Director General, Department of Community Services v Houdek

[1999] NSWSC 1031

CITATION:	Director General Department of Community Services v Houdek & Ors [1999] NSWSC 1031
CURRENT JURISDICTION:	Common Law
FILE NUMBER(S):	10635/99
HEARING DATE(S):	13 October 1999
JUDGMENT DATE:	13 October 1999
PARTIES :	Director General Department of Community Services (Plaintiff) Wolfgang Houdek (First Defendant) Ling Lin Houdek (Second Defendant) Helen Syme CM (Third Defendant) Lynda Jennings, Clerk of the Campsie Children's Court (Fourth Defendant)
JUDGMENT OF:	Bell J at 1

COUNSEL :	Mr I Bourke (Plaintiff)
SOLICITORS:	IV Knight, Crown Solicitor (Plaintiff) Ellis McLachlan (First Defendant)
CATCHWORDS:	COURTS AND JUDGES; Children's Court; Power of court to make costs order as sanction for breach of directions; Whether incident of implied power
ACTS CITED:	Children (Care and Protection) Act 1987 Children's Court Act 1987
CASES CITED:	Wilson v McDougall (1987) 11 NSWLR 241 Grasby v Regina (1989) 168 CLR 1 B v K (unreported) 24 September 1998 Gittins v WHC Stacey and Son Pty Ltd (1964) 82 WN (Part 1) NSW 157 Darcey v Preterm Foundation Clinic (1983) 2 NSWLR 497
DECISION:	Summons dismissed; Plaintiff to pay defendants' costs

THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

BELL J

Wednesday, 13 October 1999

10635/99 - DIRECTOR GENERAL, DEPARTMENT OF COMMUNITY SERVICES v WOLFGANG HOUDEK AND ORS

JUDGMENT

1 HER HONOUR: By these proceedings, the plaintiff, the Director General of the Department of Community Services, seeks by summons filed on 19 March 1999, firstly, a declaration that the order for costs made by the third defendant, a magistrate exercising jurisdiction under the Children (Care and Protection) Act 1987 against the plaintiff on 16 November 1998 is void and of no effect. Secondly, a declaration that the third defendant lacked jurisdiction to make an order for costs in favour of the first and second defendants. Consequential orders are also sought as set out in the summons.
2    The third defendant, the magistrate, and the fourth defendant, the Clerk of the Campsie Children’s Court, have both entered submitting appearances. The second defendant, Ling Lin Houdek, has, so I am informed by the parties, indicated that she has no interest in the subject proceedings.
3    As is clear by reference to the terms of the second declaration sought in the plaintiff’s summons, it is the plaintiff’s submission that the learned magistrate did not have jurisdiction to make the order for costs which she purported to do in the proceedings on 16 November 1998.
4    A deal of affidavit evidence was placed before me on the hearing of this matter. It is not necessary for me to refer to it in detail since there was a large measure of agreement between the parties as to the relevant facts.
5 On 4 March 1998 the plaintiff filed in the Children’s Court at Campsie a care application pursuant to s 57 of the Children (Care and Protection) Act in relation to Michael Houdek, an infant then aged about 18 months. On 11 March 1998 the court found that the child was in need of care within the meaning of that Act. The proceedings were adjourned to 3 April 1998 and an order made that the child remain in the care of the Director General.
6 On 3 April 1998 the proceedings were again before the Children’s Court. On that date a report was placed before the court dated 2 April 1998 prepared by Mr Abdullah, a District Officer with the carriage of the proceedings on behalf of the plaintiff. Mr Abdullah recommended in the body of that report that an order pursuant to s 72(1)(c)(ii) of the Children (Care and Protection) Act be made placing the child in the care of his father for a period of 12 months upon the father making certain undertakings.
7    Thereafter the proceedings were further adjourned on occasions.
8    Mr Abdullah commenced a period of extended leave on 10 August 1998. Another District Officer in the employ of the plaintiff, Ms Spiliotopoulos, took over the conduct of the matter.
9 On 9 September 1998 the proceedings were again before the court. On that occasion the plaintiff was represented by Ms Fairley, solicitor. An updated report prepared by Ms Spiliotopoulos was tendered on that occasion. In that report which bore the date 9 September 1998 a recommendation that an order pursuant to s 72(1)(c)(ii) placing the child in the care of his father for a period of 12 months upon the giving of certain undertakings was again made. The proceedings were adjourned to 30 September 1998.
10    On 30 September 1998 Ms Fairley again appeared on behalf of the plaintiff. A transcript of the proceedings on that day is in evidence before me. At the commencement of the proceedings Ms Fairley informed the court of the following matters:

“My instructions are that the child be placed in the custody of his father. The department had recommended 12 months and the father has indicated that he wanted until 18 and the department is agreeable to that proposition. The undertakings remain the same as before.”

11    The transcript goes on to record that Mr McLachlan, who appeared on behalf of the father, observed that it appeared, having regard to the contents of Ms Fairley’s statement, that the Department had accepted submissions which he had made to it in writing.
12    The solicitor who appeared on behalf of the child’s mother indicated that she was not in a position to advise the court as to her client’s instructions. However, she asserted her belief that her client was unlikely to agree to the proposed order, namely that the child be placed in the custody of his father until he attained the age of 18 years, and she foreshadowed that the matter may have to proceed to a hearing.
13    It is clear from a reading of the transcript of 30 September 1998 that the assertion by Ms Fairley that the Department was agreeable to the orders sought by the father had introduced a new element.
14    Having regard to the submission made by Ms Rowley on behalf of the mother that it was likely that the matter would now need to proceed to hearing, the magistrate proceeded to make a number of directions. Those are recorded at page 4 of the transcript:

“Department to file the orders now sought within 14 days together with a list of documents that it relies on or proposes to rely on for hearing. Father to file his affidavits that he proposes to rely on within 7 days thereafter together with notice of witnesses required for cross-examination. Mother to file 7 days thereafter together again with notice of witnesses required for cross-examination.”

15    Her Worship fixed a date for hearing on 14 December 1998.
16    On 1 October 1998 Mr McLachlan wrote to the Assistant Manager of the plaintiff’s Marrickville office noting the order that the court had made, namely that the Department file and serve its material within 14 days. Mr McLachlan went on to ask if the material might be sent by facsimile to his North Sydney office to ensure compliance by his firm with the court’s direction to file material on behalf of the father within 7 days.
17    It is to be noted that in her affidavit Ms Spiliotopoulos states that she did not attend the Children’s Court on 30 September 1998 when the magistrate made the subject orders. She asserts that throughout the time she had the carriage of the matter it was her understanding that the Department at all times maintained it was seeking a 12 month custody order in favour of the father. She goes on to say in the concluding paragraph of her affidavit that on or around 1 October 1998, “I received a letter from Ellis McLachlan in relation to the care proceedings”.
18    She annexes a copy of the letter to which I made reference a few moments ago. She does not disclose what, if any, action she took in relation to the receipt of that letter. It appears that the Department did not respond to it.
19    Mr McLachlan on 27 October, almost two weeks after the expiration of the time period imposed on the plaintiff by the magistrate’s directions, wrote a further letter to the plaintiff. That letter is an annexure to the affidavit of Mr McLachlan. It is in these terms:

“We refer to our letter of 1 October 1998, a copy of which is attached. We do not appear to have been served with the department’s material to enable us to in turn file our client’s material. We note the court gave very clear directions on 30 September and the department’s known breach of those directions. Unless we receive those materials within the next 48 hours, we shall seek to re-list the matter to ask the court for further directions, including a direction in relation to costs. We trust that will not be necessary.”

20    A further annexure to the affidavit of Mr McLachlan is a copy of a letter apparently sent to Mr Abdullah dated 30 October 1998 and prepared by Rowley and Associates, the solicitors for the mother. That letter refers to an earlier letter of 19 October sent by that firm to Mr Abdullah. A copy of the letter of 19 October is attached to the subsequent letter and I infer it had not been responded to as at 30 October 1998. The letter of 30 October, inter alia, states:

“Our client is becoming most anxious with respect to the department’s apparent change of position and we request that you comply with the court directions made on 30 September 1998 in relation to the department providing written advice as to its position. We advise that if the same is not received by 5 pm on Friday, 30 October 1998, then we will be requesting the court to re-list the matter at the first available opportunity.”

21    It is not suggested that the Department took any action to reply to that letter or Mr McLachlan’s letter of 27 October 1998.
22    There is no explanation as to the basis upon which the solicitor, Ms Fairley, put to the court on 30 September that the Department’s stance was now to agree to an order in terms that the child remain with the father until aged 18. Ms Fairley did prepare a file note which is annexed to her affidavit sworn on 2 June 1999. That file note records:

“Department to file doc setting out current position and noting why change and orders sought and list of docs proposes to rely on 14 days”

23    On 2 November 1998 Mr McLachlan wrote to the Registrar of the Campsie Children’s Court noting that no documents had been served on him by the plaintiff and requesting that the matter be re-listed for further directions. In that letter Mr McLachlan stated,

“The father, of course, cannot complete his material until such time as he has received the department’s documentation. On 1 October and subsequently on 27 October letters were sent by this office to the Marrickville CSC in regard to that court direction. To date no documents have been served.”

24    A copy of that letter was sent to the plaintiff.
25    Mr Abdullah returned from leave on 15 October 1998. Such reports containing recommendations as to the custody of the child Michael Houdek as were contained on the Department’s file consistently sought orders in terms that the child be placed in the custody of the father for a 12 month period. Neither Ms Spiliotopoulos nor Mr Abdullah were aware that the Department had at any time changed its position in this regard. It appears that no transcript of the proceedings before the court on 30 September was taken out. As I have already indicated, no evidence has been led to explain the basis upon which Ms Fairley made the submissions that she did to the court on 30 September.
26    Following receipt of the letter of 2 November prepared by Mr McLachlan, it appears that Mr Abdullah took some action. The following day he made contact with an administrative officer with the Campsie Children’s Court. He was not aware that the court had set any deadlines for the filing of documents by the Department. The administrative officer faxed him a copy of documents setting out the orders that the court made on 30 September.
27    The following day Mr Abdullah met with Mr Malos, the Department’s legal officer, and showed him a copy of Mr McLachlan’s letter of 2 November. The two of them then reviewed the Department’s file relating to the child Michael Houdek. They saw no evidence by reference to the file of any change in the Department’s position. Accordingly, neither Mr Abdullah nor Mr Malos considered it was necessary to take any action with respect to the order that “the department file documents setting out current position and noting why change and orders sought.” I quote there from the document which is annexed to the affidavit of Mr Abdullah, being the copy of the orders which he received on or about 3 November 1998.
28    Mr Malos in his affidavit states:

“I was not concerned about the matter being re-listed because as far as I was concerned, except for the failure to file a list of documents, the department had complied with the directions made on 30 September 1998. My understanding of the effect of the direction made on 30 September 1998 was that the department was required to file a report if and only if it had changed its position in relation to the final orders sought.”

29    The matter was listed before the court on 11 November 1998. It was not dealt with on that day and it was stood over to 16 November. On that occasion the magistrate, after hearing submissions from both Mr McLachlan and Mr Malos, made an order that the plaintiff pay the costs of the first defendant in a sum which she fixed in the amount of $350.
30 It is common ground that there is no power in terms under either the Children (Care and Protection) Act 1987 or the Children’s Court Act 1987 for the making of an order for costs in proceedings pursuant to the former Act.
31 Mr McLachlan submits that s 15 of the Children’s Court Act is in terms sufficiently broad to embrace an order for costs. That section provides as follows:

“The court may in respect of all matters with respect to which it has jurisdiction make such orders, including interlocutory orders, as it thinks appropriate.”

32 The submission based on, in effect, s 15 was not to the forefront in the way Mr McLachlan developed his submissions. It is not necessary for me to determine the scope of s 15 having regard to the view I have formed about the matter.
33 The plaintiff accepts that a magistrate exercising jurisdiction pursuant to the Children (Care and Protection) Act may make an order for costs in the exercise of the court’s implied powers. Such a power, it is submitted, would only be found in an exceptional case. In this respect the plaintiff referred me to the decision of the court in Wilson v McDougall (1987) 11 NSWLR 241. It is not submitted that the later decision of the High Court in Grasby v Regina (1989) 168 CLR 1 has relevantly altered the authority of Wilson, although it is noted that his Honour Newman J in the latter case spoke of the power to make an order for costs as falling within the inherent jurisdiction of the Children’s Court.
34    The plaintiff submits, relying on Wilson and on a decision of his Honour Hodgson CJ in EQ in B v K (unreported) 24 September 1998, that the power of a magistrate exercising jurisdiction in care proceedings to make an order for costs only arises in circumstances where the party against whom the proposed order is to be made has engaged in misconduct. The circumstances of the present case, so the plaintiff submits, may be suggestive of inefficiency on the part of its officers but do not establish misconduct.
35    Both Wilson and B v K were cases in which consideration was given to the power to make an order for costs in care proceedings where the proceedings were themselves tainted by misconduct.
36    It seems to me that the failure to abide by a direction of the court made within jurisdiction might be thought to raise different considerations to those with which the court was concerned in both Wilson and B v K.
37 Mr McLachlan in his written submissions made reference to an article written by K Mason QC, as his Honour then was, published in (1983) 57 ALJ 449. The article is titled “The Inherent Jurisdiction of the Court”. The learned author there referred to the court’s inherent jurisdiction to order its own business:

“These powers extend to the imposition of sanctions involving the payment of costs upon failure to adhere to the procedures laid down.”

38    The decision of the court in Gittins v WHC Stacey and Son Pty Ltd (1964) 82 WN (Part 1) NSW 157 was cited in this respect. That case involved a challenge to the power of the court to frame a practice note with the consequence of exposing parties to penalties in costs upon the failure to comply with it. His Honour Brereton J observed (at 158):

“In my opinion, it follows from what I have already said that if the court can order its own business, it must be able to impose some sanction upon failure to adhere to the procedure laid down.”
Gittins was concerned with the inherent powers of this Court.

39 It would be surprising if the implied powers of a magistrate exercising jurisdiction pursuant to the Children (Care and Protection) Act did not include the power to sanction by an order for costs a breach of directions made to ensure the orderly conduct of the proceedings. Mr Bourke, who appears for the plaintiff, did not seek to contend otherwise. However, it was his submission that the power to make an order for costs in circumstances of non-compliance would only arise where the non-compliance was accompanied by mala fides or recklessness. No authority was cited for that limitation. The plaintiff relied on the observations in Wilson and B v K which, as I have noted, seem to me to raise rather different issues.
40 Similarly, the plaintiff conceded that a magistrate exercising jurisdiction under the Children’s Court Act would have power to make an order for costs against a person who procured the issue of process in the nature of a subpoena cast in excessively wide terms upon a successful application to set that subpoena aside. In such a case, Mr Bourke submitted, there would be an abuse of the procedure of the court such as to found the implied power to order costs.
41 In Darcey v Preterm Foundation Clinic (1983) 2 NSWLR 497 at 503-4, his Honour Hunt J, as he then was, observed,

“There is no doubt in my mind that the magistrate was correct in awarding costs in these circumstances, if indeed he had the jurisdiction to do so. The only question is whether that inherent jurisdiction existed. It would certainly be surprising if it did not. It was accepted by Mr Darcey, again correctly in my view, that this court would have the inherent jurisdiction to award costs in these circumstances.”
Like Wilson this decision was prior to Grasby .

42    In developing his submission that something more than non-compliance with a direction made within jurisdiction needed to be made out, Mr Bourke submitted that the plaintiff’s failure to reply to correspondence from both Mr McLachlan and Ms Rowley was not a relevant consideration. The matter which attracted the order for costs, so Mr Bourke submitted, was the re-listing of the proceedings which followed the application addressed to the court dated 2 November 1998. Thereafter, it was submitted, the plaintiff had not been wholly inactive. Mr Bourke referred to the evidence that Mr Abdullah and Mr Malos had looked through the Department’s file and seen no evidence of a change of position and thereafter concluded, wrongly, that it was not necessary to take any action to comply with that portion of the order relating to filing documents setting out the Department’s current position.
43    The magistrate took into account the plaintiff’s failure to respond to requests addressed to it in writing and what she described as further reminders. In my view she was right to do so.
44    I consider the starting point is the admitted failure of the plaintiff to comply with the directions of the court made with a view to the efficient dispatch of the proceedings. I consider the unexplained failure to obey the directions of the court might in an appropriate case justify the making of an order for costs. Not every failure would do so.
45    In determining whether the failure is of such a quality as to attract the sanction of a costs order, the court may look to the conduct of the defaulting party. Here the plaintiff submits that the agreed failure arose as a result of a misconception by its officers. That submission needs to be evaluated in the light of the plaintiff’s failure to heed the correspondence both from Mr McLachlan and the firm Rowley and Associates which put it on notice that the view taken by Mr Abdullah and Mr Malos of the meaning and effect of her Worship’s orders was not shared by the other parties to the proceedings and was the cause of embarrassment to them.
46    I consider that the making of the order in the circumstances of this case was within the scope of the court’s implied power in order to ensure compliance with directions made to promote the efficient conduct of the litigation before it. I detect no error of principle in the approach that the magistrate took.
47    Accordingly, I dismiss the summons. I order the plaintiff to pay the defendants’ costs.

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Last Modified: 10/14/1999