Fox v M.A. Kent & Associates B86/2000 [2001] HCATrans 503 (12 October 2001)

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Brisbane No B86 of 2000

B e t w e e n -

GARNETT ALAN FOX

Applicant

and

M.A. KENT & ASSOCIATES

Respondent

Application for special leave to appeal

KIRBY J

HAYNE J

TRANSCRIPT OF PROCEEDINGS

FROM BRISBANE BY VIDEO LINK TO CANBERRA

ON FRIDAY, 12 OCTOBER 2001, AT 1.23 PM

Copyright in the High Court of Australia

MR G.A. FOX appeared in person.

KIRBY J: We have not received any submissions from the respondent and I have a note that there will be no appearance for the respondent. Is that your understanding?

MR FOX: Yes, only from the list outside, though, your Honour. I have had no contact with the respondent. There has been no - - -

KIRBY J: So you are moving the Court ex parte on your own behalf and you have not notified the respondent of these proceedings, or have you?

MR FOX: Yes, they have been served with all documentation, your Honour.

KIRBY J: Very well. Well, we have read the written material and there is no need for you to repeat what you have put in the written material. You just tell us orally what you want to say in elaboration of what you put in writing.

MR FOX: Your Honour, I am sorry, could I just say to you that I suffer from industrial deafness and it could be that I - - -

KIRBY J: Yes. Well, if it at any time you do not hear what I have to say or what Justice Hayne has to say, if you just indicate that, we will repeat it. Do not worry about that. I am a little bit deaf myself.

MR FOX: Yes. One other problem too, of course. I have an eyesight problem which inhibits me reading at times, or at least I have to read slow, and I hope you will take that into consideration, please.

KIRBY J: Yes. We cannot extend the time, because there are other cases running today, but we will make sure that you get a fair hearing. Now, what do you have to say, Mr Fox?

MR FOX: I believe I can do it in 20 minutes, anyway. Thank you, your Honour. Your Honour, this application for special leave to appeal results from an order of the Full Court of the Family Court handed down on 1 December 2000. The reasons for judgment are shown at pages 45 to 76 of the application book. The need to seek leave to appeal is a result of a denial of natural justice and the prejudice which I have suffered as a result of the order. The prejudice is that the Full Court of the Family Court did not consider the relevant sections of the Family Court Act and the Family Law Rules and, indeed, the precedents which I relied upon during the course of my appeal to the Full Court of the Family Court.

This failure in itself was a denial of natural justice which I shall demonstrate to this Court during the course of these submissions. I understand that special leave to appeal is determined on the merits of my application to the Full Court of the Family Court. I would consider that the only way that the Court can properly consider this application is to peruse the evidence produced by me to the Full Court in my appeal. I submit that the merit is properly detailed in my outline of submissions to the Full Court of the Family Court, which is shown in the application book at pages 22 to 44. Can I continue?

KIRBY J: Yes, proceed.

MR FOX: Thank you. Together with my summary of arguments to this Court which is shown on pages 88 to 97 of the appeal book. The chain of events which caused this special leave to appeal application are detailed in the chronology which appears at pages 89 to 91 of the appeal book.

KIRBY J: Yes, we have had the appeal book. We have looked at the appeal book. We have gone through it carefully. We have read your submissions. We have also looked at the judgment of the Full Court, and the other documents in the appeal book. So we know all about what the case is concerning.

MR FOX: Thank you, your Honour. The Full Court failed to give any or proper weight to my submissions. I shall rely upon both of these documents in total in this application. I ask if I can expect this Court to read these documents without me reciting their contents. You have just told me that you have done that. I have been denied natural justice by the failure of the Full Court to properly appraise the two applications which were the subject of my application for costs against the respondent firm. There can be no natural justice if solicitors are at liberty to file applications, enforce respondents to retain legal representation to defend the matter, then fail to pursue these applications. It is not the fact that the applications were made to the Family Court on behalf of a client by solicitors, but the fact that the application prepared by the solicitors was so far outside of the parameters of the written law.

I shall now refer you to what would appear to be the errors in law of the orders of the Full Court, which are the reasons why I have suffered a denial of natural justice and prejudice. I shall briefly highlight the shortcomings of the Full Court order. For the purpose of expedience and easy identification, I shall refer to the two applications in question as the company's application and the contempt application. With respect to the company's application, the Full Court stated that I had not demonstrated that the application lacked lawful content and that I had not persuaded them that the Family Court did not have the power to grant the orders sought. I would ask you to please note the application book at page 60, between 5 and 35, where this is expressed by the court. I draw the Court's attention to the application book at pages 28, between 45 and 55, and page - - -

KIRBY J: Now, just pausing there. On page 60, which you referred us to - - -

MR FOX: On page 60, between 5 and 35, where this is expressed by the court.

KIRBY J: Yes, that is right. It is in paragraph 45, and it is in that paragraph that the Full Court refers to Order 31A rule 4(1)(b). That is right, is it not?

MR FOX: Yes, I think it is, yes.

KIRBY J: Very well.

MR FOX: Thank you. I draw the Court's attention to the application book at pages 28, between 45 and 55, and pages 29 to 35 in their entirety, for a detailed summary of the specific reasons why the company's application lacked lawful content and why the Family Court did not have the power to grant the orders sought. One very important reason why the court could not have granted the orders sought was that I was not a director of the companies in question and therefore was not in a position to comply with the requested orders. Please note the application book, page 30, at 30 to 45, and further, application book at page 94, at 40 to 55.

This fact could not be side-stepped by the Family Court and it therefore follows that the orders sought could not lawfully be granted by the Family Law Court and the orders would have been useless. I refer the Court to the Official Trustee in Bankruptcy v Bassola [1986] FamCA 12; (1986) 11 Fam LR 557, at "Held" in (iii) and (iv), which, in effect, states that Parliament did not give the Family Court power to make useless orders. For the benefit of the Court, this case is shown at page 129 of the authorities, statutes and regulations reference book of the applicant, for which I trust the Court has a copy.

The Full Court did note the fact that the respondent firm failed to ensure that the original company's application complied with the requirements of Order 31A rule 4 of the Family Court Rules, but the court then claimed that I should have insisted upon, and obtained, proper particulars from the respondent firm prior to the matter coming before the court on 1 February 1990. That is shown at application book page 58 at 50 to 60. A copy of Order 31A rule 4 is shown in the application reference book at pages 1 and 2, for the benefit of the Court. With all due respect to the members of the Full Court, the respondent firms are solicitors, practising solicitors, who placed before the court, on behalf of their client, an application in which they relied upon a particular section of the Family Court Rules.

The requirements of Order 31A are detailed in plain, simple English, and it would be expected that the respondent firm, practising solicitors, would have complied with the Rules by the time the matter was set down before Justice Underhill on 1 February 1990. The Full Court failed to accept that the court did not have the power to interfere with the lawful running of companies. In this respect, I refer you to Ascot Investments Pty Ltd v Harper & Anor [1981] HCA 1; (1981) 33 ALR 631 at 643, at 45, and 646, at 10, which is shown in the application authorities reference book at pages 62 and 64. This case states that the Family Court cannot disregard the genuine rights of third parties who, in this case, are the companies. It also states that an order on me, as I was not a director, would have been to expect me to perform the impossible.

I further rely upon Re Bodego Co [1904] 1 Ch 276, in the first paragraph. This case is shown at page 49 of the application authorities reference book. This case states that if the articles of a company state that a director vacates his office on the happening of an event, then it is mandatory that this take place if the event occurs. In this case, the directorship of the respondent's firm client was vacated by her non-attendance at company meetings. Please note the application book 31 at 35, to application book pages 33 at 30.

The Full Court failed to take account of the fact that the respondent firm had in their possession, 12 months prior to making the application, the articles of association of the companies, and knew 7 months prior to making the application that I was not a director of the companies. The Full Court failed to recognise the fact that the amended application filed by the respondent firm on 15 February 1990 was void of any reference to injunctions against me, but still called for an order against me to pay the costs of their client for the application. The Full Court failed to appreciate that this application was never returned to court for adjudication. The court failed to appreciate the fact that Mr Justice Underhill was not called upon to evaluate the company's application, when the matter came before him on 1 February 1990.

With respect to the contempt application, the Full Court failed to appraise the application filed by the respondent firm. Had they done so, they should have realised that the orders sought in the application were outside of the parameters allowed by section 114 of the Family Law Act. For the convenience of the Court, a copy of 114 is shown at page 9 of the applicant's authorities reference book. I rely upon In the Marriage of Sahari (1976) FLC 90-086 at 75,401 - second column at 30, which is a citation from Marshall v Marshall, which reads:

too free a use had been made of the remedy for committal for contempt: committal for contempt of court was a serious matter and it was not right that it should be treated as a weapon in the course of domestic warfare.

Please note at page 122 of the application authorities book, that will appear. For a detailed description of this application, I draw the Court's attention to page 37 at 35, to page 43 at 40, of the applicant's book. I draw the Court's attention to the fact that the intent of this application was for the imprisonment of me, as the respondent to the application. The Full Court failed to comprehend that the primary motivation of the respondent firm was the receipt of legal aid funding. This is documented by two statements of the respondent firm's partner, Mrs Hartfiel, in an affidavit which was before the court. These statements are, and I quote:

". . . it was difficult to justify to Legal Aid that it would be appropriate for the application to proceed".

And further:

"there was little benefit to the wife by that stage pursuing a contempt application.")

That is all noted in the application book, pages 39 at 30 to 50. It is obvious to see that these statements, that once legal aid money had dried up, the alleged contempt was no longer contemptible or of any importance to the respondent firm. At this point, I rely upon In the Marriage of Collins (1985) FLC 91-603, on page 76,880 between 15 and 30, and the first column, which states:

The introduction of legal aid systems does not affect the general principle. The fact that a party has been granted a legal aid certificate does not absolve that party's solicitor from the duty to act with propriety in the conduct of litigation. A solicitor who proceeds with hopeless litigation (even if legally aided) may still be liable to pay personally the costs of the other party.

Please refer to page 45 of the application authority reference book for a copy of that authority.

The Full Court failed to appreciate the fact that legal aid money was no longer available did not relieve the respondent firm from the responsibility of advising me the application was no longer afoot. Nor does it relieve the respondent firm from the responsibility of filing a notice of discontinuance, should it be intended not to continue with the application. A copy of Order 11A, as it was until 8 January 1996, and Order 9 rule 12, as it was since 8 January 1996, is shown in the application authorities reference book at pages 3 and 5. These are the sections of the Family Law Act related to a notice of discontinuance.

How can it be that a court would ever consider to condone this type of action by solicitors? For to do so is to sanction wilful abuse of the legal aid system by officers of the court, with the sole purpose being rewarded of taxpayer funds from the legal aid system. The Full Court placed some reliance on the bankruptcy of the respondent firm's clients. That is noted at application book page 63 at 5. The true facts are that the respondent firm's client did not become bankrupt until September 1997, eight years after the commencement of the application which are the subject of this special application for leave to appeal to the High Court. This bankruptcy is totally irrelevant to the matters which were heard before the Full Court of the Family Court.

The Full Court failed to recognise the fact that it is the solicitors, and not the client, who formulate the legal contents of an application. The Full Court failed to appreciate that solicitors cannot hide behind the cloak of counsel by claiming that they acted on the advice of counsel and the instructions of the client. In that regard I rely upon White Industries (Queensland) Pty Ltd v Flower & Hart (a firm) [1998] FCA 806; (1999) 156 ALR 169 at pages 242 at 30, to pages 244 at 20. This reference is shown at pages 105 and 106 of the application authorities reference book. Further, in Flower & Hart v White Industries [1999] FCA 773; (1999) 163 ALR 744 at 745 in "Held" (ii), a solicitor:

was obliged to make his own independent assessment of whether proceedings should be instituted without further investigation -

and (iii), in the same "Held" section:

It was not necessary before a finding could be made that proceedings were instigated for an improper purpose that it be found that the proceedings were based on a cause of action that was not arguable. The power to prevent an abuse extended to proceedings raising a prima facie case.

Please refer to page 111 of the application reference book for a copy of this recital. Further, in the same case, at 757, at 10, it is stated:

He was bound to turn his own mind to the prospects of success and to the purpose of the proceedings and the nature of the causes of action proposed to be pleaded and to the extent to which he did so he determined upon and implemented an improper purpose resulting in an unreasonable institution of the proceedings.

That is noted at page 117 of the reference book.

I would further refer to the matter of Cassidy and Murray [1995] FamCA 91; (1995) 19 Fam LR 492 at "Held", which covers the principles to be applied in the making of an order for costs against a solicitor. That is noted at page 27 of the authorities reference book. Further, at page 503 of Cassidy and Murray, at 40, I rely upon the following citation:

(3) The court's jurisdiction to make a wasted costs order against a solicitor is founded in breach of duty owed by the solicitor to the court to perform his duty as an officer of the court in promoting within his own sphere the course of justice.

(4) To show a breach of duty it is not necessary to establish dishonesty, criminal conduct, personal obliquity or behaviour such as would warrant striking a solicitor off the roll. While a mere mistake or error of judgment would not justify an order, misconduct, default, or even negligence is enough if the negligence is serious or gross.

(5) The jurisdiction is compensatory and not merely punitive.

That is noted at page 38, at 35 to 45, of the reference book. The Full Court failed to properly consider the relevant issues which would constitute an order for costs under Order 38 rule 36 and section 117 of the Family Law Act. For the benefit of the Court - sorry. Three minutes.

KIRBY J: 117 was the section that was applied in Cassidy, I think.

MR FOX: I will be finished in three minutes - rule 36 and section 117 of the Family Law Act. For the benefit of the Court, a copy of Order 38 rule 36 is shown at pages 6 and 7 of the reference book, and a copy of section 117 is shown at page 10. I submit that the relevant points are these. Negligence, the negligence is the failure of the respondent firm to ensure that a statement of claims was filed to ensure that the company's application conformed with Order 31A and ready for adjudication by the Family Court at the hearing on 1 February 1990. Further negligence is the failure of the respondent firm to ensure that the court had the power to grant the orders sought, before placing the application before the court.

There is an abuse of process. The fact that the respondent firm placed matters before the court, then failed to ensure that the matters were returned to court for adjudication after the respondent to the application had extended funds in legal representation to defend the issue. Further, the fact that the respondent firm forced me to retain legal representation, then failed to advise me that there was no intention of returning the matters to court. Dereliction of duty, the failure to ensure that the matters placed before the court were ready for adjudication, the failure to return the matters to court, the failure to file a notice of discontinuance if there is no intention to proceed.

Undue delay, the fact that the respondent firm commenced two applications and failed to return either of these to court for adjudication in a period of 10 years. The reason that the matters never returned to the court is clearly that the respondent firm realised that the application had no legal merit. Indeed, for matters to be commenced in any court by solicitors with the intention of causing the opposing side a financial burden due to legal costs, then not to bring the matters back to court for adjudication, is a denial of natural justice to the extreme, and is, as I understand it, not tolerated by any court in this land. Thank you, your Honour.

KIRBY J: The applicant, Mr Garnett Alan Fox, seeks to challenge a judgment entered by the Full Court of the Family Court of Australia dismissing his appeal from orders of Justice Buckley. The essential question in issue is whether the former solicitors for the applicant's wife - she has since been made bankrupt - should have been ordered to pay the costs of the proceedings commenced by them in the wife's name as long ago as 16 February 1989. Those proceedings sought orders dealing with the applicant for alleged contempt of court constituted by his failure to comply with undertakings allegedly given by him to the Family Court in September 1988.

When the foregoing proceedings were first returned before Justice Lindenmayer on 23 March 1989, they were adjourned because counsel appearing for the applicant contended that his client had not been properly served. The proceedings have never been discontinued nor brought on for determination.

The Family Court does have power under the Family Law Rules O 38 r 36, and perhaps otherwise, in certain circumstances to order a solicitor for a party to pay costs, put broadly, for improper or unreasonable conduct. The Family Court at several levels has determined that this was not a case where that exceptional order should be made. There is no public importance or point of principle in the issue. It relates to the particular circumstances of the applicant's litigation. No error on the part of the Full Court has been shown. Special leave is refused.

Mr Fox, those reasons will be available on the Internet today or early next week and they will be available to you sometime next week at the latest.

AT 1.46 PM THE MATTER WAS CONCLUDED