In Venter & Venter (No 2),1 $1.7 million in costs were awarded personally against a barrister and firm of solicitors after they were found to have engaged in improper and unreasonable conduct which caused significant costs to be incurred unnecessarily and resulted in considerable disruption and delays.
The substantive proceedings involved a property dispute between a former husband and wife and various other family members and related entities.
The court heard a dispute concerning applications for costs sought against the barrister and firm of solicitors who acted for the wife, or alternatively, against the wife, by virtue of the delay that arose from the wife’s disclosure and use of documents in the substantive proceedings.
Although the trial commenced in July 2023, little of the actual trial proceeded as the balance of the time was taken up with objections to evidence and attempts to overcome prejudice resulting from the wife’s late discovery of 96,000 documents that were “dumped” on the respondents a week before the trial.2
The wife did not provide an explanation for the delay in disclosing such an extraordinary number of documents. Additionally, her undertaking to the court that she had complied with her disclosure obligations was patently wrong.3 The consequences of the wife’s late disclosure and the apparent decision by her previous legal advisors to ignore their own protocols and with regard to viewing privileged material had serious consequences for all parties.
When considering submissions and evidence concerning the conduct of the solicitors who had acted for the wife, the court noted that the firm of solicitors had demonstrated a surprising ignorance about the disclosure process, its purpose, and solicitors’ obligations in litigation.
The court also noted that the firm was uncooperative when reasonable requests for information were made by the respondents, and that if they had responded professionally and candidly and in a timely fashion, the enormity of the disclosure issues may have become apparent to the respondents and the court much earlier and enabled an earlier adjournment of the trial.4
Further, the court was of the view that the barrister engaged by the firm had evinced a reckless indifference to the truth of the representations given to the court and to his ethical and professional obligations more broadly.5 He was found to have misled the court on various occasions and withheld relevant information, or at least made no reasonable attempt to ensure that he had been frank and open about the documents he had accessed that may have been subject to a privilege claim.6
The conduct of both the barrister and the law practice were considered improper and unreasonable by the court in many respects, and ultimately caused delay and disruption to the orderly conduct of the court’s processes.
The court held that the circumstances were extraordinary such as to warrant indemnity costs for the costs thrown away by the adjournment of the part-trial heard. The barrister and law firm were found liable for the wasted costs jointly and severally in the sum of $1.7 million. They were also referred to the regulator for investigation.
The court provided a thorough discussion on the fundamental concepts of disclosure in litigation and legal professional privilege.7
Further, the decision provides a timely reminder to practitioners of their obligations to the courts, to their clients and to their opponents, to ensure that their clients understand and comply with their obligations to disclose information and documentation that is relevant to an issue in the proceedings in a timely manner.
Footnotes
1 [2024] FedCFamC1F 862.
2 Ibid [156].
3 Ibid [22].
4 Ibid [192].
5 Ibid [179].
6 Ibid [207].
7 See ibid [187]-[194], [244]-[250].
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