Gade and Jabbar (No.12)
[2018] FCCA 1655
•12 July 2018
FEDERAL CIRCUIT COURT OF AUSTRALIA
| GADE & JABBAR (No.12) | [2018] FCCA 1655 |
| Catchwords: FAMILY LAW – Costs – application for costs by Independent Children’s Lawyer following a final hearing. |
| Legislation: Family Law Act 1975 (Cth), s.117 |
| Cases cited: De Roma & De Roma [2013] FamCA 566 Telfer & Telfer (1996) FLC 92-688 |
| Applicant: | MR GADE |
| Respondent: | MS JABBAR |
| File Number: | NCC 2265 of 2015 |
| Judgment of: | Judge Terry |
| Hearing date: | 6 June 2018 |
| Date of Last Submission: | 6 June 2018 |
| Delivered at: | Newcastle |
| Delivered on: | 12 July 2018 |
REPRESENTATION
| Solicitors for the Applicant: | Legal Aid NSW Newcastle |
| Solicitors for the First Respondent: | NLS Law |
| Appearance for the Second Respondent: | In Person |
ORDERS
The Application for costs by the Independent Children’s Lawyer is dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Gade & Jabbar (No.12) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT NEWCASTLE |
NCC 2265 of 2015
| MR GADE |
Applicant
And
| MS JABBAR |
Respondent
REASONS FOR JUDGMENT
Introduction
This is an application for costs by the Independent Children’s Lawyer following the end of a final hearing. The Independent Children’s Lawyer seeks orders that the father pay costs fixed in the sum of $15,566.50 and the mother pay costs fixed in the sum of $19,220.00. The difference in the amounts is because the father has already made some payments.
Both parents oppose the application.
Background
On 24 August 2015 the father filed an application seeking parenting orders in respect of the parties’ children [X] and [Y]. The matter came on urgently and on 31 August 2015 an order was made requesting the Legal Aid Commission to appoint an Independent Children’s Lawyer for the children.
A solicitor employed by Legal Aid NSW was appointed and on 19 October 2015 she sent each of the parties a letter informing them of her appointment and requesting that they provide her with certain information.
Attached to the letters sent to the parties was a document headed “Scale of Fees for Independent Children’s Lawyers from 9 December 2013.” It outlined that Legal Aid would be seeking reimbursement from the parties in due course for the entire cost associated with providing representation for the children and set out the costs which would be charged. The costs outlined were a lump sum for all work leading up to final hearing and individual costs which would be charged for discrete events such as preparation for and appearance at an interim hearing.
The Independent Children’s Lawyer requested that they each make an initial payment of $1,650.00 to Legal Aid or apply for a waiver or provide evidence that they were in receipt of a grant of Legal Aid.
The final hearing of the matter which involved property as well as parenting took place over six days in August and September 2017 and was adjourned to 18 October 2017 for closing submissions. Prior to the commencement of closing submissions, the Independent Children’s Lawyer handed to the father’s lawyer and to the mother a copy of a Costs Notice setting out the costs the Independent Children’s Lawyer intended to claim from each of them.[1]
[1] Affidavit of the Independent Children’s Lawyer filed on 24 May 2018
The costs were calculated in accordance with the scale of costs of which the parties had been advised.
I handed down a decision on 11 May 2018 and the Independent Children’s Lawyer immediately made an application for costs.
R.21.10 of the Federal Circuit Court Rules 2001 provides that unless the court otherwise orders, a party entitled to costs in a proceeding is entitled to costs in accordance with Parts 1 and 2 of Schedule 1 and disbursements properly incurred.
This clearly leaves it open to me to order costs on some other basis and it is appropriate in this case to use the scale advised to the parties by the Independent Children’s Lawyer.
The parties had ample notice of the intention of the Independent Children’s Lawyer to use this particular scale and it does not disadvantage them. The fees payable in accordance with that scale are modest compared to the fees which could be charged pursuant to Schedule 1. The total amount charged is in the vicinity of $38,000.00 for proceedings which involved numerous interim events and consumed five full hearing days and parts of two other days.
The applicable law
The court has the power to award costs on the application of an Independent Children’s Lawyer. The relevant starting point is s.117 (2) & (3) of the Family Law Act which provide as follows:
(2)If, in proceedings under this Act, the court is of the opinion that there are circumstances that justify it doing so, the court may, subject to subs. (2A), (4), (4A) and (5) and the applicable Rules of court, make such order as to cost and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.
(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.
S.117 (2A) contains the matters which I must consider in determining whether to award costs and they include the financial circumstances of the parties, the conduct of the litigation, whether any party has been wholly unsuccessful and any other relevant matter.
However s.117(4) always needs to be considered first when an application is made by an Independent Children’s Lawyer because it provides as follows:
(4) However, in proceedings in which an independent children’s lawyer 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 a party had to bear a proportion of the costs of the independent children’s lawyer;
The court must not make an order under sub-section (2) against that party in relation to the costs of the independent children’s lawyer.
The parties’ submissions
The Independent Children’s Lawyer submitted that both parties had the capacity to pay the costs sought. The father earned $324,000.00 per annum and while the court found itself unable in the property decision to be sure of the mother’s income it found that in light of her qualifications she should have the prospect of obtaining well paid employment in the future.
He asked the court to have regard to the fact that pursuant to the property orders the father would receive assets to the value of $390,110.18 and the mother assets to the value of $352,956.82. It was his case that there was nothing about the financial circumstances of the parties which meant that they would suffer hardship if required to pay the amount sought by the legal aid commission.
The Independent Children’s Lawyer also asked me to have regard to s.117 (5) of the Family Law Act. He asked me to interpret this section as Watts J did in De Roma & De Roma[2] and submitted that this should predispose me to make the orders sought by the Independent Children’s Lawyer.
[2] De Roma & De Roma [2013] FamCA566
S.117(5) provides as follows:
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.
The meaning of s.117 (5) was the subject of debate after it was inserted in the Family Law Act in 2003. Watts J noted that some judges had taken the view that s.117(5) made it more rather than less difficult for an Independent Children’s Lawyer to succeed with a costs application.
Watts J was of the view that s.117 (5) was ambiguous or obscure and that he was therefore entitled to have regard to extrinsic material capable of assisting to ascertain the meaning of the provision. He formed the view having regard to extrinsic material that:
It is clear that Parliament’s intention when introducing s. 117(5) FLA was that (absent any other s. 117(2A) FLA factors that pointed in the opposite direction) parties (usually parents) who could help pay for the Independent Children’s Lawyer, should.[3]
[3] De Roma & De Roma (supra) paragraph 44
Watts J also pointed out the similarity between the wording of s.117 (5) and the wording in s.75 (3) of the Family Law Act. S.75(3) requires the court when determining whether to make an award of spouse maintenance to disregard any entitlement of a party whose maintenance is under consideration to an income tested pension, allowance or benefit. Watts J observed that there had never been any dispute that this provision was designed to protect the public purse.
In his discussion of the matter Watts J referred to a passage from the judgment of Lindenmayer J in Telfer & Telfer[4]. That judgment predates the insertion of s. 117(3)- (5) into the Family Law Act but succinctly sets out the approach which Watts J considered s. 117(5) required a court to take when considering a costs application by an Independent Children’s Lawyer:
… the funds of the Legal Aid Office are finite; they are subject to very heavy demands in all areas, not the least of which is the area of legal aid for separate representatives for children in proceedings before this court. I think it is relevant for the court to consider, in the exercise of discretion as to costs, that the funds of such a body ought not to be exhausted in proceedings where there are other available means of providing the funds for the representation of the relevant children, and particularly where the necessity for that representation arises essentially out of conflict between the parties, rather than out of any deep- seated issues relating to the welfare of the children. [5]
[4] Telfer & Telfer (1996) FLC 92-688
[5] Telfer & Telfer (1996) FLC92-688
The Independent Children’s Lawyer submitted that the parties in the case before me had the capacity to pay the costs of separate representation of their children and that they should be ordered to do so.
The father submitted that notwithstanding his income it would cause him financial hardship if he had to pay the costs of the Independent Children’s Lawyer. He had the care of the two children and was receiving no child support and he had been required to pay an unusually large (unspecified) amount of legal costs during the parenting proceedings because the mother had brought an unusually large number of interim applications.
He was also facing proceedings in the Supreme Court and the District Court which had been filed by the mother.
The mother submitted that if the father could not afford to pay costs based on his income then it could hardly be argued that she could afford to do so. She maintained that her income was about $26,000.00 per annum. I gleaned from her submissions that she did not intend to immediately seek employment and intended to press on with completing her (studies omitted).
However the mother’s primary submission on the costs issue was a lengthy and vitriolic diatribe about the Independent Children’s Lawyer who she asserted had failed to do her job and had acted in concert with the father.
Discussion
I need to first consider whether s.117 (4) prohibits me from making a costs order. Neither of the parents has ever been in receipt of legal aid but the word “hardship” cropped up in their submissions.
A dictionary definition of hardship is “severe suffering and privation” and synonyms for the word include “privation, deprivation, destitution, poverty, austerity, penury, want, needs, neediness, beggary, impecuniosity, financial distress.”
The father earns $324,000.00 per annum and although he no doubt has many calls on his income and has incurred considerable expense in respect of the proceedings in this court, the Full Court and the Supreme Court of New South Wales he did not provide any detailed evidence about these matters in support of a submission that it would cause him hardship if he had to pay the costs sought by Independent Children’s Lawyer.
The father gave evidence in the property proceedings about expenses he had been required to meet since separation including paying for his parents to obtain permanent residency but it is not open to me in the absence of detailed evidence about his financial situation, including the extent of the legal costs he has been required to pay, to find that he would suffer hardship if ordered to pay $15,000.00, especially if he was given time to pay.
I noted in my property judgment that the mother had not been forthcoming with evidence about her income. It may be that she is earning $26,000.00 per annum as she claims. However she has never properly accounted for cash of $132,000.00 she removed from the parties joint account shortly after separation and she is entitled to $81,000.00 from the husband pursuant to the property settlement orders I made albeit to be reduced by payment of some costs owing to the father and the Legal Aid Commission. The mother is also highly qualified and there is nothing to suggest that she cannot in time obtain well paid employment.
I cannot not find that the mother would suffer hardship if she was required to pay $19,000.00 to the Legal Aid Commission especially if given time to pay.
The first of the s.117(2A) matters to which I am required to have regard in determining whether there are circumstances justifying a costs order being made is the financial circumstances of each of the parties to the proceedings and I have already referred to this. Both parties have an income earning capacity, the husband’s greater than the wife. Both will receive assets as a result of the property settlement.
I must consider whether any party is in receipt of legal aid and neither is or has been.
I must consider 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, direction to answer questions, admissions of facts, production of documents and similar matters.
The Independent Children’s Lawyer did not assert that this was a relevant consideration.
I must consider whether the proceedings were necessitated by the failure of a party to the proceedings to comply with an order of previous orders of the court; that is not a relevant consideration in this case.
I must consider whether any party to the proceedings has been wholly unsuccessful in the proceedings.
The mother was wholly unsuccessful in the parenting proceedings in that orders were made that she spend no time and have communication with the children.
I must consider whether any party to the proceedings made an offer in writing to the other party to settle the proceedings and the terms of any such offer.
That was not raised as a relevant matter by the Independent Children’s Lawyer.
I must consider such other matters as the court considers relevant.
An issue which might have been relevant is the mother’s decision to dispute that she sent the text messages and to argue that the video was a fake. As I noted in my 11 May 2018 judgment, she gave a great deal of contradictory evidence about these issues and her arguments about them were ultimately unsuccessful. The trial would still have been necessary if the mother had conceded these issues but it would have been much shorter. However the Independent Children’s Lawyer did not ask me to consider making a costs order against the mother based on the time taken dealing with these discrete issues.
Another relevant matter though is that this was always a complex case. It began as one where the father sought an order that the children spend only supervised time with the mother and ended as one where he sought a “no-time” order. That is an extreme outcome for children and it is not an outcome which the other parent can ordinarily be expected to accept. I have expressed concern about the mother’s conduct in respect of arguing about the validity of text messages and video but given the outcome proposed by the father and at trial by the Independent Children’s Lawyer, I cannot blame her for not settling the matter.
I also cannot find that the father took an unreasonable position. This was not a matter which simply arose out of conflict between the parents. It was a matter in which, to use the words of Lindenmayer J in Telfer & Telfer, “the necessity for representation arose out of deep-seated issues relating to the welfare of the children.”
Conclusion
The decision of Justice Watts in De Roma & De Roma is not binding on me as it is a first instance decision but his reasoning is compelling and I agree with his interpretation of s. 117(5). This means that I ought to give very serious consideration to making a costs order.
However while the father earns a high income, due to the number of interim applications the mother filed, the interim applications he was been required to file in relation to the property matter, the length of the parenting trial and the applications he has had to deal with in other courts he must have faced (although I cannot put a figure on it) an unusually heavy commitment to payment of legal fees, and he never took an unarguable or unreasonable position in the proceedings.
He is entitled to a property settlement but the property pool can only be described as modest and his share of it even more so.
The mother has been responsible for a large number of interim applications but the Independent Children’s Lawyer did not seek costs in respect of them at the time and some of them occurred up to two years ago now. She is not a high income earner whatever might be the case in the future and the comment on the modesty of the pool applies to her also.
The mother was wholly unsuccessful in the parenting proceedings but she cannot be blamed for opposing the final orders sought by the father given their extreme nature.
Taking into account the parents financial positions and the nature of the proceedings, I do not consider that the circumstances justify me making a costs order against the parents and I intend to dismiss the Independent Children’s Lawyer’s application for the father and mother to make a contribution to the costs of the representation of their children.
I certify that the preceding fifty-three (53) paragraphs are a true copy of the reasons for judgment of Judge Terry
Date: 12 July 2018
Key Legal Topics
Areas of Law
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Civil Procedure
Legal Concepts
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Costs
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Standing
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