Z (A Solicitor) v Limousin (Costs)
[2010] FamCAFC 59
•29 March 2010
FAMILY COURT OF AUSTRALIA
| Z (A SOLICITOR) & LIMOUSIN | [2010] FamCAFC 59 |
| FAMILY LAW - APPEAL – COSTS ORDER – Costs order against solicitor – Whether the trial Judge erred in making findings that the proceedings were unreasonably maintained by the solicitor without proper consideration of prospects of success –Where the case was listed for trial on the basis of the solicitor’s representations several years after commencement of the proceedings – Where multiple opportunities for inspection of the husband’s documents were afforded – Where applications made during the lengthy hearing were found to be without merit – Where there was evidence to support the finding that the proceedings were unreasonably maintained with disregard of any proper consideration of the prospects of success – No appealable error established. FAMILY LAW - APPEAL – COSTS ORDER – Costs order against solicitor – Whether the trial Judge erred in finding that the solicitor had an improper purpose in instituting or maintaining the proceedings – An allegation against a legal practitioner of improper motive for the conduct of litigation is an extremely serious one which requires clear and cogent proof – Where there was evidence suggestive of an improper purpose – Where such evidence taken at its highest did not meet the standard required by the Evidence Act 1995 (Cth) – Where the trial Judge failed to analyse the difference between the husband’s expert’s oral evidence and the purported record of it – Finding of improper purpose by the trial Judge unsafe. FAMILY LAW - APPEAL – COSTS ORDER – Costs order against solicitor – Whether the trial Judge erred in relying on “in court observations” of the wife – Where the trial Judge’s remarks were not confined to observations of the wife in the witness box – Whether the solicitor was denied natural justice by the trial Judge failing to inform him that he intended to rely on his in court observations – Where the matter proceeded by way of written submissions – Where the husband’s principal submissions did make reference to the wife’s demeanour – Trial judge’s findings supporting the costs order not dependent on in court observations of the wife – Stead v State Government Insurance Commissioner (1986) 161 CLR 141 applied – Appeal not allowed on this ground. FAMILY LAW - APPEAL – COSTS ORDER – Costs order against solicitor – Whether the trial Judge failed to provide adequate reasons for costs order against the solicitor for discrete applications made by the wife – Where the course adopted by the trial Judge in respect of the discrete applications was practical – The trial Judge’s reasons in each instances were adequate – No appealable error. FAMILY LAW - APPEAL – COSTS ORDER – Costs order against solicitor – s 117(2) does not mandate that more than one or all of the matters in s 117(2A) must be found to warrant departure from the general provision that each party pays its own costs – Where the trial Jude determined that the solicitor’s undue protraction of the proceedings was of itself sufficient to justify the order made – Appeal dismissed. |
| Family Law Act 1975 (Cth) – s 117(1), s 117(2), s117(2A) Uniform Civil Procedure Rules 1999 (Qld) |
| Aon Risk Services Australia v Australian National University (2009) 239 CLR 175 Bagshaw v Scott [2005] FCA 104 Cassidy & Murray (1995) FLC 92-633 CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 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 and Anor (2005) 33 Fam LR 123 Flower & Hart (a firm) v White Industries (Qld) Pty Ltd (1999) 87 FCR 134 Inghams Enterprises Pty Ltd and Anor v Timania Pty Ltd and Anor (2005) 221 ALR 823 Jones v Dunkel (1959) 101 CLR 298 Knight & Anor v F P Special Assets Limited & Ors (1992) 174 CLR 178 Lemoto v Able Technical Pty Ltd & Ors (2005) 63 NSWLR 300 Levick v Commissioner of Taxation (2000) 102 FCR 155 Neat Holdings Pty Ltd v Kurajan Holdings Pty Ltd (1992) 67 ALJR 170 Penfold v Penfold (1980) 144 CLR 311 Ridehalgh v Horsefield (1994) 3 All ER 848 Stead v State Government Insurance Commissioner (1986) 161 CLR 141 Ucar v Nylex Industrial Products Pty Ltd (2007) 17 VR 492 Wentworth v Rogers [1999] NSWCA 403 White Industries (Qld) Pty Ltd v Flower & Hart (a firm) (1998) 156 ALR 169 Zantiotis & Zantiotis (1993) FLC 92-367 |
| APPELLANT: | Mr Z |
| RESPONDENT: | Mr Limousin |
| FILE NUMBER: | MLF | 10522 | of | 1996 |
| APPEAL NUMBER: | SA | 42 | of | 2008 |
| DATE DELIVERED: | 29 March 2010 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | May, Boland & O’Ryan JJ |
| HEARING DATE: | 6 May 2009 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 30 April 2008 |
| LOWER COURT MNC: | [2008] FamCA 315 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr O’Bryan |
| SOLICITOR FOR THE APPELLANT: | Obst Legal |
| COUNSEL FOR THE RESPONDENT: | Mr St John SC |
| SOLICITOR FOR THE RESPONDENT: | Berry Family Lawyers |
Orders
That the appeal be dismissed.
That the parties are at liberty to file written submissions with regard to the costs of the appeal in accordance with the following timetable:
(a)on behalf of the respondent within 21 days of the date hereof;
(b)on behalf of the appellant in response thereto within 21 days thereafter;
(c)on behalf of the respondent in reply thereto within seven days thereafter; and
(d)that each submission have endorsed on the cover sheet the date on which a copy of that submission was served on the other party.
IT IS NOTED that publication of this judgment under the pseudonym Z (a solicitor) & Limousin is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT MELBOURNE |
Appeal Number: SA 42 of 2008
File Number: MLF 10522 of 1996
| Mr Z |
Appellant
And
| Mr Limousin |
Respondent
REASONS FOR JUDGMENT
Introduction
After the conclusion of property, spousal maintenance and child support proceedings between Mr Limousin and his former wife, Ms Limousin, which extended over many years and included a number of appeals to the Full Court, the husband asked for orders that the wife and her solicitor, Mr Z, pay costs of specific days of the trial before Guest J, and of a number of applications, including interlocutory applications, before Guest J and Brown J.
Pursuant to directions made by Guest J on 20 February 2008, written submissions were filed by the husband and Mr Z. The wife did not appear at the procedural hearing conducted by the trial Judge in respect of the costs application, nor did she file any submissions opposing the husband’s application. His Honour delivered reasons and made orders, the subject of this appeal, on 30 April 2008. We will later set out the trial Judge’s orders in full. It is sufficient for us at this point to record that the orders require Mr Z to pay:
·60 per cent of the husband’s costs on an indemnity basis for certain days of the trial;
·costs on a party and party basis in respect of:
- the wife’s unsuccessful application filed 26 March 2003 that the proceedings be stood over generally;
- costs incurred by the husband in preparing written objections to the trial affidavit of the wife and her expert accountant, Mr M;
- costs incurred as a result of the wife’s unsuccessful application filed 14 May 2003 asserting the husband had failed to give proper discovery and for the proceedings to be adjourned;
·costs on an indemnity basis of the wife’s unsuccessful application filed 16 July 2003 that the trial Judge be disqualified from further hearing the matter; and
·all costs on a party and party basis incurred by the husband in preparing written submissions of 5 March 2008 and 4 April 2008 being the written submissions prepared in support of the husband’s application for costs on a party and party basis.
The trial Judge found the wife was without “financial means”, and that she was marginally successful in her claim for spousal maintenance. His Honour made no order against the wife in respect of the husband’s application for costs.
This is Mr Z’s appeal against the trial Judge’s orders. For convenience in these reasons we will refer to Mr Z as “the solicitor”. We take the opportunity to record at this point that the solicitor ceased acting for the wife on 31 May 2007 during the course of the hearing of an appeal against the trial Judge’s property and spousal maintenance orders.
Counsel for the solicitor sought that the appeal be allowed, and the husband’s application for costs be remitted for rehearing before another Judge. He did not seek, in the event that we found appealable error, that we should re-determine the matter.
Senior counsel for the husband opposed the appeal. He submitted that in the event, which he did not concede, we found the trial Judge was in error in making findings about the wife’s demeanour in court without affording the solicitor an opportunity to make submissions about that issue, we would not allow the appeal and remit the matter for rehearing as to do so would inevitably result in the same order as made by the trial Judge. He relied on the statement of principle in Stead v State Government Insurance Commissioner (1986) 161 CLR 141. He submitted if we found error in the trial Judge’s determination that the solicitor had an ulterior motive for pursuing the litigation, we should nevertheless dismiss the appeal. He asserted the discrete findings of the trial Judge that the litigation was improperly brought or maintained without proper consideration of the prospects of success justified the costs orders made.
The appeal raises for consideration issues relevant to the circumstances which may result in a costs order, not against a party to the proceedings, but against a party’s solicitor. The particular issues raised in this appeal include whether:
·his Honour’s finding of an “improper purpose” by the solicitor maintaining the proceedings was available on the evidence (the improper purpose being the continuation of the proceedings in circumstances where the husband had effectively no assets, to bring pressure on his father to settle the case);
·findings could be made by the trial Judge of his observations of the wife’s demeanour enabling his Honour to conclude she was submissive to the direction of the solicitor; and
·the solicitor was denied natural justice by not being afforded the opportunity to respond to the trial Judge’s findings about the wife’s demeanour.
Background
Because of the complexity of the litigation it aids understanding of these reasons if we set out briefly from the trial Judge’s reasons and documents in the appeal book some detail of the various interlocutory and other applications in respect of which costs were sought by the husband against the wife and the solicitor, as well as costs of particular days of the trial.
The substantive proceedings were commenced by an application filed by the wife on 20 February 1998.
On 2 February 2000 orders were made by consent which included orders for the husband to make available for inspection by the wife various documents, and for the wife to have sole occupancy of a property at T for one week during school holiday periods.
Further orders to facilitate discovery by the husband were made by consent on 1 June 2000 and 17 August 2000.
On 24 January 2001 orders were made by consent which provided for the husband and wife to have joint care and responsibility for their three children, that the eldest child reside with the husband, and the two younger children reside with the wife. The orders also permitted the wife to issue subpoenas directed to a number of companies, trusts, business entities and individuals the wife asserted were relevant to the husband’s financial position. The subpoenas were returnable before Guest J.
On 30 May 2001 Mushin J made orders requiring the husband and wife to file a further and better updating affidavit of documents, and for the filing of objections to the other party’s affidavit. Costs were reserved.
On 1 October 2001 Mushin J made orders, including an order that the husband file and serve answers to the wife’s specific questions. Various other interlocutory orders to prepare the matter for trial were made by Mushin J on 16 November 2001 and 11 February 2002.
On 6 September 2002 Frederico J dealt with an interlocutory application of the wife, granted various injunctions and ordered that the husband file a financial statement and an affidavit disclosing any shareholding he held in any private company and any income received from such entity. He was also required to disclose similar information in respect of any trust.
On 3 December 2002 orders were made by consent by Carter J for the husband to file an affidavit of documents, and for the documents to be made available for inspection by the wife’s solicitor on 18 December 2002.
On 19 December 2002 counsel then appearing for the husband and wife each submitted the matter should be fixed for trial in the long causes list. Prior to the appearance of the wife’s counsel that day the solicitor made submissions to Guest J the matter be fixed for trial for seven days.Similar submissions about the readiness of the matter for hearing were made by the solicitor on the wife’s behalf on 10 February 2003.
On 14 March 2003 Guest J made orders that the husband provide for inspection by the wife’s solicitor various documents.
On 26 March 2003 the late Mr Udorovic QC appeared on behalf of the wife before Guest J and sought an adjournment of the proceedings, and orders for further discovery. The application was refused.
On 28 March 2003 Mr Maxwell QC (as his Honour then was) appeared for the wife initially seeking an adjournment of the trial, but subsequently conceding on the wife’s behalf the matter should proceed on the dates fixed for trial commencing the following Monday, 31 March 2003.
The trial commenced before Guest J on 31 March 2003.
On 14 May 2003, on the eighth day of the trial, an application was made by the wife’s then counsel to adjourn the trial. The application was dismissed by the trial Judge. His Honour’s ex tempore reasons given that day were included in the appeal book as were subsequent ex tempore and reserved judgments.
On 28 May 2003 after 10 hearing days, counsel then appearing for the wife made an application that the trial Judge disqualify himself from further hearing the matter. Again his Honour delivered ex tempore reasons.
On 22 and 23 July 2003 Guest J again heard and dismissed an application by the wife that he be disqualified from further hearing the matter, that the further hearing of the matter be adjourned, or in the alternate, the wife be given leave to tender documents in rebuttal and/or to reopen her case. The wife’s solicitor relied on supplementary submissions in which it was asserted that the trial Judge, by reason of an asserted “personal and close relationship” with the husband’s senior counsel might be influenced in his capacity to deal with the matter impartially.The trial Judge dismissed the wife’s application on 24 July 2003 and reserved the costs of the application until the conclusion of the proceedings.
The trial Judge delivered reasons for judgment and made orders in respect of the substantive proceedings on 25 May 2004.His Honour dismissed the wife’s application for property settlement (having found the husband to have minimal assets and substantial debts), dismissed the wife’s claim for a final order for ongoing spousal maintenance, but ordered that the husband pay the wife the sum of $1,907.00 per calendar month for a period not to exceed two years. The trial Judge also dismissed the wife’s child support departure application.
Although not in the appeal book, at the hearing of the appeal the husband’s senior counsel provided us with a copy of an application filed on behalf of the husband on 9 July 2004 in which he formally sought orders for costs against the wife and the solicitor, or in the alternate, that the solicitor solely bear the costs sought.
We were also provided with a copy of the transcript of the proceedings before the trial Judge on 20 February 2008. On that occasion the husband’s solicitor appeared on his behalf, and the solicitor appeared personally. At the request of the trial Judge, Mr Levine of counsel participated informally in the procedural hearing as a courtesy to the Court. He had previously appeared for the wife until he withdrew during the course of an appeal against the substantive orders. The wife did not appear, nor was she represented. The orders made by the trial Judge on that day were not included in the appeal book, but we are satisfied from paragraph 1 of the trial Judge’s judgment, the subject of this appeal, that orders included a provision for the wife to file written submissions opposing any order against her, but she failed to file any submissions. We also note that some brief reference was made to the written application of 9 July 2004 at the procedural hearing.
On 20 February 2008 the trial Judge made orders and directions for the filing of written submissions in respect of the husband’s application for costs. Detailed written submissions comprising some 24 typed pages dated 5 March 2008 drawn by the husband’s senior counsel were filed on behalf of the husband. In those submissions it was noted, at paragraph 24, that the husband had not entered into a costs agreement with his solicitors, (thus any indemnity costs order made would be at the scale of charges provided in Schedule 3 of the Family Law Rules 2004 (“the rules”)). Extensive written submissions comprising some 15 pages dated 27 March 2008 were filed by the solicitor, and the husband’s senior counsel replied to those submissions with further submissions comprising 14 pages.
On 30 April 2008 the trial Judge published his reasons and made the following orders:
(1)That [Mr Z] the former solicitor for the wife in these proceedings do pay 60 per cent of the costs of the husband on an indemnity basis as agreed or in default of agreement as assessed under the Family Law Rules 2004 (Cth) (‘the said Rules’) such costs being those incurred on 2 April and 3 April 2003, 12, 13, 14, 26, 27 and 28 May 2003, 31 July 2003 and 1 August 2003.
(2)That [Mr Z] do pay:
2.1all reasonable costs of and incidental to the wife’s application filed on 26 March 2003, such costs to be assessed on a party/party basis as agreed or in default of agreement as assessed under the Rules;
2.2all costs of and incidental to preparation of all written objections to the trial affidavit of the wife and the trial affidavits of [Mr M] together with costs for one half day of the proceedings on 1 April 2003 lost in preparation of the substituted affidavit of the said [Mr M], such costs to be assessed on a party/party basis as agreed or in default of agreement as assessed under the said Rules;
2.3all costs of and incidental to the application of the wife filed on 14 May 2003 being the professional costs and disbursements necessary to prepare all answering submissions and receive judgment, such costs to be assessed on a party/party basis as agreed or in default of agreement as assessed under the said Rules;
2.4all costs of and incidental to the wife’s application filed on 16 July 2003 including the costs of retention of Mr St John SC and Mr Graham QC and for the preparation of all written submissions, such costs to be assessed on an indemnity basis as agreed or in default of agreement as assessed under the said Rules.
(3)That the said [Mr Z] do pay all costs of and incidental to the preparation of the costs submissions prepared on behalf of the husband including the written submissions of 5 March 2008 and 4 April 2008, such costs to be assessed on a party/party basis as agreed or in default of agreement as assessed under the said Rules.
(4)That all applications be otherwise dismissed and the proceedings removed from the Active Pending Cases List.
IT IS CERTIFIED
(5)That pursuant to rule 19.50 of the Family Law Rules 2004 this matter reasonably required the attendance of Counsel including Senior Counsel.
The grounds of appeal
The solicitor relied on an Amended Notice of Appeal filed on 2 February 2009.
Although an outline of argument was filed on behalf of the solicitor in accordance with the rules, his counsel did not rely on the whole of the outline. He abandoned several of the paragraphs of the submissions. We will, where appropriate, refer to those parts of the written submissions, as well as the oral submissions, relied on by the solicitor’s counsel.
Because of the nature of the grounds ultimately relied on, we are of the view it is essential that we set out those grounds. Before doing so, however, we record that at the hearing of the appeal counsel for the solicitor abandoned grounds 2(a), (c) and (e) of the amended grounds. The remaining grounds are as follows:
1.There was no evidence in relation to the findings of the Trial Judge that:
(a)[Ms Limousin] (the Wife) was naively compliant, submissive and acquiescent to the direction of the Appellant (Judgment, paragraph [12]);
(b)the proceedings were maintained at the direction and under the control of the Appellant (Judgment, paragraph [13]);
(c)partisanship and personalised instinct dominated the Appellant (Judgment, paragraph [26]);
(d)the Appellant’s maintenance of the proceeding was unrealistic, and devoid of objectivity (Judgment, paragraph [33]);
(e)it was the decision of the Appellant, and not the Wife, to retain [Mr M] (Judgment, paragraph [53]);
(f)groundless, at times risible, applications were made under the advice of the Appellant (Judgment, paragraph [81]);
(g)the failure by the Wife’s Counsel to call the Appellant was because he feared to do so (Judgment, paragraph [88]);
(h)the Appellant sought to gain an advantage by an undue protraction of the proceedings (Judgment, paragraph [91]); and
(i)the Appellant failed to undertake professional vigilance, and became deeply, blindly and personally involved (Judgment, paragraph [93]).
2.Further, or in the alternative to paragraph 1:
(b)the Respondent’s Trial Submissions did not contend that the Wife was naively compliant, submissive and acquiescent to the direction of the Appellant. In finding that the Wife was naively complaint [sic], submissive and acquiescent to the said direction, the Trial Judge failed to afford natural justice to the Appellant;
(d)the Respondent’s Trial Submissions did not contend that Counsel for the Wife failed to call the Appellant because he [Counsel] feared to do so. In finding that Counsel for the Wife did fail to call the Appellant because he [Counsel] feared to do so, the Trial Judge failed to afford natural justice to the Appellant;
3.His Honour relied on in-Court observations that:
(a)the Wife was naively compliant to the direction and advice of the Appellant, and did so without question (Judgment, paragraph [12]); and
(b)the Wife was submissive and acquiescent to the direction of the Appellant (Judgment, paragraph [12]).
4.In failing to:
(a)inform the Appellant that he intended to rely on in-Court observations; and
(b)having done so, afford the Appellant an opportunity to respond, the Trial Judge, in relying on such observations, failed to afford to the Appellant natural justice.
5.The Trial Judge erred in relying on the principles set out in Jones v Dunkel to draw an adverse inference against the Appellant, by reason of the fact that the Appellant was not called at trial to give evidence:
(a)about a discussion on 2 April 2003 (Judgment, paragraph [26]);
(b)about a letter dated 5 March 2003 (Judgment, paragraph [28]).
6.The Trial Judge failed to give adequate reasons as to:
(a)why the costs of the adjournment application heard on 28 March 2003 were ordered against the Appellant (Judgment, paragraph [96]);
(b)why the costs of and incidental to the application heard on 14 May 2003 were ordered against the Appellant (Judgment, paragraph [100]); and
(c)why the costs of and incidental to the application on 16 July 2003 were:
(i)ordered against the Appellant;
(ii)to be assessed on an indemnity basis,
(Judgment, paragraph [106]). (original emphasis)
Before us, counsel for the solicitor argued grounds 1, 2, 3 and 4 on essentially a twofold basis. First, he submitted that a number of findings made by the trial Judge were not available on the evidence, and secondly he submitted that the solicitor had been denied procedural fairness by his Honour failing to inform him that he proposed to rely on “in court observations”, thus not affording him an opportunity to respond to such a proposal.
In summary, it was argued on the solicitor’s behalf that the trial Judge’s findings, which included a finding that the proceedings were unreasonably maintained, were not open on the evidence, and/or that a denial of natural justice vitiated the orders made.
Grounds 5 and 6 were argued independently. In respect of ground 5 it was submitted the trial Judge had misapplied the principles enunciated in Jones v Dunkel (1959) 101 CLR 298. The arguments on ground 6 were directed to an asserted lack of adequate reasons for the making of personal costs orders against the solicitor in respect of adjournment applications and the applications that the trial Judge disqualify himself.
It was not in issue that the Court may make an order for costs against a legal practitioner personally. But it was argued that the circumstances in which such an order should be made are rare, and that the authorities indicate extreme care will be exercised by a court before making such an order. The submissions made on behalf of the solicitor implied that this case was not one which justified a costs order against him personally.
We will consider the grounds of appeal under the same topics as argued by the solicitor’s counsel. We will, prior to our discussion, refer to relevant parts of the trial Judge’s reasons.
Relevant provisions of the act, rules and principles to be applied
While the written submissions filed on behalf of the solicitor appear to challenge the making of an order against the solicitor when he was not a party to the proceedings, as we have already noted, counsel appearing at the appeal for the solicitor did not purport to rely on all of the written outline of argument. There was otherwise before us no suggestion or challenge to the fact that a court, exercising power under the Family Law Act1975 (Cth) (“the Act”), may make a costs order against a non-party under s 117(2) of the Act, including a costs order against a legal practitioner on varying bases, including on an indemnity costs basis.
Given it was appropriately conceded before us, and the trial Judge, that the Court has power to make an order for costs against a solicitor personally, it is strictly unnecessary that we refer to the relevant provisions of the Act or the rules. However, given the importance of the issues raised, we think some reference to the basis on which the orders the subject of the appeal were founded should be made.
In his reasons the trial Judge set out the relevant principles applicable to the making of a costs order against a legal practitioner. No challenge was raised in this appeal to the correctness of his Honour’s recitation of the relevant principles. We will refer to particular aspects of the relevant principles later in these reasons.
Section 117 of the Act governs costs. Although s 117(1) refers to “each party to proceedings under this Act” bearing his or her own costs, s 117(2) is not so limited. Section 117(2) provides as follows:
If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4) and (5) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.
Rule 19.10 of the Family Law Rules 2004 (which was applicable at the relevant time) provides that a person may apply for an order that a lawyer pay the costs of a party. Rule 19.10(1) provides as follows
(1) A person may apply for an order under subrule (2) against a lawyer for costs thrown away during a case, for a reason including:
(a) the lawyer’s failure to comply with these Rules or an order;
(b) the lawyer’s failure to comply with a pre-action procedure;
(c) the lawyer’s improper or unreasonable conduct; and
(d) undue delay or default by the lawyer.
At the time of the trial Judge’s determination, another relevant rule was r 19.19. It provides as follows:
(1)The court may order that rule 19.18 does not apply and that a party is entitled to costs:
(a)of a specific amount;
(b)as assessed on a lawyer and client basis or an indemnity basis;
(c)to be calculated in accordance with the method stated in the order; or
(d)for part of the case, or part of an amount, assessed in accordance with Schedule 3.
Example
For paragraph (1) (c), the stated method may be in accordance with Schedule 3 but with an additional percentage for complexity.
(2)In making an order under subrule (1), the court may consider:
(a)the importance, complexity or difficulty of the issues;
(b)the reasonableness of each party’s behaviour in the case;
(c)the rates ordinarily payable to lawyers in comparable cases;
(d)whether a lawyer’s conduct has been improper or unreasonable;
(e)the time properly spent on the case, or in complying with pre action procedures; and
(f)expenses properly paid or payable.
While we were referred to a number of authorities in the list of authorities prepared by the solicitor’s legal representatives those authorities were directed to principles of natural justice and the necessity to give adequate reasons. However, during oral submissions the “improper purpose” challenge was highlighted by both parties’ counsel and our focus was directed to circumstances in which courts have determined that the pursuance of litigation, without reasonable prospects of success, was unwarranted and could sound in a personal costs order against a solicitor. We propose therefore to commence our determination of the issues raised in the appeal by considering the authorities which deal with the principles to be applied in such cases before dealing with the specific challenges identified by counsel for the solicitor.
In this Court the question of when a costs order (colloquially at times, in other jurisdictions, referred to as a “wasted costs order”) should be made, and the applicable principles were discussed by the Full Court in Cassidy & Murray (1995) FLC 92-633. Their Honours, having referred to the decision of the High Court in Knight & Anor v F P Special Assets Limited & Ors (1992) 174 CLR 178, concluded that the Court had the power to make an order against a non-party to the proceedings.
Having satisfied themselves that the order made against the solicitor was within power, the Full Court then examined, by reference to English authority (including particularly Ridehalgh v Horsefield (1994) 3 All ER 848) the circumstances or criteria to be established before a wasted costs order could be made. At 82,364-5 their Honours said:
Whereas some of the cases say that there must be ‘a serious dereliction of duty’ by the solicitor before a costs order can be made against that solicitor, in our view the matters identified by the Master of the Rolls in Ridehalgh v. Horsefield accurately reflect the law, which, in its application to this jurisdiction, can be set out as follows:
1. Pursuant to s. 117(2) Family Law Act, the Court has jurisdiction to make an order for costs against a solicitor or a non-party.
2. The court should not make such an order without giving the person to be affected by the order an opportunity to be heard.
3. The Court may make an order for costs against a solicitor without the necessity to establish that the solicitor has been guilty of serious professional misconduct.
4. The solicitor has a duty to the Court to promote the interests of justice whilst at the same time attending to the needs of the solicitor’s client.
5. A mistake or error of judgment would not justify an order for costs against a solicitor. However, misconduct, default or negligence, any of which are found by a Court to be of a serious nature, may be sufficient to justify an order.
6. The jurisdiction is compensatory.
Whilst the English cases talk of the conduct needing to be ‘serious or gross’, it adds nothing to set the threshold at ‘serious or gross’, rather than at ‘serious’, ‘gross’ being a more extreme term than ‘serious’. We think that this represents an appropriate balance between the competing public interests involved, namely, the concern that lawyers should not be deterred from pursuing their clients’ interests for fear of being made personally subject to orders for costs, and the principle that innocent parties should not be occasioned costs, for which they would not otherwise be liable, as a result of the inappropriate conduct of solicitors.
Subsequent to the decision in Cassidy & Murray the question of when a costs order against a legal practitioner should be made has been considered in both State and Federal intermediate appellate courts. These cases have, in the main, been determined after the introduction of the uniform civil procedure rules and the substantial amendments to this Court’s rules in 2004 (“the Family Law Rules 2004”). The objects of this Court’s rules, their main purpose and responsibilities of legal practitioners are important, and have direct relevance to matters in issue in this appeal. We draw particular attention to the following:
Rule 1.04 - Main purpose of Rules
The main purpose of these Rules is 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.
Note Section 43 of the Act sets out the principles that the court must apply when exercising its jurisdiction under the Act.
Rule 1.07 - Achieving the main purpose
To achieve the main purpose, the court applies these Rules in a way that:
(a) deals with each case fairly, justly and in a timely manner;
(b) encourages parties to negotiate a settlement, if appropriate;
(c) is proportionate to the issues in a case and their complexity, and the likely costs of the case;
(d) promotes the saving of costs;
(e) gives an appropriate share of the court’s resources to a case, taking into account the needs of other cases; and
(f) promotes family relationships after resolution of the dispute, where possible.
Rule 1.08 - Responsibility of parties and lawyers in achieving the main purpose
(1) Each party has a responsibility to promote and achieve the main purpose, including:
(a) ensuring that any orders sought are reasonable in the circumstances of the case and that the court has the power to make those orders;
(b) complying with the duty of disclosure (see rule 13.01);
(c) ensuring readiness for court events;
(d) providing realistic estimates of the length of hearings or trials;
(e) complying with time limits;
(f) giving notice, as soon as practicable, of an intention to apply for an adjournment or cancellation of a court event;
(g) assisting the just, timely and cost-effective disposal of cases;
(h) identifying the issues genuinely in dispute in a case;
(i) being satisfied that there is a reasonable basis for alleging, denying or not admitting a fact;
(j) limiting evidence, including cross-examination, to that which is relevant and necessary;
(k) being aware of, and abiding by, the requirements of any practice direction or guideline published by the court; and
(l) complying with these Rules and any orders.
(2) A lawyer for a party has a responsibility to comply, as far as possible, with subrule (1).
Note The court recognises that a lawyer acts on a party’s instructions and may be unable to establish whether those instructions are correct.
(3) A lawyer attending a court event for a party must:
(a) be familiar with the case; and
(b) be authorised to deal with any issue likely to arise.
Note The court may take into account a failure to comply with this rule when considering costs (see subrule 19.10 (1) and subclause 6.10 (1) of Schedule 6).
We observe the objects, purpose and responsibilities referred to in this Court’s rules find similar expression in the Uniform Civil Procedure Rules 1999 (Qld) (s 5), and Part 6, Division 1 of the Civil Procedure Act 2005 (NSW) (s 65). Further, in considering the matters raised in this appeal about maintenance of proceedings without proper assessment of the prospects of success with potential consequent waste of resources both of the parties and courts, we are conscious of the discussion by the plurality of the High Court in Aon Risk Services Australia v Australian National University (2009) 239 CLR 175.
In the course of determining an appeal against a wasted costs order made under the provisions Legal Profession Act 1987 (NSW), in Lemoto v Able Technical Pty Ltd & Ors (2005) 63 NSWLR 300 McColl JA (with whom Hodgson and Ipp JJA agreed) comprehensively examined the authorities which have dealt with the making of costs orders against legal practitioners.
This case was determined by reference to the (now repealed) Legal Profession Act 1987 (NSW). The latter amendments were introduced as part of the suite of tort law reforms and precluded a solicitor or a barrister providing legal services on a claim, or a defence of a claim, for damages unless the solicitor or barrister “reasonably believes on the basis of provable facts and a reasonably arguable view of the law that the claim or defence … has reasonable prospects of success”. Although the terminology has changed similar provisions are found in the Legal Profession Act 2004 (NSW).
In the course of that examination her Honour referred, not only to the English authorities, including Ridehalgh v Horsefield, but also to decisions of the High Court, particularly CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408.
Having noted that in Wentworth v Rogers [1999] NSWCA 403 the NSW Court of Appeal concluded there was no difference in substance to the approach taken in England and NSW, McColl JA summarised, at paragraph 92, the applicable principles as follows:
The new Div 5C should be construed against the background of the following principles which can be gleaned from the English and Australian authorities which have considered the power to order legal practitioners to pay the costs of proceedings in which they have represented parties:
(a) The jurisdiction to order a legal practitioner to pay the costs of legal proceedings in respect of which he or she provided legal services must be exercised ‘with care and discretion and only in clear cases’: Ridehalgh (at 229); Re Bendeich (No 2) (1994) 53 FCR 422; Deputy Commissioner of Taxation v Levick (1999) 168 ALR 383 at 389 [11]; 43 ATR 621 at 627 [11], per Hill J; Levick v Commissioner of Taxation (2000) 102 FCR 155 at 166 [44]; Gitsham v Suncorp Metway Insurance Ltd [2002] QCA 416 at [8], per White J (with whom Davies JA and Williams JA agreed); De Sousa v Minister for Immigration, Local Government and Ethnic Affairs (1993) 41 FCR 544; Money Tree Management Services Pty Ltd and Institute of Taxation Research v Deputy Commissioner of Taxation (No 3) (2000) 45 ATR 262;
(b) A legal representative is not to be held to have acted improperly, unreasonably or negligently simply because he or she acts for a party who pursues a claim or a defence which is plainly doomed to fail: Ridehalgh (at 233); Medcalf v Mardell [2003] 1 AC 120 at 143 [56], per Lord Hobhouse of Woodborough; White Industries (Qld) Pty Ltd v Flower & Hart (a firm) (1998) 156 ALR 169; 29 ACSR 21 (affirmed on appeal; Flower & Hart (a firm) v White Industries (Qld) Pty Ltd (1999) 87 FCR 134); Levick v Commissioner of Taxation; cf Steindl Nominees Pty Ltd v Laghaifar [2003] 2 Qd R 683;
(c) the legal practitioner is not ‘the judge of the credibility of the witnesses or of the validity of the arguments’: Tombling v Universal Bulb Co Ltd [1951] 2 TLR 289 at 297; [1951] WN 247 at 238; the legal practitioner is not “the ultimate judge, and if he reasonably decides to believe his client, criticism cannot be directed to him”: Myers v Elman (at 304) per Lord Atkin; Arundel Chiropractic Centre Pty Ltd v Deputy Commissioner of Taxation (2001) 179 ALR 406 at 413 [34]; 47 ATR 1 at 8 [34], per Callinan J;
(d) A judge considering making a wasted costs order arising out of an advocate’s conduct of court proceedings must make full allowance for the exigencies of acting in that environment; only when, with all allowances made, a legal practitioner's conduct of court proceedings is quite plainly unjustifiable can it be appropriate to make a wasted costs order: Ridehalgh (at 236, 237);
(e) A legal practitioner against whom a claim for a costs order is made must have full and sufficient notice of the complaint and full and sufficient opportunity of answering it: Myers v Elman (at 318); Orchard v South Eastern Electricity Board (at 572); Ridehalgh (at 229);
(f) Where a legal practitioner’s ability to rebut the complaint is hampered by the duty of confidentiality to the client he or she should be given the benefit of the doubt: Orchard v South Eastern Electricity Board (at 572); Ridehalgh (at 229); in such circumstances ‘[t]he court should not make an order against a practitioner precluded by legal professional privilege from advancing his full answer to the complaint made against him without satisfying itself that it is in all the circumstances fair to do so’: Medcalf (at 134 [23]) per Lord Bingham of Cornhill;
(g) The procedure to be followed in determining applications for wasted costs must be fair and ‘as simple and summary as fairness permits…[h]earings should be measured in hours, and not in days or weeks… Judges … must be astute to control what threatens to become a new and costly form of satellite litigation’: Ridehalgh (at 238–239); Harley v McDonald [2001] 2 AC 678 at 703 [50]; Medcalf (at 136 [24]).
Her Honour went on to note, in paragraph 103, “a tension between decisions of the Federal Court and decisions of State appellate courts concerning the propriety of legal practitioners acting for litigants in hopeless cases”. Her Honour quoted from Goldberg J’s judgment at first instance in White Industries (Qld) Pty Ltd v Flower & Hart (a firm) (1998) 156 ALR 169 (which was upheld by the Full Court of the Federal Court in Flower & Hart (a firm) v White Industries (Qld) Pty Ltd (1999) 87 FCR 134 and expressly approved in Levick v Commissioner of Taxation (2000) 102 FCR 155).
In White Industries it was asserted, although not the dominant contention in the case, that the solicitors, Flower & Hart, had improperly brought proceedings to put White Industries under pressure to compromise the claim. It is relevant to the issues in this case that we repeat what Goldberg J said in White Industries at pages 236 and 237:
The authorities do not support the proposition that simply instituting or maintaining a proceeding on behalf of a client which has no or substantially no prospect of success will invoke the jurisdiction. There must be something more namely, carrying on that conduct unreasonably. It is not clear what is encompassed by ‘unreasonably’ initiating or continuing proceedings if they have no or substantially no chance of success. It seems to me that it involves some deliberate or conscious decision taken by reference to circumstances unrelated to the prospects of success with either a recognition that there is no chance of success but an intention to use the proceeding for an ulterior purpose or with a disregard of any proper consideration of the prospects of success.
Expressing the principle this way accommodates the competing principle that a party is entitled to have a practitioner act for him or her even in an unmeritorious case. …
…
In order to affix liability for costs to a solicitor there must be something further added in the nature of acting unreasonably or for reasons unconnected with success in the litigation or for an otherwise ulterior purpose resulting in an abuse of process or in circumstances resulting in a serious dereliction of duty or serious misconduct in promoting the cause of and the proper administration of justice. I do not accept the submission advanced by White that the law is that because a solicitor’s duty is to the court he or she should refuse to pursue, on behalf of a client, a case which he or she knows to be hopeless, nor do I accept that Myers v Elman; Edwards v Edwards and Currie & Co v Law Society support this submission; something further is required. It is likely that the fact that a client insists on pursuing a hopeless case will raise an issue or inquiry as to whether the reason for pursuing the case is the pursuit of an ulterior purpose. However, an ulterior purpose or an abuse of process cannot, in my opinion, be assumed simply because of the fact that the case is hopeless.
Later McColl JA referred to NSW and Queensland Court of Appeal decisions which did not support the principle that a solicitor (or client) who commenced proceedings which had no prospect of success could be said to have acted reasonably. Her Honour concluded at paragraph 111:
It is plain, as Goldberg J accepted in White Industries (Qld) Pty Ltd v Flower & Hart (a firm) (at 231; 83), that the proposition that ‘commencing or maintaining proceedings with no or no substantial prospects of success enlivens the jurisdiction to order a solicitor to pay the costs of a party’ is expressed at a dangerous level of generality. Something more is required as both Goldberg J and Davies JA accepted. Sheller JA in Carson (at [113]) characterised it as improper for a solicitor to commence proceedings which were “futile or foredoomed to fail”. This accords with Davies JA’s proposition.
We are satisfied for the purpose of this appeal, there is no significant divergence in the summary of the principles set out in Cassidy & Murray and those referred to by McColl JA in paragraph 92 in Lemoto, albeit that in the latter case the principles are explained with greater particularity and reference to authority. Consequently we are of the view the principles enunciated in each of the cases are relevant in this Court.
Although not referred to by either counsel, the relevant authorities about the making of a personal costs order against a legal practitioner were comprehensively discussed by French J (as his Honour then was) in Ex Christmas Islanders Association Inc and Others v Attorney-General (Cth) (No 2) (2006) 233 ALR 97. There his Honour was, not unlike this appeal, dealing with an application for a costs order based on the cost power in the Federal Court of Australia Act 1976 (Cth) and the relevant rules of the Federal Court, not the inherent power of a court. In the discussion contained between paragraphs 9 and 25 his Honour referred to a number of cases and we would respectfully adopt the principles as extracted by him from those cases.
His Honour, at paragraph 12 of his reasons, referred to the decision of the Full Court of the Federal Court in Levick where the Full Court discussed the need for caution when a court does not know the details and circumstances of a client’s instructions. His Honour then set out the continuation of the Full Court’s discussion, at paragraph 44, as follows:
[44]... it is equally important to uphold the right of a court to order a solicitor to pay costs wasted by the solicitor’s unreasonable conduct of a case. What constitutes unreasonable conduct must depend upon the circumstances of the case; no comprehensive definition is possible. In the context of instituting or maintaining a proceeding or defence, we agree with Goldberg J that unreasonable conduct must be more than acting on behalf of a client who has little or no prospect of success. There must be something akin to abusive process: that is, using the proceeding for an ulterior purpose or without any, or any proper, consideration of the prospects of success. (emphasis added by French J)
Of that, his Honour said:
It is the last mentioned conduct which is relevant here where the question is whether the practitioner has proceeded without any, or any proper, consideration of the prospects of success. That does not require demonstration of any collateral or improper purpose.
In addition, we refer to paragraphs 15 and 20 of his Honour’s reasons. In paragraphs 12 to 15 of his reasons French J discussed a number of decisions of the Federal Court, and in particular the decision of Bennett J in Bagshaw v Scott [2005] FCA 104. His Honour, at paragraph 15, recorded that in Bagshaw v Scott her Honour had reviewed the authorities and set out a number of propositions emerging from those authorities. French J then, referring to those propositions and the list set out by McColl JA in Lemato, said “[i]t is not necessary to quote or analyse those lists here save to acknowledge them as convenient, albeit not entirely congruent, references to the law as stated in English and Australian cases”. His Honour went on, at paragraph 20, to refer to the divergence between the state appellate courts and the Federal Court and concluded it was unnecessary “to resolve those tensions”. It is unnecessary we think to say anything further about any divergence between state appellate courts, and the Federal Court on this topic.
We also with respect adopt the observations of French CJ at paragraph 30 of his reasons. There his Honour said:
A solicitor or counsel may conceive of himself or herself as advancing the public interest or some moral cause in pursuing particular proceedings. Whether acting in the public interest or to advance a moral purpose, whether charging the highest fees or acting pro bono and whether counsel or solicitor, legal practitioners have a duty to the client and to the court to be competent in their conduct of legal business.
Thus we conclude in this case a costs order could have been made against the legal practitioner if the proceedings:
(a)were commenced with little or no chance of success, but for an ulterior purpose; OR
(b)were commenced or continued with disregard of any proper consideration of the prospects of success.
The trial judge’s reasons (costs judgment)
The trial Judge commenced his reasons by referring to the long history of the litigation and the orders sought by the husband. His Honour noted he had not received submissions from the wife but said he had received “comprehensive” submissions from the solicitor who had argued that no order for costs should be made against him as sought, or at all.
At paragraph 8, his Honour recorded his conclusion, for reasons later given, that an order should be made that the solicitor pay the husband’s costs. Given the importance of his Honour’s findings to aspects of this appeal we now set out that paragraph in full:
I am satisfied that in the discrete circumstances before me it is appropriate to order that [Mr Z] pay the costs of the husband in the terms later described in this judgment for there are clear circumstances, in combination, justifying such an order. As to the exercise of judicial discretion in an application of this nature, see Penfold v Penfold (1980) 133 CLR 311 and Collins v Collins (1985) FLC 91-603.
His Honour then referred to the relevant statutory provisions and authorities dealing with costs.
At paragraph 10 the trial Judge referred to the submissions made by senior counsel for the husband to the effect that the wife had “utterly failed in her primary application”.
At paragraph 11 his Honour explained:
It was also the submission of [the husband’s senior counsel] that the wife and her legal advisors maintained the proceedings despite due warning being given that further pursuit could result in orders for costs being imposed.
In paragraph 12, having noted that the solicitor no longer acted for the wife, his Honour said:
… The impression I had from the whole of the proceedings having observed the wife in court and listened carefully to her evidence before me was that she [sic] naively compliant to the direction and advice given by [Mr Z] and did so without question. Sufficient dialogue was exchanged in court (some of which is referred to in the submissions of [the husband’s senior counsel]) such as to alert any reasonable and vigilant litigant to what may be seen as obvious short comings to the application. It seems to me, perforce the conduct of the whole proceedings, that the wife was submissive and acquiescent to the direction of [Mr Z] and otherwise to her legal and forensic advisors.
His Honour went on to explain there had been no disclosure of how much the wife paid the solicitor by way of fees although he noted an assertion in the submissions of the solicitor that he “acted on a success fee basis”. Having explained that the solicitor “lays blameworthiness” on the instructions he received, the trial Judge said:
I do not accept that and given the evidence as to improper purpose I am satisfied that the proceedings were maintained at the direction and under the control of [Mr Z]. In the whole of the circumstances I do not propose to make any order for costs against the wife. (paragraph 13)
At paragraph 14 his Honour posed for himself the question whether, “in the discrete circumstances” before him, such costs should be awarded on an indemnity or some other basis.
His Honour, at paragraph 18, referred to the written submissions prepared by the husband’s senior counsel. His Honour accepted the submission of senior counsel for the husband as to the relevant principles to be applied. The summary of the principles reflects our discussion earlier in these reasons. However the question of whether his Honour appropriately applied those principles is pivotal of the issues in this appeal. Although lengthy we repeat what his Honour said in paragraph 18:
…
18.1the power provided for me to order costs (s 117(2) of the Family Law Act (1975) (as amended) is wide and may be made against third parties, including a party’s solicitor;
18.2the Family Law Rules 2004 provide for applications of this nature specifically including a solicitor’s failure to comply with the Rules, his/her improper or unreasonable conduct and for issues of undue delay or default (Rule 19.10(1)(a)(c)(d));
18.3to warrant an order for such costs, it has been said that the degree of blameworthiness must be shown to include, for example, conduct which attracts the ‘… censure of the court in a serious way’ or a ‘… serious dereliction of duty’. (See Jachimowicz v Jachimowicz (1986) 10 FamLR 566, at 572);
18.4costs can be ordered where proceedings are brought or continued for an improper purpose (Flower & Hart v White Industries (1999) 163 ALR 744). There is a duty upon a solicitor to make an independent assessment of the basis upon which proceedings should be instituted and that an abuse of process is made out where it is found that proceedings are ‘… brought not to vindicate a legal right, but some other purpose’, or where the proceedings are to gain some collateral advantage beyond that offered by the law (Williams v Spautz (1992) 174 CLR 509);
18.5that a legal practitioner ought not improperly initiate nor maintain proceedings, nor unreasonably continue proceedings in circumstances where there is no, or no substantial chance of success (Edwards v Edwards (1958) 2 All ER 179).
His Honour, under the heading “Submissions”, summarised what the husband’s senior counsel asserted, which was principally that the wife’s claim was entirely speculative (paragraph 19) and that throughout the trial his Honour had expressed concern about the reliability of the wife’s expert accountant, Mr M’s valuation. Although at this point in his reasons his Honour indicated he was summarising the submissions of senior counsel for the husband during this exercise we discern his Honour did make findings in accordance with the general tenor of submissions.
At paragraph 21 his Honour said:
[The husband’s senior counsel] focused attention upon the fact that [Mr Z] ought to have been vigilant to the merits of the wife’s case, the criticisms made of [Mr M’s] utterly unacceptable valuation and his abject failure to present as an independent professional expert witness. The whole of the evidence, so apparent from early in the proceedings ought to have demonstrated in the clearest terms the obvious risk that there was no reasonable likelihood of success. A plain reading of my judgment covering 200 pages of detailed analysis demonstrates that fact with some clarity and my expressions of concern which were translated by [Mr Z] as perceived bias.
At paragraph 23 his Honour referred to comments made by him during the course of the trial when he noted, among other matters, that the husband’s financial statement disclosed assets of about $3,750.00 and debts of about $2.5 million. His Honour explained, in his view, a reading of the transcript of the proceedings exposed a “vain and futile quest against the evidence and the weight of the evidence to generate an asset base for distribution that was never there” (paragraph 24).
At paragraph 25 of his reasons, the trial Judge was extremely critical of the evidence of Mr M, who he found was not “a witness of independence”. His Honour referred to his findings in his substantive judgment in which he had rejected Mr M’s evidence. In the context of his discussion of Mr M’s evidence immediately thereafter, at paragraph 26, his Honour referred to a meeting which was attended by the husband’s expert accountant, Mr R, Mr M and the solicitor. His Honour recorded:
It seems to me that wisdom and objectivity was lost and abandoned in the process and that partisanship and personalised instinct dominated [Mr Z]. This can perhaps be best evidenced by my findings relating to a meeting on 2 April 2003 between the husband and the wife’s forensic accountants:
‘267.In the course of examination, [Mr R] was referred by [the husband’s senior counsel] to a meeting he had at the offices of [Mr M] on 2 April 2003. I have earlier detailed [Mr M’s] evidence in relation to this particular incident. [Mr R] said that whilst he was with [Mr M] and during the course of the meeting [Mr Z] entered the room. He went on to say:
“…He ([Mr Z]) asked who I was. I didn’t answer him at that stage. [Mr M] replied that I was the expert witness for [Mr Limousin]. At that stage he mentioned I must be a scum bag and a crook, and he kept saying that for probably about 60 seconds and [Mr M] got up and sort of tried to usher him out of the door.” [T 84]
268.As to the strength of voice used by [Mr Z], it was [Mr R’s] evidence that it was “… more just to make sure that he got his point across and I heard him”. He said that [Mr M] got up from behind his desk and tried to “… shoo him out of the office”. He explained that [Mr M] came around the desk and motioned [Mr Z] to leave the office and went on to say:
“… The only additional comments [Mr Z] made when [Mr M] was exiting was words to the effect ‘we’ve got more money on him. We’ve got more money on him’.” [T 86]
He said [Mr M] apologised for [Mr Z’s] attendance. I have no hesitation in accepting [Mr R’s] version of this incident in reference to that of [Mr M].’ (original emphasis)
The second matter the trial Judge relied on to underpin his findings of loss of objectivity and professional impartiality, as well as improper purpose in conducting the proceedings, was a letter from the husband’s solicitors to the solicitor concerning a meeting between Mr McV (the husband’s proposed trustee in a Part X arrangement under the provisions of the Bankruptcy Act1966 (Cth) (“the Bankruptcy Act”)) and the wife’s expert accountant. His Honour proceeded to set out five paragraphs from his substantive judgment where he dealt with the incident. Those paragraphs included reference to a report by Mr McV to the husband’s creditors of his recommendation that the husband enter into a Deed of Arrangement under the Bankruptcy Act. His Honour also repeated paragraph 320 of his substantive judgment, being his Honour’s summary of a discussion which occurred between Mr McV and Mr M.
Paragraph 320 of the substantive judgment is of significance and we now set it out in full:
[Mr McV] made it clear when examined by [the husband’s counsel] that when [Mr M] visited his office (in September 2002) their’s [sic] was a cordial meeting and that he provided for [Mr M’s] inspection all files in his possession. He said that [Mr M] asked a number of specific questions in relation to the detailed information provided and that towards the end of the meeting there was a discussion of the overall position, as he understood it to be. In relation to that, the following evidence took place:
‘What was that discussion? … Generally there was a discussion as to what it was all about and how long it was going to take, that sort of thing, and I actually said to [Mr M], ‘well, what do you hope to get out of this?’ you know, ‘How are you going to get paid out of it?’
What was his response to that inquiry? … His response was that he and [S] dealt with these things all the time and that they just pushed on and on and eventually the family generally settled.
When he made reference to [S], first of all, did he say the surname of that person? … No, he did not.
Who did you understand [S] to be? … [Mr Z].
When this comment was passed as to pressing on the family and the like, what was your response to [Mr M]? … I made no real response to that particular comment.’ …
I accept that evidence. (original emphasis)
His Honour noted that the solicitor did not give evidence explaining Mr M’s comment. At paragraph 31 his Honour expressed surprise that the solicitor, who he described as an experienced professional advisor, had permitted himself to be a party to the “professional situation and relationship” which his Honour had referred to in his substantive judgment. At this point in his reasons, his Honour summarised in broad terms his findings about the relationship of the solicitor and Mr M. He said:
I found, for example that that dispossessed [Mr M] of his independence in the sense of his presentation as a professional expert witness. It was damning that [Mr M’s] fee was ‘success based’ (par 353) and extraordinary that [Mr Z] permitted such a situation to exist. He permitted their professional relationship and importantly, the significance of impartiality, objectivity and professional detachment to be lost. (paragraph 31)
Having commented that he found that any “reasonable, sensible and objective professional advisor” would have understood the “untenable” situation concerning Mr M, his Honour concluded that the solicitor had undertaken “a fishing expedition of planetary dimension”.
At paragraph 33 of his reasons, the trial Judge referred to his endeavours to manage the trial and how he had been met with what his Honour described as “at times with risible applications” in circumstances where the claim being pursued lacked an evidentiary foundation. His Honour described the presentation (of the wife’s case) as “blustery, long winded and time wasting”.
His Honour then turned to consider what he noted senior counsel for the husband had described as the “true motive” of the proceedings being correspondence which became Exhibit “H1” before him. We will later set out the relevant portion of Exhibit “H1”. It is sufficient at this point to note it was a letter which included the allegation that Mr M had informed the Mr McV:
…that the property settlement application was being continued ‘as a pressure tactic’ designed to cause the husband’s father to advance funds for settlement in favour of the wife. ... (paragraph 35)
At paragraph 36 of his reasons, his Honour explained that he had referred to a meeting between Mr M and Mr McV in his substantive judgment and made it clear that he preferred the evidence of Mr McV to that of Mr M. At this point in his reasons the trial Judge referred to the submissions of the husband’s senior counsel (paragraphs 45 and 46) which he described as compelling, and set out in full. Given the acceptance of those submissions by the trial Judge and the reliance we discern he placed on them in coming to his conclusion of improper motive we too will record those submissions:
45. The importance of the finding is difficult to overstate. It confirms the improper purpose complained of in the letter forwarded to the Wife’s solicitor (i.e. Exhibit H1). It explains the behaviour of the Wife and [Mr Z] in pursuing proceedings for settlement of property, a pursuit otherwise impossible to rationally explain. Evidence of this nature is rarely available to be called. The tactical pursuit of proceedings directed not towards the Husband but towards his extended family to obtain a settlement the Wife was on the facts as known to her and those she instructed, not entitled to receive, was a shameful abuse of the Court’s process. The full financial cost to the Husband of this false and improper conduct should be visited upon the Wife and [Mr Z] both to compensate for costs improperly and unfairly incurred and to demonstrate that such behaviour will not be countenanced by this Court.
46.That [Mr Z] had a vested interest in obtaining such an unjustified settlement is manifest from the vast legal costs he is otherwise unlikely to recover from the Wife. It moreover explains [Mr Z’s] abusive and intimidatory behaviour towards the accountant [Mr R] during his Court-ordered conference with [Mr M] to discuss their conflicting valuations (see Judgment paragraph 102, 103, 267 & 268). [Mr R] was found to be ‘a very impressive witness indeed, and one upon whom I can safely rely’ (Judgment paragraph 298).
We pause at this point to note that in a number of places in his reasons thereafter his Honour incorporated into his reasons findings made in earlier judgments, including his ex tempore reasons delivered on 14 May 2003 when an application was made on the wife’s behalf for an adjournment of the proceedings, his Honour’s judgment of 28 May 2003, again an ex tempore judgment when he dealt with an oral application that he disqualify himself, and his further judgment of 24 July 2003 when he again dealt with an application to disqualify himself. We are satisfied that his Honour was entitled to incorporate his earlier reasons into his costs judgment. We record the solicitor’s challenge to the reliance on findings in earlier reasons for judgment of the trial Judge was not pursued at the hearing before us.
We note that each of the relevant judgments and his Honour’s substantive judgment form part of the appeal book. We will later refer to relevant parts of these judgments.
At paragraphs 45 to 50, his Honour dealt with the submissions of the solicitor. Having referred to the fact the solicitor accepted the Court had jurisdiction to make an order against a lawyer, that such an order would involve special consideration and the power should be exercised with caution, his Honour explained that the solicitor joined issue with much of what senior counsel for the husband argued in his written submissions.
At paragraph 47, the trial Judge referred to the solicitor’s submission that a legal practitioner could “only consider the question of the merit of a case based on the ‘material, evidence and instructions’ provided by the client and advice of counsel” (original emphasis). His Honour also noted Mr Z asserted that he was bound by legal professional privilege.
In the following paragraph the trial Judge further summarised the solicitor’s submission that he had relied on the advice provided by three senior counsel and the counsel who had the care and conduct of the trial. His Honour recorded that the solicitor submitted that if the advice of counsel was questioned they should have been joined as third parties or respondents to the costs application.
Later his Honour referred to the fact that the solicitor opposed the making of costs on an indemnity basis.
The trial Judge, at paragraph 53 of his reasons, touched on the subject of the retention of Mr M as the wife’s forensic accountant, and again referred to his findings in his substantive judgment about the professional relationship between the solicitor and Mr M.
At paragraph 54 the trial Judge referred to the solicitor’s denial in his submissions that there was a “further purpose” (original emphasis) in placing pressure on the husband’s late father to settle the proceedings. Having summarised the submissions of the solicitor to the effect that Mr M denied the improper purpose and as the comments were not made in the solicitor’s presence they could not be constituted as an admission against him, the trial Judge said “[h]owever, I have made findings on this issue in my substantive judgment”.
His Honour then turned to the husband’s submissions about the failure to call the solicitor to give evidence on the topic of the true purpose of the litigation.
His Honour noted other submissions of the solicitor, including his submissions that:
·he had not drafted and settled the affidavits;
·it was counsel’s decision to call Mr D Limousin for cross-examination;
·the adjournment application made on 14 May 2003 was made by counsel on instructions received from the wife after consultation with the solicitor;
·the submissions made by the husband’s senior counsel in respect of the second disqualification application were an attempt to punish him for making the application; and
·the failure of the wife to file a financial statement was an oversight which should have been corrected by counsel and not attributed to him.
At paragraphs 64 to 73 of his reasons, the trial Judge summarised the submissions in reply of senior counsel for the husband. Among the matters his Honour recorded from the submissions were the following:
·reliance on counsel’s advice, based on the authority of White Industries, did not absolve the solicitor from responsibility in relation to the institution and conduct of proceedings;
·the arrangements and circumstances in the engagement of counsel and their advice was known only to counsel, the solicitor and/or the wife;
·the wife made no submissions or complaints about counsel;
·the solicitor had not seen fit to join any of the counsel or give precise particulars of advice given;
·although the solicitor had submitted he was hampered in responding to the allegations by legal professional privilege, he had on occasions in his submissions referred to advice allegedly received from counsel or instructions from the wife;
·the solicitor had not disclosed whether he had sought permission from the wife to respond to the allegations made;
·significantly, that the solicitor had not responded to the specific allegation that the proceedings were conducted for an improper purpose;
·the solicitor had acted for the wife for many years, had the benefit of detailed affidavits of the husband from interim proceedings, as well as the final affidavits of Mr McV, Mr R (the husband’s expert accountant) and the husband’s supporting witnesses. In addition, he had the assistance of Mr M who spent many years investigating at the solicitor’s direction;
·while it was assumed that the various senior counsel engaged for the wife gave advice, the actual nature and extent of the advice could only be a matter of speculation;
·there could be no inference properly drawn that the decision to proceed with the trial was in accord with the advice of counsel; and
·it would be unjust for the husband to bear the cost of the proceedings based on Mr M’s report (described as “a false and contrived report” (original emphasis)) which was prepared as a result of the urgings of the solicitor.
At paragraph 71 of his reasons, the trial Judge dealt with the issue of the retention of Mr M. His Honour said:
Specifically dealing with [Mr Z’s] submission that the wife made a decision to retain [Mr M] as her forensic accountant and relied upon his professional expertise and ability, [the husband’s senior counsel] had this to say:
‘… What the commentary failed to address is the behaviour of [Mr Z] towards [Mr M] and the relationship between them as found. It is disingenuous to assert reliance on [Mr M’s] ‘professional expertise and ability’ in the light of those findings, especially [Mr Z’s] close association with [Mr M], [Mr Z’s] behaviour in prevailing on [Mr M] to produce a valuation of [sic] the days leading up to the final hearing and the revelation of the motive of [Mr M] to continue the litigation as a means of pressuring the family of the husband to obtain a settlement. The unhealthy alliance between [Mr Z] and [Mr M] in their respective professional roles also renders as fatuous the proposition that the wife was not encouraged to use the services of [Mr M].’
As my substantive judgment records, I was seriously concerned as to the independence of [Mr M] and his close relationship with [Mr Z]. My findings are clear.
His Honour concluded his discussion of the submissions of senior counsel for the husband at paragraphs 72 and 73 as follows:
It was the submission of [the husband’s senior counsel] that any attempt by [Mr Z] to wash his hands of responsibility for the conduct of the case had no proper basis in law. With that, I agree.
In each instance, the submissions in reply by [the husband’s senior counsel] met and dealt with the submissions made by [Mr Z]. I was assisted by those submissions and find that the criticisms made by [the husband’s counsel] are well made out. The terms of my judgment delivered on 25 May 2004 and findings made are clear. [The husband’s counsel] has relied upon those findings and accurately recorded them in support of various of the matters raised by him to underpin his application for costs. In my view, his criticisms of the various submissions made by [Mr Z] are well made out.
Thereafter, under the heading “Conclusion”, his Honour referred to what he described as “a number of significant findings” which he brought into account in the exercise of his discretion, noting the considerable advantage he obtained as the trial Judge in determining the costs application.
At paragraph 76, his Honour again referred to, and incorporated into his reasons, his earlier ex tempore judgments.
At this point in his reasons, the trial Judge referred to the submissions made by senior counsel for the husband directed to the wife’s role in the proceedings. The trial Judge found the submissions equally applicable to his consideration as to whether or not he should make an order against the solicitor.
His Honour then went on to conclude that the case was one of an exceptional nature which justified the making of an order for costs on an indemnity basis.
At paragraph 78, his Honour said:
From all that I have observed in the course of the trial, I am satisfied that it was a highly speculative claim launched by the wife under the professional hand of [Mr Z] who had a fundamentally mistaken and misguided view of the husband’s asset position in circumstances, despite the assistance of a forensic expert’s investigation over a period of several years with the production of numerous documents, the husband’s position was patently clear.
His Honour then went on to confirm his findings in his substantive judgment that Mr M’s methodology was fundamentally flawed and his relationship with the solicitor lacked professional independence. At paragraph 81, his Honour said:
I find it difficult to envisage how it is that a professional advisor could have permitted such a situation to have existed, let alone continue and be maintained over the period of the litigation. I agree also with [the husband’s senior counsel’s] submissions that groundless, at times risible applications were made, all plainly under the advice and/or supervision of the solicitor.
The trial Judge found there had been an “abject failure on the part of [Mr Z] to achieve the required standard of professional objectivity” (paragraph 82) His Honour said:
I have little doubt that there was an abject failure on the part of [Mr Z] to achieve the required standard of professional objectivity. His appalling and lamentable conduct in the presence of [Mr M] and [Mr R] underpins the powerful subjective view held by him without a reasonable basis and in the face of compelling and persuasive evidence to the contrary. (paragraph 82)
At paragraph 83, his Honour set out his conclusion that the conduct of the solicitor was unreasonable, and then posed for himself again the question whether that unreasonable conduct warranted an indemnity costs order against the solicitor for the whole or some part of the proceedings.
At paragraphs 84 and 85, his Honour dealt with the serious allegation against the solicitor, namely that the proceedings had been conducted for an improper purpose. His Honour said:
The evidence of [Mr McV] was of real concern to me. I found that [Mr M] did say that which [Mr McV] complained of recognising of course that it was said in the absence of [Mr Z]. [Mr Z] was in court when this evidence was given and was clearly aware of it having regard to the references it generated in the course of the trial, not forgetting of course that the essence of the complaint was made clear to him in a letter from the husband’s solicitors. True it is that the admission as found by me is not evidence against [Mr Z].
It was a damning and serious [sic] of evidence clearly underpinning male fide and improper purpose. It struck at the very heart of professional integrity, professional conduct and clearly had great significance in the trial. One must ask oneself, why wasn’t [Mr Z] called, at least of his own volition and seek to be heard on what, if untrue, was a scandalous and disgraceful allegation to make?
His Honour then, having referred to the judgment of Windeyer J in Jones v Dunkel, concluded he was satisfied that the failure of the wife’s counsel to call the solicitor on this issue was because he feared to do so and that the risk was taken to rely on Mr M’s denial.
At paragraph 90, his Honour concluded:
To conduct this litigation in the pious hope of ‘squeezing’ a settlement as evidenced by the admission of [Mr M] is an improper purpose in my view and plainly unprofessional. That too must be gauged against the claim itself which, as I articulated at the commencement of the trial, as being ‘highly speculative’. It involved an artistic licence in presenting a valuation that was risible and borne from a professional relationship between the forensic expert and the practitioner that was open to significant and appropriate criticism. That relationship, as found by me, alone was destructive of the required level of independence.
Additionally, at paragraph 91, the trial Judge found that the solicitor sought to gain an advantage by the undue protraction of the proceedings. The trial Judge said:
I also find that [Mr Z] sought to gain an advantage that was simply not open to him upon any rational, professional and objective appraisal of the facts by an undue protraction of the proceedings and to place pressures upon the husband to settle the action. This alone warrants the type of order I propose to make, but when viewed in tandem with all other negative aspects as described by me at considerable length in my substantive judgment, such an order is quite appropriate. I have earlier set out several findings concerning the material underpinning the orders I propose to make. (See par 30, 31, 32 and 33).
His Honour then referred to earlier findings made by him which he relied on to underpin the orders, namely his findings at paragraphs 30 to 33. Those paragraphs included findings that the husband’s financial position was found by his Honour at the conclusion of the trial to be as was opened on the husband’s behalf at the commencement of the trial, that the pursuit of the wife’s claim became “ever increasingly futile and devoid of professional objectivity”, that the fee arrangement between the solicitor and Mr M (a “success based” fee) was extraordinary resulting in a loss of professional detachment, that the solicitor had failed to recognise the “untenable situation” concerning Mr M, and that applications had been made during the trial which were without merit. Further the trial Judge found that the maintenance of the proceedings was “unrealistic and devoid of objectivity”.
At paragraph 95 his Honour recorded his reasons for the order ultimately made. There he said:
In making my orders I propose to allow for a certain percentage of the overall trial to clearly demonstrate that it was an adequate and sufficient allowance for [Mr Z] to have understood the professional status of the litigation and acted in the best interests of his client. What I propose to do is order that [Mr Z] be responsible for 60% of the husband’s costs of trial on an indemnity basis as later set out in this judgment. That is, in my view having regard to the whole of the facts and circumstances of the trial, a generous consideration and provides a period of time in which the wife, through [Mr Z], could be seen to have had every opportunity to present an arguable case.
Grounds asserting no evidence to support findings, asserted reliance on in court observations, and associated alleged lack of procedural fairness
The sub-grounds in ground 1 as well as grounds 2, 3 and 4 fall into three broad topic areas:
·assertions directed to findings that the proceedings were unreasonably maintained by the solicitor without the necessary evidentiary foundation to support such findings (“the unreasonable maintenance of proceedings challenge”);
·assertions that other findings were not supported by the evidence (it is implicit in this challenge that reliance on such findings by the trial Judge caused his discretion to miscarry); (“findings not supported by the evidence challenge”). Embedded in this challenge is a challenge to the trial Judge’s finding that the proceedings were instituted and/or maintained for an improper purpose; and
·a lack of procedural fairness and/or natural justice challenge, in that it is asserted the trial Judge failed to warn the solicitor he was considering relying on “in Court” observations of the wife and failed to give the solicitor an opportunity to respond to them (“the procedural fairness challenge”).
Later his Honour noted, at paragraph 110, that Mr M conceded he had not prepared a valuation days before the trial was listed to commence but “[Mr Z] required him to prepare a valuation which he did, being dated 30 March 2003” (the day prior to the commencement of the trial). The trial Judge also recorded Mr M’s concession that the valuation technique used was not one he would personally use or adopt.
In dealing with the issue of the husband’s asserted failure to disclose documents, at paragraph 213 of his substantive judgment, the trial Judge explained (after referring to lack of professional co-operation between the solicitors for the parties):
For example, the husband made it quite clear that he provided the necessary authority in writing on a ‘couple’ of occasions for the wife’s professional advisors ([Mr Z]) to speak to the relevant accountants. That was clearly open to them, and as I understand it, never taken up. Furthermore, in an affidavit filed by the husband for example on 5 June 2000 (page 69-70 of Exhibit “W16”), he made it clear that when he settled his dispute with [Mr RT] and the ANZ Bank he received boxes of documents which he had examined and that he also instructed his accountants to go through those boxes and provide all documents to the wife requested by her. It appears to me that if the wife’s solicitors were assiduously attending to their task, they would have inspected the ‘boxes’.
Significantly, at paragraph 220, his Honour said:
When [counsel for the wife] resumed his cross examination on 27 May 2003 (day 10) he at first directed the husband’s attention again to various discovery issues. I do not propose to canvass them all, but the husband maintained that he had, for example, ‘handed over’ MYOB disks for production to [Mr Z] and which contained relevant information. Further, if that did not cover the specific period in time, he provided a written authority for the wife’s professional advisors to speak to the relevant accountants in their quest for information. On 17 August 2000 it was ordered by consent that the husband authorise a number of named persons to make available for inspection by the wife’s legal and financial advisors documents specified in her Form 8 Application filed on 28 April 2000. He swore an affidavit on 16 October 2000 deposing that he had done so and that, to the best of his knowledge, no approach had been made to any of them by the wife’s legal or financial advisers. I accept that evidence.
Later, at paragraph 223, having discussed the time taken up by the wife’s counsel in cross-examination on issues relevant to discovery said:
In my view, the pathway to enlightenment was open to [Mr Z] and [Mr M]. They appear, for reasons best known to them, not to have availed themselves of reasonable opportunities for inquiry. It concerns me that despite the enormous number of photo copied pages taken, the several hundreds of thousands of dollars for professional fees incurred by the wife, the prodigious number of hours invested by [Mr M] in his task and the years over which the proceedings spanned, the professional advisors of the wife (having acknowledged the proceedings as ready for trial) utilised so much time before me re-capitulating past discovery issues.
At paragraphs 351 to 352, his Honour set out his findings about the relationship between the solicitor and Mr M. Given the importance of those findings, particularly when regard is had to his Honour’s later criticisms of Mr M’s role, we set them out in full:
351.The valuation put forward by [Mr M] of the husband’s interest in the four entities is contested, and accordingly, the issue of what weight I should give to his report and his evidence in the particular circumstances of these proceedings is an important matter for my consideration. There were a number of matters exposed in cross-examination that are of real concern to me, including the role undertaken by [Mr M] during the proceedings over the past several years which has, on any objective analysis embedded him ‘in the camp’ of the wife. So much is clear from the wording of the various affidavits deposed to by him and his evidence before me as he ‘argued’ her case. That is, he assumed the role of her ‘advocate’ and which is, in my view, quite undesirable if he is engaged in the role of an independent expert witness. It is also indicative of partisanship.
352.If there was any doubt about that, it was put to rest by his own evidence, including his professional ‘relationship’ with [Mr Z]. The evidence that emerged, upon any objective analysis was quite bizarre. It seems to me that [Mr M] is, to a substantial degree, ‘dependant’ upon [Mr Z] for his professional work as an investigating accountant (the majority of his forensic work being sourced from him) which is reinforced by the location of his office to that of [Mr Z] and the public assertion of their ‘association’ described in the advertisement that [Mr Z] placed in the Jewish News. His relationship with [Mr Z] is further demonstrated by his failure to acknowledge what I regard as a diatribe of abuse delivered by [Mr Z] to [Mr R] in his presence. In relation to that incident, I have no hesitation whatsoever in accepting the evidence of [Mr R] concerning the unseemly conduct of [Mr Z]. I observed [Mr M] carefully during the course of his evidence and the obvious embarrassment he demonstrated in asserting that he did not hear what [Mr Z] was alleged to have said. I have no doubt that he heard every word of it and that his evidence, as given, was a by-product of his professional dependence upon [Mr Z].
At paragraph 367 of his reasons, the trial Judge referred to the fact that it was asserted by the wife’s counsel that the role played by Mr M included expressing an opinion on the adequacy of the husband’s discovery. His Honour said:
It was never put by [counsel for the wife], to my recollection, that such was his role ‘as an expert’, for surely that would be the function of the solicitor who, in usual circumstances, professionally attends to discovery and inspection of documents. That role seems to have been intermingled with Mr M and which may well have been as a result of their most unusual professional ‘association, to which I have referred.
In his substantive reasons his Honour also referred, at paragraph 394, to the fact that although the wife sought to pursue a claim for spousal maintenance, the wife’s professional advisors had failed to file any recent Financial Statement, and it had been necessary for leave to be sought to re-open her case on 23 September 2003 to adduce further evidence (an updated Financial Statement).
As we have discussed earlier in these reasons, on 14 May 2003, the eighth day of the trial, an application was made by the wife’s counsel for the matter to be adjourned. The consequence of this application was explained by the trial Judge in his ex tempore reasons on that day as having, if granted, the effect of aborting the trial. His Honour referred to the dual role Mr M purported to undertake, and noted his involvement in the proceedings since 2001. His Honour then extensively traced the history of the proceedings to that point in time, including what the trial Judge described (in paragraph 11) as “[t]he contentious history of discovery”, and explained while the wife’s counsel complained the husband had not complied with orders relating to discovery or if he did, it was not adequate, but went on to observe that no enforcement application was brought by the wife.
His Honour then turned to refer to what was said to him by the husband’s solicitor at the call over of the long causes list on 20 December 2002, namely that there would be no issue about discovery. Later his Honour referred to the submissions made by Mr Maxwell QC (as his Honour then was) (and to which we have earlier referred in our summary of the trial Judge’s costs judgment). His Honour referred to the position taken at the commencement of the hearing by the wife’s counsel that she should receive $2 million by way of property settlement, and a foreshadowed application to adjourn the proceedings on the fifth day of the hearing
At paragraph 23 of his reasons delivered on 14 May 2003, his Honour summarised the husband’s senior counsel’s submissions about discovery which were that the fault lay with the solicitor, that the solicitor could have given evidence about any correspondence from him to the husband’s solicitor prior to trial and any alleged non-production of documents. His Honour found, at paragraph 25, that the parties had sufficient time to prepare and bring the matter to trial and he refused the application for adjournment.
His Honour’s ex tempore reasons of 28 May 2003, when an oral application was made by the wife’s counsel that he disqualify himself, are the subject of a discrete costs order, and are challenged on the basis of lack of adequate reasons. For completeness however we have considered those reasons, which his Honour incorporated into his costs judgment. We are satisfied neither those reasons, nor his Honour’s reasons for the second disqualification application, have direct relevance to the issue now under consideration.
In summary, the evidence his Honour relied on to support his finding that the proceedings were unreasonably maintained by the solicitor, and that the solicitor was in serious dereliction of his duty were:
·assurances that the matter was ready for hearing in 2002;
·his unusual relationship with Mr M, which lacked appropriate professional boundaries;
·his “instructions” immediately prior to the commencement of the trial to Mr M to prepare a valuation when no asset of the husband had been identified ;
·his failure as a professional to recognise his inappropriate relationship with Mr M and the deficiencies in Mr M’s valuation;
·his unprofessional conduct at the joint experts’ conference;
·his failure to seek enforcement of any asserted non-compliance by the husband with orders in respect of discovery;
·his failure to inspect documents when made available, or inspection was authorised, by the husband;
·his failure to file a relevant Financial Statement on the wife’s behalf necessitating an application to re-open;
·his failure to examine the husband’s list of creditors prepared by Mr McV; and
·the failure to establish any asset to which an order in favour of the wife could attach at the commencement of the hearing or during it.
As the trial Judge explained, in both his substantive and costs judgments, the proceedings were difficult ones involving a number of corporate entities and trusts. Before us, senior counsel for the husband submitted that the trial Judge, by making the solicitor responsible for costs limited to 60 per cent of the hearing days, appropriately reflected a proper exercise of discretion. That is, such an apportionment disclosed that the trial Judge had taken into account that it may have been reasonable for the wife’s case to commence, but it was the continuation of it by the solicitor without proper regard for the prospects of success which was unreasonable. We think there is considerable merit in this submission which reflects the reality of the orders made by the trial Judge and his findings in paragraph 95.
Further, we are satisfied, from a careful reading of all of his Honour’s judgments, that there was evidence to support the following findings which are subject of a special challenge by the solicitor.
(a) (i) that the proceedings were maintained at the direction of and under the control of the solicitor and (ii) that the maintenance of the proceedings was unrealistic and devoid of objectivity
The solicitor in his professional capacity determined the proceedings were ready for hearing in 2002, he “instructed” Mr M to prepare a valuation immediately before the commencement of the trial in circumstances in which it may be implied (because of the methodology adopted) that Mr M was unable to do so in accordance with well recognised valuation methodologies. Further, notwithstanding the position adopted on 28 March 2003, and at the opening of the trial, applications were made to adjourn the proceedings on the eighth day of the trial for further discovery when no asset could be identified. Notwithstanding the trial Judge’s refusal of the application, the proceedings were continued. At that point in the proceedings, if not earlier, given the substantial pre-trial discovery opportunities, the solicitor should have assessed the negligible prospects of success if the property proceedings continued.
(b) that the solicitor failed to undertake professional vigilance
We have already referred to the trial Judge’s findings that the solicitor, who asserted the husband had failed to give appropriate discovery, did not file any affidavit annexing correspondence from him on this topic to the wife’s solicitors, nor did he bring any enforcement proceedings asserting such failure. Further, the trial Judge’s findings that the solicitor failed to inspect documents made available to him by the husband was not challenged, nor was the finding that Mr M, rather than acting as an independent expert valuer, carried out discovery, challenged. The undisputed term of Mr M’s engagement on a “success based” fee was controversial. The solicitor should have been acutely aware of the deficiencies of the valuation report and lack of independence of Mr M. The solicitor, who was at all times aware the wife’s application included claims for spousal maintenance and child support, failed to ensure an appropriate Financial Statement was filed to support her claim.
(c) Mr M was retained by the solicitor not by the wife
We turn at this point to consider the assertion that the trial Judge found Mr M was retained by the solicitor, not the wife. This assertion is not an accurate reflection of what the trial Judge actually said. At paragraph 53 the trial Judge explained:
[Mr Z], somewhat ungenerously in my view, argues that it was the wife’s decision to retain [Mr M] as her forensic accountant and that he was entitled to rely upon [Mr M’s] professional expertise and judgment. With that said, it may be helpful for [Mr Z] to reconsider my findings in relation to [Mr M] and their own professional relationship.
At paragraph 71, the trial Judge referred to the facts which lead him to conclude the wife was “encouraged” to use Mr M’s services. That finding was open on the evidence, particularly the evidence discussed by the trial Judge in his substantive judgment and which we have recorded in paragraph 144 of these reasons.
The challenge as pleaded in the Amended Notice of Appeal has no merit.
the unreasonable maintenance of the proceedings challenge – conclusion
We are satisfied there was evidence to support a finding that the proceedings were unreasonably maintained with disregard of any proper consideration of the prospects of success.
Asserted erroneous reliance on “in court” observations and denial of natural justice
the submissions
Counsel for the solicitor asserted there was no evidentiary basis for the trial Judge’s findings in paragraph 12 of the costs judgment that the wife was “naively compliant to the direction and advice given by [Mr Z] and did so without question”. Nor, it was asserted, could there be an evidentiary basis for the trial Judge’s findings that the wife was submissive and acquiescent to the direction of the solicitor. It was asserted, the matter having proceeded by way of written submissions, that the solicitor was denied an opportunity to respond to any proposed reliance on observations made by the trial Judge, nor was the finding made by the trial Judge urged on him in the written submissions of the husband.
The husband’s principal submissions in paragraphs 13 to 21 set out the three bases on which the claim for costs against the solicitor were agitated:
·that his conduct of the proceedings constituted a level of negligence or dereliction of duty;
·that the solicitor had an improper purpose and the litigation was being conducted to put pressure on the husband’s family to settle and thus was an abuse of process; and
·that the solicitor had continued the claim unreasonably when there was no prospect of success.
We accept that at no point in the husband’s principal submissions to the trial Judge did his senior counsel suggest that the wife was subservient to the solicitor, nor did the submissions make any reference to the wife’s evidence in the witness box. Further, the husband asserted the improper purpose in conducting the litigation was not only that of the solicitor but also that of the wife.
At its highest, in his submissions in reply, senior counsel for the husband submitted that nothing had been said by the solicitor to indicate he had sought permission from the wife to fully respond to the allegations made in respect of the costs application or that the wife’s permission had been refused (husband’s costs submissions in reply, paragraph 7). We do not consider that submission could have alerted the solicitor to seek leave to file further submissions on the topic of the wife’s demeanour.
Consequently, we accept that the solicitor was not on notice of the need to address in his written submissions any material going to the wife’s sworn evidence in the witness box or observations of her in the Court.
the trial Judge’s findings about the wife’s demeanour and attitude
We think it appropriate at this point that we should again set out paragraph 12 of the trial Judge’s costs judgment:
Section 117(2A)(g) of the Act provides scope for me to consider ‘such other matters’ as I consider relevant. As matters now stand, [Mr Z] is no longer her solicitor. The impression I had from the whole of the proceedings having observed the wife in court and listened carefully to her evidence before me was that she naively compliant to the direction and advice given by [Mr Z] and did so without question. Sufficient dialogue was exchanged in court (some of which is referred to in the submissions of [the husband’s senior counsel]) such as to alert any reasonable and vigilant litigant to what may be seen as obvious short comings to the application. It seems to me, perforce the conduct of the whole proceedings, that the wife was submissive and acquiescent to the direction of [Mr Z] and otherwise to her legal and forensic advisors.
relevant law – in court observations
We were referred to a number of authorities dealing with the principles of natural justice. Those principles are not in doubt and it is unnecessary that we refer extensively to the authorities cited on behalf of the solicitor.
We were also referred to natural justice considerations arising in cases involving trial Judges’ treatment of in court observations (see Ucar v Nylex Industrial Products Pty Ltd (2007) 17 VR 492; Inghams Enterprises Pty Ltd and Anor v Timania Pty Ltd and Anor (2005) 221 ALR 823). We directed counsel’s attention to the decision of the Full Court in Zantiotis & Zantiotis (1993) FLC 92-367 at 79,837. There the Full Court said:
There have been a number of reported cases where a Trial Judge has made observations of a party or a witness outside the witness box. Most of those cases were reviewed by the Court of Appeal of the Supreme Court of New South Wales in the case of Government Insurance Office of New South WalesvBailey (1992) 27 NSWLR 304. The headnote in that case says that it held in that case that:
‘Judges may make their own observations of witnesses outside the witness-box, but if these observations are to have a significant influence on the decision, counsel must be informed and given adequate opportunity to respond. Otherwise (per Kirby P) there will be a breach of the requirements of procedural fairness.’
The headnote also says that the Court of Appeal followed the South Australian cases of MinagallvAyres [1966] SASR 151 at 156, Jobstv Inglis (1986) 41 SASR 399 at 417 and Angaston and District HospitalvThamm (1987) 47 SASR 177 at 178-179. In the lastmentioned case King J. said at pp. 178-179:
‘The principle of law which was expressed in Minagall v Ayres and which was accepted by the judges who constituted the Court in Jobst v Inglis, is expressed in a passage in the judgment of Napier CJ, with whom Travers J agreed, at 156 of the report. It is as follows:
“But, while we agree with Hogarth J, we desire to guard ourselves against being understood as laying down any absolute rule upon the subject. It seems to us that it is a matter of what we should regard as ‘fair play and common sense’. The condition upon which a judge is at liberty to take notice of what he has seen for himself is that the parties should know or be informed of what he has noticed, and have an opportunity of answering or dealing with it.”
The rule, as appears from the passage cited, is not to be regarded as absolute in the sense that it must be applied rigidly to every observation which a judge might make of a party during the course of a trial outside the witness-box. Something will depend, no doubt, on the circumstances of the particular case and upon the significance of the particular observations. It is clear, however, that where the judge makes observations of the actions or demeanour of a party, which actions and demeanour are not observable by counsel, and makes use of those observations in a way which has a significant influence upon his decision of the case, he is required in justice, before making such use of those observations, to make those observations and the possibility of his using them in the course of his judgment known to counsel at a stage of the hearing at which counsel still has an opportunity of dealing with them in a proper and effective way.’
discussion
In this case, the solicitor was not alerted to the fact that the trial Judge would rely on in court observations of the wife (if his Honour’s observations in paragraph 12 were not confined to his observations wife’s evidence in the witness box).
Our reading of paragraph 12, in which his Honour refers to “[t]he impression I had from the whole of the proceedings”, as well as the reference to senior counsel for the husband’s submissions (which were not directed to the wife’s evidence) causes us disquiet. We are unable to accept the submissions made by senior counsel for the husband that his Honour’s remarks were confined to observations of the wife in the witness box.
We are therefore satisfied that there is, prima facie, merit in this complaint. However, as we noted at the commencement of our reasons, that conclusion does not determine this appeal. We turn therefore to consider, as submitted by the husband’s counsel, whether the qualification to the principles enunciated in Stead v State Government Insurance Commission apply.
In Stead v State Government Insurance Commission Mason, Wilson, Brennan, Deane and Dawson JJ at 145 explained the relevant principle:
The general principle applicable in the present circumstances was well expressed by the English Court of Appeal (Denning, Romer and Parker L.JJ.) in Jones v. National Coal Board, in these terms:
‘There is one thing to which everyone in this country is entitled, and that is a fair trial at which he can put his case properly before the judge. ... No cause is lost until the judge has found it so; and he cannot find it without a fair trial, nor can we affirm it.’
That general principle is, however, subject to an important qualification which Bollen J. plainly had in mind in identifying the practical question as being: Would further information possibly have made any difference? That qualification is that an appellate court will not order a new trial if it would inevitably result in the making of the same order as that made by the primary judge at the first trial. An order for a new trial in such a case would be a futility. (footnote omitted)
As we have earlier set out, the trial Judge, in paragraph 18 of his costs judgment, clearly enunciated the bases on which a costs order could be founded. We are satisfied that the trial Judge’s crucial findings to support the costs orders were as summarised by him in paragraph 91 of the costs judgment. Those were the findings earlier made by his Honour in paragraphs 30, 31, 32 and 33 of the costs judgment. It is unnecessary we repeat those findings. None of the findings referred to are dependent on his Honour’s in court observations of the wife.
While we have found the natural justice challenge is established, we accept there is no utility to the costs application being remitted for rehearing on this basis alone. For reasons we will more fully explain in our overall conclusions, we accept that the trial Judge’s findings, based on a careful consideration of the evidence that the solicitor acted unprofessionally and without due regard to the prospects of success of the litigation are compelling. Thus, we see no practical utility in a new trial. Accordingly, we would not allow the appeal on this ground.
The jones v dunkel challenge (ground 5)
This ground simply asserts that the trial Judge was in error in relying on the principles set out in Jones v Dunkel to draw an adverse inference against the solicitor. This claim is intrinsically linked with the trial Judge’s treatment of the question of improper purpose. We have already determined that the evidence relied on by the trial Judge to reach his conclusion of “improper purpose” was unsafe. In these circumstances, it is unnecessary that we consider his Honour’s reliance on his Jones v Dunkel determination which was clearly related to the “improper purpose” findings.
Asserted lack of adequate reasons (ground 6)
submissions
The challenge mounted on the basis of lack of adequate reasons was limited to his Honour’s determination that the costs of the applications of 28 March 2003, 14 May 2003 and 16 July 2003 be paid by the solicitor. In the written submissions no specific arguments were advanced to support this ground. Rather, the ground of appeal as appearing in the Amended Notice of Appeal was simply repeated in the submissions.
In his oral submissions, counsel for the solicitor acknowledged the authorities dealing with reasons for costs orders, including the decision of the High Court in Penfold v Penfold (1980) 144 CLR 311 but sought to distinguish those cases from a case where an order is made against a non-party to the proceedings. He acknowledged in the former case only brief reasons may be given to support a costs orders.
It was further asserted in oral submissions on behalf of the solicitor that the application heard on 28 March 2003 for an adjournment had been made on the basis that the late Mr Udorovic QC had been required to withdraw from the case because of a personal relationship with the husband’s accountant and in the end the application for adjournment was abandoned (transcript, 6 May 2009, paragraph 22). We think counsel for the solicitor has confused the application of 26 March 2003 when the late Mr Udorovic QC appeared and the application of 28 March 2003 when Mr Maxwell QC, as he then was, appeared for the wife.
In respect of the unsuccessful application of 14 May 2003, it was asserted that the wife was alleging inadequate discovery by the husband, and insofar as the order in respect of 16 July 2003 was challenged, there was a general assertion made that his Honour’s reasons were inadequate.
trial Judge’s reasons for the costs awarded in the discrete applications
At paragraph 96 of his reasons, the trial Judge referred to an application by the wife heard on 28 March 2003. It was unnecessary for the trial Judge to give reasons on 28 March 2003 because the wife’s application that the proceedings be adjourned generally was abandoned by Mr Maxwell QC (as he then was).
In dealing with this application the trial Judge referred to and accepted the submissions of senior counsel for the husband (both the substantive submissions and costs submissions in reply).
Adopting what was said by by McColl JA in Lemoto that costs proceedings should not turn into “satellite litigation” we accept the practicality of the course adopted by the trial Judge in respect of the discrete applications, including this application, particularly where costs had been reserved. A careful reading of the submissions of senior counsel for the husband explain the basis that the adjournment was sought was on an asserted alleged failure of the husband to disclose his financial position. It is clear from the history of the matter, including the trial Judge’s finding, not disputed, that the solicitor had assured the Court the matter was ready for trial in 2002 and his failure to inspect documents made available to him, were sufficient and adequate reasons to require the solicitor to pay the costs of the husband thrown away by the aborted application of 28 March 2003.
The husband’s senior counsel’s written submissions specifically sought costs thrown away in respect of the application of 14 May 2003 against the solicitor. It was noted no evidence had been called by the wife to support the assertion that the husband had failed to produce relevant documents, including any evidence from the solicitor “who as the solicitor at the helm of the matter, could have given such evidence” (husband’s costs submissions, paragraph 59).
We are satisfied, in these circumstances, the trial Judge did not err in making an order that the solicitor pay the costs of that application on a party/party basis, and that his reasons, which adopt senior counsel for the husband’s submissions, are adequate.
In dealing with the application made on 16 July 2003 that the trial Judge be disqualified from further hearing the matter, his Honour noted that the submissions of senior counsel for the husband accurately summarised the background. His Honour found the application to be entirely without merit and that the solicitor should pay the costs on an indemnity basis.
At paragraph 104 of his costs judgment, the trial Judge referred to his separate judgment relevant to this issue and noted there was no appeal from his order.
In his costs submissions, counsel for the husband referred to submissions of a prolix nature being filed by the solicitor in support of this application and that supplementary submissions were filed without notice on 21 July 2003 which “called into question the relationship between Senior Counsel for the Husband and [the trial Judge]” and the consequential necessity for the adjournment of the application for other counsel to be retained to argue the matter.
Senior counsel for the husband also referred to his Honour’s finding that the disqualification application amounted to an abuse of process. Senior counsel referred to the trial Judge’s findings, including his findings in paragraph 38 of his disqualification judgment, that portion of the written submissions of the solicitor in support of the application were intemperate and offensive. It was not in dispute that this application was personally argued by the solicitor.
In his disqualification judgment the trial Judge again set out an extensive history of the litigation which had occurred to that point in the proceedings and referred to his earlier reasons in refusing an adjournment on the basis of lack of adequate disclosure. His Honour pointed out that when he had expressed preliminary views no objection had been taken by the wife’s counsel, an experienced practitioner in the jurisdiction. The trial Judge found it was an abuse of process to seek to re-litigate matters determined in the first disqualification application brought. In the alternate, he noted no contemporaneous complaint was made by the wife’s solicitor and that failure to do so constituted a waiver.
His Honour specifically recorded in his disqualification reasons that comments made in the submissions annexed to the application by the solicitor were not to be attributed to the wife, but rather were matters for which the solicitor was responsible. His Honour recorded that the solicitor forwarded an apology to the trial Judge (which correspondence had become an exhibit) for the use of some language in his submissions.
At paragraph 61 of his disqualification reasons, the trial Judge, having earlier set out the principles to be applied in a disqualification application found in the judgment of Gleeson CJ, McHugh, Gummow and Hayne JJ in Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 at 348, said:
It appears to me that the drafts person of this particular application has mis-applied the law and mis-applied the evidence. In my view, the ‘unsubstantial objection’ advanced falls far short of the required standard of persuasion and gives rise to cause for concern as to its professional propriety. That does not necessarily fall at the feet of the wife, but may, subject to further submissions, be the responsibility of others.
Later in his reasons the trial Judge dealt with the supplementary submissions by the solicitor directed to his asserted close relationship with the husband’s counsel. The trial Judge noted the arguments advanced were “without foundation”, and said that the wife’s counsel had not made objection contemporaneously with exchanges between the trial Judge and counsel where he was asserted to be critical of the solicitor.
As noted in senior counsel for the husband’s written costs submissions dated 5 March 2008 (particularly paragraphs 71 and 73) a number of findings were made by the trial Judge about this application. He referred to paragraph 29 of the disqualification judgment and submitted: “[t]he bringing of the process found to be an abuse of the Court as being misconceived, irresponsible and frivolous necessarily reflects upon the professionalism and competence of the wife’s solicitor”.
At paragraph 106 of his costs judgment, the trial Judge commented “[t]he minimal response of [Mr Z] itself reveals the inarguable position taken on behalf of the wife” and went on to say he proposed that the solicitor pay the costs personally and on an indemnity basis.
conclusions – reasons challenge disqualification application
We are satisfied his Honour’s reasons for the costs order made in respect of the disqualification application are discernable from both his disqualification judgment and his Honour’s incorporation of the submissions of the husband’s senior counsel and acceptance of them into his costs reasons. The path of reasoning leading to his Honour’s ultimate conclusion is abundantly clear. We also note that his Honour had earlier in his reasons set out the appropriate authorities applicable to awarding costs on an indemnity basis, and that his findings in respect of this application fell within the criteria enunciated in those cases. Thus, we find no merit in this challenge.
Conclusions
While we have determined:
·the trial Judge was in error in relying on “in court” observations of the wife and the conclusions he drew from those observations without providing the solicitor with an opportunity to respond to such observations and what might be inferred from them; and
·the finding of improper purpose was unsafe
it remains for us to consider whether the findings leading to those determinations were integral to his Honour’s orders which are the subject of the appeal. The relevant order is Order 1 of his Honour’s orders. We now repeat that order:
(1)That [Mr Z] the former solicitor for the wife in these proceedings do pay 60 per cent of the costs of the husband on an indemnity basis as agreed or in default of agreement as assessed under the Family Law Rules 2004 (Cth) (“the said Rules”) such costs being those incurred on 2 April and 3 April 2003, 12, 13, 14, 26, 27 and 28 May 2003, 31 July 2003 and 1 August 2003.
We have already determined the trial Judge’s findings in paragraph 12 would not, of themselves, warrant a retrial.
One reading of paragraph 8 of the trial Judge’s reasons, in isolation, supports a conclusion that the exercise of his Honour’s discretion in making the costs order was based on circumstances “in combination” and that the ultimate orders made were not founded on a single basis, but a number of bases. However, when read in context with the immediately preceding paragraph, we think it is clear that his Honour was referring to the matters to be considered in s 117(2A) as circumstances which warranted departure from the general provision found in s 117(1) that each party to the proceedings pay their own costs.
We observe that s 117(2) does not mandate that more than one or all of the matters in s 117(2A) must be found to warrant a departure from s 117(1). This was explained by the Full Court in Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish and Anor (2005) 33 Fam LR 123 at paragraph 41 as follows:
… Nowhere in subsection (2A) or elsewhere in section 117, is there any prescription that more than one factor must be present before an order for costs is made nor of comparative weight of the factors set out in subs (2A). As a consequence, there is nothing to prevent any factor being the sole foundation for an order for costs.
At paragraphs 18.3 to 18.5 of his reasons the trial Judge set out three bases any of which if established would support the making of a costs order against the solicitor. Although his Honour did not thereafter deal discretely with each of the separate bases and make findings relevant to those individual bases, we are satisfied that failure to proceed in that manner was not fatal to the actual order made.
We have given careful regard to his Honour’s clear and unambiguous findings in paragraphs 78 and 82 of the costs judgment, but particularly to paragraph 91. We have earlier set out these paragraphs of his Honour’s reasons. There his Honour concluded the solicitor’s undue protraction of the proceedings alone was sufficient to justify the order made (in respect of the days of the substantive proceedings). Later in that paragraph, as we have earlier in these reasons more fully canvassed, the trial Judge confirmed the findings he had relied on to support the order (paragraphs 30 to 33). As we have just explained, it was not necessary for his Honour, a very experienced trial Judge who had conducted the lengthy hearing and whose reasons disclose he was well aware of the relevant statutory provisions, to have found multiple factors to justify the costs orders made.
We are comfortably satisfied that the solicitor’s overall conduct of the proceedings demonstrated failure to adhere to r 19.10(a), (c) and (d). That basis for the making of a costs order referred to in paragraph 18.2 of the trial Judge reasons is unchallenged in this appeal.
Although we accept that his Honour made a finding of improper purpose by the solicitor in the maintenance of the proceedings if that had been the core finding relied on to support the costs order it is inherently unlikely that his Honour would have ordered, as he did, that only a percentage of the costs be paid. Rather, a principled approach would indicate the solicitor would have been ordered to pay all the costs of the proceedings.
The third identified basis which supported the making of an order was, in our view, clearly established in the findings of the trial Judge. We have already explained that we found merit in the submission of senior counsel for the husband that Order 1, being limited to 60 per cent of the husband’s assessed costs for specified days on an indemnity basis reflects his Honour’s conclusions that the solicitor’s conduct in maintaining the proceedings with disregard of their prospects of success was the core finding on which that order was based. It is implicit in that order, and having regard to paragraphs 23, 24, but particularly paragraph 95, of his Honour’s reasons, the recognition that, at least up to the commencement of the hearing, or perhaps some little time after the proceedings actually commenced, they may have appeared not to be utterly hopeless. But it was the failure of, or disregard by the solicitor, a very experienced practitioner in the jurisdiction, to conclude that the proceedings had no prospect of success, and his failure to advise discontinuance, or for him to withdraw from them, within a reasonable time, which justified the order. No error having been established in respect of that serious finding, notwithstanding the errors we have identified, the appeal should be dismissed.
Costs
At the conclusion of the hearing we sought submissions from counsel in respect of costs of the appeal. Counsel for the solicitor sought an opportunity to file written submissions on costs after delivery of our reasons for judgment. We will accordingly make provision in our orders for the filing of such written submissions.
I certify that the preceding two hundred and four (204) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court.
Associate:
Date: 29 March 2010
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