Wallace and Stelzer (No. 2)

[2008] FamCA 936

FAMILY COURT OF AUSTRALIA

WALLACE & STELZER (NO. 2) [2008] FamCA 936

FAMILY LAW – COSTS - Circumstances justifying order
FAMILY LAW – COSTS - Between parties

Family Law Act 1975 (Cth)

Bass and Permanent Trustee Co Limited (1998) 198 CLR 334

APPLICANT: Mr Wallace

RESPONDENT: Ms Stelzer

FILE NUMBER: SYC 5433 of 2007

DATE DELIVERED: 4 November 2008

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Justice Fowler

HEARING DATE: 30 October 2008

REPRESENTATION

COUNSEL FOR THE APPLICANT: G. Richardson, SC

COUNSEL FOR THE RESPONDENT: R. Lethbridge, SC

Orders

1. The husband’s Application in a Case for costs filed 22 October 2008 is dismissed.

2. Each party pay their own costs of and incidental to that application.

IT IS NOTED that publication of this judgment under the pseudonym Wallace and Stelzer is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 5433  of 2007

MR WALLACE

Applicant

And

MS STELZER

Respondent

REASONS FOR JUDGMENT

Introduction

1. The application before me is made by the husband seeking the following orders:

   “1.That the wife do pay the husband’s costs of and incidental to the application for disqualification filed on 13 October 2008 on a party/party basis in a sum to be agreed and in absence of agreement within 28 days then as taxed.

   2.That the wife do pay the husband’s costs and disbursements as thrown away as a consequence of the vacation of the hearing dates commencing 29 October 2008 on an indemnity basis in a sum to be agreed within 28 days and in absence of agreement then as taxed.

   3.In the event that the relief sought in paragraph 2 be refused then order that the wife do pay the husband’s costs and disbursements as thrown away as a consequence of the vacation of the hearing dates commencing 29 October 2008 on a party/party basis in a sum to be agreed within 28 days and in absence of agreement then as taxed.

   4.That the wife do pay the husband’s costs and disbursements of the present application on a party/party basis as agreed and in absence of agreement within 28 days then as taxed.”

Background facts

1. The application for disqualification referred to was an application dealt with in my judgment published on 17 October 2008.  In that judgment I disqualified myself from any further hearing of the matter which involved the receipt of oral evidence from a named witness (hereinafter called “the witness”).

2. The hearing costs sought in the husband’s application are costs thrown away by reason of the hearing of the principal matter not proceeding.  Those costs are sought by the husband on an indemnity basis.

3. That hearing was as to a preliminary point as to whether the remedy of rectification was available with respect to a certain purported binding financial agreement or perhaps more correctly the certificates annexed to the agreement.  If so, the issue was whether that remedy ought to be granted to the wife who wished to rely on an agreement which was otherwise defectively certified under the relevant section of the Family Law Act 1975.

4. Upon making the order for disqualification a proposal was made that I make myself available on one of the days to hear an application proposed to be brought by the husband for the summary dismissal of the wife’s application.  I understood it was to be argued that the law did not permit the remedy of rectification to be applied to the certificates required to be given in respect of a binding financial agreement in order to give it full effect.  Such an application would not have involved challenged evidence of the witness.

5. Counsel for the wife at my invitation sought instructions from his client as to whether she would consent to that course, and those instructions were that she did not so consent and in these circumstances the dates were vacated.

As to the claim for costs of the application for disqualification

1. The Law in relation to all the claims made for costs is set out in section 117 of the Act which provides a scheme which establishes that ordinarily the parties to proceedings will, in the absence of an order to the contrary, each pay and bear their own costs of the proceedings.  However section 117(2A) provides a list of matters required by the Act to be taken into account by the Court and weighed in the exercise of what has been described as a very broad discretion to order costs.  Those matters are:

a.      the financial circumstances of each of the parties to the proceedings

1. Mr Richardson on behalf of the applicant, sought to have me draw inferences that upon a consideration of the parties’ relative financial positions, the wife was supported by an indemnity as to costs by an insurance company, and that this was evident because of the failure of the wife to answer the question which directly put that matter to her.  That there was no response to the question posed in a letter in this case does not encourage me to draw the inference sought.  The nature of the proceedings suggests that either party could probably afford the payment of costs if ordered.

b.      whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party

1. There is no evidence that either party is in receipt of legal aid.

c.       the conduct of a party to the proceedings in relation to the proceedings including, without limiting the generality of the forgoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of fact, production of documents and similar matters

1. I will refer later in this judgment to the issues surrounding the late filing of an affidavit by a witness whose role in these proceedings invoked the application for disqualification.

d.      whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court

1. The application for disqualification made before me was not one which was occasioned by the failure of either party to comply with a previous order of the court.

e.       whether any party to the proceedings has been wholly unsuccessful in the proceedings

1. The application for disqualification was successful, and the wife’s opposition to it unsuccessful.

f.       whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and terms of any such offer

1. The matters relied upon by the applicant were placed before the respondent but no offer could have been made to settle these proceedings since the decision of a judge to disqualify himself is uniquely his and cannot be procured by consent of the parties.  Indeed, it is open to a judge to refuse to do so in the face of a consent to that course.

g.       such other matters as the court considers relevant

1. There is no doubt in my mind that this application was properly brought and was a bona fide application, without ulterior motive and pursuant to the obligation of the parties and their advisers to act in the support of the administration of justice.

2. The application was brought to ensure that justice was not only done but seen to be done, in circumstances where I had as a practitioner in robustly conducted litigation, instructed Senior Counsel to cross examine the witness, including a lengthy and robust cross examination as to his credit.  Since the matter settled, there was no finding by that Court on that issue.

3. Once the matter was before me I informed Counsel of a further involvement which I had with the witness, namely representing his first wife.  That information was not available to them or either of them.  However, it formed a significant part of my decision on the total consideration of the case, to make the decision for disqualification that I did.

4. In the same way as the interest of justice is served by the husband’s application and it properly being brought it seems to me that those same interests were served by the robust opposition to the application.

5. It is clear on the authorities that justice is not served by too ready an accession to applications of the type brought and the respondent to the application served to highlight the matters which I could take into account in coming to my decision.

6. Neither party in the event was privy until the hearing to the further matters which I ultimately took into consideration in making my decision.

7. It is asserted by the husband that he should have his costs because of the decision I made which wholly he says, vindicated his application.  He had previously informed the wife of the basis of his application.  As I have pointed out in my judgment referred to above, I took into account matters not available to either party in making my final decisions.

8. In my view the applications of the sort made in this case are essential in maintaining the high standards of our system of justice and generally that the obligations to promote that end are obligations of all who utilise the system of justice, whether as litigants or as the lawyers who practice within it.

9. In all the circumstances of this case, I do not consider it appropriate or proper that the general rule in relation to the payment of costs be changed given that particularly each of the parties was aiding the Court in its task by both bringing and opposing the application.

10. I accordingly dismiss the applications for orders for costs of the application for disqualification.

11. I am asked notwithstanding that decision to consider whether or not the wife should pay for the costs thrown away by the vacation of the dates on which this matter had been listed for hearing.  Alternatively it is sought that some part of them be paid, by reason of the failure of the wife to accept the invitation to utilise some part of those days in the hearing of the application for summary dismissal.

12. Those costs are sought on both an indemnity, and in the alternative, a party/party, basis.

13. The applicant has placed in evidence copies of the relevant fee agreements entered into by the husband and relating to the costs claimed.

14. Mr Richardson says that if the wife had complied in a timely fashion with the obligation she had to file affidavits the issue might have come to the surface earlier and an another judge might have been made available for the hearing of the matter.

15. I understand that the delay in filing was of some five weeks, but Mr Lethbridge points out that husband was informed prior to then that an affidavit was to be filed, and he asks rhetorically, by whom would it have been filed, given the issues but the witness in question, whose name was known to those advising the husband.

16. Mr Richardson points out that until he has had the opportunity of seeing the affidavit he does not know with finality what the evidence will be and whether it would be challenged orally.

17. I find that the suggestion that the costs should be paid by reason of the potential availability of another judge is highly speculative and I reject the argument.  Lists of cases for hearing by judges are set well ahead and I have doubt that any such alternative judge could have been found.  The possibility that one might is so speculative as to make me reject the submission as a basis for ordering the costs.

18. As to the application for partial costs be reason of the failure of the wife to accept the invitation to have a summary dismissal issue heard, which would not have involved the oral evidence of the witness, Mr Lethbridge says that if a judge is disqualified from a hearing for any purpose he is disqualified from the hearing for all purposes.  I indicated at the time that I would only undertake that task if the consent of both parties was received to that course.  It was not.  I therefore decline to make any order for costs based on that refusal.

19. In any event Mr Lethbridge suggests that the hearing would have been pointless since the result would not have bound the parties.  I disagree with this last submission and note the reference to the decision reported in Bass and Permanent Trustee Co Limited (1998) 198 CLR 334 at 360.

20. Argument was put before me as to the nature of reservation (previously called cancellation fees) which was a part of the agreement between the husband and his counsel.  It seems to me that it is clear that in a free, open, competitive and well informed market place a service provider may stand and offer his or her services upon the terms he or she commands.  However I do not in this case believe that even if I was minded to make an order for indemnity costs (which I am not) I would not make an order including such fees.

21. Notwithstanding the failure of the applicant to succeed in his application I do not in all the circumstances think that I am persuaded that this is a case in which there should be any order for the provision by one party to the other of the costs claimed or of this application.

22. Taking into account all the matters referred to above and in the exercise of my broad discretion under Section 117 of the Act I make the orders set forth above.

I certify that the preceding thirty-five (35) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Fowler.

Associate: 

Date:  4 November 2008