Tho and L Firm

[2010] FamCA 919

FAMILY COURT OF AUSTRALIA

THO & L FIRM [2010] FamCA 919

FAMILY LAW – COSTS DISPUTE – Between solicitor and client – Instructions to single expert

Family Law Act 1975 (Cth)

APPLICANT: Mr Tho

RESPONDENT: L Firm

FILE NUMBER: MLC 992 of 2008

DATE DELIVERED: 13 October 2010

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: THE HONOURABLE JUSTICE CRONIN

HEARING DATE: 5 OCTOBER 2010

REPRESENTATION

COUNSEL FOR THE APPLICANT: MR CROFTS

SOLICITOR FOR THE APPLICANT: HARRIS COST LAWYERS

COUNSEL FOR THE RESPONDENT: MR WARNE

SOLICITOR FOR THE RESPONDENT: L FIRM

Orders

1. That the practitioners for the parties forthwith instruct single expert witness Mr Weingart to prepare a report in accordance with the terms set out in the reasons delivered with these orders.

2. That the application of the applicant filed 22 April 2010 and the response of the respondent filed 8 June 2010 be adjourned for final hearing before me as the third case in the list of defended matters for the period of 15 days commencing on 3 February 2011 but not before Monday 14 February 2011 as a two day matter.

3. That by 4 pm on 22 December 2010 the applicant file and serve the affidavits of evidence in chief of all witnesses relied upon.

4. That unless the applicant obtains a waiver of the relevant fee, the applicant pay the trial fee by 4 pm on 22 December 2010.

5. That by 4 pm on 21 January 2011 the respondent file and serve the affidavits of evidence in chief of all witnesses relied upon.

6. That all parties have liberty to approach the registrar responsible for the management of the court file to vary the obligations under these orders to ensure readiness for trial.

7. Should any party fail to comply with these orders or the ensuing amending directions of the registrar responsible for the file, that registrar shall:

   (a)If both parties are in default, be at liberty to move the case from the rolling list in its allocated place and either strike the case out of the list with a right of reinstatement upon conditions to be determined by the Registrar; or

   (b)refer the case to the trial judge for directions as to its future management; or

   (c)if the trial judge is unavailable, refer the case to the Case Management Judge for directions and determination; or

   (d)return the case to the Registrar’s docket on a date to be fixed for further management

   AND IT IS NOTED THAT all parties have been advised that a failure by one party to comply with these orders and those of the registrar responsible for the file may lead to the complying party seeking from the trial judge leave to proceed on an undefended basis.

8. That the practitioners for the parties file and serve electronically to my Associate by 4 pm on 11 February the following:

   (a)a concise set of orders to be sought if different from those already filed;

   (b)a list of the affidavits to be read and, if not the whole affidavit, the relevant paragraphs relied upon;

   (c)a list of assets and liabilities; and

   (d)a bullet-point summary of argument in relation to the issues in dispute.

AND THE COURT NOTES

A.That although this case has been allocated a number in the defended list referred to, all parties have been advised that that place may change as the list evolves and all parties are to monitor the progress of the list to be ready to start at any time during the defended period referred to in the order.

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

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 992  of 2008

MR THO

Applicant

And

L FIRM 

Respondent

REASONS FOR JUDGMENT

1. On 23 April 2010, Mr Tho (“the applicant”) filed an application in a case naming L Firm (“the respondent”) as the respondents to the proceedings.  The applicant sought to dispute cost accounts sent to him by the respondent. 

2. On 8 June 2010 the respondent filed a response seeking a dismissal of the application. 

3. On 10 June 2010, the registrar adjourned the dispute to the Judicial Duty List and made orders for the appointment of a single expert witness. 

4. In the Judicial Duty List on 15 September 2010 where both parties were represented by counsel, discussion occurred about the extent of the single expert witness order.  Orders were made, inter alia, by consent.  The parties filed pleadings to enable the limitation of the dispute.  One order made was that the parties endeavour to agree upon the instructions to the single expert witness.  They have been unable to reach that agreement.

5. On 6 October 2010, counsel for the respondent sought to revisit the single expert witness order saying that the respondent did not consider that that evidence was necessary.  Having regard to the process everyone had followed, I indicated an unwillingness to revisit that order.

6. Submissions were then made about the instructions set out in each party’s proposed letters to the single expert witness. 

7. The parameters of the dispute are confined by the pleadings or as they have been described by the parties, points of claim and points of defence.  The evidence should be confined to the proof of the matters so pleaded notwithstanding this Court does not use pleadings in the strictest sense.

8. Chapter 1 of the Family Law Rules 2004 intends those rules to be used so as to ensure that each case is resolved in a just and timely manner at a cost to the parties (and the court) that is reasonable in the circumstances of the case. The rules provide for the court to make the sort of procedural orders contemplated because they are directed to the resolution of the dispute by the provision of expert evidence.

9. Importantly in this case, the admissibility of evidence is governed by the Evidence Act 1995 (Cth) (in particular see s 4(1), s 8(1), s 55 and s 56).

10. The applicant’s points of claim (paragraphs 5, 6 and 7) assert the charges levied by the respondent’s cost agreement were unreasonable when compared with the schedule of the Family Law Rules and also to the “market place”. The respondent’s defence is yet to be filed to that document.

11. The respondent’s points of claims (paragraphs 1-6) assert that the applicant became entitled to various property interests as a result of the provision of legal services, a consequence of which it is said, the respondent became “the beneficiary or contingent beneficiary” of equitable interests in the nature of a charge over those property interests of the applicant.  In the points of defence to that claim, the applicant either denies or does not admit the claim by the respondent. 

12. The initial order of the registrar appointing a single expert witness required a report on the “enforceability of the cost agreement”.  If proposed evidence was directed to that, it would be usurping the function of the Court.

13. The issues therefore upon which the expert evidence can be given must relate to an issue that has to be decided, confined by the pleadings.  In this case, those issues are about what work was required to be done by the solicitors, whether there was a complexity about that work justifying legal services of a particular skill level and if the matter was of some complexity, what the expectations would be in the market place in respect of fees.

14. Whilst it might be thought that the rules have provided for a court to subjectively assess some or all of those issues, there is clear authority that it should not do so but rather determine the matter on the evidence.  In New South Wales Crime Commission v Fleming [1991] 24 NSWLR 116 at 124 Gleeson CJ said that a judge was not at liberty to give effect to an individual opinion, formed by reference to some personal standard of social justice that fees charged by solicitors and barristers were generally too high. The Chief Justice went on to say that those matters ought to be determined on the basis of properly prepared and presented evidence.

15. The question remains about the nature of that evidence and the requirement for it to come from an expert.  In my view it must be expert evidence because otherwise, the Court is required to hear a range of evidence from professionals in a market place which has the diversity as wide as the central business district, interstate practices, various suburbs and rural areas. 

16. Expert evidence has been accorded a definition by Heydon JA (as he then was) in Makita (Australia ) Pty Ltd v Sprowles [2001] NSWCA 305. There, his Honour said that if expert opinion evidence was to be admissible, it had to be demonstrated that there was a field specialised knowledge about it. His Honour said that the specialised knowledge had to be identified and the witness had to demonstrate expertise. His Honour went on to say:

    The opinion proffered must be wholly or substantially based on the witness’s expert knowledge; so far as the opinion is based on facts “observed” by the expert, they must be identified and admissibly proved by the expert, and so far as the opinion is based on “assumed” or “accepted” facts, they must be identified and proved in some other way; it must be established that the fact on which the opinion is based form a proper foundation for it; and the opinion of an expert requires demonstration…of the conclusion reached.

17. Heydon J said that if the court could not be sure of any of those things, the evidence was, strictly speaking, inadmissible and even if it was admissible, it was of diminished weight.  Notwithstanding the reservation of counsel for the respondent, both parties have agreed that Ariel Weingart is a person who has such expertise.  It is important however that Mr Weingart follow the Makita principles to ensure that his evidence is admissible.

18. It remains to be seen whether the proposed evidence can meet each of those criteria but in this case, the dispute currently is about what material Mr Weingart should have.

19. I was provided with a letter from each party being the draft that was intended to be sent to Mr Weingart.

20. The applicant’s position was that instructions should be expanded to look at both the particular and overall costs incurred, as well as the Melbourne “market” for legal services and also the scale costs.  It was suggested that the single expert witness should have access to the applicant’s position as to what happened to him as a client of the respondent but should not have any documentation nor what the position was at the time that it was asserted by the respondent that the cost agreement was entered into.  It was also argued by the applicant that the expert should not have the application or responses of the parties to this dispute.  The applicant also argued that the single expert witness should view the court documents as at the time of the agreement but in my view, that is unnecessary to determine such things as reasonableness and complexity because both of those aspects can be looked at retrospectively.  Hindsight might be helpful.

21. The respondent’s counsel did not cavil with the applicant’s position but preferred the letter drawn by the respondent as the appropriate model.

22. The single expert witness needs to be able to see what work was done and whether on the basis of that work, the matter would be seen as complex (and if so, to what extent it would require expertise).  In respect of the respondent’s letter therefore, the single expert witness should be given:

    1.All applications and responses filed by the parties to this dispute to date;

    2.All orders made in these proceedings to date and these reasons;

    3.The parties respective points of claim and points of defence;

    4.The relevant provisions of Part 15.5 of the Family Law Rules 2004.

23. The respondent’s letter of instruction should be amended to provide the specific charges both as to the specific items and as to the general retainer based upon the alleged cost agreement but also if prepared on the scale attached to the rules, compare it with what is happening in the Melbourne market.

24. I do not propose to be precise in the drafting of that paragraph because I would expect the parties to be able to do so. 

25. It goes without saying that the single expert witness needs to make all necessary inquiries to provide expert opinion having regard to the Makita test set out above, to provide the underlying factual basis of the opinion.  As such, the paragraph in the respondent’s draft which begins “you are requested to make inquiries in relation to the rates…” should be removed.

26. The next paragraph of the respondent’s letter which begins “The characteristics …” is a matter for description by the parties.  That paragraph can be amended either by agreement or each can put their perception of how they saw the situation in which the advice was sought and given.  If there is a conflict, the single expert witness will have to either draw a conclusion and justify it or alternatively provide alternate outcomes.

27. The paragraph “You are not asked…” is unnecessary.

28. In respect of the applicants, Item 1 should be removed.  Those matters go the substance of whether there was in fact an agreement.

29. Items 2-6 remain by agreement if, as was suggested by both parties, they wish the single expert witness to assist in any settlement of the dispute.  Otherwise, those matters are not matters germane to the admissible evidence of the single expert witness.

30. The first paragraph of the applicant’s instructions on the third page should be deleted but the second paragraph may otherwise remain. 

31. The other matter of some concern to the parties was to have time allocated for the trial.  I propose to make orders.  Because of the fact that the respondent is a firm of solicitors engaged in family law practice in Melbourne, I raised again with the parties whether there was likely to be any objection to any of local judges hearing the case and unless a judge determines that he or she feels compromised and should not hear the matter, the case will proceed without any such argument being raised by the parties.

32. In the circumstances, I propose to make orders.

I certify that the preceding Thirty Two (32) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 13 October 2010.

Associate: 

Date:  13 October 2010