CELAN & CELAN - [2021] FamCA 228

FAMILY COURT OF AUSTRALIA

CELAN & CELAN

[2021] FamCA 228

FAMILY LAW – COSTS – INDEPENDENT CHILDREN’S LAWYER – s 117(3), s 117(5) – review of authorities.

Family Law Act 1975 (Cth), s 117

Family Law Amendment Act 2003 (Cth)

Legal Aid Commission Act 1979 (NSW), s 36(1)(a)

Aider Shipping Co Ltd v Interbulk Ltd (The Vimeira (No 2)) [1986] AC 965
Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27
Burns Philp & Co Ltd v Bhagat [1993] 1 VR 203
Carr v Western Australia (2007) 232 CLR 138
Cassidy & Murray (1995) 19 Fam LR 492
Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs (1992) 176 CLR 1
Commonwealth v Baume (1905) 2 CLR 405
Cooper Brooks (Wollongong) Pty Ltd v Commissioner of Taxation (1981) 147 CLR 297
De Roma v De Roma (2013) 49 Fam LR 266
Fitzgerald v Fish (2005) 33 Fam LR 123
Gahen & Gahen (No 2) [2013] FamCA 936
Goodridge & Beadle (No 2) [2019] FamCA 786
Greedy & Greedy (1982) 8 Fam LR 669
Guild & Stasiuk [2020] FamCA 348
In re Gardiner; ex parte Orgill (1890) 16 VLR 641
In the Marriage of Jachimowicz (1986) 10 Fam LR 566
In the Marriage of McDonald (1994) 18 Fam LR 265
In the Marriage of Oriolo (1985) 10 Fam LR 665
In the Marriage of Tuck (1979) 7 Fam LR 492
K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd (1985) 157 CLR 309
Knight v F.P. Special Assets Ltd (1992) 174 CLR 178
Minister for Lands (NSW) v Jeremias (1917) 23 CLR 322
Northern Territory v Collins (2008) 235 CLR 619
Panwar & Panwar [2020] FamCA 480
Penfold v Penfold (1980) 144 CLR 311
Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355
R v Berchet [1794] 89 ER 480
Roy Morgan Research Centre Pty Ltd v Commissioner of State Revenue (2001) 207 CLR 72
Separate Representative v JHE and GAW (1993) 16 Fam LR 485
Southwest Water Authority v Rumble’s [1985] AC 609
Taylor v Public Service Board (NSW) (1976) 137 CLR 208
Toronto Suburban Railway Co v Toronto Corporation [1915] AC 590
Wentworth v Attorney-General (1984) 154 CLR 518
Yanner v Eaton (1999) 201 CLR 351
Yarmirrv Northern Territory (2001) 208 CLR 1

APPLICANT:

Mr Celan

RESPONDENT:

Ms Celan

INDEPENDENT CHILDREN’S LAWYER:

Mark Whelan Lawyer

FILE NUMBER:

SYC

3274

2017

DATE DELIVERED:

21 April 2021

PLACE DELIVERED:

Sydney

PLACE HEARD:

Sydney

JUDGMENT OF:

Wilson J

HEARING DATE:

20 & 21 April 2021

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr M. Wong

SOLICITOR FOR THE APPLICANT:

Watts Mccray (NSW) Pty Ltd

COUNSEL FOR THE RESPONDENT:

Ms D. Lioumis

SOLICITOR FOR THE RESPONDENT:

Sexton Family Law

COUNSEL FOR THE INDEPENDENT CHILDREN’S LAWYER:

Ms M. Falloon

SOLICITOR FOR THE INDEPENDENT CHILDREN’S LAWYER:

Mark Whelan Lawyer

Orders

The applicant father must pay to the Legal Aid Commission of New South Wales (“Legal Aid NSW”) the costs of independent representation for B born on … 2006 and C born on … 2008 (“the children”) totalling $8,692.04.
Payment must be made to Legal Aid NSW within three calendar months of the date of these orders, subject to any waiver that may be granted by Legal Aid NSW or different date(s) for payment that may be agreed with Legal Aid NSW, as to which any negotiations are to be directly between the applicant father and Legal Aid NSW.
Any amount paid by the applicant father prior to the date of these orders towards the costs of representation for the children is to be credited against the applicant father’s liability pursuant to these orders.
The independent children’s lawyer is discharged.

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

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

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 r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 3274 of 2017

Mr Celan

Applicant

And

Ms Celan

Respondent

And

Independent Children’s Lawyer

EX TEMPORE REASONS FOR JUDGMENT

This proceeding was listed for trial of both parenting and property issues on an estimated duration of four days, this day being the second of those four days.
Late on the first day of the trial, parenting issues were resolved. By consent I made an array of orders affecting the two children in this case. At the request of the parties and the ICL I deferred making any order for the discharge of the ICL pending the hearing and determination of the ICL’s application for orders requiring the parties to pay the ICL’s costs then in the amount sought of $8,827.50. At the close of the first day of the trial, counsel for the ICL foreshadowed the making of a formal costs application. However no documentation had been prepared to support any such application so I gave Ms Falloon of counsel for the ICL until 10am on 21 April 2021 to prepare any documentation on which she intended to rely and I adjourned the ICL’s application for costs until 10am today. Ms Lioumis of counsel indicated that her client, the respondent wife, opposed the order sought by the ICL and wanted to be heard on point. Mr Wong of counsel for the applicant husband indicated that he did not wish to be heard on the ICL’s costs application.
At 10am on 21 April 2021 Ms Falloon of counsel for the ICL brought her client’s application for the payment of the sum of $8,827.50 in respect of costs. In support, counsel for the ICL relied on –
a)an unsealed application in a case returnable this day;
b)the affidavit of Mr Mark Whelan of the ICL; and
c)a bundle of authorities.
To better understand the ICL’s application for costs it is necessary to set the application against the statutory scheme for the recovery of costs as prescribed by the Legal Aid Commission Act of New South Wales, especially s 36(1)(a) as well as s 117 of the Family Law Act.
When extending a grant of legal aid to parties to litigation under the Family Law Act, s 36(1)(a) of the Legal Aid Commission Act makes express provision to the effect that the grant of legal aid may be subject to a condition requiring the applicant to pay the Commission such amount as the Commission determines by way of contribution to the costs and expenses and of the legal services sought by the applicant. The ICL in this case is Mark Whelan, an experienced specialist family law solicitor. Mr Whelan made an affidavit in this proceeding on 21 April 2021. He deposed to having been appointed as the ICL in this case on 25 May 2020. On 15 April 2021 Mr Whelan sent an invoice for $14,487 to the solicitors for each party seeking payment. The invoice was divided into two components – the first being costs and the second being disbursements. The total costs sought were $6,875 and the total disbursements sought were $6,295 which, when GST was added, aggregated $14,487.
It will be immediately apparent that the amount set out on Mr Whelan’s invoice ($14,487) was substantially greater than the amount set out in the ICL’s application in a case ($8,827.50). I asked Ms Falloon which sum she pursued and I asked her to take me through the arithmetical computations supporting the claim for $8,827.50 as that amount –
a)was greater than the cost component set out in Mr Whelan’s 15 April 2021 letter ($6,875);
b)was less than the combined sum in the 15 April 2021 invoice ($14,487); and
c)included as a component of the costs figure exclusive of disbursements in the 15 April 2021 invoice four days of trial at the daily rate of $750 when in fact the parenting aspect of this litigation settled on day one of the trial rendering the amount of $750 and not $3,000 appropriate for instructing at trial.
I also pointed out that under the category of disbursements in the 15 April 2021 invoice, two other anomalies emerged. They were –
a)a significant and seemingly ambit amount was claimed for subpoenae service fees and conduct money in the suspiciously round amount of $1,800; and
b)the ICL had purported to charge for four days, each at the daily rate of $965, when the parenting aspect of the case finished on the first day, rendering the appropriate sum for counsel $965 rather than the sum stated on the invoice being $2,895.
Ms Falloon sought an opportunity to address the anomalies mentioned above. I stood the matter down to noon.
At noon on 21 April 2021 Ms Falloon produced an amended invoice from Mr Whelan addressed to the parties jointly. Various alterations were made including –
a)a reduction in the total sum sought from $14,487 to $8,692.04;
b)a reduction of the costs component from $6,875 to $4,625, effected by altering from four days to one the instructing solicitor’s fee for the trial;
c)the reduction of subpoena conduct money from $1,800 to $1,676.85;
d)the reduction of four days of counsel’s fees from $2,895 to $1,200; and
e)the overall alteration of costs from $6,875 to $4,625 to be added to the altered sum of disbursements from $6,295 to $3,276.85 making in total overall the sum of $8,692.04.
As mentioned earlier, on behalf of the applicant husband, Mr Wong indicated that his client agreed to be bound by any decision made on the ICL’s application. Mr Wong also submitted that any decision about a costs order was for the court in any event.
In developing her submissions in favour of the ICL’s costs application, Ms Falloon quite properly raised the ICL’s status in this proceeding. She said the ICL was not a party and so the reference in s 117(1) of the Family Law Act to “each party to the proceedings under this Act” did not apply. Yet observations have been made in an array of authorities in relation to this court’s power under s 117(2) to make a costs order on the application of the ICL, notwithstanding that the ICL was not a party to the proceeding within the contemplation of s 117(1) of the Family Law Act.
Before addressing the proper construction of s 117(2) in its operation as a statutory enabler for the ICL’s costs application, it is utile to say something about costs generally in family law litigation. Many of the matters on point were addressed by me in Goodridge & Beadle (No 2)[1] and the comments at paragraph 13 and following repay examination. Certain propositions made be distilled, as follows –
a)since the High Court’s decision in Penfold v Penfold,[2] pursuant to s 117(2) of the Family Law Act, the court may make such order as to costs as it considers just if the court is of opinion in a particular case that there are circumstances that justify it doing so;
b)an applicant for costs bears no onus to show that it is a clear case for an order for costs (Penfold);
c)this court possesses a wide discretion in relation to costs;[3]
d)power exists to make a costs order against a person who is not even a party to the proceeding;[4]
e)applying limitations to the breadth of the statutory jurisdiction in respect of costs, especially implied limitations, has been rejected;[5]
f)s 117(2) is in broad terms and does not define the powers against whom or to whom the court may award costs;[6] and
g)a costs order has been ordered against a solicitor personally.[7]
[1] [2019] FamCA 786.
[2] (1980) 144 CLR 311.
[3] In the Marriage of Tuck (1979) 7 Fam LR 492, Greedy & Greedy (1982) 8 Fam LR 669 and In the Marriage of Oriolo (1985) 10 Fam LR 665 to name but a few.
[4] In re Gardiner; ex parte Orgill (1890) 16 VLR 641, Wentworth v Attorney-General (1984) 154 CLR 518, Knight v F.P. Special Assets Ltd (1992) 174 CLR 178, Burns Philp & Co Ltd v Bhagat [1993] 1 VR 203 and Separate Representative v JHE and GAW (1993) 16 Fam LR 485.
[5] see Lord Goff of Chieveley in Aider Shipping Co Ltd v Interbulk Ltd (The Vimeira (No 2)) [1986] AC 965.
[6]Cassidy & Murray (1995) 19 Fam LR 492.
[7]In the Marriage of Jachimowicz (1986) 10 Fam LR 566.
The power under s 117(2) is not confined to orders against parties to the proceeding. Further, as the survey above reveals, s 117(2) does not define the persons against whom or to whom a costs order may be made. Ms Falloon brought to my attention the decision in In the Marriage of McDonald[8] to that effect, the decision of De Roma v De Roma[9] and the decision in Gahen & Gahen (No 2),[10] each to like effect.
[8] (1994) 18 Fam LR 265.
[9] (2013) 49 Fam LR 266.
[10] [2013] FamCA 936.
So much for the operation of s 117(2).
Section 117(3) puts the position beyond doubt[11] in that the subsection contains an express statutory statement that the ICL’s costs may be the subject of a specific costs order. Nevertheless s 117(2) is subject to s 117(2A).
[11] Or, as Austin J put it in Gahen & Gahen (No 2) [2013] FamCA 936 where his Honour said (at [5]) “lest it not otherwise be obvious”.
Section 117(5) provides that in any consideration of an application for a costs order under s 117(2) in a proceeding in which an ICL has been appointed, the court must disregard the fact that the ICL is funded under a legal aid scheme. In De Roma & De Roma[12] Watts J examined the statutory evolution of s 117(5) tracing the provisions of the 2003 Family Law Amendment Act as well as paragraph 3.6 of the Senate and Legal Constitutional Committee’s report. In my respectful view, his Honour’s examination of that evolution was most useful. That said, his Honour (at [44]) held that pursuant to a proper statutory construction of ss 117(3), 117(4) and 117(5), parliament in enacting s 117(5) is to be taken to have intended that “parties (usually parents) who could help pay for the independent children’s lawyer, should”. His Honour also said that the subsection is likely to lead to an increase in the protection of the public purse.
[12] (2013) 49 Fam LR 266.
Two things must said of his Honour’s observations recorded in the immediately preceding paragraph. First, in my view, any attempt to divine or ascribe an intention to parliament from legislation must always be undertaken by orthodox processes of statutory construction. Principles prescribed by the High Court of Australia in relation to statutory construction are beyond doubt and apply to s 117(5) of the Family Law Act as much as they apply to any other piece of legislation. The following is a snapshot of those principles –
a)the primacy of the words used in legislation itself determines the proper construction of legislation;[13]
b)the primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all other provisions of the statute;[14]
c)the meaning of a particular legislative provision must be determined by reference to the language of the instrument viewed as a whole;[15]
d)the process of construction must always begin with an examination of the context of the provision being construed;[16]
e)a court construing a statutory provision must strive to give meaning to every word or relevant provision;[17]
f)no sentence, clause or word is superfluous, void or insignificant;[18]
g)ordinarily the meaning of legislation is to be taken to have intended that the words of a provision corresponds to the grammatical meaning of the relevant provision;[19] and
h)the task of statutory construction begins with a consideration of the text itself and historical considerations and extrinsic material cannot be relied upon to displace the clear meaning of the Act.[20]
[13]Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355.
[14] Ibid and also Taylor v Public Service Board (NSW) (1976) 137 CLR 208.
[15] Cooper Brooks (Wollongong) Pty Ltd v Commissioner of Taxation (1981) 147 CLR 297 and Southwest Water Authority v Rumble’s [1985] AC 609.
[16] Toronto Suburban Railway Co v Toronto Corporation [1915] AC 590, Minister for Lands (NSW) v Jeremias (1917) 23 CLR 322 and K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd (1985) 157 CLR 309.
[17] Commonwealth v Baume (1905) 2 CLR 405 and Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs (1992) 176 CLR 1.
[18]R v Berchet [1794] 89 ER 480.
[19]Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355.
[20] Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27, Yanner v Eaton (1999) 201 CLR 351, Yarmirr v Northern Territory (2001) 208 CLR 1, Roy Morgan Research Centre Pty Ltd v Commissioner of State Revenue (2001) 207 CLR 72, Carr v Western Australia (2007) 232 CLR 138 and Northern Territory v Collins (2008) 235 CLR 619.
Having regard to those statements from the High Court, I do not share the observations of Watts J that s 117(5) of the Family Law Act reveals parliament’s intention that parents who can help pay for the ICL should. Section 117(5) says precisely what it says and is to be understood in the manner the clear words of the section provide, not otherwise.
The second aspect of the De Roma decision attributed to s 117(5) was the observation of Watts J that s 117(5) is “likely to lead to a general increase in the protection of the public purse”. I do not construe s 117(5) in that way, at least having regard to the principles of statutory construction set out above. And, with great respect, I disagree with the observations of Austin J in Gahen & Gahen (No 2) where, at [10] his Honour said – “In such circumstances I proceed to consider the costs application in the knowledge of the legislative intent that I should protect the public purse, where possible.”Section 117(5) says no such thing. I do not ascribe to that subsection any such “legislative intent” to protect the public purse.
In addressing s 117(2A) Ms Falloon relied mainly on subsection (g), namely “such other matters as the court considers relevant.” As was held in Fitzgerald v Fish,[21] an applicant for a costs order under s 117(2) need only successfully invoke one of the provisions of s 117(2A). It seemed to me that there was considerable merit in the ICL’s position on point. It had been brought into this litigation by court order and the ICL had undertaken very substantial activities leading to the resolution of the parenting issues. In my view it is appropriate to recognise that the costs and disbursements rendered by the ICL should be met in this case in the manner contemplated by s 117(3).
[21] (2005) 33 Fam LR 123.

the wife’s resistance to any costs order

On behalf of the wife Ms Lioumis submitted that any order under s 117(2) informed by s 117(2A) should be made only against the applicant husband and not against the wife. Ms Lioumis directed my attention to s 117(4)(b), submitting that the statutory power thereby conferred on the court required the court not to make an order under s 117(2) against a party (here, the wife) if the court considers that such party would suffer financial hardship if that party had to bear a proportion of the costs of the ICL. Ms Lioumis argued that the wife’s income is low, that she is in receipt of social security, and that conversely, the husband’s income is in the vicinity of $500,000 per annum. Ms Lioumis submitted that one of the children has serious difficulties and that the wife would suffer financial hardship if ordered to bear some or all of the ICL’s costs. In support of that submission Ms Lioumis relied on the details of income in the wife’s financial statement made 23 October 2020. When compared to the applicant husband’s statement (Part B) the disparity is considerable as between the two. Ms Lioumis urged me to adopt the approach that if an order were made as urged by the ICL then the order should be expressed to operate only as against the husband.

Section 117(2) is premised on a costs order being just. In my view, not only would it orchestrate financial hardship to make a costs order against both parties jointly but it would not be just to make the wife partly responsible for the ICL’s costs. In Guild & Stasiuk[22] and Panwar & Panwar[23] I considered the phrase “hardship”. Certain parity of reasoning is apposite, albeit that different sections of the legislation were under consideration.
[22] [2020] FamCA 348.
[23] [2020] FamCA 480.

orders proposed by the icl

Ms Falloon proposed orders in four separate paragraphs, namely –
1.The parents shall pay to the Legal Aid Commission of New South Wales (‘Legal Aid NSW’) the costs of independent representation for B born on … 2006 and C born on … 2008 (‘the children’) totalling $8,692.04.
2.The total payment required by Order 1 shall be shared equally between the parents.
3.Payment shall be made to Legal Aid NSW within three calendar months of the date of these orders, subject to any waiver that may be granted by Legal Aid NSW or different date(s) for payment that may be agreed with Legal Aid NSW, as to which any negotiations are to be directly between a parent or both parents and Legal Aid NSW (telephone number …).
4.Any amount paid by a parent prior to the date of these Orders towards the costs of representation for the children is to be credited against the parent’s liability pursuant to these Orders.
Having regard to my views on hardship, all paragraphs of the proposed orders need refinement to delete reference to both parties and to replace any such reference with a reference to the applicant father only.
The justice of such an order is fortified by counsel’s joint submission to the effect that an order made against one party only is enforced by the Legal Aid Commission as to half only but in full and final settlement. The applicant is well able to meet a costs order of an amount a little over $4000.
I make an order for the discharge of the ICL and otherwise pronounce orders upon the urgings of the ICL for costs under s 117(3) as modified in the manner mentioned above.

I certify that the preceding twenty-six (26) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Wilson delivered on 21 April 2021.

Associate:

Date: 23 April 2021