W AND W & C

FAMILY COURT OF AUSTRALIA

W AND W & C

[2006] FamCA 860

CATCHWORDS:

APPEAL FROM FEDERAL MAGISTRATES COURT – COSTS – BETWEEN SOLICITOR AND CLIENT – PROCEDURAL FAIRNESS – On the date set for trial of parenting issues between the appellant and first respondent, the appellant sought an adjournment in order for the appellant’s solicitors to finalise their affidavit material – The first respondent and the separate representative sought costs thrown away on an indemnity basis – The Federal Magistrate made an order joining the second respondent (the appellant’s solicitor) as a party to the proceedings and further ordered that the appellant and first respondent file and serve affidavits to show cause why an indemnity costs orders should not be made against them – The Federal Magistrate then made orders adjourning the hearing of the costs application to 15 June 2006 – During discussions between the Federal Magistrate and the Bar table prior to adjourning the court, Counsel for the first respondent suggested that the appellant should be advised to obtain independent legal advice as his solicitor was now a party to the proceedings – The Federal Magistrate, however, failed to so advise – On the date of the hearing of the costs application, the second respondent failed to make an appearance – The Federal Magistrate observed that neither the appellant nor the second respondent had filed affidavits in accordance with directions – The Federal Magistrate then made orders that the appellant and second respondent be jointly and severally responsible for the costs of the first respondent and the separate representative – It was not incumbent upon the Federal Magistrate to reiterate the clear statement by counsel for the mother that the appellant needed to seek independent legal advice to safeguard his position – While it may have been correct to deny the appellant a further opportunity to give oral evidence, the Federal Magistrate failed to give the appellant an opportunity to make submissions prior to making orders for costs against him.

COSTS CERTIFICATES – Prior to the hearing of the appeal, the parties agreed that the appeal should be allowed – However, the parties appeared at the hearing on the basis that the appeal needed to be “heard” prior to a Court being able to consider whether costs certificates should be issued – In line with the decisions of the Full Court in Brown & Brown and Shears & Shears, once a matter is called on for commencement and then dealt with, the Court may regard itself as having heard the appeal for the purposes of issuing costs certificates.

Federal Proceedings (Costs) Act 1981

Brown & Brown (2002) FLC 93-098
Shears & Shears [2005] FamCA 852

APPELLANT: W

FIRST RESPONDENT: W

SECOND RESPONDENT: C

FILE NUMBER: TVM2443/2004

APPEAL NUMBER: NA 55 of 2006

DATE DELIVERED: 5 September 2006

PLACE DELIVERED: Brisbane

JUDGMENT OF: Warnick J

HEARING DATE: 1 September 2006

LOWER COURT JURISDICTION: Federal Magistrates Court
LOWER COURT JUDGMENT DATE: 7 July 2006

SOLICITOR FOR THE APPELLANT:

Emerson Black Lawyers

COUNSEL FOR THE APPELLANT:	Ms Anderson
SOLICITOR FOR THE SECOND RESPONDENT:	Hope Lawyers
COUNSEL FOR THE SECOND RESPONDENT:	Mr Bowler

Orders

1.That the appeal be allowed.
2.That insofar only as orders 12, 13 and 14 of the orders of the Federal Magistrates’ Court pronounced on 15 June 2006, fix a joint and several liability for costs of the appellant and the respondent his former solicitor, Mr C, they be set aside.
3.That the question as to who as between the appellant and the respondent Mr C is to be held liable for the costs allowed and ordered to be paid by orders 13 and 14 of the said orders (but not as to the quantum thereof) be remitted to the learned Federal Magistrate for determination according to law.
4.That the court grants to the respondent a costs certificate pursuant to the provisions of section 6 of the Federal Proceedings (Costs) Act 1981 being a certificate that, in the opinion of the court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the respondent in respect of the costs incurred by the respondent in relation to the appeal.
5.That the court grants to the appellant a costs certificate pursuant to the provisions of section 9 of the Federal Proceedings (Costs) Act 1981 being a certificate that, in the opinion of the court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the appellant in respect of the costs incurred by the appellant in relation to the appeal.

FAMILY COURT OF AUSTRALIA AT BRISBANE

APPEAL NUMBER: NA 50L of 2003

FILE NUMBER: TVM 2466 of 2003

Appellant

And

First Respondent

And

Second Respondent

REASONS FOR JUDGMENT

introduction

This appeal is to be allowed. Counsel for the respondent conceded that that should be so. The second respondent, “Mr C”, is a solicitor. The concession on his behalf came only after counsel for the appellant “Mr W”, a former client of the solicitor, had completed her submissions. However, the concession was clearly intended before the hearing commenced. It appears that this course was taken firstly, because both counsel were of the view that an appeal could not be allowed purely by consent and secondly, because it was thought necessary that the appeal be “heard” before requests could be made for certificates under the Federal Proceedings (Costs) Act 1981, stating the Court’s opinion that it was appropriate for the Commonwealth Attorney-General to authorise a payment to each party towards costs of the appeal and of a rehearing (about which the parties also agreed).
The approach taken was probably unnecessary and I will refer briefly to the reasons for that later. In any event, the appeal had undoubted merit and the unavoidable result of its success will be a rehearing.
The appeal arose from events in the Federal Magistrates Court in proceedings between the client and “Ms W” about parenting orders in relation to their children. In those proceedings the mother was legally represented, as was the children’s representative and, as seen, the father (“the client”) was represented by Mr C (“the solicitor”).
The trial was set to commence before Jarrett FM on 30 May 2006, in Mackay in Northern Queensland. However, Mr Dowling of counsel appeared for the client and sought an adjournment on the basis that the client’s case was not ready for trial. The trial was adjourned but orders made that day required each of the client and the solicitor to “show cause as to why an order for costs on an indemnity basis should not be made against them in respect of the costs and outlays thrown away…”
On 15 June 2006, the date to which the proceedings were adjourned, Jarrett FM ordered that the client and the solicitor be jointly and severally responsible for the costs of the children’s representative and those of the mother.
The appeal is against those orders.
Essentially the client asserts a denial of procedural fairness; through lack of sufficient explanation to him on 30 May 2006 of the position in which he was placed as a result of the “show cause” order and through the conduct of the hearing on 15 June 2006.
Notwithstanding the concession that the appeal be allowed, I think it desirable in the circumstances, including the difficulty in which the court below was placed, to give short reasons. These will be best appreciated after an outline of events in the Federal Magistrates Court.

The course of events before Jarrett fm

On the date set for trial of parenting issues the mother was represented by solicitor and counsel, the child representative was represented by counsel and Mr Dowling announced that he was a barrister of Mackay and that he appeared for the client, instructed by Mr C’s firm. Mr Dowling informed the Court:
…my instructions are to ask for an adjournment of this matter in order for my solicitors to finalise their affidavit material and to file it in the court.
The indication that has been given to me by my instructing solicitors, having just come off the phone from them, is that they were unable until last Friday afternoon, as I understand it, to progress the matter beyond where they had reached at that stage because of lack of funds. That has changed now and they would be in a position to immediately finalise the necessary documentation and proceed with the hearing.
and that led to the following exchange:
FEDERAL MAGISTRATE: That might explain why the solicitors haven’t done what they perhaps needed to do, but is there any explanation for your client not complying with the directions?
[MR W]: Well, that’s what the solicitors paid for.
MR DOWLING: That is my client’s only observation on the matter, that he understood that his solicitors were looking after the matter and he expected that was being done by his solicitors.
[MR W]: I didn’t even know until 5.30 yesterday afternoon that I was supposed to be here today, your Honour. No official notification whatsoever.
MR DOWLING: There does seem to have been a great lack of communication between the solicitors and my client, between his solicitors and my client and that seems to have been the problem up until now.
Following that exchange, a number of questions were addressed. During discussion and consistently with what appears from the passages quoted, the client, though apparently represented, often directly addressed the bench.
Ultimately, on the children’s issues, the Federal Magistrate made interim orders and adjourned the final hearing. However, Jarrett FM further ordered that the father file and serve, by a nominated time, any amended application for parenting orders that he wished to make and that, absent such an amended application, the interim orders become final.
As indicated, both the mother and the children’s representative sought costs thrown away by the adjournment on an indemnity basis. There was little said relevant to the issues that might arise as between the solicitor and the client in meeting the applications for costs. However, counsel for the children’s representative said to the court:
“We received a letter from [Mr C’s firm] on 29 May 2006, which was also copied to Barron and Allen solicitors. We note in that letter that [Mr C] said or at least [Mr C’s firm] said
Our client has not provided us with instructions to enable us to act on his behalf in the hearing of this matter.
We hear today it’s a matter of funds.”
As to the costs application, Jarrett FM made the following orders:
15.That [Mr C], Solicitor of [Mr C’s firm] be joined as a respondent to these proceedings.
16.That the child representative and the mother forthwith serve on the father and [Mr C] an itemised schedule of costs and outlays said by them to have been thrown away by today’s adjournment, the costs associated with the preparation of such schedule and costs of the appearance to be made on 15 June 2006.
17.That the father and [Mr C] each show cause as to why an order for costs on an indemnity basis should not be made against them in respect of the costs and outlays thrown away by today’s adjournment, the costs associated with the preparation of schedules by the child representative and the mother and costs of the appearance to be made on 15 June 2006.
18.That the father and [Mr C] file and serve no later than 4.00pm on 13 June 2006 any affidavit on which that party intends to rely in the costs application.
19.That this matter be adjourned to 9.30am on 15 June 2006 in the Federal Magistrates Court of Australia at Brisbane.
20.That the father, the mother and the child representative be granted leave to appear by telephone link at the next Court date.
21.That [Mr C] appear in person at the next Court date.
Relevantly to the position in which those orders placed the client, when, after giving formal reasons and stating the orders, Jarrett FM asked if any other directions were sought, counsel for the mother said:
MR CULLINANE: Just one other matter, your Honour. I’d ask that it be impressed upon [Mr W] that he would need to seek independent legal advice it would seem other than [Mr C’s firm] to safeguard his position so that he’s aware of that walking out of the courthouse now because quite clearly they’re going to have different songs to sing in a couple of weeks.
FEDERAL MAGISTRATE: All right, Mr Honchin?
Discussion moved away from the point raised by counsel for the mother and no direction in the terms suggested was repeated by the Federal Magistrate.
On 15 June 2006, the client appeared by telephone and was not legally represented. Legal representatives appeared for each of the mother and the children’s representative. The solicitor failed to appear. Jarrett FM observed that neither the client nor the solicitor had filed an affidavit in accordance with directions. That led to the following exchange:
[MR W]: Your Honour, was I supposed to do one or - - -
FEDERAL MAGISTRATE: Well, [Mr W], you were in Court, you heard the orders I made, yes, you were supposed to do one.
[MR W]: I thought it was a combined effort, your Honour, I’m sorry.
FEDERAL MAGISTRATE: Well, I’m not going to accept that, [Mr W], you were in Court, the orders were clear. The orders have since been issued in writing. You’ve got a copy of those, haven’t you?
[MR W]: Yes, your Honour.
FEDERAL MAGISTRATE: Yes. Did you read them?
[MR W]: Yes, your Honour.
FEDERAL MAGISTRATE: Yes.
[MR W]: I’ve been trying to contact [Mr C] ever since with no luck whatsoever.
FEDERAL MAGISTRATE: Right. All right. Well, Mr Purcell and Mr Barnett, I’ve read the documents that your clients have filed, there’s a schedule of costs by each of you. I propose to order that both the father, [Mr W], and [Mr C] be jointly and severally responsible for the costs incurred by the child representative and the costs incurred by the wife. [Mr W], do you want to say anything about that? (emphasis added)
[MR W]: Your Honour, I’ve got a lot to say. Just [Mr C] has been paid a phenomenal amount of money. I’ve been assured constantly that the paperwork that was supposed to be lodged on the 18^th was done.
FEDERAL MAGISTRATE: Well now, the reason I made the directions very clearly last time about you filing an affidavit was so that you would not be on the phone simply saying things that were not sworn to. That I would have an affidavit that set out all of these things by you so that your could establish why [Mr C] should pay the costs and not you. You’ve chosen not to do that, so I am not going to hear you over the telephone say those things that you have had a perfect opportunity to put in writing in the appropriate way.
[MR W]: Sorry, your Honour, I just don’t understand the process sometimes.
FEDERAL MAGISTRATE: Well, I don’t accept that, [Mr W], at all. I think you understand perfectly well.
Shortly after, the Federal Magistrate pronounced the orders appealed, which are:
12.That the father and [Mr C] be jointly and severally responsible for the costs incurred by the Child Representative and the solicitors for the mother as set out hereunder.
13.That the father and [Mr C] pay the mother’s costs reserved on 30 May 2006 fixed in the sum of FOUR THOUSAND SIX HUNDREN AND NINETY ONE DOLLARS AND FIFTY CENTS ($4,691.50), such sum to be paid within sixty (60) days.
14.That the Father and [Mr C] pay the Child Representatives costs reserved on 30 May 2003 fixed in the sum of SEVEN THOUSAND THREE HUNDRED AND SIXTY TWO DOLLARS AND TWENTY ONE CENTS ($7,362.21), such sum to be paid within sixty (60) days.
In subsequent discussion about what should happen in respect of the children’s issues, the client maintained that he did not receive a written copy of the orders made on 30 May 2006, until 8 June 2006.

Were there failures to afford procedural fairness?

Counsel for the client argued that, because the orders made on 30 May 2006 set the client against his former solicitor, upon their pronouncement the client was without legal representation. The argument was that the Federal Magistrate should then have given him advice.
However, counsel for the client did not, either in her written or oral submissions, detail what that advice might have been, save that he ought have been advised to obtain separate legal representation.
In the absence of argument about other points, I do not endeavour to anticipate them.
As to the one point raised, I do not necessarily accept that it was incumbent upon the Federal Magistrate to reiterate the clear statement by counsel for the mother that the client would need to seek independent legal advice (ie. other than from the solicitor) to safeguard his position. The client of course was not obliged to seek any legal advice and there is nothing in the material to indicate that he made anything other than a deliberate choice not to do so. He has not said that he failed in an attempt to obtain legal advice, nor did he seek an adjournment of the day fixed for hearing of the costs issue, to enable him to seek advice.
Events of 15 June 2006 are of greater concern. As seen, the client appeared by telephone, without representation. As also seen, in response to the Federal Magistrate’s observation that he had not filed an affidavit as directed, the client said that he thought the affidavit was to be a “combined effort” and that he had been trying to contact the solicitor. The terms of the relevant order are worth revisiting:
12.That the father and [Mr C] file and serve no later than 4.00pm on 13 June 2006 any affidavit on which that party intends to rely in the costs application.
Notwithstanding the reference to “that party” and my expectation that a legally qualified reader would readily understand the direction as applying to each party individually, I would not discount that a lay reader, in particular a former client of the solicitor, would read the first part of the direction (namely “the father and [Mr C] file”) conjunctively.
Counsel for the client further argued that, on 15 June 2006, Jarrett FM ought to have advised the client that, though he had failed to file an affidavit, he had a right to seek leave to give oral evidence. While this is a simply stated proposition, I think it not one which is as self evident as was perhaps assumed. The questions which arise include whether the order for the filing of any affidavit to be relied upon amounted to an implied ruling that no other form of evidence would be received at the hearing. If that was the case, one returns to the question of whether that was a matter about which the client ought have been advised on 30 May 2006.
While this argument of counsel for the client has complexities, I do not conclude that it has no merit, but, in view of the next matter and the circumstances of this appeal, think it unnecessary to decide.
I think the telling point on this appeal is that on 15 June 2006, orders were made against the client without him being given any opportunity to make submissions. While it may have been correct to deny him a further opportunity to give evidence, such denial occurred in the context that on 30 May 2006 the client had stated some bases for argument that the solicitor bear all of the costs sought when he referred to a lack of communication from the solicitor and, in particular, advice about the trial date. Though the evidentiary status of those statements might have been questionable, they were openly stated in court on 30 May 2006, and might at least have amounted to identification of an issue to be raised by the client against the solicitor. Moreover, the solicitor, though (one might have assumed) well aware of the “show cause” hearing on 15 June 2006, and of the direction that he appear in person, failed to do so. On an arguable view, notwithstanding that the client had not “put on” any affidavit the client was entitled to “judgment” against the solicitor.

However, he was given no chance to put any argument before the Court. Immediately after the opening exchange about the failure to file an affidavit, the intention to make the orders appealed was announced.
Despite being asked, following that announcement, whether he had anything to say about it, that did not amount to an opportunity given to the client, particularly where he was unrepresented, to argue his case. It is fundamental that such opportunity be granted to a party. Accordingly, the appeal must be allowed.
Since there has never been a proper hearing, perhaps not even a framing of issues to be heard as between the client and the solicitor, it is inevitable that the matter must be remitted for “rehearing”.
Though I have not determined some of the matters argued, I think it prudent that on a rehearing a further opportunity be given to each party:
•to frame the issues between them in writing
•to each file and serve any affidavits to be relied upon
and that, after an opportunity for submissions about it,
•the course of proceedings (that is whether any oral evidence in chief and/or cross-examination will be permitted) be determined.

Should the parties receive certificates in respect of costs of the appeal and of a rehearing?

While there are some indications that attitudes of the client have contributed to the unsatisfactory state in which the issue between the client and the solicitor presented for resolution before Jarrett FM on 15 June 2006, nonetheless, his appeal has succeeded because he was denied procedural fairness.
In those circumstances I consider that the client ought receive a certificate in respect of the appeal.
While there may appear to be bases for ordering costs against the solicitor in respect of the appeal, the parties seem to have mutually taken the course of proceeding with the hearing notwithstanding the concession of the solicitor.
In those circumstances the solicitor is not in the same position as a party who has opposed a successful appeal. I consider he also ought receive a certificate in respect of the costs of the appeal.
I do not grant a certificate in respect of any rehearing. There was effectively no hearing between the parties on 15 June 2006. The client was unrepresented. The solicitor did not even appear.

The course taken by the parties on appeal

While it is true that, notwithstanding the agreement of parties that an appeal be allowed, the making of an order allowing an appeal involves an exercise of the appellate jurisdiction of the court, parties are at liberty to inform the appellate court at the outset of a hearing that they agree that an appeal be allowed. Then, the Court, in the light of the consent and its own assessment of the appeal may, without argument, make the orders sought.
As to whether an appeal must be argued in Court before it can be considered to have been “heard” by the court, “heard” being a term used in the Federal Proceedings (Costs) Act 1981, in Brown & Brown (2002) FLC 93-098, the Full Court said:
8.The issue that this case turns on is whether or not this Court can be said to not only have heard the appeal but that the appeal then has succeeded on a question of law. In my view once the matter is called on for commencement and then dealt with, the Court can be said, within the meaning of the legislation, to have heard the appeal.
9.In circumstances where the parties wish to make no further submissions but merely to jointly suggest the appropriate outcome having regard to the results that must flow from the reappraisal from the pool of assets, it can be said that the appeal has succeeded on a question of law. As the new orders allow the re-hearing of the matter, particularly the maintenance matter, it can properly be said that his Honour's discretion in the circumstances has miscarried.
In Shears & Shears [2005] FamCA 852 the Full Court said:
In our opinion it is artificial to require that the Court should have in fact sat and commenced hearing the proceedings to satisfy the provisions of ss 6 and 9 of the Federal Proceedings (Cost) Act 1981 to constitute the hearing of the appeal. Substantial arguments were presented in advance. These required preparation on the part of both counsel and the Court and, in our opinion, to require the Court physically to sit and open proceedings and proceed for some time before determining would be an artificial and unreasonable restriction.

Terms of orders

While counsel for the solicitor did not oppose orders being made in accordance with those sought in the Notice of Appeal, I consider that the subject matter of the fourth order sought, which relates to the conduct of a rehearing, properly a matter for the Federal Magistrate.

I certify that the preceding forty (40) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Warnick

Date: 5 September 2006

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established