Barrister Guy Waterman reflects upon a case which provides a useful guide to the circumstances where solicitors may expose themselves to a cost order being sought against them personally.
Weldon v Levitt (No.2)  FCCA 436
In this case following the conclusion of the substantive proceedings the Respondent Wife applied for costs against the Applicant Husband and his solicitors. The Court declared pursuant to S 90RD that the Applicant and Respondent were never in a defacto relationship.
The Respondent Wife sought the following cost orders:
- That the applicant and his solicitors, D & M Lawyers be jointly and severally liable to pay the respondent’s costs of and incidental to these proceedings on an indemnity basis being the sum of $42,579.00; or,
- Alternatively, that the Applicant and his solicitors D & M Lawyers be jointly and severally liable to pay the Respondent’s costs and disbursements on a party/party basis to be agreed or in default as assessed (Para 4).
Judge Riley identified the relevant legislation (Para 7), relevant law and indemnity costs (Para 8), family law authorities on costs (Paras 9-14), the financial circumstances of the parties (Paras 15-17) and the relevant factors to be considered pursuant to Section 117(2) of the Act (Paras 18-31).
Riley J in considering matters referred to above found inter alia as follows:-
- That the Applicant instituted proceedings for an ulterior motive, namely in retaliation for the Respondent seeking Child Support from him; and,
- That the Applicant solicitor engaged in misconduct in relation to the preparation and swearing of affidavits; and,
- That the Applicant brought the proceedings in willful disregard of the known facts. That is, the Applicant knew that he did not live with the Respondent for 13 years (Para 33).
Notwithstanding the above findings, Riley J did not ultimately consider that indemnity costs were warranted on the basis that a defacto relationship is a complex legal question that even family lawyers find difficult and that the case was not as black and white as the ultimate conclusion might suggest (Para 34).
Her Honour further found that:
“It is also the case that these proceedings are different from the average family law proceeding, where the dispute is typically about questions of degree, such as the amount of time children should spend with each parent or the proportion of the property pool that should go to each party. The present proceedings did not involve any questions of degree, but concerned whether a de facto relationship existed at all. Unlike most family law proceedings, it was inevitable that one party would be entirely successful and the other would be entirely unsuccessful” (Para 35).
Her Honour further found that both parties were in constrained financial circumstances (Para 36).
In relation to the question of an order being made against the Applicant and his former solicitor on a joint and several basis her Honour found that that would expose the solicitor to greater liability than their conduct warrants (Para 37).
Her Honour made orders whereby the Applicant pay 75% and his former solicitor pay 25% of the Respondent’s costs on scale (Para 38).
The Judgment and the authorities cited provide a useful guide to the circumstances where the solicitors may expose themselves to a cost order being sought against them personally.
Keywords: Family Law – Property – costs application against the applicant and his former solicitors on an indemnity basis – the court having found that parties were never in a de facto relationship – costs awarded against the applicant and his former solicitors.
Guy Waterman was admitted as a Solicitor and practised extensively in the area of De Facto and Family Law and as a Mediator prior to being called to the Bar in 1993. Guy has continued to practice in the Family Law/De Facto areas as a Barrister and Mediator and during this time and has presented at seminars dealing with Family Law & Practice – Disclosure, compliance with Orders and making the most of financial experts in financial matters in conjunction with Joe Box, forensic accountant and Greg Jorgenson, registered valuer at BAQ, and Cost – Orders, Offer and Risks, How to Deal with a Client Raising That The Solicitor For The Other Party Has A Conflict Of Interest And Should Be Restrained From Acting, and Family Law Legislative Reform and Case Update.
Contact Guy at [email protected]