Naczek & Dowler (No 3)

[2009] FamCA 966

FAMILY COURT OF AUSTRALIA

NACZEK & DOWLER (NO. 3) [2009] FamCA 966

FAMILY LAW – COSTS

Evidence Act 1995 (Cth)
Family Law Act 1975 (Cth)

Carmel-Fevia and Fevia (2009) FamCA 9
Whitford and Whitford (1979) FLC 90-612

APPLICANT: Mr Naczek

RESPONDENT: Ms Dowler

INDEPENDENT CHILDREN’S LAWYER:

FILE NUMBER: MLF 1222 of 2006

DATE DELIVERED: 9 October 2009

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: THE HONOURABLE JUSTICE CRONIN

HEARING DATE: BY WAY OF WRITTEN SUBMISSIONS

SUBMISSIONS RECEIVED FROM:

COUNSEL FOR THE APPLICANT: MR ST JOHN SC

SOLICITOR FOR THE APPLICANT: WESTMINSTER LAWYERS

COUNSEL FOR THE RESPONDENT: MR KIRKHAM QC AND MR WOOD

SOLICITOR FOR THE RESPONDENT: LANDER & ROGERS

SOLICITOR FOR THE INDEPENDENT CHILDREN’S LAWYER: VICTORIA LEGAL AID

Orders

1. That the husband pay towards the costs of the wife, one half of her costs for the period from and including 21 April 2007 by agreement, and failing agreement, as may be assessed.

2. That the husband pay the costs of the Independent Children’s Lawyer for the entire proceedings as agreed and in default of agreement, as assessed.

3. That the husband’s application that the wife make a contribution towards his costs is dismissed.

4. That the wife’s application in a case filed 1 June 2009 is otherwise dismissed.

IT IS NOTED that publication of this judgment under the pseudonym Naczek & Dowler is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLF 1222  of 2006

MR NACZEK

Applicant

And

MS DOWLER

Respondent

INDEPENDENT CHILDREN’S LAWYER

REASONS FOR COSTS JUDGMENT

The background and the applications

1. Applications by the husband, the wife and the Independent Children’s Lawyer for costs have been made arising out of a long defended parenting hearing.

2. On 21 April 2009, I made orders for the filing of financial documents and submissions concerning costs.  At that point there was already an existing application by the husband for costs against the wife because of affidavit material she had filed. 

3. On 1 June 2009, the wife filed an application in a case in which she sought costs against the husband from 5April 2007 on an indemnity basis.

4. The Independent Children’s Lawyer sought all of her costs against the husband of approximately $42,800. She sought no order against the wife.

5. The husband argued there should be no order for costs in favour of the Independent Children’s Lawyer but if I disagreed then the wife should pay one half.

Orders

1. I propose to:

   (a)reject the husband’s application for costs against the wife;

   (b)order the husband to pay some of the wife’s costs; and

   (c)order the husband to pay all of the Independent Children’s Lawyer’s costs.

The material

1. The wife relied upon an affidavit by her solicitor filed 1 June 2009. Objection was taken as to paragraphs 5, 6 (as to the source of payment of various monies) and most of paragraph 11.

2. The annexure to paragraph 5 of the affidavit is a business record. Section 69 of the Evidence Act 1995 (Cth) applies. The representation in the document is not caught by s 59 of the Evidence Act. 

3. The objection to paragraph 6 is about the source of the payments. It is the payment not the source that is relevant to the matter that I am determining. Section 60 of the Evidence Act therefore applies.

4. A large part of paragraph 11 is hearsay save as to the last part of the paragraph but those details are also set out as asserted facts by the wife in her financial statement filed 15 May 2009. That statement can be relied upon as a primary source of evidence.

5. The objections of the husband to the affidavit are therefore rejected. 

6. I have relied upon the financial statement of each party. 

7. The submissions that were otherwise relied upon were:

   (a)paragraphs 40-64 of the submissions by the husband filed on 17 March 2009;

   (b)      the wife’s submissions filed 1 June 2009; and

   (c)      the husband’s replying submissions filed 23 June 2009.

8. The submission by the husband about the costs of the Independent Children’s Lawyer was filed earlier than the material concerning the costs dispute between the husband and the wife. I have read that earlier material.

Section 117 of the Act

1. The relevant provision in s 117 of the Act provides that each party to proceedings shall bear his or her own costs. If there are circumstances justifying a court so doing, it may make an order for costs but that is subject to the court considering the matters in s 117(2A). That provision reads 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.

The husband’s claim against the wife

1. The husband did not quantify the sum that he was seeking against the wife. 

2. The husband argued that the wife’s affidavit filed 8 March 2007 was “hugely prolix” and contained a substantial quantity of irrelevant matters.  It consisted of 161 pages of narrative together with 96 separately identified annexures constituting at least a further 200 pages. 

3. Senior Counsel for the husband said the wife’s original material required two hours of his reading time but there were other costs such as negotiations and correspondence. There were also lengthy written objections prepared in respect of the affidavit of the wife and her witnesses.

4. On 29 March 2007, before the trial began in earnest, Senior Counsel for the wife conceded that the affidavit was prolix. It was agreed that the affidavit would be redrawn. In turn, it was said that a fresh approach by the wife would truncate the proceeding and the affidavit would become a more workable document.

5. On 12 April 2007, the wife filed revised affidavits.

6. The husband argued that his lawyers’ earlier time spent was therefore unnecessary. 

7. The husband said that he should have his costs in respect of that work assessed on an indemnity basis.

8. The wife submitted that the dispute about the affidavits arose in the context of an ongoing debate about whether the rules of evidence should or should not apply. There had been a compromise after discussion between the lawyers but the husband observed that there had been no agreement about his costs arising out of that material.

9. A court should criticise any party (or their legal practitioner) who files a prolix affidavit containing irrelevant material. Chapter 15 of the Family Law Rules 2004 says that affidavit material may be struck out if it is inadmissible, unnecessary, irrelevant, unreasonable long, scandalous or argumentative. The rule goes further to provide that if the material is so struck out, the costs thrown away may be ordered.

10. The unusual position in this case was that because it was seen as an international relocation dispute, the final trial was expedited. On 7 December 2006, Mushin J set the matter down and ordered the parties to file their affidavits of evidence in chief. It is interesting to note that on what he was told, his Honour estimated it would take five days. The parties on that day were represented by counsel who appeared on the final trial.

11. The material was then prepared and filed.

12. The difficulty created by a direct hearing approach in which affidavits of evidence in chief were ordered to be filed lies in s 69 ZQ(1) of the Act. That is a mandatory requirement for the court to assess and decide which of the issues should be fully investigated and which could be disposed of summarily. It does not sit comfortably with Chapter 15 of the rules.

13. Section 69ZT requires that various provisions of the Evidence Act do not apply to child-related proceedings. Division 12A allows a party to seek orders that the application of some or all of the provisions of the Evidence Act be applied where the circumstances are exceptional. That occurred here and an application was made before the trial began in earnest. It was not made to Mushin J but rather to me as the trial judge.

14. Retrospectively looking at what occurred, it would seem that the parties’ minds were not attuned to the relevant provisions of Division 12A until after the material was prepared. Division 12A had only been in operation for some months.

15. Having regard to the way each party approached the listing for trial, their preparation, the uncertainties about what evidence would be called because of Division 12A and the dispute about the application of the Evidence Act, notwithstanding the prolixity of the affidavit material, I do not find that the wife adopted an unreasonable and untenable position. The issues of both parties were undefined. It may have been more sensible for both parties to have waited for some preliminary discussion to take place on what issues were in dispute and what evidence was going to be called. 

16. Even if the husband incurred costs in the exercise, it was his choice to have senior counsel involved in that exercise. It may have been more cost effective for the solicitors to have undertaken the discussion about the evidence points earlier. I do not find therefore that the husband was put to any unusual expense nor that the wife’s conduct warrant criticisms to that point in time.

17. I would not exercise the discretion to make costs orders against the wife on the husband’s application.

The wife’s claims for costs against the husband

1. The wife claimed costs against the husband on an indemnity basis from 5 April 2007. 

2. The application was filed on 1 June 2009.  In the affidavit in support of that application, the wife’s solicitor said that the wife had incurred costs both before and after 5 April 2007 of approximately $1.2 million of which more than $800,000 remained unpaid.

3. In addition to the affidavit, the wife relied upon a submission drawn by her counsel. 

4. The thrust of the argument was that after the single expert witness Dr M released his 2007 report:

   the husband’s unconditional and unremitting pursuit of his application thereafter was unjustified and caused the escalation of costs thereafter.

   The wife’s submission said that the husband’s proposed orders were extreme in nature. It was put by the wife that despite some significant changes in the husband’s circumstances after his initial proposals and the commencement of the hearing, he pressed on.

5. In my reasons for judgment I indicated:

   ·the husband did not have a good understanding of the impact on the children of a move to live with him;

   ·concern that the husband simply saw the time between the children and the wife if they moved overseas as a matter for her;

   ·The husband had not given serious thought to how a distance-affected relationship would work nor how he would promote it.

6. I referred to the husband as having focussed doggedly on “an outcome” and pursued it.  I said that that attitude permeated what occurred in the case.

7. An example of the dilemma about any significant changing of the children’s lives was that the child N suffered from autism spectrum disorder. It was argued that N would have an aversion to change. What he needed was stability and the husband had not fully considered. The husband’s approach was that he would work those things out with professionals overseas.

8. The children were settled in school. A change of environment would have adverse consequences for them.

9. On the very first day of the less-adversarial trial, the husband said that he had no choice but to pursue his proposed orders because he had done everything he could to maintain his relationship with his children and his efforts were being thwarted by the behaviour of the wife.  His attitude was simple:  Enough was enough. 

10. The wife’s submission highlighted the husband’s principal contention that her behaviour was calculated to alienate him from the children. She responded that her weakness occurred because of her diagnosed condition.  That diagnosed condition was of a borderline personality disorder. Dr M noted therapeutic counselling was a long term solution to address her problems. 

11. The wife pointed to Dr M’s evidence in the April 2007 hearing.  The parties had had the report of the witness before the hearing began. The wife argued that despite the recognition of her difficulties, the husband pressed on in an unrelenting pursuit of his proposed orders.

12. Whilst attacking the wife’s proposals, it was argued that the husband failed to establish a basic contention unpinning his case namely that the wife poisoned the relationship between he and the children. 

13. Thus, with a combination of the wife’s problem being addressed and the husband’s failure to prove his contention, the argument was that the husband caused the hearing to continue unnecessarily.

14. During the hearing, changes to husband’s circumstances occurred which made his case more difficult. According to Dr M, the husband had said that his partner Ms G would be the day to day carer for the children. The breakdown of that relationship must have meant a significant alteration of the husband’s position. No such change occurred.

15. During the hearing, an incident occurred and the Department of Human Services were brought in by or at the behest of the husband. Counsel for the wife noted that the department harboured no concerns about the mother’s household. The husband pressed on with the change of residence argument.

16. After the hearing began, in an incident known as the Restaurant incident involving the husband, his partner and the children, the husband’s case for the role of Ms G became untenable and he ended their relationship. Senior counsel for the husband said that the departure of Ms G led to a change in the husband’s proposals. 

17. In my view, the Restaurant incident and more importantly, the events leading up to it, were initially not comprehensively disclosed. That certainly extended the hearing. 

18. The wife too extended the hearing due to her scepticism about what had happened in circumstances where the husband had put Ms G forward as a potential carer of the children. She was entitled to pursue details of Ms G’s background.  The wife was entitled to find out some of the things that may have explained why the children were behaving the way they were. The husband’s reticence about Ms G generally and the problems that arose from their relationship extended the hearing.

19. Thus, the wife argued the husband had a flawed argument at the start and the various events that occurred after April 2007 should have made him realise that his proposals were untenable.  That was in the context of a hearing that ran over a period of 15 days plus a variety of other interim procedural hearings. 

20. At all times, the wife’s practitioners were complaining that she could not afford to continue the defended hearing and that her legal costs were going to be the subject of a dispute.

The husband’s argument about the wife’s claim for costs

1. In a very comprehensive reply, senior counsel for the husband said that the 2007 report of Dr M was not an unequivocal endorsement of the wife as the primary residential parent.  I agree. But that does not answer the problem that there were concerns about the husband’s proposals which would have had a significant impact on the children in terms of change. 

2. Senior counsel for the husband noted that the wife did not identify the manner in which the husband should have amended or varied his application.  He rhetorically asked what the husband was to do because the wife suffered with profound, long-term difficulties which were seriously impacting on the children and his communication with them. 

3. In defence of the husband, his senior counsel said that he was fully justified in continuing to pursue his application for residential care of the children from the time of the first report and thereafter.  That was because of the wife’s sustained and aberrant behaviour.

4. Senior counsel for the husband pointed out that at no stage did I characterise the husband’s application as being frivolous, reckless or needlessly pursued.  Quite the contrary he said, there was trenchant criticism of the wife and an acceptance of much of the husband’s complaints as to her behaviour and attitudes.

5. The unusual feature of this case was that the children had a very close and affectionate relationship with their father on a face to face basis which was without equivocation.  There was no serious suggestion of alienation in that face to face contact.  The major concern related to the wife’s behaviour towards the husband in the presence of the children and particularly arising out of the telephone contact.

6. Senior counsel for the husband said that whilst he had not been wholly unsuccessful in the litigation, from the husband’s perspective, there could be no doubt that the proceedings resulted in substantial benefit for the children.  Whilst that may be so, from the perspective of the children having uninterrupted telephone communication with their father, that seemed to have occurred when I suggested that the children’s school might assist by arranging the various calls to be made through the school principal. 

7. The husband said it was not a proper complaint to say that he had pursued his application vigorously.  Counsel described the prosecution of the case as diligent and appropriate.  The husband submitted that the adjournment in the reasons which I gave on 17 August 2007 showed that the husband was neither blinkered nor dogmatic because this was not a normal or simple parenting dispute.

8. Senior counsel for the husband said that the case was complex and difficult and had always been anticipated by the parties and the court as taking many days of court time.  He said that the circumstances clearly required comprehensive investigation and there was no finding of irresponsible, unjustified or reckless action on the part of the husband in terms of his cause of action. 

9. Once it was known that the problem of the wife’s behaviour largely if not entirely arose from her borderline personality disorder and combined with the evidence of a good face to face relationship between the husband and the children, the husband should have reconsidered his application.

10. Whilst at the start of the case, there may not have been acceptance of the diagnosis which in turn warranted investigation, the impact of the change on the children was still a major problem.

11. The problem became more difficult for the husband when it became apparent that his relationship with Ms G could not be relied upon as part of a basis to change the residence of the children.

12. A change for these children to another part of the world where certainty of lifestyle was not apparent made the husband’s position very difficult. These two children had had a disrupted start to life and had adjustment problems which were being addressed.

13. Whilst this may not have been a “normal or simple” parenting dispute, the husband certainly took every point and made it complex.

14. The husband justified his “diligent” approach on the basis that the Court was deprived of the evidence of the wife’s psychotherapist.  He argued that the notes of the psychotherapist gave reason for scepticism about the wife’s true attitude. 

1. Because the treatment of a borderline personality remains extant for a considerable period of time, it was to be expected that the wife would be initially resistant to change. The cross-examination of the wife about her views of the treatment being unnecessary did not assist me. Similarly, her expressed unhappiness about the whole process was understandable.

2. The husband’s senior counsel said the husband was entitled and justified to test that evidence. In my view, it was unnecessary.

3. The husband also highlighted that there was no unequivocal endorsement of the wife in terms of her parenting capacities. That was but one aspect of the matter. I found that she was a competent parent save for the issue associated with the problems of communication between the husband and the children.

Discussion

1. The husband’s reticence about Ms G generally and the problems that arose from their relationship extended the hearing. For example, there were interlocutory issues about the production of the medical file of Ms G. I made clear that I thought that there was a tactical issue involved.

2. The husband had always argued that any attempt to curtail the duration of the trial was arbitrary and amounted to a lack of procedural fairness.  Endeavours were made to shorten the trial by focussing on specific issues that would have affected the outcome of the proceedings.

3. The husband argued that matters relevant to his case were sought to be safeguarded including a proper opportunity to cross-examine. 

4. The husband never wavered from his position that the Court had no alternative other than to remove the children from the wife. Based on the approach of the husband, it was therefore inevitable that the trial would be lengthy and every issue contested. 

5. In a less adversarial trial relating to parenting issues where the Court has to be proactive and determine what is best for the future of the children, limiting evidence and witnesses should only be done if that course of action does not prejudice the interests of the children. 

6. As a matter of natural justice, a court should hear all of the evidence that a party thinks is relevant to the court’s determination but if the evidence is subjectively not likely to influence the outcome of the proceedings, a court has both the opportunity and responsibility to control the proceedings and decline to hear the evidence. If there is an argument for hearing lengthy evidence based upon natural justice principles, the party desiring that course must be conscious of the risk of costs. 

7. The husband would not accept any compromise because he saw no prospect of the wife’s attitude towards him changing.  His dogged approach therefore closed off any avenue to contemplate how the problem could be resolved if the wife’s borderline personality disorder issue was resolved.  His insistence on calling all of the evidence prolonged the hearing.

8. Having regard to his case, the course the husband took was unnecessary.

9. Subsequent to the conclusion of the evidence, the husband sought to re-open the hearing on the basis of a change of his circumstances and his desire to call new evidence. That extension of hearing time arose because the husband wanted to put a different proposition to that about which he had been litigating. The dispute as to whether that could or should be done involved the parties and in particular, the wife, in further costs.  Having regard to my earlier remarks about the extended hearing because of the way the husband conducted the hearing, it follows that these further hearings meant that the wife had to be engaged in the process through no fault of her own. Costs are not a punishment but rather designed to compensate the party who has little or no choice other than to participate.

The statutory provisions

1. Having regard to the matters to which I have referred, there is a justification for a departure from the principle that each party should pay their own costs and I turn to the matters in s 117(2A).

2. The financial circumstances of the parties as at May 2009 were set out in their respective financial statements. 

3. The husband’s income is derived from rental of a property in the United States of America and some modest dividends.  He described himself as unemployed. 

4. From his income, the husband pays tax, mortgage commitments and maintenance before his living expenses all of which would indicate that he is living way beyond his income.  His property consists of the residence in the United States with an equity of about $700,000, savings of about $240,000 and investments of $377,000.  He faces liabilities however in excess of $300,000 for tax.  He has superannuation of $1.5 million and deferred compensation of $875,000 about which he said little but I have presumed that that has something to do with his departure from his employment.  Unlike the wife however, he does not have any outstanding legal costs due to his own lawyers.

5. The wife described her occupation as home duties.  Her only source of income is maintenance from the husband.  Whilst there may be some inconsistency with the evidence that she gave in the proceedings, I think it matters little.  The wife’s income is used to meet her living expenses but they are not completely covered.  She has a house with limited equity and a motor car.  The wife’s outstanding legal fees and debt for a litigation loan exceeds $1 million. 

6. There is therefore a distinct difference between the husband and the wife.  The husband is much stronger overall.  However his capacity to access that stronger position is questionable.  His major immediate financial strength lies in his cash position which distinguishes him from the wife.  That however may change significantly if he meets his taxation obligations at the end of the year.  His future earning capacity is unknown.

7. Neither party has had the benefit of any legal aid grant.

8. There is a significant dispute between the parties about two factors set out in s 117(2A)(c) and (e). I have set out my reasons above for criticising the husband but not the wife.

9. The husband argued even about having to file a financial statement on this very costs application. 

10. Was either party “wholly unsuccessful”?  The husband wanted the children to live with him.  I rejected that.  The wife ultimately wanted to limit the husband’s time with the children to weekends.  I rejected that. To an extent, both parties were unsuccessful but it will be obvious that the husband more so.

11. In a parenting matter, success is often hard to judge. In this case, the appropriate way to determine the costs issue is to assess the necessity of the litigation road that the parties trod.

12. After the release of the report of Dr M should have necessarily altered but it should have been less stridently litigious once the wife’s medical position was known and I determined that an adjournment to enable the wife to pursue psychotherapy was best for the children.  It is also important to note that in his evidence, the husband had maintained that the wife had some form of mental illness. 

13. The husband did not appear to alter his course after the case resumed in 2008.  That was evident in the Department of Human Services dispute, the argument about the notes of Dr SS and the termination of the relationship with Ms G.  Those matters extended the dispute. The husband must take some responsibility for that. 

14. S 117(2A) refers to a party being “wholly” unsuccessful in the proceedings but it is only one of the matters to be taken into account. I have taken into account that the husband has not been wholly unsuccessful by not ordering that he pay all of the wife’s costs.

15. I accept that there were some matters that entitled the husband to test evidence but not to the extent that he did. It is that path that caused the hearing to be extended at huge expense to the parties.

16. Section 117(2A)(g) also directs a court in a very wide discretionary way, to consider any other relevant matter.  The wife said that the financial disparity between the parties could justify an order by itself.  The submission referred to Carmel-Fevia and Fevia (2009) FamCA 9, a decision of mine in which I stated that the principle in Kelly (No 2) (1981) FLC 91-108 had to be cautiously considered because not every case involving disparity justified an order for costs. I referred particularly to the difficulty in parenting cases. The husband said that Carmel-Fevia was distinguishable because it was the husband who was forced to issue the proceedings.  He argued that disparity of financial positions would not justify an order for costs where the wife had conducted herself in an unjustifiable manner.  I would agree with that if the conduct was calculated and designed to cause hurt to the other party in circumstances where it had an adverse impact on the children.  Here, the wife’s behaviour was appalling but surprisingly, it had no impact upon the husband’s face to face relationship with the children. 

Finding as to costs

1. I adjourned the proceedings after five days of hearing in April 2007. I gave reasons then for the delayed adjournment. Until that adjournment, the husband’s was in my view, tenuous but arguable. Beyond that day, I find that he persisted in the face of increasing difficulties and his approach extended the hearing.

2. The wife needed to participate and to advocate her own proposals but her approach at the end of the five day period in April was a sensible one. I could not however say that the husband was entirely unreasonable to that point. Each party should bear their own costs until the end of that five day hearing.

3. From 21 April 2007 onwards, whilst the wife still had issues to propose and there was debate about the psychotherapist and her role, the husband’s position was largely unreasonable.

4. I could not find however that the husband should pay all of the wife’s costs thereafter. Arbitrary though it may be, in the exercise of my discretion, I find it just and appropriate that the husband should contribute one half of her costs on and from 21 April 2007.

5. However, that is not the end of the matter because the wife also seeks her costs on an indemnity basis.

Quantum

1. The dispute as to the quantum cannot be resolved in these reasons because of their complexity. I propose to have that issue resolved on the basis that if the parties fail to reach agreement, the costs will have to be assessed. 

Indemnity costs

1. The wife seeks that her costs be paid on an indemnity basis.  In Carmel-Fevia and Fevia I said the following:

   48.Costs being ordered on an indemnity basis is an exception in this Court rather than the rule (see Kohan[1] and Colgate-Palmolive Company & Anor v Cussons Pty Ltd[2]).

   49.Chapter 19 of the Rules makes clear that costs to be paid by parties to their lawyers should be within the range set out by the schedules unless the parties knowingly contract out of the rules.

   50.Where a party applies for an order for costs on an indemnity basis, the Court must be informed if the party is bound by a Costs Agreement in relation to those costs, and if so the terms of the Costs Agreement… 

   51.In Yunghanns[3] the Full Court said that the categories of circumstances that might give rise to an indemnity order are not closed.  The Court said at 87,471:

   …and it is not a condition precedent to the exercise of the discretion that some collateral purpose or species of fraud be established against the party against whom such an order is sought.  All that is required is that the Court asked to exercise the discretion be satisfied that some ‘particular facts and circumstances of the case in question warrant the making of an order for repayment of costs other than on a party/party basis’.

   [1] (1993) FLC ¶ 92-340

   [2] (1993) 46 FLC ¶ R22

   [3] (2000) FLC ¶ 93-029

2. Whilst I have been critical of the husband in respect of his dogged approach to matters this is not a case in which I could find there were exceptional features that would justify a departure from the ordinary practice in relation to the payment of costs.  Accordingly, the only order for costs that I will make is that the husband pay one half of the wife’s costs for the period referred to. 

3. In relation to the period, I also confirm that it was appropriate in the circumstances for the wife to be represented by senior and junior counsel.

The costs of the independent children’s lawyer

1. In this case, the Independent Children’s Lawyer also sought costs.  Having regard to the amount of the costs that the parties have mentioned and the duration of the hearing, the costs sought were extremely modest. 

2. The husband opposed any order being made but if it was to be imposed, each party should pay one half. 

3. The wife’s position was that consistent with the view of the Independent Children’s Lawyer, the costs should be met solely by the husband.

4. Despite what I have said about the husband making a contribution to the wife’s costs rather than them all, the position of the Independent Children’s Lawyer must be viewed differently.

5. The relevant provisions relating to costs concerning an independent children’s lawyer are found in s 117 of the Act and are as follows:

   (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.

   (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.

6. The first question is whether or not there is any justification for making any order for costs in favour of the Independent Children’s Lawyer.

7. The husband’s argument was that there should be no order but if I was against him in respect of that then each party should pay one half.

8. Senior counsel for the husband argued that it would be unjust and inappropriate for the husband to be required to pay any portion of the Independent Children’s Lawyer’s costs which were attributable to the wife particularly where the husband litigated for the purposes of materially advancing important aspects of the lives of the children. 

9. If the husband had adopted the view that there was to be no compromise, and the Independent Children’s Lawyer disagreed, the Independent Children’s Lawyer had no choice but to persist with the case and incur costs.

10. The position adopted by the Independent Children’s Lawyer by February 2008 was to largely adopt the recommendations of Dr M.  There were matters that needed to be canvassed but it was clear that the Independent Children’s Lawyer largely supported the position of the wife.

11. The submissions of the husband in the final hearing made clear that he disagreed with the position of the Independent Children’s Lawyer.

12. The Independent Children’s Lawyer argued that the problem caused by the wife’s medical condition was not only being addressed but that the orders I made for the alternative telephone arrangements through the school had ameliorated the difficulties for the husband in communicating with the children.

13. In my view, it is just therefore that the husband should contribute towards the Independent Children’s Lawyer’s costs.

14. There is no evidence that either party has received legal aid in respect of the proceedings.

15. There is no definition of financial hardship in s 117. In the context of an application under s 44(3) of the Act, hardship has been accepted to mean substantial detriment (see Whitford and Whitford (1979) FLC 90-612 at 78,144). In the context of s 117, I do not think there is a justification for taking the definition that far. The words should be used in their normal meaning which is to mean severe or to suffer privations.

16. Having regard to the financial position of the wife which I accept, I am satisfied that she would suffer financial hardship if she had to bear a portion of the costs of the Independent Children's Lawyer. That is particularly so because on the basis of what I propose to order concerning her own costs and the evidence about what she owes, any contribution towards the costs of the Independent Children’s Lawyer would make her position more difficult than it currently is. Based on that finding, s 117(4) requires that an order must not be made against her.

17. The husband has greater resources than the wife and has the capacity to absorb the costs. I am not aware of any significant costs he owes his own lawyers that remain outstanding. I could not find that he would suffer financial hardship if he was ordered to pay costs.

18. The question remains as to whether the husband should pay all or some of the costs of the Independent Children’s lawyer. Because of the matters to which I have referred about the position adopted by the husband in the face of the position adopted by the Independent Children’s Lawyer, I see no reason why the husband should not bear all of the costs.

I certify that the preceding One Hundred and Twenty One (121) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin

Associate: 

Date:  9 October 2009