Dansey & Dansey (No 7)
[2024] FedCFamC1F 455
•10 July 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Dansey & Dansey (No 7) [2024] FedCFamC1F 455
File number(s): SYC 3614 of 2021 Judgment of: ALTOBELLI J Date of judgment: 10 July 2024 Catchwords: FAMILY LAW – COSTS – Where the Independent Children’s Lawyer brought an application for costs – Where the parties opposed the application on the basis that it would cause financial hardship – Where the Court finds that both parties would suffer from financial hardship if a costs order was made – Where the Independent Children’s Lawyer’s application for costs is dismissed. Legislation: Family Law Act 1975 (Cth) s 117 Cases cited: Celan & Celan [2021] FamCA 228
Dansey & Dansey (No 4) [2023] FedCFamC1F 1068
Guild & Stasiuk (2020) 63 Fam LR 322; [2020] FamCA 348
Panwar & Panwar (2020) 63 Fam LR 44; [2020] FamCA 480
Parke & The Estate of the Late A Parke (2016) FLC 93-748; [2016] FamCAFC 248
Taggart & Taggart [2020] FamCAFC 66
Division: Division 1 First Instance Number of paragraphs: 21 Date of last submissions: 4 June 2024 Date of hearing: In Chambers Place: Sydney Solicitor for the Applicant: Pearson Emerson Family Lawyers The Respondent: Litigant in person Solicitor for the Independent Children's Lawyer: G & D Lawyers ORDERS
SYC 3614 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR DANSEY
Applicant
AND: MS DANSEY
Respondent
INDEPENDENT CHILDREN'S LAWYER
ORDER MADE BY:
ALTOBELLI J
DATE OF ORDER:
10 JULY 2024
THE COURT ORDERS THAT:
1.The application for costs made by the Independent Children’s Lawyer is dismissed.
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 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Dansey & Dansey has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
ALTOBELLI J:
INTRODUCTION
The Independent Children’s Lawyer (“the ICL”) seeks an order for costs on behalf of the New South Wales Legal Aid Commission (“Legal Aid”) in the amount of $45,476.20 to be paid equally between the applicant father (“the father”) and the respondent mother (“the mother”) following the finalisation of the substantive proceedings in relation to their children (“the children”). The ICL made an application for costs at the conclusion of the final hearing. Although the Court was informed at the time that the parties would be able to reach an agreement in relation to this issue, they have been unable to do so.
Both the mother and the father oppose the ICL’s application for costs.
BRIEF BACKGROUND
The Court heard the final hearing of the parenting aspect of this matter for 14 days throughout June and October 2023. On 13 December 2023, the Court delivered judgment and made orders for the father to have sole parental responsibility and for the children to live with him. The children were to spend no time and have no communication with the mother until 2 February 2024 at which point they would live with her for five nights per fortnight and increase to week-about time in 2026. Extensive reasons for judgment were provided, Dansey & Dansey (No 4) [2023] FedCFamC1F 1068 (“my reasons for judgment”).
An urgent Application in a Proceeding was filed by the father on 15 February 2024 and the matter was reopened. Another interim hearing was held on 7 March 2024 and the Court suspended time between the children and the mother until 14 August 2024. However, it is noted that the ICL’s application for costs only relates to costs accumulated until the final hearing.
PRESENT APPLICATION
In support of his application, the ICL relies on his written submissions filed 26 April 2024.
In support of her application, the mother relies on her written submissions filed 10 May 2024.
In support of his application, the father relies on the following documents:
(1)Written submissions filed 4 June 2024;
(2)Financial Statement filed 29 September 2023;
(3)His affidavit filed 25 January 2024; and
(4)Orders made 31 May 2024.
LEGAL PRINCIPLES
The law relating to costs in family law proceedings is well settled and is set out in detail in the Full Court decision of Parke & The Estate of the Late A Parke (2016) FLC 93-748.
An application for costs is governed by s 117 of the Family Law Act 1975 (Cth) (“the Act”). Section 117(1) of the Act sets out the general presumption that each party to the proceedings shall bear their own costs. This is subject to s 117(2), which provides that:
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) and (5) and the applicable Rules of Court, make such order as the court may make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.
Sections 117(3) and 117(4) sets out the matters the Court is to have regard to when determining the costs of the ICL:
(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.
The ICL, via Legal Aid, is funded by the public purse. However, the Court must have regard to s 117(5) of the Act which states:
Funding of independent children’s lawyer not to affect costs order
(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.
It should be noted that whilst s 117(2A) of the Act examines several historical factors relating to the parties in the proceedings in which costs are sought (for example, the conduct of the parties throughout the proceedings), s 117(4) requires the Court to consider whether a party “would suffer financial hardship” in the present tense. Therefore, the Court must look to the current financial positions of the parties.
Justice Wilson in Celan & Celan [2021] FamCA 228 at [22] stated that the meaning of hardship under s 117(4)(b) may be informed by definitions elsewhere within the Act, “certain parity of reasoning is apposite, albeit that different sections of the legislation were under consideration”. Justice Wilson referred to the definitions of hardship applied in Guild & Stasiuk (2020) 63 Fam LR 322 (“Guild”) and Panwar & Panwar (2020) 63 Fam LR 44 (“Panwar”). Cumulatively, these judgments define hardship as “akin to concepts of hardness, severity, privation” (Guild at [442]) or otherwise “a substantial detriment” (Panwar at [8]). The ICL bears no obligation to prove that a costs order would not cause financial hardship to the parties (Taggart & Taggart [2020] FamCAFC 66 at [13]).
DISCUSSION
Both parties were privately aided throughout the entirety of the substantive proceedings. The mother was represented by experienced counsel and the father by senior counsel throughout the proceedings. Both parties accumulated extensive legal costs by the conclusion of the final hearing. The father’s costs disclosure as at 6 March 2024 provides an amount of $1,196,153.49 and the mother’s costs disclosure as at 5 February 2024 states $1,182,671.02. But for the focus on the parties’ current financial positions, the large amount of legal fees each party has spent on their own case is potentially an indicator that the ICL’s costs be paid equally between the parties.
Presumably, this is why the father’s initial position was not to be heard in relation to the ICL’s costs application. However, he has since filed written submissions stating circumstances have changed significantly for him which directly impact the costs application. The Court is informed that the parties settled the property aspect of this matter on a final basis on 31 May 2024. The orders provide for $1,068,482 to be provided to the mother, $451,483 to the father’s parents and $119,263 to the father. There is also a modest superannuation split from the father’s superannuation to the mother’s superannuation of $189,271.
In his written submissions, the father submits he is in a precarious financial position. He relies on his Financial Statement filed 29 September 2023 which states he has a weekly income of $3,333 and weekly expenditure of approximately $4,432 (a deficit of over $1,099). He has updated this figure in his written submissions by stating that his expenditure exceeds his income by approximately $680 per week (paragraph 12). In his Financial Statement, he deposes to owning property valued at $1,972,800 and liabilities of $877,910. However, most of that was redistributed to his parents, the mother and himself as part of the final property consent orders. He contends that he has other liabilities owing to his parents as a result of the ongoing parenting proceedings and potential taxation liabilities arising from the recent sale of a property owned by him at Town AT of which he has no means to pay. He also continues to pay for all of the children’s expenses as they are not currently spending any time with the mother.
At paragraph 11 of his written submissions, the father states that his means of funding his legal fees is not as yet determined. Notwithstanding that, the Court notes senior counsel has appeared on his behalf at almost every Court event throughout these proceedings including the mention that occurred on 25 June 2024. This postdates the filing of his written submissions where he clearly alleges that he has no funds. He does advert to receipt of significant loans from his parents, thus leading to an inference that his legal fees are being paid using that source of funds.
The mother also states that she will suffer financial hardship if she is ordered to bear the ICL’s costs. In her written submissions, she annexes a loan agreement with her father recording that she has borrowed $1.2 million from him on 1 November 2023 to be used for legal fees and general living costs. She states that this loan amount was capped and there is no other option available to her to borrow more funds. She is currently receiving the JobSeeker allowance from Centrelink and alleges her earning capacity is greatly impaired due to her post-traumatic stress disorder.
At the mention on 25 June 2024, the mother appeared self-represented and informed the Court that she would be applying for legal aid.
The common theme of the evidence adduced, and the submissions made, by both parties is that for all practical purposes their regular expenditure exceeds their regular income, and their liabilities exceed their assets. The Court accepts this. For present purposes they both experience hardship for the purposes of section 117(4) of the Act and certainly would experience hardship if ordered to pay the costs of the ICL.
CONCLUSION
In the circumstances of this case, therefore, the application for costs by the ICL is dismissed.
I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Altobelli. Associate:
Dated: 10 July 2024
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