Venter & Venter (No 2)

Case [2024] FedCFamC1F 862

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

FIRST INSTANCE

Venter & Venter (No 2) [2024] FedCFamC1F 862

File number: BRC 7462 of 2024
Judgment of: CAREW J
Date of judgment: 13 December 2024
Catchwords: FAMILY LAW – COSTS – Applications by the husband and other respondents for costs against a barrister and firm of solicitors who previously acted for the wife, or alternatively, against the applicant wife – Whether there has been exceptional circumstances to justify an order for costs on an indemnity basis – Where it is found that the barrister and firm of solicitors engaged in improper and unreasonable conduct – Where the conduct caused significant costs to be incurred unnecessarily and a waste of Court resources – An order for costs to be paid jointly and severally made against the former barrister and solicitor for the applicant wife – Legal practitioners referred to the relevant state Legal Services Commissioners.
Legislation:

Family Law Act 1975 (Cth) ss 117

Federal Circuit and Family Court of Australia Act 2021 (Cth) ss 67, 68, 69

Federal Circuit and Family Court of Australia Rules 2021 (Cth) rr 12.08, 12.13, 12.15, 12.17 12.47  

Cases cited:

Boland v Yates Property Corporation Pty Ltd (1999) 74 ALJR 209

Cassidy & Murray (1995) FLC 92-633

Clifton (Liquidator) v Kerry J Investment Pty Ltd trading as Clenergy [2020] FCAFC 5

Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225

Dura (Australia) Constructions Pty Ltd v Hue Boutique Living Pty Ltd (No 5) (2014) 48 VR 1

EI Du Pont De Nemours & Co v Commissioner of Patents (1987) 16 FCR 423

Ex Christmas Islanders Association Inc and Others v Attorney-General (Cth) (No 2) (2006) 233 ALR 97

Fitzgerald (as Child Representative for A (Legal Aid Commission of Tasmania)) v Fish (2005) 191 FLR 294

Jones v Dunkel (1959) 101 CLR 298

Idoport Pty Ltd v National Australia Bank Limited, Idoport Pty Ltd v Donald Robert Argus [2007] NSWSC 23

Kohan and Kohan (1993) FLC 92-340

Lenova & Lenova (Costs) [2011] FamCAFC 141

Mineralogy Pty Ltd v Sino Iron Pty Ltd (No 7) [2018] FCA 1217

Nada & Nettle (Costs) (2014) FLC 93–612

Parke & the Estate of the Late A Parke (2016) FLC 93-748

Penfold v Penfold (1980) 144 CLR 311

Re Wilcox, Ex parte Venture Industries Pty Ltd (1996) 72 FCR 151

Stopford Malloy & Malloy (Costs) [2018] FamCAFC 6

Venter & Venter (No 5) [2023] FedCFamC1F 635

Venter & Venter (No 6) [2024] FedCFamC1F 94

Warbrick & Warbrick (No 2) (2021) FLC 94-030

Z (a solicitor) & Limousin (2010) FLC 93-433

Number of paragraphs: 250
Date of last submissions: 29 August 2024
Date of hearing: 15 – 16 August 2024
Place: Brisbane
Counsel for the Applicant: Mr Tatarka
Solicitor for the Applicant: Kalus Kenny Intelex
Counsel for the First Respondent: Mr Kelly KC with Dr Smith
Solicitor for the First Respondent: Broun Abrahams Burreket
Counsel for the Second, Third, Fifth and Seventh Respondents: Mr Stewart KC with Mr Barnett
Solicitor for the…

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AGLC
Venter & Venter (No 2) [2024] FedCFamC1F 862
Case
[2024] FedCFamC1F 862
Decision Date

CaseChat Overview and Summary

The case of Venter & Venter (No 2) involves a family law dispute where the husband and other respondents sought costs against the wife's former legal representatives, specifically a barrister and a firm of solicitors. The primary legal issue before the court was whether there were exceptional circumstances that would justify an order for costs on an indemnity basis, given the improper and unreasonable conduct of the wife's former legal team. This conduct led to significant unnecessary costs and a waste of court resources. The court found that the wife's former legal representatives indeed engaged in improper and unreasonable conduct, which resulted in a substantial waste of resources and unnecessary costs. As a result, the court ordered the costs to be paid jointly and severally by the former barrister and the firm of solicitors. Additionally, the court referred the matter to the relevant state Legal Services Commissioners for potential disciplinary action.

The court's reasoning was grounded in the importance of maintaining the integrity of the discovery process and the obligations of legal practitioners to comply with court-ordered disclosure. The court emphasized that non-compliance with these obligations has serious consequences, as it undermines the fairness of the trial process and public confidence in the court system. The court's decision was influenced by the need to uphold the principles of honesty and fairness in litigation and to serve the administration of justice. The court's final orders included specific amounts for costs to be paid by the former legal representatives within a specified timeframe and referred the matter to the Legal Services Commissioners for potential disciplinary action against the implicated legal practitioners.

Orders

Orders of the court

1. The first respondent’s costs thrown away by the adjournment of the trial listed to commence on 24 July 2023 and adjourned on 3 August 2023 be paid by Mr P and GG Lawyers Pty Ltd jointly and severally in the fixed sum of $400,000.

2. The first respondent’s costs of and incidental to his Application in a Proceeding filed 1 August 2023 be paid by Mr P and GG Lawyers Pty Ltd jointly and severally in the fixed sum of $150,000.

3. The first respondent’s costs of and incidental to his Application in a Proceeding filed 28 March 2024 be paid by Mr P and GG Lawyers Pty Ltd jointly and severally in the fixed sum of $200,000.

4. The second, third, fifth and seventh respondents’ costs thrown away by the adjournment of the trial listed to commence on 24 July 2023 and adjourned on 3 August 2023 be paid by Mr P and GG Lawyers Pty Ltd jointly and severally in the fixed sum of $550,000.

5. The second, third, fifth and seventh respondents’ costs of and incidental to the Application in a Proceeding filed on 2 August 2023 be paid by Mr P and GG Lawyers Pty Ltd jointly and severally in the fixed sum of $150,000.

6. The second, third, fifth and seventh respondents’ costs of and incidental to the Application in a Proceeding filed on 28 March 2024 be paid by Mr P and GG Lawyers Pty Ltd jointly and severally in the fixed sum of $250,000.

7. The costs be paid within 60 days.

8. The Applications in a Proceeding filed 28 March 2024 by the first respondent and second, third, fifth and seventh respondents be otherwise dismissed.

IT IS FURTHER ORDERED THAT:

9. The Principal Registrar of the Federal Circuit and Family Court of Australia (Division 1) send a copy of the following documents to the Victorian Legal Services Commissioner for consideration of what, if any, investigation, disciplinary action, or educative process might be undertaken into the professional conduct of any of the legal practitioners referred to in paragraph 2(a) and 2(c) of the order made by this Honourable Court on 28 February 2024:

(a) The Order made on 28 February 2024 and the Order made on 13 December 2024;

(b) The reasons for judgment in Venter & Venter (No 5) [2023] FedCFamC1F 635;

(c) The reasons for judgment in Venter & Venter (No 6) [2024] FedCFamC1F 94;

(d) The reasons for judgment delivered on 13 December 2024; and

(e) The transcript of proceedings on 15 and 16 August 2024.

10. The Principal Registrar of the Federal Circuit and Family Court of Australia (Division 1) send a copy of the following documents to the Queensland Legal Services Commission for consideration of what, if any, investigation, disciplinary action, or educative process might be undertaken into the professional conduct of Mr AK and MM Lawyers:

(a) The Order made on 28 February 2024 and the Order made on 13 December 2024;

(b) The reasons for judgment in Venter & Venter (No 5) [2023] FedCFamC1F 635;

(c) The reasons for judgment in Venter & Venter (No 6) [2024] FedCFamC1F 94;

(d) The reasons for judgment delivered on 13 December 2024; and

(e) The transcript of proceedings on 15 and 16 August 2024.

NOTATION

A. The covering letter sent by the Principal Registrar of the Federal Circuit and Family Court of Australia (Division 1) to the Victorian Legal Services Commissioner and the Queensland Legal Services Commission should state only the following:

At the direction of the Honourable Justice Carew please find a copy of the following documents:

(a) The Order made by the Honourable Justice Carew dated 13 December 2024;

(b) The reasons for judgment of the Honourable Justice Carew delivered on 13 December 2024;

(c) The Order made by the Honourable Justice Carew on 28 February 2024;

(d) The reasons for judgment in Venter & Venter (No 5) [2023] FedCFamC1F 635;

(e) The reasons for judgment in Venter & Venter (No 6) [2024] FedCFamC1F 94; and

(f) The transcript of proceedings on 15 and 16 August 2024.

Note: The form of the order is subject to the entry in the Court’s records.

Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).

Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.

Background

Background to the litigation

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Evidence

Evidence Before The Court

Mr P, and Ms AL, a partner with GG Lawyers, were cross-examined. MR AK’S EVIDENCE Mr AK is a former solicitor of the wife’s and appeared in answer to a subpoena issued at the request of the husband. Mr AK gave evidence on the first day and his evidence was not challenged by Mr P or GG Lawyers. Mr AK was admitted to practice as a legal practitioner in 2009 and commenced working in litigation in 2011. He had the carriage of the wife’s case from early 2021 until MM Lawyers ceased to act for the wife in about early March 2023. Mr AK received a letter from the husband’s lawyers dated 13 August 2024 which set out the topics of questions that he would be asked about at the costs hearing to assist him in his preparation. I am satisfied that Mr AK did his best to prepare for the hearing as requested by the husband’s lawyers. In early 2021, the wife gave three hard drives to Mr AK. During the time Mr AK acted for the wife he extracted 146 emails from the blue hard drive and stored them in what has been referred to in the case as Folder 1. These are the emails, that by their descriptors indicate that Mr AK or someone under his direction had made an assessment that they would be helpful to the wife’s case. (It remains unclear to me what other documents were reviewed by MM Lawyers in circumstances where the blue hard drive was a back-up of the two silver hard drives). On 15 March 2023, Mr AK provided the wife’s file to GG Lawyers, including the emails in Folder 1 and six recordings. To the best of Mr AK’s recollection, he told Ms AL at that time that documents relevant to the proceedings had not been disclosed to the husband and other respondents. Mr AK conceded that a recording that was identified by the descriptor “[Mr UU] and barrister” should have triggered in his mind the very real possibility that the recording was privileged. Mr AK made several admissions against interest. In the context of the process of disclosure in litigation, he was candid in admitting his ignorance of his obligations as an officer of the Court, and in particular, of the need to guard against reviewing material that may be subject to legal professional privilege inhering in someone other than his client. It seemed to cause him some surprise that appropriate systems needed to be in place to manage such matters. Mr AK conceded that at the time of giving evidence he “now” considered that his failure to turn his mind to whether a document may be privileged was a dereliction of his professional duties. Mr AK said there were about 30 emails exchanged between himself and Mr P in October 2021. In particular, he confirmed that he had sent emails to Mr P attaching documents which he or other members of his firm at his direction had identified as being relevant to the proceedings on 5 October 2021 and 11 October 2021. Mr AK admitted that he had failed to disclose relevant documents to the husband and the other respondents. Mr AK said that he failed to disclose the documents on the advice of Mr P. The documents were not only relevant but assessed to be beneficial to the wife’s case. Mr AK said that he received advice from Mr P on more than one occasion not to disclose relevant documents.[27] [27] Transcript 15 August 2024, p. 53 lines 36–37.

Decision

Reasons for decision

GG Lawyers did not correct the record when Mr P assured the Court on 25 July 2023, that no document subject to privilege or a potential claim for privilege, had been accessed by any of the wife’s legal representatives other than the December 2012 email chain when they knew or ought to have known that that was not correct. At the very least, GG Lawyers had accessed the audio recording, titled “[Mr UU] and barrister”, a recording that had not even been disclosed to the respondents at that stage. Conclusion – costs thrown away A failure to comply with obligations both as a litigant and as a legal practitioner in relation to disclosure is intended to have serious consequences. As I noted in my reasons for judgment in Venter (No 5) at [56]:56.The Explanatory Statement to the 2004 Family Law Rules refers to the “major reform in the concept of discovery” introduced by those rules. Rule 13.14 (which is in the same terms as r 6.17 of the current rules) was introduced to “send a clear message that the Court will take a serious view of non-compliance with the duty of disclosure and the Rules”. It is apparent from the Explanatory Statement to the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 that the current Rules are intended to continue the clear message introduced by the previous Rules. It is also apposite to set out the quote at [60] of those reasons, from the decision of the Full Court of the Federal Court of Australia Clifton (Liquidator) v Kerry J Investment Pty Ltd trading as Clenergy:[39][39] [2020] FCAFC 5. 60. …[137]The importance of parties providing proper discovery in accordance with orders made by the Court is well recognised in the authorities. In Brookfield v Yevad Products Pty Ltd [2004] FCA 1164 (Brookfield) Lander J referred to the origins of discovery and at [366]–[368] explained that:The process enables the parties to obtain documents from their opponents which support their own case, and which destroy their opponent’s case. It enables the parties to assess their own prospects of success before trial and to ensure that they are not ambushed at trial.…The integrity of the discovery process must be maintained. The discovery process in many ways depends upon the honesty of the parties and their legal advisers.[138]At [392]–[394] his Honour said:… A trial has not been regularly conducted where a party to the litigation has not discovered documents which are relevant to the issues in the trial. That party has not complied with its obligations in the interlocutory processes and by failing to make full discovery that party has withheld evidence from its opponent.Moreover, another aspect of the administration of justice must be considered. Because it serves the administration of justice, it is also in the public interest that the integrity of the court’s processes are preserved.For the reasons already given the discovery process is very important in ensuring that the parties are accorded a fair trial. Litigants will lose confidence in the court’s processes and decisions if they think that a party might avoid giving proper discovery and not be later held to account.

Ratio Decidendi

Legal Principle Established

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