Demetriou and Demetriou (No 2)
[2020] FamCA 286
•29 April 2020
FAMILY COURT OF AUSTRALIA
| DEMETRIOU & DEMETRIOU (NO. 2) | [2020] FamCA 286 |
| FAMILY LAW – COSTS – Costs of the Independent Children’s Lawyer – Where the Independent Children's Lawyer has sought that the mother and the father pay half of their costs of the proceedings – Where the mother and father assert that they will suffer financial hardship if they are required to pay half the costs of the Independent Children's Lawyer – Where the mother and father have significant assets – Where the mother is unlikely to gain employment as a result of her mental health issue – Where the father primarily cares for the children – Court orders that the mother and the father contribute to the costs of the Independent Children's Lawyer. |
| Family Law Act 1975 (Cth) ss 68LA, 117 |
| Brown v Brown (1998) FLC 92-822 De Roma v De Roma (2013) 49 Fam LR 266 Demetriou & Demetriou [2020] FamCA 24 Firentes & Teung [2014] FamCA 1046 Fitzgerald (as Child Representative for A (Legal Aid Commission of Tasmania)) v Fish (2005) 33 FLR 123 Gahen & Gahen (No 2) [2013] FamCA 936 Prantage & Prantage (Costs) [2014] FamCA 850 |
| APPLICANT: | Mr Demetriou |
| RESPONDENT: | Ms A Demetriou |
| INDEPENDENT CHILDREN’S LAWYER: | Tiyce & Lawyers |
| FILE NUMBER: | SYC | 2580 | of | 2017 |
| DATE DELIVERED: | 29 April 2020 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Harper J |
| HEARING DATE: | In Chambers by way of written submissions |
| DATE OF LAST SUBMISSION: | 24 February 2020 |
REPRESENTATION
| SOLICITOR ADVOCATE FOR THE APPLICANT: | Ms Mirza-Price |
| SOLICITOR FOR THE APPLICANT: | Mills Oakley |
| SOLICITOR ADVOCATE FOR THE RESPONDENT: | Mr Rowlandson |
| SOLICITOR FOR THE RESPONDENT: | Rowlandson & Co Solicitors |
| COUNSEL FOR THE INDEPENDENT CHILDREN’S LAWYER: | Mr Scarlett |
| SOLICITOR FOR THE INDEPENDENT CHILDREN’S LAWYER: | Tiyce & Lawyers |
Orders
Each party pay the amount of $10,000 of the costs of the Independent Children’s Lawyer within 28 days of these orders.
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 Demetriou & Demetriou 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 2580 of 2017
| Mr Demetriou |
Applicant
And
| Ms A Demetriou |
Respondent
REASONS FOR JUDGMENT
Introduction
The substantive proceedings, between the applicant father, Mr Demetriou (“the father”), and the respondent mother, Ms A Demetriou (“the mother”) were finalised when I delivered my reasons for judgment on 23 January 2020: Demetriou & Demetriou [2020] FamCA 24
This judgment deals solely with a costs order sought by the Independent Children’s Lawyer (“ICL”).
The parenting aspect of the proceedings concerned the parties four children, AA, BB, who are twins, CC, and DD, together referred to herein as “the Children”.
The Court made an order for the appointment of an ICL on 29 May 2017, and has had the benefit of the assistance of an ICL since 27 July 2017, when Tiyce & Lawyers filed a Notice of Address for Service.
The matter was listed for final hearing on 2 September 2019 for seven days. However, the majority of the parenting issues were settled by consent on 3 September 2019, and the entirety of the property proceedings settled by consent on 6 September 2019. Therefore, the hearing before me dealt only with a number of discrete parenting issues primarily concerning CC and DD. The ICL played a role in determining these remaining issues.
Orders sought
Exhibit “ICL 1” contained the ICL’s proposed orders in respect of the outstanding parenting dispute. Those proposed orders included an order that the parties each pay the costs of the ICL in the sum of $12,614.00.
When I delivered my reasons on 23 January 2020, I ordered that the parties file and serve written submissions concerning the ICL’s application for costs within 28 days from the date of those orders.
My chambers received the written submissions of the father on 21 February 2020, and the written submissions of the mother on 24 February 2020. Both the father and the mother oppose the ICL’s costs order.
The Law
Section 117 of the Family Law Act 1975 (Cth)(“the Act”) governs orders for costs in this jurisdiction. It is well-established that s 117(1) of the Act does not apply to the ICL because the ICL is not a party to proceedings in the strict sense: De Roma v De Roma (2013) 49 Fam LR 266 at [12].
However, ss 117(3) and (4) of the Act enable the Court to make orders for an ICL’s costs:
(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 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.
Neither party was legally aided in these proceedings. However, both focused on the financial hardship each contended they would face if the Court made the order sought by the ICL.
Section 117(2) of the Act, referred to in s 117(3), gives the Court discretion to make a costs order in the appropriate circumstances. In deciding whether to exercise that discretion the Court is guided by s 117(2A) of the Act.
It is well-settled that no one factor has priority under s 117(2A), nor must there be more than one factor to be satisfied, any one factor may be sufficient: Prantage & Prantage (Costs) [2014] FamCA 850 at [12]; Fitzgerald (as Child Representative for A (Legal Aid Commission of Tasmania)) v Fish (2005) 33 FLR 123 at [41]. There may be a dominant or outstanding feature that makes an order for costs appropriate: Brown v Brown (1998) FLC 92-822 per Kay J at [17]. Thus although any one factor may be sufficient, no one factor is essential.
Discussion
For the purposes of this judgment, I will only discuss the relevant sub-sections in s 117(2A), which are (a), (c) and (g).
The financial circumstances of the parties
Both the mother and the father submitted that they would suffer financial hardship if they were ordered to contribute to the costs of the ICL. They placed emphasis on this to oppose the ICL’s orders. Financial circumstances are to be taken into account by the Court pursuant to s117 (2A)(a) in weighing the exercise of discretion whether to make a costs order. A finding of financial hardship raises a prohibition pursuant to s 117(4)(b) on making a costs order in favour of an ICL.
The father relied upon the final judgment delivered on 23 January 2020, his Written Submissions, specific paragraphs in his Affidavit sworn on 7 August 2019, and his Financial Statement filed on 16 August 2019.
The mother does not specify any particular document she seeks to rely upon for the purposes of this costs argument, however, I note that in addition to her Written Submissions, she swore an Affidavit on 15 August 2019, and filed a Financial Statement on 28 August 2019.
In his written submissions, the father points out he expended approximately $746,000 plus GST to fund his litigation.
The property aspect of the proceedings was settled by consent, and orders stipulating property distribution between the parties was made on 6 September 2019. It is necessary to take account of those orders since they had important consequences for the parties’ respective financial positions.
Pursuant to the consent orders, the father retained property valued at $4,428,210.00, which includes a cash component of $3,546,000.00, being the balance of the proceeds of sale of properties at Suburb F. The father thus submitted he is not impecunious. I accept that submission. Nonetheless, the father submitted that by reason of the burden of his parental responsibilities, he should not be ordered to pay any costs of the ICL.
The father emphasised that all the children live with him, and he will be “solely responsible for the financial needs of the four children, including private school fees, medical expenses and extra-curricular expenses” and that “the mother does not pay child support to the father”. I do not entirely accept this submission.
The twins, BB and AA, were born in 2002, and will turn 18 years just after delivery of this judgment. It is appropriate to assume that once they turn 18, the twins will be responsible for themselves. Accordingly, the father will no longer be responsible for their care, although, I accept there may be ongoing expenses even for adult children.
On 23 January 2020, orders were made for the father to have sole parental responsibility for DD with respect of decisions surrounding his health, but that in all other respects, the parties shared parental responsibility. Accordingly, in respect of DD, the father is not solely responsible for his financial needs. The mother is responsible to contribute to DD’s needs. Under cross-examination, at the final hearing, the mother stated she would be prepared to contribute to the cost of schooling DD, and CC.
The father further submitted that his only income derives from nominal dividends quantified at $1 per week, and that he is unable to return to the workforce due to his “heavy parenting commitments”. The father relied on his Financial Statement which indicated that the children’s expenses were $3,075.00 per week.
I accept that each of the children have special needs, which ranged from intellectual and behavioural impediments. Additionally, as a result of the mother’s own mental health issues, I accept that the burden of parenting primarily has fallen, and continues to fall upon, the father.
Despite the submissions made by the father, I do not accept that his circumstances are so parlous, that an order for him to pay a proportion of the ICL’s costs would cause him financial hardship. His submission that he cannot return to the workforce was based upon the extent of his parenting commitments. However, whilst this submission may be correct, it is difficult to form a view about it on the basis of the limited evidence provided. Nonetheless, I will assume the father would have difficulty returning to the work force.
In respect of the mother, the consent orders made on 6 September 2019, allowed her to retain the former matrimonial home, which the single expert valued at $1,750,000.00 and received a cash payment of $1,860,000.00. Like the father, her financial position is not impecunious.
The mother gave evidence that she expended $749,067 in legal fees on the litigation.
The mother submitted that she had been unable to gain employment since 2001, and she has no qualifications or work experience. Additionally, her mental health issues are a significant impediment to her gaining employment and she requires ongoing treatment with her psychiatrist. Under the orders made on 23 January 2020, the mother is required to attend upon her treating medical practitioners, including her psychiatrist.
The mother’s mental health issues were detailed in her Affidavit and have been ongoing since her teenage years. The judgment delivered on 23 January 2020 further details the mother’s mental health issues: at [33] and [34].
I accept that the mother’s mental health issues, coupled with her disengagement from the work force, would make it unlikely that she would be able to gain employment in the future. I also accept that the mother has no other source of funds, apart from the cash payment of $1,860,000.00. She also has a valuable property. Her financial resources, like those of the father are in truth substantial. I do not accept that a contribution to the costs of the ICL would cause her financial hardship.
Conduct of the parties
When considering making an order for costs concerning an ICL, the role the ICL plays in proceedings is of relevance. Pursuant to s 68LA(5) of the Act, the specific duties of the ICL are:
(5) The independent children’s lawyer must:
(a) act impartially in dealings with the parties to the proceedings; and
(b) ensure that any views expressed by the child in relation to the matters to which the proceedings relate are fully put before the court; and
(c) if a report or other document that relates to the child is to be used in the proceedings:
(i) analyse the report or other document to identify those matters in the report or other document that the independent children’s lawyer considers to be the most significant ones for determining what is in the best interests of the child; and
(ii) ensure that those matters are properly drawn to the court’s attention; and
(d) endeavour to minimise the trauma to the child associated with the proceedings; and
(e) facilitate an agreed resolution of matters at issue in the proceedings to the extent to which doing so is in the best interests of the child.
There is no reason, and the parties put forward none, to think that the ICL did not discharge their role throughout the proceedings in accordance with s 68LA(5) of the Act. Despite the complexity and difficulty of these proceedings, I infer the role of the ICL was positive and constructive. In these proceedings, although not privy to any discussions which helped resolve aspects of the parenting dispute, I infer that the ICL assisted the parties to some extent at least in reaching an agreed partial resolution, which ultimately resulted in consent orders being made on 3 September 2019.
Other relevant matters
Both parties emphasised that the parenting aspect of these proceedings were complex and protracted. During the course of the proceedings there were six interim hearings, and two expert reports prepared by Dr R.
In this context, it is necessary to refer to s 117(5) of the Act, which is in the following terms:
(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.
In De Roma at [52] Watts J held s 117(5) of the Act requires the Court to disregard both the source of the Independent Children's Lawyer’s funding and the fact that the Independent Children's Lawyer is funded. It is a provision which should be interpreted as protecting the public purse. In Gahen & Gahen (No 2) [2013] FamCA 936 at [9] Austin J followed the view of Watts J and considered a costs application by an ICL “in the knowledge of the legislative intent that I should protect the public purse, where possible.” See also Firentes & Teung [2014] FamCA 1046 at [201].
I accept that both parties incurred significant legal fees, in the approximate amount of almost $750,000 plus GST each. However, this must be considered in the context of the proceedings as a whole, and whilst the parenting aspect of these proceedings were complex, so to was the property aspect, which no doubt contributed to the large legal costs of the parties. On one view these significant legal fees can explain the parties’ reticence to pay anything more towards legal fees. But I am obliged to protect the public purse, where possible. In my view it is possible in this matter. In circumstances where the parties have not insignificant wealth, and have expended a significant amount of money for their own fees, I consider it appropriate that they be ordered to contribute to the ICL’s costs in these proceedings.
Conclusion
I am satisfied each party should contribute to the costs of the ICL. Taking account of the range of continuing problems both parties will have, discussed above, the fact that both parties were able to find almost $750,000 to pay their own legal fees, and the need to protect the public purse, I consider some contribution to the ICL’s costs is appropriate. In my view, it is not in the interests of the parties or the ICL for any further time and money to be expended on the question of costs. I therefore consider the parties should be ordered to pay a specified amount of the ICL’s costs. Taking account of the amount claimed by the ICL, I consider, in the exercise of my discretion, that a contribution of $10,000 by each party is appropriate.
I certify that the preceding thirty eight (38) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Harper delivered on 29 April 2020.
Associate:
Date: 29 April 2020
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