Arnet & Arnet

[2021] FamCA 139

FAMILY COURT OF AUSTRALIA

Arnet & Arnet [2021] FamCA 139

File number(s):	SYC 3638 of 2012
Judgment of:	MCCLELLAND DCJ
Date of judgment:	19 March 2021
Catchwords:	FAMILY LAW – COSTS –  Costs of Independent Children’s Lawyer – Where both parties oppose the Independent Children’s Lawyer’s Application – Where the parties came to a consent position at the conclusion of the evidence at final hearing – Where both parties contend that they would experience financial hardship if an order was made for them to each pay the costs of the Independent Children’s Lawyer – Consideration given to the proportion of costs – Orders made for each party to pay the costs of the Independent Children’s Lawyer in equal shares.
Legislation:	Family Law Act 1975 (Cth) s 117
Cases cited:	CDJ v VAJ (No 2) (1998) 197 CLR 172 De Roma & De Roma [2013] FamCA 566 Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish and Another (2005) 33 Fam LR 123 Gahen & Gahen (No 2) [2013] FamCA 936 Lenova & Lenova (Costs) [2011] FamCAFC 141 Mallory & Mallory [2020] FamCAFC 62 Malloy & Stopford Malloy [2021] FamCAFC 23 Stoian & Flemming (Costs) [2014] FamCA 944
Number of paragraphs:	32
Date of last submission/s:	26 February 2021
Place:	Sydney by written submissions

­­­­­

ORDERS

SYC 3638 of 2012

BETWEEN:

MR ARNET

Applicant

AND:

MS ARNET

Respondent

LEGAL AID NSW SYDNEY CENTRAL FAMILY LAW

Independent Children’s Lawyer

ORDER MADE BY:	MCCLELLAND DCJ
DATE OF ORDER:	19 MARCH 2021

THE COURT ORDERS THAT:

1.That within six (6) months of the date of these orders, each party shall pay to Legal Aid NSW the sum of $7121, being equal shares of the costs of the Independent Children’s Lawyer in the parenting proceedings between the parties.

Note:   The form of the order is subject to the entry in the Court’s records.

Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to 17.02 Family Law Rules 2004 (Cth).

IT IS NOTED that publication of this judgment by this Court under the pseudonym  Arnet & Arnet has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

REASONS FOR JUDGMENT

McClelland DCJ:

INTRODUCTION

1. This decision concerns an Application brought by the Independent Children’s Lawyer (“ICL”) for Mr Arnet (“the father”) and Ms Arnet (“the mother”) to pay, in equal shares, the costs of the ICL associated with their parenting proceedings.

2. In those proceedings, the parties sought competing orders concerning their children, Y born in 2007 and X born in 2012 (collectively “the children”). Those proceedings were listed for hearing over a period of seven (7) days, being 25-26 August 2020, 9-10 September 2020, 18 December 2020, and 11-12 February 2021. Commendably, the parties were ultimately able to come to a final agreement prior to final submissions and, on 12 February 2021, I made orders finalising the parenting dispute.

   ORDERS SOUGHT

3. The ICL seeks that an order be made for each of the parties to pay the costs of the ICL in equal shares, in the sum of $7,121 each.

4. The mother and father both oppose an order for the costs of the ICL to be paid. In the alternative, the mother seeks that, if an order is made, “the father meet a greater proportion of the [ICL’s] costs”. Contrary and in the alternative, if the Court was minded to order the costs of the ICL be paid, the father supports the position of the ICL that each party pay those costs in equal shares.

   LEGAL PRINCIPLES

5. Section 117(1) of the Family Law Act 1975 (Cth) (“the Act”) provides that, subject to certain qualifications, each party to the proceedings shall bear his or her own costs. However, that does not apply to the ICL because the ICL is not a party to the proceedings.

6. In that regard, ss 117(3) and (4) of the Act set out the following:

   (3) To avoid doubt, in proceedings in which an independent children's lawyer for a child has been appointed, the court may make an order under subsection (2) as to costs or security for costs, whether by way of interlocutory order or otherwise, to the effect that each party to the proceedings bears, in such proportion as the court considers just, the costs of the independent children's lawyer in respect of the proceedings.

   (4) However, in proceedings in which an independent children's lawyer for a child has been appointed, if:

   (a) a party to the proceedings has received legal aid in respect of the proceedings; or

   (b) the court considers that a party to the proceedings would suffer financial hardship if the party had to bear a proportion of the costs of the independent children's lawyer;

   the court must not make an order under subsection (2) against that party in relation to the costs of the independent children's lawyer.

7. In this matter, it is acknowledged that neither party was in receipt of legal aid. As will be discussed, the real question to be determined in this judgment is whether each of the parties would suffer financial hardship if a costs order was made against them and further the proportion that each party bears that cost.

8. Having noted that the presumption set out in s 117(1) does not apply, it is necessary to consider whether a costs order is justified, having regard to s 117(2) of the Act, which provides:

   (2) If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4), (4A), (5) and (6) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.

9. The matters relevant to determining what order, if any, should be made for costs are set out in s 117(2A) of the Act, as follows:

   (2A) In considering what order (if any) should be made under subsection (2), the court shall have regard to:

   (a) the financial circumstances of each of the parties to the proceedings;

   (b) whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;

   (c) the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;

   (d) whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;

   (e) whether any party to the proceedings has been wholly unsuccessful in the proceedings;

   (f) whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and

   (g) such other matters as the court considers relevant.

10. It is incumbent upon the Court, in the exercise of its discretion, to consider and apply those provisions set out in s 117(2A). However, there is nothing to prevent any factor being the sole foundation for any order for costs being made: see Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish and Another (2005) 33 Fam LR 123 at [130].

    EVIDENCE

11. The father relies upon the following:

    (a)Written submissions filed 26 February 2021; and

    (b)Costs memorandum of the father dated 11 February 2021.

12. The mother relies upon the following:

    (a)Written submissions filed 26 February 2021;

    (b)Costs notice of the mother dated 16 February 2021; and

    (c)Financial Statement dated 26 February 2021.  

    CONSIDERATION

13. I have considered each of the paragraphs contained in s 117(2A) of the Act and have determined that the factors most relevant to my decision are those set out at paragraphs (a), (c) and (e).

    Conduct of the parties and wholly unsuccessful

14. It is not contested that the parties were able to come to an agreement based largely on the recommendations and oral evidence of the Single Expert, following evidence being presented at final hearing including cross examination by the Independent Children’s Lawyer of the Single Expert. The mother, however, contends that due to the conduct of the father, including the father agitating for certain orders, such as a relocation of one of the children to his primary care, she was put in a position where she had no alternative but to resist the father’s application. Accordingly, she contends that she, therefore, should not be liable for half of the ICL’s costs.

15. Respectfully, I agree with the submission of the father that “neither party was wholly successful in relation to their applications”. In that respect, at final hearing, the mother sought that the children continue living with her and the father spend five (5) days per fortnight with X and time as agree with Y. Comparatively, the father sought that X relocate into his primary care and spend time with the mother for five (5) days per fortnight and for Y to remain living with the mother and spend time with him as agreed. Ultimately, with the consent of the parties, orders were made for Y to remain living with the mother and spend time as agreed with the father and for X to live with the parents in an equal time arrangement.

16. In circumstances where by both parties held diametrically opposed positions until they received the benefit of the oral evidence of the Single Expert, I do not find that the conduct of one or either of the parties resulted in the unreasonable prolonging of the proceedings.

    Financial circumstances

17. I note that a consideration of the parties financial circumstances, pursuant to s 117(2A)(a), necessarily overlaps with the concept of financial hardship as referred to in s 117(4), which I have set out. Both parties substantially rely on this factor as the basis upon which they should not be required to pay half of the ICL’s costs.

18. The father has not introduced any sown evidence of his financial situation and contends that the Court has knowledge of the following:

    a.Each of the parties is in paid employment;

    b.Each of the parties was privately represented during the hearing; and

    c.Each of the parties briefed Counsel at the hearing.

    …

    a.The father currently works as a self-employed allied health professional and relies on the income received through his personal exertion;

    b.The father lives in a household which includes three dependants, including two adult children and one child from his relationship with [the mother]; and

    c.The Court would be aware that COVID-19 has affected a number of industries, particularly those involving physical contact.

19. The mother relies upon her Financial Statement, which sets out the following:

    (a)Her property is valued at approximately $1,714,400 together with superannuation of $41,000;

    (b)Her liabilities are quantified at approximately $488,000;

    (c)Her income is $1,405 per week; and

    (d)Her total personal expenditure is $1,881 per week.

20. Prima facie, both parties appear to have sufficient capital and prospects of raising the amount of $7,121 sought by the ICL.

21. The mother specifically contends, however, that she has “limited capacity to meet an order for costs”. In that respect, I note that the shortfall between the mother’s stated income and expenditure is $476 per week.

22. I further note that both parties have incurred not insubstantial costs in respect to these proceedings, including the cost of the Single Expert Report and associated fees. I accept that those fees were impacted by the COVID-19 pandemic as a result of the hearing listed on 23 December 2020 being adjourned due to a cluster outbreak. 

23. In circumstances where both parties where legally represented throughout the proceedings, I am not satisfied that the financial circumstances of the parties is such that it would be inappropriate or unfair for the parties to bear the costs of the ICL. In any event,  in Malloy & Stopford Malloy [2021] FamCAFC 23, the Full Court at [14], citing Lenova & Lenova (Costs) [2011] FamCAFC 141 at [12]; Mallory & Mallory [2020] FamCAFC 62 at [9], noted that “impecuniosity is not a bar to a costs order”: see also Cross & Beaumont (2008) 39 Fam LR 389 at 402,[60].

24. However, to mitigate hardship that may result from an order for costs, I propose to make orders that both parties be permitted a period of six (6) months to pay the costs of the ICL.

    Other relevant matters

25. In terms of s 117(2A)(g) of the Act, it is relevant that the role played by the ICL in parenting proceedings, including in this matter, is invaluable. The role of the ICL was summarised in the context of an Application for costs in proceedings before the High Court of Australia in CDJ v VAJ (No 2) (1998) 197 CLR 172. Specifically, at [11], Kirby J said:

    The children's representative has a duty to “act in an independent and unfettered way in the best interests of the child”. This duty carries over to an appeal. The interests of the children and their welfare is of concern to the public. Those interests extend beyond, and are separate from, the interests of the parents. The children are the children of both parties. They should share equally the costs of their children being separately represented in this court. 

    (Citations omitted)

26. I accept that it is in the public interest for the best interests of children to be represented in proceedings before this Court and that the Court invariably receives substantial assistance, in that regard, from ICLs appointed in parenting proceedings.  Such assistance was undoubtedly provided by the ICL in this case. The incisive cross examination by counsel for the ICL of the single expert was highly relevant to the resolution of this matter.

27. Also relevant to these proceedings is s 117(5) of the Act, which provides:

    (5)  In considering what order (if any) should be made under subsection (2) in proceedings in which an independent children's lawyer has been appointed, the court must disregard the fact that the independent children's lawyer is funded under a legal aid scheme or service established under a Commonwealth, State or Territory law or approved by the Attorney-General.

28. Accordingly, it is my view that the ICL should be presumed to be unfunded and, having regard to authority, in those circumstances, the Court is generally inclined to Order litigants to contribute to the ICL’s costs: see Gahen & Gahen (No 2) [2013] FamCA 936 and De Roma & De Roma [2013] FamCA 566.

29. Further, I note that the ICL has sought an order for costs to be paid by the parties in a lump sum amount.  Those costs have been itemised in the ICL’s cost notice. 

30. Pursuant to rule 19.18(1)(a) of the Family Law Rules 2004 (Cth), the Court may make an order for costs of a specific amount. Having regard to the principles adumbrated by Kent J in Stoian & Flemming (Costs) [2014] FamCA 944 at [91], I am satisfied that the costs figure sought by the ICL is logical, fair and reasonable.

31. In respect to the proportion of the costs of the ICL, I note that s 117(3) of the Act provides a broad discretion in respect to how the court apportions costs. I am not satisfied, for the reasons outlined above, that either party should bear a greater responsibility of the costs of the ICL. I will, therefore, make an order for costs in favour of the ICL for the father and mother to pay in equal shares, in the sum of $7,121 each, the costs of the ICL.

    CONCLUSION

32. Accordingly, for these reasons, I make the orders as set out at the commencement of these Reasons for Judgment.

I certify that the preceding thirty-two (32) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice McClelland.

Associate:

Dated:       19 March 2021