Appellant v Respondents

Appellant v Respondents - [2015] VSC 37 - VSC 2015 case summary — Zoe

[24]

I draw that to the court's attention because in my submission it should be said that that offer has not been accepted, but the court does have power under 3.4.45(2) to otherwise order or depart from what is laid down by the section as the prima facie consequence of a reduction of 15 per cent or more.

But not only pursuant to 3.4.45(2) does the court have the power to depart from that, but the court has power in the Civil Procedure Act, of course, itself to make costs orders that follow from any departure from the requirements of that Act.[12]

If the reality is that the other side are saying, '$1,000 is an appropriate reduction', and we're saying, 'Not only will we say $1,000 is fine, but $5,500 is fine', and that's rejected, then the court should draw appropriate conclusions about the genuineness of the position of the applicant.

It would be - if there is any scintilla of genuineness in the offer which is made 12 days ago, then given the power of the court to deal with costs, it would be appropriate, in my submission, that - no, I hear my learned friend say (indistinct) this offer hasn't come to his attention and that is troubling, but the court ought not spend further time, in my submission, if the parties are genuinely that short distance apart, and the court ought to proceed to deal with questions of the costs of the taxation rather than to spend further time in dealing with items and an item - a detailed review, and to have my learned friend correct what were inappropriate objections, amongst other things. But - - -.[13]

No, I am inviting the court to rule that an open offer having been made, that the respondent accepts a reduction of $1,000, that open offer having been made by the applicant, the court should fix that figure as the relevant reduction, and you can't have your cake and eat it too effectively, and seek to obtain a benefit in the eyes of the court by making an open offer without being prepared to meet the consequences, and it would seem that that's what the applicant is now seeking to do, and our counter offer, which is couched in reasoned terms, goes beyond, and accepts the $1,000 as an appropriate reduction, but the counter offer is effectively in respect of the costs over and above the $1,000.

So where the court has, what is put forward as an open offer, with a figure nominated and the figure being accepted by the other party, and the court always retaining discretion in respect of costs at any point, whether an offer of compromise is accepted or not, then it would be appropriate for the court, rather than spending time and the court resources, in proceeding to tax to determine whether it should be $1,000 or whether it should be $800 or whether it should be $1,200, whether it should be $3,000.

Both parties are, in an open way, saying to the court $1,000 is an appropriate reduction. We are only at issue, we are only at odds with one another in respect of costs, and absent total consent, the costs are always in the discretion of the court.

So that's why I submit that where there is unanimity as to the quantum, it's not desirable to spend more time in seeking to refine whether it should be $1,000, $1,200 or some other figure of a reduction because we can bypass that and go straight to the real issue, the real issue being the cost of the taxation because that's all that the parties are at issue about at this stage.[14]

[28]

I doubt that there is anything more that can be said that is going to affect the decision that I make. I really think that both parties have had broad range and much time has been spent through the whole matter with parties making lengthy submissions on each side and there has been little or no ground given by either party. It has been a hard-fought and difficult issue right from the start.

My impression has been that the solicitor has from the start taken umbrage at the fact that his bills have been reviewed. The summons that was issued at the time was a summons which was a fairly standard form for summonses for review under the Act and it seems to me that from the start of the commencement of the proceedings under 3.4.38 of the Act that the cost lawyers have sought orders, they have in fact not sought orders pursuant to the section but sought orders outside the section broadly.

The objections that were drawn at that time largely arose because of a failure to comprehend the work that was done, largely because access to the file was prevented and my impression is that it was really only as a result of the court's directions that access to the file was in fact granted, and then there were issues about it being delivered and taken away and it had to be produced to the court rather than the solicitor making it available at their offices. There have just been disputes and issues all the way through this.

It has also been a standard practice of people bringing applications under s 3.4.38 and 40, or the respondents in 3.4.40 to attack the costs agreement and costs disclosure. It is not helpful for the parties to behave in that way, and although there may be disclosure breaches they only in fact at the end of the day go to a reduction of the bill under 3.4.17.

The conduct all the way through has been repeated. The fact that these solicitors at the time of the application on 24 September having heard my ruling - on 24 September 2012 - having heard my ruling chose not then to seek to refer the matter across the road, rather the matter proceeded through taxation and was almost complete before they repeated that application, was not helpful. The late affidavits of Mr Rubenstein and Mr Armitage again were controversial and difficult and really did not help again, and all in all the conduct of the parties has not assisted the court very much in the whole taxation.

However, when I consider that in fact this has resulted in an order that the respondent is to repay moneys that the respondent has had the use of for over three years and has seriously resisted making any offer other than basically a payment of costs, in the two offers that the respondent appears to have been made, or the three offers the respondent has been made have been made as all-in offers for small amounts of costs that don't nearly reflect the costs of the proceeding at any time when the offers were made. It cannot in my view be said to be reasonable to award the respondent any costs in this matter.

The question arises whether the applicant should recover any or part of the costs of the taxation, and in my view the applicant should recover some costs of the taxation.

The costs that the applicant will recover are 50 per cent of its costs, save for the costs of the referral to Ferguson J under Rule 63.51 and also the applicant will not recover the costs of today.

Each party will bear their own costs in relation to the costs of the referral to Ferguson J and will bear their own costs of today. They are the orders that I intend to make.[16]

[43]

(1) If any party interested objects to an order of the Costs Court constituted by a judicial registrar -

(a) allowing or disallowing, wholly or in part, any item in a bill; or

(b) allowing some amount in respect of any item -

the Costs Court constituted by that judicial registrar, on the application of that party, may reconsider the order.

(2) If any party interested objects to an order of the Costs Court constituted by a Costs Registrar (who is not a judicial registrar) or by a Deputy Costs Registrar -

(a) allowing or disallowing, wholly or in part, any item in a bill; or

(b) allowing some amount in respect of any item -

the Costs Court constituted by a judicial registrar, on the application of that party, may review the order.

(3) An application under paragraph (1) or (2) shall be made by notice.

(4) The notice under paragraph (3) shall -

(a) state by a list each item in the bill in respect of which the party objects to the order of the Costs Court constituted by a judicial registrar ...; and

(b) state specifically and concisely the grounds of objection to that order and the order sought in its place.

(5) Within 14 days after the making of the order which is the subject of reconsideration or review -

(a) the notice under paragraph (3) shall be filed; and

* * *

(c) a copy of the notice shall be served on each party interested.

(6) Upon the application, the Costs Court constituted by a judicial registrar -

(a) shall reconsider or review the taxation upon the objections stated in the notice;

(b) shall make an order confirming, setting aside or varying the taxation or make such further or other order as may be necessary; and

(c) may make any other order the case requires.

(7) For the purposes of the reconsideration or review, the Costs Court constituted by a judicial registrar may receive further evidence in respect of any objection.

(8) The Costs Court constituted by a judicial registrar may, and if required by any party within seven days after the order is made under paragraph (6) shall, give written reasons for the decision in respect of any item in the bill to which objection was taken in the notice.

[109]

The legislative power of Parliament to authorise the exercise by officers of the Family Court of part of its jurisdiction, powers and functions is subject to some limitation, as is the power of the court to delegate some part of its jurisdiction, powers and functions whether in the exercise of its rulemaking power under s 123 of the Family Law Act 1975 (Cth) ("The Act") or in the exercise of its inherent jurisdiction. The limitation is that the legislative power and the power of delegation cannot be exercised in a manner that is inconsistent with the continued existence of the Family Court as a Federal Court constituted under Ch III. In other words, both the legislative power and the power of delegation must be exercised in conformity with the requirement that the Court's Federal jurisdiction, powers and functions are to be exercised by a court whose members are judges appointed pursuant to s 72 of the Constitution.

It seems to us that, so long as two conditions are observed, the delegation of some part of the jurisdiction, powers and functions of the Family Court as a federal court to its officers is permissible and consistent with the control and supervision of the Family Court's jurisdiction by its judges. The first condition is that the delegation must not be to an extent where it can no longer properly be said that, as a practical as well as a theoretical matter, the judges constitute the court. This means that the judges must continue to bear the major responsibility for the exercise of judicial power at least in relation to the more important aspects of contested matters. The second condition is that the delegation must not be inconsistent with the obligation of a court to act judicially and that the decisions of the officers of the court in the exercise of the delegated jurisdiction, powers and functions must be subject to review or appeal by a judge or judges of the court. For present purposes it is sufficient for us to say that, if the exercise of delegated jurisdiction, powers and functions by a court officer is subject to review or appeal by a judge or judges of the court on questions of both fact and law, we consider that the delegation will be valid. Certainly if the review is by way of hearing de novo, the delegation will be valid.[38]

[125]

76 As with my consideration of appeal grounds 2(a) and (b), it is once again necessary to pay careful regard to the manner in which AJH conducted the proceedings before Gourlay JR. I have set out earlier in this judgment the exchange which took place between counsel for AJH and the Judicial Registrar on 17 February 2014. That exchange was directed to the circumstance of Gourlay JR ordering AJH to pay Mathieson the sum of $1,000. Indeed, counsel for AJH urged the Judicial Registrar to adopt that very course. The transcript of the exchange speaks for itself. The inference is irresistible that counsel for AJH wished to allay any concern which the Judicial Registrar may have entertained that by ordering AJH to pay Mathieson the insignificant sum of $1,000, Mathieson would automatically be exposed to a cost liability by falling well short of the 15% threshold prescribed by s 3.4.45(2)(a) of the LPA. Doubtless, for this reason, counsel was at pains to point out to the Judicial Registrar that the court had a discretion not to order Mathieson to pay costs notwithstanding that the amount of $1,000 fell well short of the 15% threshold. This inference is supported by examination of the submissions which were advanced by counsel for AJH on the question of the costs of the proceeding once the Judicial Registrar had indicated her intention to make an order that AJH pay Mathieson the sum of $1,000. In stark contrast to the submissions advanced before Wood AsJ and before myself, counsel for AJH did not submit that by reason of the Judicial Registrar having ordered AJH to pay Mathieson a sum equivalent to 2.8% of the costs in dispute, Mathieson was liable to pay AJH's costs by reason of falling well short of the '15% Rule' prescribed by s 3.4.45(2)(a) of the LPA.[42] Such a submission would have been plainly untenable given the earlier exchange between himself and the Judicial Registrar in which he had been at pains to point out that the Judicial Registrar had a discretion to depart from the prima facie position prescribed by s 3.4.45(2)(a).

[129]

HIS HONOUR: It does appear on a fair reading of that submission from Mr Sandbach that he was - he was positively submitting to the Judicial Registrar that the, for want of a better term, the 15% rule did not tie her hands so to speak if an order was made for a reduction of less than 15%.

MR VAN de WIEL: Provided there were satisfactory sustainable reasons to do so. Now that's not expressed, but that would have to be the logical basis of what my learned friend, Mr Sandbach, said.[43]

...

HIS HONOUR: But Mr Sandbach has made a submission which I understand it's an agreed position at the Bar Table, the upshot of the submission at Court Book 246, line 13-23, was an invitation to the Judicial Registrar that she was not constrained by the 15% rule, if an order was made. If an order was made in favour of Mathieson for less than 15%. And that was in the context that we now - it now appears that Mr Sandbach referring to your client's offer all in at $5,500.

MR VAN de WIEL: Yes.

HIS HONOUR: Now all that's being ordered by the Judicial Registrar is $1,000.

MR VAN de WIEL: Yes.

HIS HONOUR: Alright, so you've got another $4,500 there.

MR VAN de WIEL: Yes.

HIS HONOUR: A fortiori in that circumstance, if the invitation was being extended, if you make an order for $5,500, the rule - the 15% rule doesn't apply. A fortiori, if what flows is $1,000 the invitation to depart from the 15% rule must be even stronger. Now you can't walk away from that Mr Van de Wiel.

MR VAN de WIEL: I'm not walking away from it, I'm not ---

HIS HONOUR: Well, you need to address it.

MR VAN de WIEL: I'm addressing it, what I submitted to your Honour earlier was valid reasons, not fallacious reasoning, not conjecture, not reasons which cannot be considered and found to be logical. For example, to say, well I will reduce it because you've been paid three years previously and therefore I will reduce it, is fallacious reasoning. To say, because you've gone to the Supreme Court and challenged the basis upon which I was originally considering matters albeit wrong I will hold against you ---

HIS HONOUR: Yes.

MR VAN de WIEL: --- To say because there's been a history of offers and you have not accepted those within a particular time when counteroffers were made and also not accepted is fallacious, and we say that if you look at all of the reasons which are considered to reduce the ordinary rule under 44.45, they're not reasons which can withstand appropriate scrutiny.[44]

[139]

The respondent argues that they should not be penalised for waiting until the conclusion of the taxation before requesting a referral of questions to a judge. However, in their own written submission it is put that the referral was the preferred course over reconsideration by the Judicial Registrar, then review to the Associate Judge who decided LIV v Keen, and then in all likelihood an appeal to a judge would follow.[48] This is precisely why a referral of questions was the more appropriate course and the earlier the better after the first ruling was made by the Judicial Registrar on 24 September 2012. Even then the respondent failed to raise the issue in the six months prior to 11 February 2013 when the matter was next listed to resume. An application for a referral could have been initiated in the interim period. The matter then ran on 11, 12 and 13 February 2013 to conclusion without the referral application being made.

Sections 22 and 24 of the Civil Procedure Act 2010 are pertinent in relation to reasonable endeavors to resolve matters, and ensure costs are proportionate. As discussed above, the case ran for four more days before the respondent asked for a referral of questions to a judge. Further, the respondent also did not convey an offer to refund $1,000 at the start of the proceedings even though it was conceded by counsel during the hearing that a refund was likely, and their offer of 10 February 2014 made it clear they would have accepted such a proposal if it had been made at the outset of the proceeding.

Implicit in the reasons of the Judicial Registrar for the costs ruling are the issues surrounding the respondent's conduct in relation to inspection of the file, the offers made, and the delay in seeking a referral of questions to the judge. There are sections of the Civil Procedure Act 2010 that are germane to and underpinning these factors - the obligation to co-operate[49], make reasonable endeavours to resolve disputes[50], minimise delay and act promptly.[51]

At a glance

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Judgment (254 paragraphs)

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Legislation Cited (12)

Cases Cited (18)