JULIET & JONES
[2011] FamCA 737
•22 September 2011
FAMILY COURT OF AUSTRALIA
| JULIET & JONES | [2011] FamCA 737 |
| FAMILY LAW – COSTS - Application by Independent Children’s Lawyer for indemnity costs orders against father and costs on the costs application - application by mother for partial costs order against father of the parenting proceedings - application by father for a partial indemnity order in respect of any costs he is ordered to pay the Independent Children’s Lawyer |
| Family Law Act 1975 (Cth) s s117(2), 117(2)(a), 117(2)( c),117(2)(a)(e), 117(2)(a)(g) and 117(5) Family Law Rules 2004 (Cth) rr 17.20 and 19.50 | |
| Woodley v Time & Anor[2008] FamCA 162 Cachia v Hanes (1994) CLR 403 | |
| APPLICANT: | Independent Children’s Lawyer – Mr B |
| FIRST RESPONDENT: | Mr Juliet |
| SECOND RESPONDENT: | Ms Jones |
| FILE NUMBER: | HBC | 730 | of | 2007 |
| DATE DELIVERED: | 22 September 2011 |
| PLACE DELIVERED: | Hobart |
| PLACE HEARD: | Hobart |
| JUDGMENT OF: | Benjamin J |
| HEARING DATE: | 12 August 2011 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Tony Fitzgerald |
| SOLICITOR FOR THE APPLICANT: | Fitzgerald & Browne |
| COUNSEL FOR THE 1ST RESPONDENT: | Mr Paul Mason |
| SOLICITOR FOR THE 1ST RESPONDENT: | In person |
| COUNSEL FOR THE 2ND RESPONDENT | Mr John Munro |
| SOLICITOR FOR 2ND RESPONDENT | John Munro & Associates |
Orders
BY CONSENT the time be extended under the Family Law Rules 2004 (Cth) to enable the hearing of the costs application of Ms Jones filed 1 March 2011.
BY DETERMINATION;
Mr Juliet pay:-
a.the costs and disbursements of the Independent Children’s Lawyer in respect of the parenting proceedings (including the fees and charges of the single expert Ms C);
b.the costs of the Independent Children’s Lawyer on the costs application; and
c.such costs are assessed or taxed in accordance with the rate agreed between the Independent Children’s Lawyer and the Legal Aid Commission of Tasmania or the Family Law Scale, whichever is the less.
Mr Juliet pay:-
a.part of the legal costs of Ms Jones; namely one-half of her counsel’s fees in respect of the hearing at this Court between 23 April and 27 April 2010; and
b.such costs to be determined in accordance with schedule 3 of the Family Law Rules 2004 (Cth), being one half of item 205 in terms of counsel’s fees for each of those days.
The application to amend the order made the 30 June 2010 pursuant to the slip rule is dismissed.
All remaining and outstanding applications for the costs of and by the parties and the Independent Children’s Lawyers not otherwise dealt with in these orders are dismissed.
This matter be removed from the list of cases requiring determination.
IT IS CERTIFIED
Pursuant to Rule 19.50 of the Family Law Rules 2004 it was reasonable to engage counsel to attend.
IT IS NOTED that publication of this judgment under the pseudonym Juliet & Jones has been by the Chief Justice approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT HOBART |
FILE NUMBER: HBC 730 of 2007
| Mr B – Independent Children’s Lawyer |
Applicant
And
| Mr Juliet |
First Respondent
And
| Ms Jones |
Second Respondent
REASONS FOR JUDGMENT
INTRODUCTION
On the 30 June 2010 this Court delivered reasons and made orders in respect of a parenting dispute between Mr Juliet and Ms Jones (the father and mother respectively) in proceedings that were heard over four days in April 2010.
An Independent Children’s Lawyer had represented the interests of the children, D and E.
On the 19 July 2010 an application was filed by the Independent Children’s Lawyer seeking an order that the father pay the costs and disbursements of the Independent Children’s Lawyer of and incidental to the father’s application filed 26 March 2009. The Independent Children’s Lawyer also sought costs in respect of his application for costs. The Independent Children’s Lawyer sought no orders for costs against the mother.
The Independent Children’s Lawyer was seeking an order that his costs be paid on the basis of the Family Law Scale, rather than on the basis of the Legal Aid Scale pursuant to which the Independent Children’s Lawyer had been retained by the Legal Aid Commission of Tasmania.
The father filed an appeal in respect of the substantive orders made 30 June 2010 and that appeal was later either dismissed or abandoned. The Independent Children’s Lawyer’s application for costs was then pursued. The mother then filed a costs application in March 2011. In that application she sought an order that the father pay the costs of $21,600. That application was made out of time but counsel for the father consented to the extension of time to enable it to be heard. That was a sensible course as it was likely, in the particular circumstances that time would have been extended in any event.
During submissions counsel for the mother indicated that she was not seeking costs in respect of the costs application.
Counsel for the father had conceded that the father should pay one-half of the costs of the Independent Children’s Lawyer on a Legal Aid basis (and on the basis of the other half if there was to be a Bullock-type order). The father also sought orders that each party should pay their own costs of the application for costs. In the event that the costs application made by the Independent Children’s Lawyer was successful, counsel for the father sought a Bullock-type order[1] that the mother contribute one-half of the costs of the Independent Children’s Lawyer ordered to be paid by the father.
[1] Bullock v London General Omnibus Co [1907] 1KB 264.
At the commencement of the costs hearing counsel for the father sought an amendment to the orders made by the Court in June 2010 under the slip rule to provide that the mother have ‘face to face’ counselling and/or mediation with the father. This was an oral application.
THE RELEVANT LEGAL PRINCIPALS TO BE APPLIED
The general rule in respect of costs is that each party in the proceedings should bear their own costs. This rule is subject to s 117(2), s 117AA and s 118 of the Family Law Act 1975 (Cth) (“the Act”). A court may make such order as to costs, whether by way of interlocutory order or otherwise, as a court considers is just. The Court is required to consider whether there are circumstances to justify the making of a costs order having regard the matters set out in s 117(2A) of the Act. The question of costs is a matter of discretion.
In Woodley & Time and Anor (2008) FamCA 162 this Court said:-
30.In Brown v Brown (1998) FLC 92-882, Kay J said at pp 85,346 to 85,347:
The obligation under s 117(2A) is that the court shall have regard to the various matters set out thereunder. This is in contrast to the previous provisions under which costs orders were made, namely, under the Family Law Regulations and in particular reg 173 which required that the court may in making an order take into account various matters. The movement from a discretionary consideration to a mandatory consideration is a matter in my view of some substance.''
31.In the absence of their being circumstances that justify the court making an order for costs, then s117(1) provides that each party will bear his or her own costs of the proceedings under the act.
32.The interpretation to be applied to s117 and the inter relationship of s117(1) and s117(2) was considered by the High Court in Penfold v Penfold (1980) FLC 98-800. In this case Stephen, Mason Aickin and Wilson JJ, said at 75,053-75,054:
“It is an accurate description of sec. 117(1) to say that it expresses a general rule, provided that it is firmly understood that the subsection is not paramount to sec. 117(2). As subsec, (1) is expressed to be subject to subsec. (2), the former must yield whenever a judge finds in a particular case that there are circumstances justifying the making of an order for costs.”
Subsection (2) requires a finding of justifying circumstances as an essential preliminary to the making of an order. Beyond this there is nothing in the subject matter or in the interrelationship of the two provisions which imposes any additional or special onus on an applicant for an order for costs. Consequently…we do not agree with the suggestion…that an order can only be made under sec. 117(2) in a ‘clear case.
Subsection (2) does not in our view as a matter of law require the judge to specify the circumstances which justify the making of an order. It does not expressly say so, and in the context of the making of an order for costs there is no sufficient basis for making an implication. Judges very frequently make orders for costs without giving reasons or making findings, even when the costs are in issue. The absence of reasons or findings does not in itself indicate that a judge has erroneously exercised his discretion to award costs, though it will place an appellate court in the position of examining the circumstances and of determining for itself whether the circumstances show that the discretion was erroneously exercised.
Moreover, the transcript shows that it was only after the respondent’s financial position had been investigated at the hearing that, in answer to questions put by the judge in cross-examination, he admitted that he could afford to pay the increased maintenance which was ultimately ordered. The respondent had filed a Form 19…(which) presented a picture of the respondent as an insolvent, a man whose liabilities exceeded his assets. It made no mention of the very valuable assets which he owned and in which he had an interest... (at 75,054).
Consequently, there was ample material from which the judge could find that there were circumstances justifying the making of an order for costs. The facts that the appellant failed in relation to the trust and the matrimonial home, and that the vacation judge dismissed the interlocutory application, though matters which are of relevance, are not of sufficient strength to deny the conclusion that there were circumstances justifying the making of the order.
33.The case of Penfolds was discussed by Justice Wilson in the High Court decision of Mallet v Mallet (1984) FLC 91-507 (with whom Gibbs CJ, Mason, Dean and Dawson JJ agreed at pp 79,123-79,124). Penfolds case also made it clear that s117(2A) “requires a finding justifying circumstances as an essential preliminary to the making of an order”. It is clear that the court has a wide discretion and that beyond this there is no “additional or special onus” on the applicant for costs which requires the court to make a preliminary finding that special or exceptional circumstances exist before making an order for costs[2].
[2] Jensen and Jensen (1982) FLC 91-263.
34.By virtue of s 117(2A), in considering what order (if any) should be made under s 117(2), I am required to have regard to the matters set out in s117(2A) (a)-(g) in so far as they are relevant. The factors set out in the subparagraphs do not comprise of a closed list of factors, because s117(2A)(g) includes “such other matters as the court thinks relevant”. I need to consider each of the various factors, subject to their relevance, however, in PBF (as Child Representative for AF (Legal Aid Commission of Tasmania) v TRF and LKL (2005) FamCA 118 the Full Court held at paragraph 41:
…Nowhere in subsection 2(A) or elsewhere in section 117, is there any prescription that more than one factor must be present before an order for costs is made nor of comparative weight of the factors set out in subsection 2(A). As a consequence, there is nothing to prevent any factor being the sole foundation for an order for costs.
35.In the matter of I and I (No 2) FLC 92-625, the Full Court at p 82,277 said:
that the relevant matters in s 117(2A) “must all be taken into account and all balanced in order to determine whether the overall circumstances justify the making of an order for costs.”
36.In this case Nicholson CJ, Ellis and Baker JJ declined to follow the approach adopted in the decision of McDonald and Mc Donald (1994) FLC 92-508 in relation to the question of costs. In that earlier case his Mushin J had said at p 81,271;
In the first instance it is important to note that the principal proceedings concerned questions of custody. As between parties in the strict sense of that word, it is rare for an order for costs to be made in such proceedings. Circumstances such as a totally unmeritorious case on one side, an attempt to vary a custody order which does not even establish a prima facie case, the withholding of evidence, the giving of false evidence and like matters are common bases for such an order. However, where no factor of this type exists, there would usually need to be a very significant disparity in financial circumstances between the parties before a costs order was made.'
37.The Full Court in I and I (No 2) above, declined to follow this approach and held at p 82,277;
With respect... we see nothing in the provisions of s 117 to justify the approach to the question of costs in custody or any other proceedings suggested by him. The matters to which he referred are matters which, in an appropriate case, would be taken into account in determining whether the circumstances justified the making of an order for costs in a particular case. However, whether such matters exist or not, the other relevant matters referred to in s 117(2A) must all be taken into account and all balanced in order to determine whether the overall circumstances justify the making of an order for costs. The financial circumstances of the parties is but one of those matters and those circumstances must be taken into account whether or not there is a very significant disparity in financial circumstances between the parties.
Section 117(2A) of the Act provides:- In considering what order (if any) should be made under subsection (2), the court shall have regard to:
(a) the financial circumstances of each of the parties to the proceedings;
(b) whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;
(c) 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, directions to answer questions, admissions of facts, production of documents and similar matters;
(d) whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
(e) whether any party to the proceedings has been wholly unsuccessful in the proceedings;
(f) whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and
(g) such other matters as the court considers relevant.
I have also had regard to the decision of May J sitting as a single Judge of Appeal exercising appellant jurisdiction of the Family Court in Oliver v Oliver (No. 2) [2010] Fam CAFC 174 where she said at paragraph 39:-
It was held in the marriage of Greedy 1982 FLC 99-250 at page 77,382 that an award of costs ought to be a sum in relation to conduct of proceedings by the parties or to their relative circumstances at the time of the application of hearing.
That principle remains good and relevant law. I have had regard to those principles.
In this case I was also referred to s 117(5) of the Act which provides:-
[funding of independent children’s lawyer must be disregarded] in considering what order (if any) should be made under sub-section (2) in proceedings in which the 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 or approved by the Attorney-General.
THE EVIDENCE
The Independent Children’s Lawyer relied upon the reasons delivered by this Court on 30 June 2010 and parts of the father’s trial affidavit filed the 1 April 2010 which included the following:-
5.I am effectively semi-retired and only work when I have to. … I am the sole director of [F Pty Ltd] (“[F]”). … is a holding company and operates two enterprises, namely:-
(i)G Suburb is a master planned suburb in G Town Tasmania. This development has approval for 210 tenancies which I have now developed 50. The project is expected to be completed in approximately 10 years time. I have been working on this project since 2000 and I presently spend approximately 20 hours per week on this project; and
(ii)I am [involved in the organisation of a Festival], and [sic] annual event held in [Suburb H], Sydney Harbour. I do not participate in the day to day management of the festival…. I work approximately 12 days each year in this project.
The Independent Children’s Lawyer relied upon the paragraph of the affidavit setting out the father’s present living arrangements in terms of Ms J and evidence from the trial in relation to extensive overseas travel of, or proposed by, the father and his reduced working time.
Tendered by consent was a decision of the Child Support Agency dated 31 March 2011.[3] In that assessment the father’s adjusted taxable income was set at $220,000 per year. The reasons observed that the financial investigators recommendation was to set the father’s adjusted taxable income at $312,259 per annum. It is clear that the income of the father was at that time somewhere between $220,000 per year and $312,000 per year.
[3] Exhibit ICL1.
The Independent Children’s Lawyer tendered by consent a letter[4] by him to each of the parties dated 15 July 2009 setting out the role of the Independent Children’s Lawyer and in which each of the parties were put on notice that:-[5]
The Independent Children’s Lawyer would be seeking an order for all professional costs and disbursements.
[4] Exhibit ICL2.
[5] Ibid.
This was expressed to be save for a determination by the Legal Aid Commission deciding to waive or reduce fees.
The Independent Children’s Lawyer further relied upon an email[6] forwarded to the solicitors for each of the parties on 19 April 2010 in which he observed the following:-[7]
[6] Exhibit ICL3.
[7] Ibid.
I have just read the report from Dr C. I note she states as follows:-
Paragraph 1.10.4 at page 34:-
As indicated, the childrens’ greatest problems relate to parental conflict. The difficulties they face on a day to day basis are more likely to be a reflection of this conflict that the limitations of either parent.
Also, in paragraph 1.8 on page 32, Dr C states that it is her view:-
The best option would be an equal shared care arrangement … however, for this to work, the parents must find a way to resolve their differences. An equal shared care arrangement in circumstances of high conflict has the potential of burdening the children and causing distress.
And further, in that paragraph she states:-
However, if a shared care arrangement cannot work because the conflict cannot be resolved or managed, then it would be more appropriate for the children to predominantly be in one of the parent’s care. Of course, it is not clear cut who that parent should be.
The Independent Children’s Lawyer went on to say:-[8]
Having taken into account those matters set out above, it is my view, as the Independent Children’s Lawyer, that subject to anything Mr Weidmann (a Registrar of the Family Court) has to say, the time arrangements in terms of the periods of time that the children currently spend with each parent each week and during holidays and during special occasions should remain the same as per the current orders.
[8] Ibid.
The Independent Children’s Lawyer went on to say at the end of the email:-[9]
On this basis, and on the basis that the father has initiated the application of the mother’s primary response position is that there should be no alteration in the time arrangements, I put the father on notice that I will be seeking my costs on a full indemnity basis under the full scale (ie. not limited to the legal aid scale).
[9] Ibid.
The Independent Children’s Lawyer then argued that the father’s economic circumstances were that he could easily meet a costs order. Having regard to the father’s assets of at least $2.3 million dollars and an income of at least $220,000 per year, I am satisfied that this is the case.
I am also satisfied that his economic circumstances, both in terms of income and assets, are significantly greater than that of the mother who has a determined income by the Child Support Agency of $14,572[10] and according to her financial statement filed 7 March 2011, of $614 per week. I accept that she has an income as set out in her financial statement of about $30,000 per year. The mother’s income is primarily made up of Government benefits and family tax payments
[10] Exhibit ICL1.
The mother has assets of about $690,000 and liabilities of about $68,000. The mother has a house valued at $680,000 and a mortgage of about $24,000 and credit card debts of about $6,700. There was an issue as to the value of the home however, it is clear the mother’s assets are far less extensive than those of the father. The mother has outstanding legal fees of about $35,000.
Neither the mother nor father is or was in receipt of Legal Aid in terms of the costs of the hearing.
Finally the Independent Children’s Lawyer relied upon the father being wholly unsuccessful in his application. The father was unsuccessful in terms of his case that the children live primarily with him or that the children live equally with him and the mother. The father was successful in some parts of this application but he was, overall, substantially unsuccessful.
The mother’s application, that the father’s proceedings be dismissed pursuant to the rule in Rice v Asplund (1979) FLC 90-725, was dismissed.
The mother relied upon her affidavit filed 11 March 2011.
The father relied upon his responses,[11] in one of which he seeks dismissal of the mother’s costs application and in the other he seeks that mother pay half of the costs of the Legal Aid Commission. The father also relied upon his affidavit[12] and an affidavit of his partner.[13] I have had regard to this evidence.
[11] Both filed the 24 May 2011.
[12] Filed the 24 May 2011.
[13] Filed the 24 May 2011.
The father tendered a letter[14] from the Independent Children’s Lawyer serving the costs application showing that the Independent Children’s Lawyer had at all relevant times after the delivery of reasons sought a costs order against the father solely.
THE ISSUES
[14] Exhibit F1.
Should the father pay the costs of the Independent Children’s Lawyer?
There is no issue that the father should pay one half of the costs and disbursements of the Independent Children’s Lawyer (presumably including the fees of Dr C), it is the other half to which he objects. The father says that as the Independent Children’s Lawyer he (the Independent Children’s Lawyer) needs to be ‘even handed’ and to prevent further damage to the children should they find out what the consequences of these orders will be, that it is in their best interests and it is hoped that each party contribute equally to the costs of the Independent Children’s Lawyer.
The father asserts that, the Independent Children’s Lawyer, in adopting the course he has adopted is itself not in the children’s best interests.
The Independent Children’s Lawyer made submissions on the evidence in these proceedings and correctly observed the following:-
(a)that the mother was ultimately primarily successful. There were some orders which were made in favour of the father and the mother did not succeed on the Rice v Asplund (supra) argument, but all in all, the primary dispute was where the children lived and the consent orders which were made in 2006 in that regard were left essentially in place. The other orders that were made were relatively minor in nature. Whilst the other orders were not entirely minor they were a less significant focus of the proceedings.
The father was not wholly unsuccessful but he was significantly unsuccessful and I have had regard to that as one of the other factors in assessing s 117(2A)(g).
(b)The father’s financial circumstances are considerably different to that of the mother. The father does not need to work full time and is, in his words, ‘semi retired’. He has an income of at least $220,000 per year and it is possibly greater than that sum. He has the capacity, if he chooses, to work greater hours. The father’s asset position is three to four times greater than that of the mother.
(c)The father was warned by the Independent Children’s Lawyer not to pursue the trial and to adopt a sensible negotiated outcome. The father was warned that if the trial was pursued and that if there was an outcome similar to the existing outcome that a costs order would be sought against him.
Each of the parties argued about the rights and wrongs of their relative positions. In my reasons in the substantive proceedings, which I have read in full context rather than partial context as submitted by me by each of the parents, it is clear that there was enormous conflict between the parties. I have had regard to that conflict.
There was a submission that the Independent Children’s Lawyer was showing bias by making a costs application only against the father. In this case the Independent Children’s Lawyer is entitled to make that application having regard to the findings made by me and the financial circumstances of the parties combined with the father’s relative lack of success in these proceedings. I do not accept that submission.
The father is well able to afford those costs and fees and it will not impinge on his ability to care for the children or to meet his child support obligations. His financial circumstances are far superior to those of the mother. The father’s application was substantially unsuccessful and he was, just prior to the hearing, warned of the risks and the likelihood that his application would not succeed. He went ahead despite that warning.
In exercising the broad discretion that I have in relation to the question of costs I am satisfied that the father should pay the whole of the costs and disbursements of the Independent Children’s Lawyer, including the fees of Dr C.
Should the mother contribute toward half of the father’s liability for the costs of the Independent Children’s Lawyer?
There was specifically no application by the Independent Children’s Lawyer for an order for costs against the mother; as such it was not open for me to make such in order directly against her.
It was open for me to make a Bullock-type order.
The mother’s financial circumstances are significantly less than that of the father’s. She was not in receipt of Legal Aid. I was critical of the mother in terms of her communication about the children and in terms of some aspects of her evidence. I was equally critical of the father. I have had regard to all of those criticisms in determining the question of costs.
The father was able to fund senior counsel at the costs hearing (and I certified for senior counsel at his request).
The mother had entered into consent orders with the father, although those orders were not working particularly well, and the end result was substantially that which the parties had at the commencement of the hearing.
Having regard to the broad discretion which I have in relation to the question of costs, I am not persuaded that the mother should contribute indirectly or directly to the costs of the Independent Children’s Lawyer, and I do not intend to do so.
Should the father pay the Independent Children’s Lawyer’s costs on the basis of the Legal Aid Scale or as party/party costs under scale set out in the Family Law Rules?
The next issue is whether those costs should be on the basis of the Legal Aid Scale or party/party costs taxed or assessed in accordance with the Family Law Rules. To that end the Independent Children’s Lawyer relied upon the matters I have eluded to elsewhere and relied upon a decision of Butler J[15] in Jetson v Harrison (unreported 4 June 1993) where His Honour observed:-
Neither the Family Law Act nor the Rules made thereunder, refer to the use of a reduced scale of costs when taxing party party bills under Orders made in favour of assisted persons. The provisions of the Act and the Commission’s guidelines, when read together, disclose (inter alia) an intention to protect the Commission’s revenues, by (inter alia) in effect placing the successful assisted person in the same position as to the responsibility for the quantum of costs with the solicitor, as if the Commission had not been involved.
[15] In the Family Court of Australia.
His Honour then went on to make an order for payment of costs on a party/party basis.
The Independent Children’s Lawyer said that I could not have regard to the arrangement between him and the Legal Aid Commission having regard to s 117(5) of the Act, to which I have alluded to earlier. I do not accept adopt that submission as it is too wide for s 117(5) of the Act was put in place to prevent an argument that the relative wealth of the Legal Aid Commission vis-à-vis the parties, be a factor in determining the question of costs. This question is one of indemnity.
In this case, the Independent Children’s Lawyer was appointed pursuant to s 68L(2) Act by order made 13 July 2009. The Legal Aid Commission made arrangements to secure that independent representation of the children's interests. Part of those arrangements involved the Commission contracting to pay the lawyer, including the rates of such payment. The Independent Children’s Lawyer undertook to do that work at those rates.
The High Court has made it clear that legal costs are not punitive; they are by way of indemnity. As Mason P said the Court of Appeal NSW in Dyktynski v BHP Titanium Minerals Pty Ltd [2004] NSWCA 154 (14 May 2004):-
4 The indemnity principle is well-established. In Cachia v Hanes[1994] HCA 14; (1994) 179 CLR 403, Mason CJ, Brennan J, Deane J, Dawson J, and McHugh J said (at 410) that:
It has not been doubted since 1278, when the Statute of Gloucester introduced the notion of costs to the common law, that costs are awarded by way of indemnity (or, more accurately, partial indemnity) for professional legal costs actually incurred in the conduct of litigation.
5 As Bramwell B put it in Harold v Smith (1860) 5 H&N 381 at 385[1860] EngR 516; , 157 ER 1229 at 1231, "... find out the indemnification, and then you find out the costs which should be allowed".
6 One corollary of the principle is the rule that a litigant in person who is not a lawyer cannot recover compensation for time spent in preparing and conducting the case (Cachia).
7 Another corollary is invoked by the respondent in the present case. If a party to an action has agreed with the solicitor that the party does not have to pay any costs, then costs cannot be recovered against the adversary under a party and party order (Gundry v Sainsbury[1910] 1 KB 645, McCullum v Ifield[1969] 2 NSWR 329 at 330). Alternatively, if the solicitor-client agreement caps the amount of costs recoverable, this enures to the benefit of the client's adversary (Tarry v Pryce (No 2)(1987) 88 FLR 270).
8 The situation is different if the client has the benefit of an indemnity from a third party, so long as the client remains under a legal liability to the solicitor (Adams v London Improved Motor Coach Builders Ltd[1921] 1 KB 495, Backhouse v Judd[1925] SASR 395, Angor Pty Ltd v Ilich Motor Co Pty Ltd [1992] FCA 348; (1992) 37 FCR 65, Wilson v Richmond River Shire Council [2000] NSWSC 71).
9 The distinction is neatly stated by Bankes LJ in Adams, in a passage explaining why a plaintiff, who was a member of a trade union that instructed a solicitor on his behalf in a successful action, could recover the solicitor's costs. His Lordship said (at 501):
When once it is established that the solicitors were acting for the plaintiff with his knowledge and assent, it seems to me that he became liable to the solicitors for costs, and that liability would not be excluded merely because the Union also undertook to pay the costs. It is necessary to go a step further and prove that there was a bargain, either between the Union and the solicitors, or between the plaintiff and the solicitors, that under no circumstances was the plaintiff to be liable for costs.
The position of the Independent Children’s Lawyer is different to a traditional legal practitioner retainer. Independent Children’s Lawyers are requested to take a referral by the Legal Aid Commission and then act essentially without instructions, except as limited in spending by the Commission and as directed in their approach by the Act and the general ethical principles by which they are entitled to be licensed as legal practitioners. Their costs are determined and capped by the Legal Aid Commission.
Having regard to the above principles the Independent Children’s Lawyer cannot recover more that that agreed amount.
The appropriate costs order ought to be that the costs are assessed or taxed in accordance with the rate agreed between the Independent Children’s Lawyer and the Legal Aid Commission provided that it is not in excess of the Family Law Scale.
In addition, of course, the father is liable for the fees for the preparation of the report by Dr C and other necessary disbursements.
The issue of the mother’s costs
The mother seeks an order that the father pay her legal costs particularised as;
·Costs of the hearing of $9,600;
·preparation of affidavits of $6,000; and
·perusal of affidavits and reading of the family report of $6,000 and preparing for the hearing.
The total costs claim by the mother amounted to $21,600.
As I have indicated earlier, the mother’s financial circumstances are significantly less than that of the father’s. She does not have the disposable income or the ability to fund travel and events to the extent that the father has deposed to in his affidavit. The mother has far less capital and she was not in receipt of Legal Aid (nor was the father). The father was able to fund senior counsel at the costs hearing (and I certified for senior counsel at his request).
I was critical of the mother in terms of her communication about the children and in terms of some aspects of her evidence. I was also critical of the father. I made some adverse observations of the parties in my primary Reasons including:-
1.… these are 2 otherwise intelligent human beings who are sacrificing their children in the order of their personal animosity. Both parents should hang their heads in shame.
Later in those Reasons I observed the mutual aggression and hostility between the parties. I have had regard to the parties approach to the proceedings coloured by their mutual animosity. I have had regard to all of those criticisms in determining this question of costs.
I am satisfied that the trial was extended for a longer period of time, bearing in mind the argument with regard to where the children should live, whether it be equally with the father or primarily with the father. As a consequence the mother has incurred considerable expense in terms of these proceedings. The mother had entered into consent orders with the father and the end result was essentially that which the parties had at the commencement of the hearing. The father was substantially unsuccessful and was aware of the view of the expert and of Independent Children’s Lawyer prior to the hearing commencing.
I am satisfied that there ought to be at least a partial costs order in favour of the mother. To that end I will order that the father pay one-half of the mother’s counsel’s fees for the hearing. That does not include any conferences or perusal of affidavits but simply one-half of counsel’s fees for the four days of the hearing.
That sum should be relatively easy to calculate and should not involve significant additional costs burdens on the parties.
Application under the Slip Rule
In my Reasons I made comment that it was time that the mother had face to face time with the father. By oral application the father seeks particularisation of those orders to put in place the words that I alluded to in my Reasons.
Rule 17.20 of the Family Law Rules provides:-
Errors in orders
(1) If a party claims that there is an error in an order issued by the court, the party must give written notice of the error to the Registry Manager and all parties.
(2) A Registrar may rectify an error that appears obvious on reading the order.
Example
A kind of amendment that a Registrar may make under subrule (2) is the correction of a typographical error.
(3) If the Registrar:
(a) is in doubt about whether there is an error in an order; or
(b) believes that an error in an order has, or may have, arisen from an accidental slip or omission;
the Registrar may take action under subrule (4).
(4) If subrule (1) or (3) applies, the party or Registrar may, after giving reasonable notice to each party, refer the order to the judicial officer who made it.
Note If the judicial officer who made the order is unavailable, it may be referred to another judicial officer (see rule 1.13).
(5) A judicial officer may, after giving each party a reasonable opportunity to be heard, rectify a suspected error referred to the judicial officer.
Note An amendment of an order may be made under this rule only if it is an error obvious when reading the order. Any other amendment must be remedied by appeal or consent.
I note that this was not a ground of appeal to which the father alluded to in his Notice of Grounds for Appeal and in particular I am aware that order 2 (c) of the orders dated the 30 June 2010 provide:-
…. Such process shall be a mediated process and that the parties shall communicate with a facilitator and each other in such process/processes.
I then went on to provide in order 19 that the parties shall each attend a further Parenting after Separation Course and that the course be completed within 12 months from the date of the orders.
I have had regard to the submissions of both the Independent Children’s Lawyer and counsel for the mother. I have noted that no appeal point was raised by the father on this point in the grounds of appeal to the Full Court. It seems that there has been laches or delay on the part of the father in that this complaint was made by him many months, if not a year, after the order was made. It may be that the order is not as well phrased as it may otherwise have been but I am not satisfied that it was an accidental slip or omission to which the rule applied.
As such I dismiss the father’s oral application in that respect. .
I certify that the preceding sixty six (66) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Benjamin delivered on 22 September 2011.
Associate:
Date: 22 September 2011
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