Krusaroski and Krusaroski

[2019] FamCA 893

FAMILY COURT OF AUSTRALIA

KRUSAROSKI & KRUSAROSKI [2019] FamCA 893

FAMILY LAW – COSTS – Costs of the Independent Children's Lawyer – Where the Independent Children's Lawyer has sought that the mother pay half of their costs of the proceedings – Where the mother asserts that she will suffer financial hardship if she is required to pay half the costs of the Independent Children's Lawyer – Where the mother has net assets of approximately $650,000 – Court orders that the mother pay half the costs of the Independent Children's Lawyer within 6 months.

Family Law Act 1975 (Cth) s. 117
Family Law Rules 2004 (Cth) r. 19.18(1)(a)

CDJ v VAJ (No 2) (1998) 197 CLR 172
De Roma & De Roma [2013] FamCA 566
Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish and Another (2005) 33 Fam LR 123
Gahen & Gahen (No 2) [2013] FamCA 936
Stoian & Flemming (Costs) [2014] FamCA 944

APPLICANT: Ms Krusaroski

RESPONDENT: Mr Krusaroski  

INDEPENDENT CHILDREN’S LAWYER:  Legal Aid NSW Family Law

FILE NUMBER: SYC 626 of 2012

DATE DELIVERED: 28 November 2019

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: McClelland DCJ

HEARING DATE: 18-20 November 2019, 22 November 2019

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Mr Dowdle from Mills Oakley Lawyers

COUNSEL FOR THE RESPONDENT: Mr Johnston and with leave, Ms Kennedy on 22 November 2019.

SOLICITOR FOR THE RESPONDENT: Mcauley Hawach Lawyers

COUNSEL FOR THE INDEPENDENT CHILDREN’S LAWYER: Ms Lioumis

INDEPENDENT CHILDRENS LAWYER:  Legal Aid NSW Sydney Central Family Law

Orders

1. Orders are made in accordance with the Minute of Consent attached hereunder.

2. That within six (6) months of the these Orders, the mother shall pay Legal Aid NSW the sum of $6565.00 inclusive of GST, being her share of the costs of the Independent Children’s Lawyer in the parenting proceedings between the parties.

3. In the event of the mother wishing to pursue to her Application for costs as set out in her substantive Application she, through her legal representative, is to file an Application within 14 days. In the events she does, the father has to respond to that Application by Friday 20^th December.

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 Krusaroski & Krusaroski 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 626 of 2012

Ms Krusaroski  

Applicant

And

Mr Krusaroski   

Respondent

REASONS FOR JUDGMENT

Introduction

1. This decision concerns an Application brought by the Independent Children’s Lawyer (“ICL”) for the mother to pay half the costs of the ICL associated with the parenting proceedings between the parties, Ms Krusaroski (“the mother”) and Mr Kulakovksi (“the father”).  The father has agreed to pay the other half of the ICL’s costs.

2. In those proceedings, the parties sought competing orders concerning their two children, namely J born in 2009 and E born in 2009 collectively referred to herein as “the children”.  Those proceedings were heard over a period of 4 days, being 18, 19, 20 and 22 November 2019. To the parties’ credit, they were able to reach agreement in respect to appropriate parenting orders on 22 November 2019.

3. The parties agree that they have been assisted by the role the ICL has played in these proceedings including assisting the parties to arrive at consent terms of settlement.

Orders sought

1. The orders sought by the ICL are for the mother to pay half of the ICL’s cost in the sum of $6565. The ICL consents to an order for the mother to have a period of 6 months to pay that amount.

Legal principles

1. Section 117(1) of the Family Law Act 1975 (Cth) (“the Act”) provides that, subject to certain qualifications, each party to the proceedings shall bear his or her own costs. However, that does not apply to the ICL, because the ICL is not a party to the proceedings.

2. In that regard, ss 117(3) and (4) set out the following:

   (3)  To avoid doubt, in proceedings in which an independent children's lawyer for a child has been appointed, the court may make an order under subsection (2) as to costs or security for costs, whether by way of interlocutory order or otherwise, to the effect that each party to the proceedings bears, in such proportion as the court considers just, the costs of the independent children's lawyer in respect of the proceedings.

   (4)  However, in proceedings in which an independent children's lawyer for a child has been appointed, if:

   (a)  a party to the proceedings has received legal aid in respect of the proceedings; or

   (b)  the court considers that a party to the proceedings would suffer financial hardship if the party had to bear a proportion of the costs of the independent children's lawyer;

   the court must not make an order under subsection (2) against that party in relation to the costs of the independent children's lawyer.

3. In this matter, it is acknowledged that the mother is not legally aided.  As will be discussed, the real question to be determined in this judgment is whether the mother would suffer financial hardship if the costs order sought by the ICL was made against her.

4. Having noted that the presumption set out in s 117(1) does not apply, it is necessary to consider whether a costs order is justified, having regard to s 117(2) of the Act, which provides:

   (2)  If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4), (4A), (5) and (6) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.

5. The matters relevant to determining what order, if any, should be made for costs are set out in s 117(2A) of the Act, as follows:

   (2A)  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.

6. It is incumbent upon the Court, in the exercise of its discretion, to consider and apply those provisions set out in s 117(2A). However, there is nothing to prevent any factor being the sole foundation for any order for costs being made: Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish and Another (2005) 33 Fam LR 123 at [130].

Consideration

1. I have considered each of those paragraphs and have determined that the factors most relevant to my decision are those set out at paragraphs (a) and (g).

Financial circumstances

1. In terms of s 117(2A)(a), I note that a consideration of the mother’s financial circumstances, pursuant to s 117(2A)(a), necessarily overlaps with the concept of financial hardship as referred to in s 117(4), which I have set out. The mother substantially relies on that factor as the basis upon which she should not be required to pay half of the ICL’s costs.

2. In support of her argument, the mother relies upon her Financial Statement filed on 15 November 2019, which sets out the following:

   a)Her property is valued at $1,921,629, together with superannuation of $170,000;

   b)Her liabilities are quantified at $1,249,530;

   c)Her income is $4012 per week; and

   d)Her total expenses are $4173 per week. 

3. In that regard, I respectfully agree with the submission of counsel for the ICL, that, prima facie, the mother appears to have sufficient capital to raise the amount of $6565 sought by the ICL.

4. The mother contends, however, that as a result of the legal proceedings in this Court she has been left with substantial indebtedness.

5. While I accept that the mother has incurred considerable expenses in respect to these proceedings she nonetheless has not insubstantial net assets which she can potentially access in order to meet the quite modest legal fees which have been sought by the ICL. 

Other relevant matters

1. In terms of s 117(2A)(g) of the Act, it is relevant that the role played by the ICL in parenting proceedings, including in this matter, is invaluable. The role of the ICL was summarised in the context of an Application for costs in proceedings before the High Court of Australia in CDJ v VAJ (No 2) (1998) 197 CLR 172. Specifically, at [11], Kirby J said:

   The children's representative has a duty to “act in an independent and unfettered way in the best interests of the child”. This duty carries over to an appeal. The interests of the children and their welfare is of concern to the public. Those interests extend beyond, and are separate from, the interests of the parents. The children are the children of both parties. They should share equally the costs of their children being separately represented in this court.  [References omitted].

2. I accept that it is in the public interest for the best interests of children to be represented in proceedings before this Court and that the Court invariably receives substantial assistance, in that regard, from ICLs appointed in parenting proceedings.  Such assistance was undoubtedly provided by the ICL in this case.

3. Also relevant to these proceedings is s 117(5) of the Act, which provides:

   (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.

4. Accordingly, it is my view that the ICL should be presumed to be unfunded and, having regard to authority, in those circumstances, the Court is generally inclined to Order litigants to contribute to the ICL’s costs: Gahen & Gahen (No 2) [2013] FamCA 936 and De Roma & De Roma [2013] FamCA 566.

5. Further, I note that the ICL has sought an order for costs to be paid by the mother in a lump sum amount.  Those costs have been itemised in a letter which became Exhibit 18 in the proceedings. 

6. Pursuant to r 19.18(1)(a) of the Family Law Rules 2004 (Cth), the Court may make an order for costs of a specific amount. Having regard to the principles adumbrated by Kent J in Stoian & Flemming (Costs) [2014] FamCA 944 at [91], I am satisfied that the costs figure sought by the ICL is logical, fair and reasonable. I will, therefore, make an order for costs in favour of the ICL in the sum of $6565, being 50 per cent of the total costs incurred by the ICL in this matter.

7. Accordingly, for these reasons I make an order for the mother to pay 50% of the costs of the independent children’s lawyer in the sum set out in these orders.

I certify that the preceding twenty-three (23) paragraphs are a true copy of the reasons for judgment of the Honourable Deputy Chief Justice McClelland delivered on 28 November 2019.

Associate: 

Date:  28 November 2019