have incurred.  Indeed, pursuant to Family Law Regulation 19.04, I had, from time to time throughout the hearing, various updated letters of costs submitted and they are embraced within the Reasons for Judgment.  Thus, costs are substantial and this is not a case of a limited hearing and reasonable costs charged.  Each of the parties have incurred costs and disbursements and are continuing to incur such costs and disbursements that have exceeded a million dollars. 

34. Whilst it is not the quantum of the costs in any way that is persuasive of my determination, it is the fact that the costs determination is also a real and substantial issue that will have a direct and very real financial bearing upon both parties.  Primarily then because of adopting a just approach and trying to bring about a just outcome in proper circumstances where there can be meaningful and timely input on behalf of both parties, I have concluded that I must allow the Application to be filed.  I add that I do so reluctantly.  However, that degree of reluctance does really highlight what I have balanced in arriving at that conclusion.

1. The outcome that I so clearly wanted to avoid will be that another Judge of this Registry, or from interstate, will be assigned the task of reading the Judgment and hearing submissions and making, or not making, one or other costs orders.  That is not the conclusion that I planned in this case, but I say no more.  I, therefore, as a first step of the matters that are before me today, will, in the exercise of discretion, grant leave to the solicitors for the wife to file an Application for costs.  Given that it is after 4 o’clock, that Application cannot be filed downstairs today. 

2. If there is no objection taken, and without in any way Mr North fettering any rights that he might want to consider and/or take other actions and/or lodge any appeal subject to appropriate leave, because it is dated 8 April it can be filed by my court officer, but that is to preserve all rights otherwise.  The disappointing aspect is, therefore, I can do no more than refer this matter to Cronin J to be listed before a Judge of this Court for determination of the costs issue on a date to be fixed.  I conclude by, again, repeating my disappointment at that outcome.  Certainly it will mean more costs for the parties and will add to their costs burden. 

I certify that the preceding thirty-six (36) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Young delivered on 8 April 2013.

Associate: 

Date:  8 April 2013