Solicitor and client both liable for costs
Tang & Keats  FamCA 99 (25 February 2016)
The following is annotated. For full case:http://www.austlii.edu.au/au/cases/cth/FamCA/2016/99.html
- On the morning of 19 February, counsel for the wife applied for an adjournment of the final hearing. That application was formally opposed. The basis of the application (as put by counsel) was that:
- On 2 December 2014, in an interlocutory hearing, Bennett J had ordered that the wife file an affidavit by a qualified translator saying that the affidavit material (then relied upon) had been read and understood;
- Counsel had found “numerous errors” in the material (the final trial affidavit filed in January 2016) when an interpreter was used to assist the wife;
- Counsel said there had therefore been a significant change in the wife’s case;
- There were mathematical and accounting errors such that it was inadequate to simply rewrite the trial affidavit;
- “Almost every issue” needed to be rewritten with the approval of the wife.
- Thus, counsel said she could not do justice to the wife’s case on the material before the Court.
- Counsel for the husband then sought costs on an indemnity basis against the wife and/or the wife and her solicitor jointly and severally. The costs were said to be less than counsel’s usual commercial fee but around the amount set out in the rules of the Court. Along with his solicitor’s fees of 2 days’ attendances and his own preparation, counsel sought the sum of $10,100.
- Quantum is not really in dispute here. Counsel for the wife thought that a full day’s fees for the first of the two days was too much but she acknowledged that both counsel had worked all day and were still at the Court at its end. As for preparation by counsel, that issue could hardly be challenged because it was acknowledged by the wife that new material would be forthcoming and there would be a significant change in the wife’s case. The solicitor for the wife, to whose remarks I return in a moment, did not dispute quantum.
- Counsel for the husband submitted:
- The orders of Bennett J should have put the wife on notice about the interpreter;
- The wife’s trial affidavit was late;
- The entire event and preparation had been wasted because of the “failure to do things” but he was unable to submit where the fault lay;
- It should have been clear to the wife and her solicitor from the 2014 order that the affidavit should have been translated;
- The solicitor should be jointly responsible because the husband could not point to the wife having funds;
- It was submitted that the circumstances were exceptional and justified a departure from the usual rule that scale costs applied.
- Counsel for the wife submitted:
- The wife had not had the material translated and by inference, it was necessary for that to have been undertaken;
- The wife now did not agree with her own material; and
- The material was not in a form with which she agreed.
- Counsel said that she personally had had difficulty with the wife understanding the material and she had used a translator all day.
- Counsel for the wife acknowledged that she did not speak for the solicitor who was her instructor, and she later acknowledged that she had sought (but not apparently then obtained) a ruling from the Victorian Bar Ethics Committee as to her own position. Having said that, she did not seek to withdraw from the case nor resile from the fact that she acted for the wife. She said that she understood that the application for costs against the solicitor required the solicitor to be heard and she had spoken to her accordingly. The solicitor indicated she wished to be heard on the subject.
- I gave the solicitor an opportunity to get advice. She did not seek to adjourn the application for costs. She did not seek to have her own legal representation and at one point, I expressed concern that there were legal professional privilege issues that she had to consider. She pressed on.
- The solicitor then submitted the following:
- She had not been on the record for the wife when the Bennett J orders were made and she had not read them;
- She had never used a translator with the wife and thus by inference, had not needed one;
- She had received both written and oral instructions from the wife;
- She conceded “an error” was hers but not the “rest of the affidavit”.
- After a lunch break, the solicitor submitted:
- She was in a “difficult” position;
- She had been provided with the instructions as set out in the affidavit;
- The wife was aware of those instructions and aware of what was in the affidavit;
- The affidavit required by Bennett J in 2014 had said that the wife had had a reasonably high comprehension of English except for some difficult words.
- Critical to my determination is the fact that when the solicitor was asked what the Court should do, she replied that there should be “an apportionment of blame” for the affidavit. That must be viewed as a concession that the task was deficient.
- As to who should pay any costs if ordered, the solicitor left it up to the Court to decide.
- It must also be remembered that costs are not awarded by way of punishment of the unsuccessful party but rather are compensatory in the sense that they are awarded to ameliorate the expense of the successful party as a result of having been required to participate in the legal proceedings. Here, the husband is clearly out of pocket, was ready to proceed and challenged the wife’s material. It was the wife who was the applicant. (see Minister for Immigration and Multicultural Affairs v Vadarlis (No 2) (2001) 188 ALR 143 citing with approval Cretazzo v Lombardi  13 SASR 4 and Chilli v Abbott  FCA 70; (1981) 53 FLR 108).
- The striking concessions by counsel for the wife and the candid concession by the solicitor for the wife are matters which must be seen as justifiable circumstances to depart from the main principle relating to costs.
- The husband has been inconvenienced at a time when he had every right to consider that his trial was going to proceed. It would be unjust to make him pay his own costs (or even some of them) where the circumstances were as I have described.
- Chapter 1 of the rules of the Court provides the following in relation to responsibilities on lawyers:
[1.04] 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.
[1.06] The court must apply these Rules to promote the main purpose, and actively manage each case by:
(c) identifying the issues in dispute early in the case and separating and disposing of any issues that do not need full investigation and trial;
(e) setting realistic timetables, and monitoring and controlling the progress of each case;
(f) ensuring that parties and their lawyers comply with these Rules, any practice directions and procedural orders;
(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). (my emphasis)
Note: The court recognises that a lawyer acts on a party’s instructions and may be unable to establish whether those instructions are correct.
- Rule 1.08(2) was not addressed by the solicitor. I appreciate the privilege issue arises but it was not suggested that the wife had been asked to waive it. The solicitor did not seek to call evidence to show the instructions were adequately and properly obtained and did not need to be questioned, corroborated or enhanced. No response was made by the solicitor to the allegations about inadequate discovery.
- In relation to rule 1.08, the provisions of (a), (c), (e), (f), (h) and (j) are particularly pertinent here. The wife and the solicitor have failed in various ways, and for whatever reason, to enable the matter to proceed expeditiously. That is particularly so where the matter was set down in October after a discussion as to the nature of the issues in dispute. The criticism of the wife applies also to her lawyer.
- The law relating to the departure from the general principle about parties being ordered to pay scale costs must be seen also in the context of what the Full Court said in Prantage and Prantage  FamCAFC 105. This case is one in which the circumstances are exceptional. They justify a finding that an order for indemnity costs should be made.
- Chapter 19 of the Family Law Rules 2004 provides specifically for costs orders against lawyers. That provides that a person may apply for an order against a lawyer for costs thrown away during a case, for a reason including:
- <li “=””>(a) the lawyer’s failure to comply with these Rules or an order;
- The principles relating to making cost orders against lawyers has been considered in various cases (Cassidy v Murray  FamCA 91; (1995) FLC 92-633 at  Z & Limousin FamCAFC 59; (2010) FLC 93-433 at ). Relevantly here, what may be drawn from those cases is:
- The court should not make such an order without giving the person to be affected by the order an opportunity to be heard;
- 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;
- 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;
- 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.
- In this case, the solicitor has been given an opportunity to be heard. Whilst on the agreed facts, I could not find that this was serious professional conduct because I do not know the full extent of the evidence of explanation, the very concessions by the solicitor indicate that her task was not fulfilled in the way that Maxwell J described as an obligation towards a lay person. The fact that there was an issue about whether or not the evidence was translated seems to me to be secondary to the point that the work was not done in a way in which the client was entitled to expect. The extent to which the wife contributed to that dilemma has not been established but on any view, she has failed to provide detail which she should have. I do not consider I am in a position to “apportion” blame having regard to the restrictions on the solicitor because of professional privilege. I do consider that had counsel been engaged much earlier and the focus been on the discovery aspects, it is conceivable that this would not have occurred.
- The solicitor has also failed to fulfil her obligations under the rules of the Court as earlier outlined.
- This is a case where the husband should have his costs on an indemnity basis and that the wife and the solicitor should be jointly and severally liable.
<li “=””>(b) the lawyer’s failure to comply with a pre-action procedure;<li “=””>(c) the lawyer’s improper or unreasonable conduct; and<li “=””>(d) undue delay or default by the lawyer.