TILBURY & QUICK

[2013] FamCA 560

FAMILY COURT OF AUSTRALIA

TILBURY & QUICK [2013] FamCA 560

FAMILY LAW – COSTS – Dispute as to costs as between solicitor and client – Whether the husband should be granted an extension of time in which to file a notice disputing an itemised bill of costs out of time

FAMILY LAW – COSTS – Application for part-party costs in respect of current proceedings – Conduct of the husband – Where the husband has been wholly unsuccessful – Application granted – Costs as assessed

Family Law Act 1975 (Cth)
Family Law Rules 2004 (Cth)

Gallo v Dawson (1990) 93 ALR 479
Penfold v Penfold (1980) 144 CLR 311

APPLICANT: Mr Quick

RESPONDENT: Mr B

FILE NUMBER: PAC 3842 of 2007

DATE DELIVERED: 18 February 2013

PLACE DELIVERED: Parramatta

PLACE HEARD: Parramatta

JUDGMENT OF: Collier J

HEARING DATE: 18 February 2013

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Mr Benetatos
Benetatos White

COUNSEL FOR THE RESPONDENT: Mr Alexander

SOLICITOR FOR THE RESPONDENT: B Lawyers

Orders

1. That I refuse the husband’s application to extend time for filing a Notice of Objection.

2. That I dismiss the husband’s application, cross application and his application in a case.

3. That I make no order with respect to the stay of proceedings pending payment of costs in respect to the order made by consent in the Local Court.

4. That, within nine (9) months of this day, the husband shall pay to the respondent solicitor the respondent solicitor’s costs in the amount of $7,000.              

IT IS NOTED that publication of this judgment by this Court under the pseudonym Tilbury & Quick 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 PARRAMATTA

FILE NUMBER: PAC 3842 of 2007

Mr Quick

Applicant Husband

And

Mr B

Respondent Solicitor

REASONS FOR JUDGMENT

1. Before me today are proceedings relating to an Amended Initiating Application and an Application in a Case filed on behalf of Mr Quick, who I shall refer to as the husband for ease.  The gist of the case promoted on behalf of the husband is that he should be allowed time in which to file an objection to a bill of costs made available to him by a solicitor previously acting on his behalf.  The applications, to which I have referred, are an Amended Application of 31 July 2012 and an Application in a Case of 6 August 2012.  As I understand it, the husband relied upon an affidavit sworn on 22 May 2012 and filed on 4 June 2012. 

2. The solicitor filed a Response on 21 August 2012.  He relied upon two relevant affidavits; those were affirmed on 6 August 2012 and filed on the same date and affirmed on 21 August 2012 and filed on the same date respectively. 

3. This matter has a significant history in this Court, and in relation to the proceedings in this Court, as best I understand it, the husband had originally instructed the firm of solicitors that now represent him in proceedings against his wife.  However, something occurred in relation to or in regard to that relationship of solicitor and client, then in about July 2006, the husband changed his solicitors from Mr Benetatos to Mr B.  Mr B I shall hereafter refer to as the solicitor.

4. It is the case, as I understand it, of the solicitor that he forwarded to the husband, under cover of a letter of 12 August 2006, a family law costs letter, a costs agreement and a costs notice.  It is the husband’s case that he did not receive these documents. 

5. The matter as between he and his wife was subsequently settled.  Amounts of money were paid in accordance with directions, as I understand it, given by the solicitor on the sale of a property pursuant to Court Orders.  The end result was that the husband received an amount of $49,956.39 from the solicitor and the solicitor retained in his trust account a sum of $20,185.  That amount is the subject of the ongoing dispute between the husband and the solicitor.

6. As I further understand it, by no later than early 2008 the husband asked the solicitor for his file.  There was then some discussion about the cost of photocopying and the husband asserts, and I accept, an amount of money was paid by him to the solicitor and the file was released.  The husband says that he did not see a tax invoice or a costs agreement with the material that he obtained from the husband.

7. I am advised that as early as 18 August 2008, in accordance with instructions given to him, Mr Benetatos wrote to the solicitor regarding this issue of costs.  It is the husband’s case that from that point on, in what it is asserted was the absence of replies from the solicitor, the husband says he took no further action until 2010, at which point he gave further instructions to Mr Benetatos and further correspondence was then entered into.

8. The husband then says that in about February 2011 he commenced proceedings in the Local Court at C Town by way of a Statement of Claim.  That Statement of Claim is attached to his affidavit and would seem to be cast in conversion.  In any event, as a result of those proceedings, he says he received for the first time a tax invoice under cover of a letter of 12 September 2011.  As I understand it, that letter is Annexure I to his affidavit and refers to a tax invoice.  I do not have a copy of that Court file.  The husband then by his original application in these proceedings filed on 4 June 2012 sought the extension of time.

9. As to the delay, I am not given any concrete explanation as to why, having received that tax invoice, it having been the subject of dispute since 2007, the husband did not immediately seek to deal with the matter.  I am told that there was some delay and difficulty caused by the position in the Local Court.  I have difficulty with this concept.  The application to the Local Court for relief was framed in conversion.  Clearly, that was not the correct way in which to proceed against the solicitor.  To my mind, that is borne out by the fact that the husband consented to an order for costs at least in part on an indemnity basis, when the Statement of Claim was dismissed. 

10. Even allowing for the fact that the husband says it was not until he received the letter enclosing the tax invoice, that being the letter of 12 September 2011, that he was in a position to go forward, did nothing from September 2011 until June 2012. 

11. If that were the only delay in this matter then I am of the view that the husband might be in a far better position to persuade me that he should be granted the indulgence of an extension of time.  However, I have in mind that it was somewhere between four and four and a half years from the time, putting his case at its best, that the husband was aware that the solicitor was holding moneys for an amount which he disputed before he took any action.  I am not satisfied that there is any explanation given to me as to why the husband could not simply have asked for an itemised account.  So far as I am concerned, Schedule 6 gives him the right to ask for an accounting provided he does so within 21 days.

12. To my mind, it cannot be seen that he is required to wait until he gets a non-itemised account to be able to move forward.  In all the circumstances, I find it very hard to understand what it is that the husband says caused him not to do anything for that period from 2007 to 2011. 

13. There can be no doubt that the Court has the power to amend the times provided in Family Law Rules 2004 (Cth). There can be no doubt that for the purpose of this particular application, I would treat the matters sent out in Schedule 6, having regard to the date upon which these proceedings were commenced, as being Rules of Court that I can vary should I choose to do so.

14. In my view, I must examine particularly the period from the letter of 12 September 2011 (allowing two days for the letter to be received) and the filing of the application on 4 June 2012. 

15. In my view, the decision of McHugh J in Gallo v Dawson[1] is highly relevant to this present matter.  His Honour in Gallo (supra) dealt with that which was required for an extension of time.  That case is authority for the fact that Rules of Court should not be allowed to act so as to damage one party or the other, but where an application for time is to be extended, there needs be some explanation for delay and there needs be some examination of the relief sought if the extension of time is granted.  His Honour said this, at 481:-

    When the time for appealing has expired -

    And in my view, that can be applied to this present case because the time for requesting an itemised account had clearly expired -

    the litigation is at an end; the successful party is entitled to the benefit of the judgment in his or her favour.

    [1] (1990) 93 ALR 479

16. In that case, in my view, the solicitor was entitled to rely upon the account that he had furnished because, simply, it was not the subject of any challenge.

    ... if, months after the time for appealing has expired, the unsuccessful party could obtain an extension of time ...

17. In this case, I am not able, as I say, to find any particular reason advanced other than it seems to be that the husband kept hoping against hope that something (or nothing) would arise.  I must say here that I am concerned that the earlier delays; that is, from 2007 to 2011, might be taken to establish that the husband was simply not taking an active part in the matter and hoping it would go away. 

18. I am of the view that whilst I can extend time under Schedule 6 of the Rules, that in this case, it is not appropriate for me to do so.  This is not a case where I believe it can be said on behalf of the husband that any inconvenience and/or prejudice caused to the solicitor can be remedied in costs.

19. I already have knowledge of a situation where an order for costs was made by consent and is, indeed, itself the subject of an application for assessment.  I am left with the uncomfortable feeling that this is part of a course of conduct by the husband.  I am further left with the uncomfortable feeling that were I to make an order for costs then there would be further delay, which the husband, I am sure, would assert should not stop him taking action if he were allowed the indulgence of the extension of time to file his notice disputing.  Accordingly, I propose to refuse the husband’s application to extend time for filing a notice of objection and I propose to dismiss his application, cross-application and his Application in a Case. 

20. Having done that, I am of the view that it is not necessary for me to look at the question of whether or not this is a matter to which issue estoppel or res judicata applies.  In my view, the proceedings in the Local Court were for a different course of action, but that is all I say.  Further, on the basis that I have dismissed the application by the husband for extension, I do not believe it is necessary for me to deal with the third leg of his argument; that is, Mr Alexander’s argument relating to the stay of proceedings pending payment of costs in respect of the order made by consent in the Local Court. 

Costs in respect of these proceedings

1. A decision having been made in the favour of the Respondent solicitor to these proceedings, an application is now made that the husband pay their costs.  At my invitation, counsel for the solicitor has quantified his costs in the sum of $10,000. 

2. Section 117 of the Family Law Act 1975 (Cth) is clear. In subsection (1), it says that subject to the following sections “each party to proceedings under this Act shall bear his or her own costs”.

3. However, by subsection (2) it is made clear that if the Court finds that there are circumstances so justifying it, an order can be made by one party against another.  In the circumstances of this case, it would seem that the argument between a party and a solicitor was very likely to result in an order for costs being made in favour of the party successful against the unsuccessful party.  It is made clear in cases such as Penfold v Penfold[2] of the High Court that the circumstances justifying an order need not be exceptional as long as they do in fact provide a reason for an order being made. In considering what order, if any, should be made under subsection (2), that is, an order for costs, I am required to have regard to a number of factors as set out in section 117(2A) of the Act.

   [2] (1980) 144 CLR 311

4. The first of those is the financial circumstances of the parties (subparagraph (a)).  I accept that the husband is not in a comfortable position and has debts which are a significant impost upon him.  I also accept that his income is modest.

5. Neither party is in receipt of legal aid (subparagraph (b)).

6. The conduct of the parties in the proceedings (subparagraph (c)), to my mind, is much wider than simply considering the situation between September 2011 and June 2012 upon which I have based my decision not to grant the extension of time to file.  The husband, in my view, has prevaricated and has not taken appropriate action in anything approaching a timely fashion to deal with this matter.

7. I am concerned that a threat would be made to report a lawyer to a body having statutory powers of discipline unless and until there was every reason for so doing, and in which case, there should have been no bargaining, “If you don’t do something, I will do this”.  Any person, particularly another practitioner, concerned that there had been a breach of the rules or some canon of behaviour and performance by another practitioner, should have reported it and not used it as some sort of bargaining tool.  I am also concerned that the husband’s attitude to this matter has been one of prevarication. 

8. This is not a matter where the proceedings were necessitated by the failure of a party to comply with a previous order (subparagraph (d)).

9. I take into account whether any party has been wholly unsuccessful (subparagraph (e)).  The wording of this subparagraph is “wholly unsuccessful”, rather than not wholly successful.  I am satisfied, in this case, that the husband has been wholly unsuccessful in that he has failed completely to obtain the relief that he sought. 

10. So far as any offer in writing is concerned, I have before me as Exhibits A and 1 respectively, documents that evidence proposals put by each of the parties to the other.  It is put to me with some force by Mr Benetatos that the husband used everything in his power to resolve the issue as borne out by his offer of compromise of 23 October 2012. 

11. To my mind that causes some concern because the costs he offers to trade off are costs to which he consented on an indemnity basis when another action that he bought failed absolutely.  I am concerned that on that basis, when I consider such other matters as the Court considers relevant, that the husband has simply set his face against dealing with this matter for whatever reason, having regard particularly that the moneys are presently held and have been held for some time by the solicitor.

12. In all the circumstances of this case, and for the reasons I have endeavoured to give, I am satisfied that it is appropriate that an order for costs be made in this case.

13. As I say, at my request, Mr Alexander has assessed those costs at $10,000.  To my mind, this has been a matter that has taken some preparation, evidenced by the documents prepared by the solicitor certainly on his own behalf and by the appearance here today.  I am not satisfied that $10,000 is an appropriate sum.  I am satisfied, however, that $7000 is a proper amount for the solicitor’s costs, and I propose to order that the husband pay that amount to the Respondent solicitor.

14. In the circumstances of this case, I am satisfied that nine months is an appropriate time for the husband to arrange his affairs so that he can make that payment within the time that is specified.

15. The orders that I make are as set out at the forefront of these reasons for Judgment.

I certify that the preceding thirty-five (35) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Collier delivered on Monday, 18 February 2013.

Legal Associate:      

Date:    29 July 2013