PEROV & MCPHERSON
[2014] FamCAFC 176
•15 September 2014
FAMILY COURT OF AUSTRALIA
| PEROV & MCPHERSON | [2014] FamCAFC 176 |
| FAMILY LAW – APPEAL – COSTS – Appeal of a costs order against a party’s solicitor – Where the solicitor appeals that order – Whether the appeal is so devoid of merit that it would be futile to make the order sought – Whether the appeal is “arguable”. FAMILY LAW – APPEAL – Application to extend time to appeal – Where the applicant is out of time – Whether the respondent would be prejudiced if leave were granted – Where the appellant will be prejudiced if he loses the ability to challenge the costs order – Where prejudice to the appellant is not such as to outweigh prejudice to the respondent –Where leave is not given. FAMILY LAW – APPEAL – COSTS – Where the respondent seeks an order for costs if the application fails – Where the application fails – Where the appellant is to pay the respondent’s costs. |
| Family Law Act 1975 (Cth): s 69ZK Gallo v Dawson (1990) 93 ALR 479 |
| APPELLANT: | Mr Perov |
| RESPONDENT: | Mr McPherson |
| FILE NUMBER: | SYC | 1930 | of | 2013 |
| APPEAL NUMBER: | EA | 113 | of | 2014 |
| DATE DELIVERED: | 15 September 2014 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Ainslie-Wallace J |
| HEARING DATE: | 9 September 2014 |
| LOWER COURT JURISDICTION: | Federal Circuit Court of Australia |
| LOWER COURT JUDGMENT DATE: | 25 June 2014 |
| LOWER COURT MNC: | [2014] FCCA 1321 |
REPRESENTATION
| THE APPELLANT: | In person |
| SOLICITOR FOR THE RESPONDENT: | Ms Little via telephone |
Orders
The application in an appeal filed 22 August 2014 seeking an extension of time in which to file an appeal is dismissed.
The applicant solicitor pay the respondent father’s costs of and incidental to the application, such costs to be agreed or assessed.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Perov & McPherson has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| THE APPELLATE DIVISION OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY |
Appeal Number: EA 113 of 2014
File Number: SYC 1930 of 2013
| Mr Perov |
Appellant
and
| Mr McPherson |
Respondent
REASONS FOR JUDGMENT
Mr Perov (“the solicitor”) by application in an appeal filed on
22 August 2014, seeks leave to bring an appeal against an order for indemnity costs orders made against him personally by Judge Scarlett on 25 June 2014.
Background
It is useful to give some background to the proceedings to give context to the application.
The principal proceedings were parenting proceedings between Ms Ward (“the mother”) and Mr McPherson (“the father”) in relation to their child, a little girl, who was born in 2007. The solicitor acted for the mother.
In March 2009 officers from the NSW Department of Family and Community Services removed the child from her mother’s care and the issue of the child’s welfare brought before the NSW Children’s Court. On 17 September 2010 the Children’s Court made orders placing the child in the joint parental responsibility of the father and the Minister of Family and Community Services for a period of 12 months. Thereafter, the order placed the child in the sole parental responsibility of the father. The orders were made pursuant to
ss 79(1)(a)(i) and 79(1)(a)(ii) of the Children and Young Persons (Care and Protection) Act1998 (NSW).
The mother contended that the father was not providing time between her and the child and, on 11 April 2013, brought an application in the Federal Circuit Court seeking parenting orders in relation to the child. On 8 May 2013, the mother, by application in a case, sought orders, inter alia:
2. Declaration that the applicant does not require written consent of a child welfare officer of the State of New South Wales.
3. That the question in (2) is removed to the Full Court of the Family Court pursuant to s 94A of the Family Law Act 1975.
4. Declaration that the respondent cannot preclude the applicant from continuing the substantive proceedings by registering in this Court order of the Children’s Court … of 17 September 2010 with respect to the child subject to the proceeding …
5. That, optionally, the question in (4) is removed to the Full Court of the Family Court pursuant to s 94A of the Family Law Act 1975.
(Emphasis in the original.)
In response the father brought an application seeking summary dismissal of the mother’s applications on the basis that the Federal Circuit Court had no jurisdiction to determine the applications.
The issue before the trial judge concerned the effect of s 69ZK of the Family Law Act 1975 (Cth) (“the Act”) and it is convenient to set it out here.
(1)A court having jurisdiction under this Act must not make an order under this Act (other than an order under Division 7) in relation to a child who is under the care (however described) of a person under a child welfare law unless:
(a)the order is expressed to come into effect when the child ceases to be under that care; or
(b)the order is made in proceedings relating to the child in respect of the institution or continuation of which the written consent of a child welfare officer of the relevant State or Territory has been obtained.
(2)Nothing in this Act, and no decree under this Act, affects:
(a) the jurisdiction of a court, or the power of an authority, under a child welfare law to make an order, or to take any other action, by which a child is placed under the care (however described) of a person under a child welfare law; or
(b)any such order made or action taken; or
(c)the operation of a child welfare law in relation to a child.
(3) If it appears to a court having jurisdiction under this Act that another court or an authority proposes to make an order, or to take any other action, of the kind referred to in paragraph (2)(a) in relation to a child, the first-mentioned court may adjourn any proceedings before it that relate to the child.
The issue of the jurisdiction of the Federal Circuit Court to entertain the mother’s application for parenting orders was then considered in light of the father’s application for summary dismissal.
The trial judge heard the father’s application for summary dismissal and on
11 October 2013 dismissed both the mother’s initiating application and the application in a case. There was no appeal against these orders brought by the mother.
His Honour then heard the father’s application filed on 11 November 2013 for costs consequent on the dismissal of the mother’s applications. The application sought an order for costs either against the mother or the solicitor and that the costs be ordered on an indemnity basis.
The solicitor opposed the application and sought an order that the costs application be dismissed.
His Honour dealt with the application by written submissions and the matter was determined in chambers without the need of further appearance. On
25 June 2014 he made orders:
1. The time for the Respondent to file an Application for costs is extended to 11 November 2013
2. The Applicant’s solicitor, [MR PEROV], is to pay the Respondent’s costs of the proceedings an (sic) indemnity basis, fixed in the sum of $4,604.00.
3. I allow three (3) months to pay.
4. Any application for an order for costs of the Application in a Case filed on 11 November 2013 is to be filed and served within twenty-eight (28) days.
5. The Applicant’s solicitor [MR PEROV] is to make a written submission to the Court within twenty-eight (28) days to show cause why a complaint should not be made to the Office of the Legal Services Commissioner in respect of unsatisfactory professional conduct in his conduct of the proceedings.
It is helpful to an understanding of the issues to consider his Honour’s reasons both for making the costs order and for dismissing the mother’s parenting applications.
The trial judge’s reasons in relation to the parenting applications
In his reasons for dismissing the mother’s Initiating Application and Application in a Case, the trial judge in the judgment of 11 October set out the solicitor’s submissions in support of the orders sought:
14. The affidavit of Mr [Perov] is in the form of a submission that there is a need for a case to be stated to the Full Court of the Family Court. In his affidavit he gives the following reasons at paragraphs [5], [6], [8] and [9]:
5.Since the current interpretation of s 69ZK of the Family Law Act 1975 appears to be that if there are any orders affecting a child under the provisions of a State welfare Act, any other court is precluded from making orders under the provisions of the Family Law act affecting that child unless those orders are to take effect upon the expiry of the first orders, or if a written consent is given by an authorised officer of a State welfare department. In my opinion such an interpretation is erroneous: if a child is subject to an order under s 79(1)(a)(i) of the Children and Young Persons (Care and Protection) Act 1998 (NSW) that child may be dealt with under the provisions of the Family Law Act, in a court of competent jurisdiction, without a written consent by an authorised officer to the NSW Family and Community Services or any other State department.
6. In order to avoid delay of the substantive proceedings it would be expeditious to deal with this preliminary issue as an early discrete event. Furthermore, the interpretation of
s 69ZK should be removed to the Full Court of the Family Court pursuant to s 94A (Case stated) of the Family Law Act 1975.…
8. Furthermore, there is a recent development in the Family Law jurisdiction that may affect the course of this proceeding. As of 1 January 2013, pursuant to s 70C of the Family Law Act 1975, Family Law Rules 2004 have introduced rule 23.01A authorising registration of a State child order in a court having jurisdiction under Part VII of the Family Law Act 1975. Such an order, after registration, has the same force and effect as if it were an order made by that court under Part VII of the Family Law Act 1975.
9. I have not sighted any recent decisions involving
s 70C and rule 23.01A but, it appears, there is a need for an authoritative interpretation of the two provisions.His Honour then considered and rejected the application that there be a case stated to the Full Court of the Family Court and concluded that the facts of the case were neither lengthy nor complex and said:
22. … The questions of law to be decided are in essence what the case is about, because if the Applicant is unsuccessful the Application will be dismissed for want of jurisdiction.
His Honour then moved to consider the solicitor’s submissions in respect to the operation of s 69ZK of the Act. The trial judge said:
37. Mr [Perov] submitted that the accepted interpretation of
s.69ZK(1), which is that there is a need for a written consent in order to bring the matter concerning a child in that situation before a court exercising jurisdiction under the Family Law Act, is “absurd”, as nobody is authorised to issue such a consent.After considering the relevant authorities, including Re Felicity [2013] NSWCA 21, a case argued by the solicitor before White J in the Supreme Court, his Honour said:
62. In my view, the decision in Re Felicity is entirely on point. The facts are essentially identical. There was an order of the Children’s Court of NSW allocating parental responsibility to the child’s father under the provisions of s. 79(1)(a)(i) of the Children and young Persons (Care and Protection) Act, just as in this case.
63. The issues argued by Mr [Perov] on behalf of the plaintiff in
Re Felicity are essentially similar to those being argued before this Court, including the contention that the consent of a child welfare officer to an application under the Family Law Act is not required where the only current order of the Children's Court was one allocating parental responsibility to one parent to the exclusion of the other under s. 79(1)(a)(i). White J found that there was no substance to the plaintiff’s submission.(citations omitted)
His Honour further said:
67. I am, however, urged by Mr [Perov], who clearly does not agree with the decision and went so far in his submission as to find White J’s finding at [50] that there was no inconsistency between Commonwealth and State laws as shown by s. 69ZK itself as “an absurd argument” not to follow the decision.
His Honour held that the decision of White J in Re Felicity was persuasive and he determined that the mother’s application for parenting orders was incompetent because the Federal Circuit Court had no jurisdiction.
The trial judge’s reasons as to costs
After setting out the history of the proceedings and the costs submissions made on behalf of the father, the trial judge in his reasons of 25 June 2014 turned to the submissions made by the solicitor opposing the father’s application. His Honour at [15] set out the submissions of the solicitor. His Honour said:
15. The Solicitor for the Applicant has filed a submission seeking that the application for costs should be dismissed for the following reasons:
… …
e) If the orders of the Children's Court do not involve the Minister, Director-General of the Department of Family and Community Services or any other “person” then the matter is no longer a care and protection matter under s. 79(1)(a)(i) of the Children and Young Persons (Care and Protection ) Act 1998 (Cth ) (sic) and, consequently, the Children's Court has no jurisdiction;
f) The decision of the Supreme Court in Re Felicity, which I followed, was wrongly decided;
… …
h) “The State courts and the counsel funded by the NSW government are responsible for the erroneous interpretation of the law regarding the matters considered in this case and in Re Felicity. It is just and equitable that the NSW government, through the office of the Legal Aid bears the father’s costs in these proceedings.”
(citations omitted)
A footnote to his Honour’s reasons references the last matter to the solicitor’s submissions. It is a verbatim quote.
His Honour referred to the solicitor’s reference to Re Felicity and his submission that it was wrongly decided. His Honour said:
24. Mr [Perov] also referred to the decision of White J in the Supreme Court of New South Wales in Re Felicity, conceding that it was a case “identical to the instant one”. However, the decision in
Re Felicity did not support Mr [Perov’s] contentions and he submitted that it should not be followed as it was wrongly decided, saying at paragraph [46] of his submission:His Honour accepted the argument by the counsel for the Director-General that the constitutional provision under
s 109 has been ousted by the provisions of s 69ZK. That is an absurd argument saying that the Commonwealth Parliament could enact legislation that is repugnant to the provisions of the Constitution – according to his Honour (at[50])(citations omitted)
After indicating that he did not accept the solicitor’s characterisation of the decision in Re Felicity, his Honour further noted that two subsequent decisions in Re Felicity were referred to by the father in his submissions but not mentioned by the solicitor, despite the solicitor arguing both subsequent cases. His Honour said:
35. The original decision of Re Felicity was heard by White J on 1 May 2012 and delivered that same day. Mr [Perov] argued the case for the Plaintiff. His Honour found that none of the arguments advanced for the Plaintiff had substance and dismissed the summons.
In the first of those subsequent cases, White J made an order that the Plaintiff pay the costs of the first and second defendants to the action and, further directed that the solicitor be notified that White J was considering making an order directing the solicitor to pay those costs. White J heard submissions and made no order for costs against the solicitor. The trial judge quoted from the judgment of White J:
39. His Honour went on to hold at [6]:
Nonetheless, I have concluded that the arguments advanced by Mr [Perov] were not so obviously untenable that I should find that the costs incurred as a result of his advancing the arguments were incurred improperly or without reasonable cause, or were incurred as a result of serious incompetence.
(citations omitted)
The trial judge noted that on 17 September 2012, the solicitor sought leave to appeal White J’s decision to the NSW Court of Appeal. Leave was required because the appeal was sought to be filed out of time. The question of leave was heard and determined by the Court of Appeal on 8 February 2013. His Honour then quoted from the decision of the NSW Court of Appeal:
41. The reasons for the decision were given by Macfarlan JA, with whom Beazley JA agreed. His Honour held at [3]:
It is unnecessary to consider discretionary considerations which may weigh against the applicant as I am of the view that the appeal sought to be brought has no realistic prospect of success. The reasons why the applicant failed at first instance are clearly described by White J’s thorough judgment. On her application to this Court, the applicant has not been able to advance any arguable basis for a conclusion that White J erred in any respect. The essence of the applicant’s argument is that s 69ZK of the Family Law Act 1975 (Cth) is inapplicable because, although the Children & Young Persons (Care and Protection) Act 1998 )NSW) (sic) is a “child welfare law” within the meaning of the section, that Act is invalid because it is inconsistent with the Family Law Act – see s 109 of the Constitution. However, as White J held, there is no such inconsistency because s 69ZK resolves any potential inconsistency.
(Emphasis in original.)
His Honour the trial judge then turned to the question of the costs of the summary dismissal application and said:
44. It is quite clear that the substantive Application had little or no chance of success. In the circumstances it is nothing short of astonishing that the Applicant’s solicitor could still, in his submission in opposition to the costs application, should make this contention:
9. ‘Serious incompetence’ and ‘without reasonable cause’.
Without repeating the arguments regarding s 69ZK in the substantive proceedings it is desirable to draw the Court’s attention to the following points:
(a) …
(b) Decision in Re Felicity [2012] NSWSC 494, which was followed in this matter, is full or errors, some of which have been raised in the final submission in this Court, and will be re-agitated in the NSW court of Appeal in light of the ruling referred to in (a) above which, together, with the erroneous interpretation of s 69 ZK creates discrimination against a class of children: a parent dissatisfied with orders of the Children’s Court where the only remaining order is pursuant to s 79(1)(a)(i), has nowhere to take his or her grievance; the Children's Court has no jurisdiction over the matter and the Family Law courts refuse to hear an application for the reasons of erroneous interpretation.
(Emphasis in original, citations omitted.)
His Honour observed that the solicitor had argued the case before him “as if the decision of the Court of Appeal had never been made” [48] and his Honour further noted that at no point in his submissions did the solicitor refer to that decision. His Honour said:
50. To this day, he is arguing that the decision of White J at first instance was wrong, blithely ignoring the Court of Appeal decision to the contrary.
…
53. The Application was filed on 11 April 2013 and was argued on
23 September 2013 “in wilful disregard of known facts or clearly established law”.(citations omitted)
Further, he found that the solicitor’s actions in advancing arguments that were clearly unarguable as a result of the decision of the NSW Court of Appeal, a decision which the solicitor had an obligation to disclose to the court and did not, was improper.
Thus his Honour determined that the circumstances were such that the solicitor should pay the father’s costs on an indemnity basis.
The application in an appeal
The solicitor seeks leave to bring the appeal against the costs orders made by the trial judge. Leave is required because the appeal was not filed within the time specified in the Rules (r 22.03 Family Law Rules 2004 (Cth)).
I observe that in the same application, the solicitor also seeks an order that his Honour’s costs order be stayed pending determination of the appeal. Applications for stay of orders are made to the trial judge who made the order. There is no evidence to suggest that the solicitor has approached the trial judge to seek the stay. In any event, no submissions were addressed to the issue of a stay of his Honour’s orders and I do not propose to consider that issue further.
The application for leave is supported by an affidavit of the solicitor. The solicitor deposes that:
2. … After receipt of submissions by the parties his Honour ordered costs against me on 25 June 2014. However, I was not able to attend the Court for delivery of the judgment and have never received from the Court a copy of the orders or the reasons for judgment.
He continues and says that he expected to receive sealed copies of the Court’s orders but did not. He continued:
3.… In about early/mid July 2014 I attempted to access the file on the Commonwealth Courts Portal but the file had been already closed and no longer accessible. I just assumed that the application for the costs had been dismissed, and I left it at that. [In their reply to my letter, the respondent’s solicitors advised me, by facsimile of
21 August 2014, that the file on the Portal is still accessible. At the time of writing this affidavit I had had no chance to test this statement].The solicitor says that on 18 August 2014 he was conducting research and came across the judgment on a legal data base and it was then that he discovered that an indemnity costs order had been made against him. He obtained sealed copies of the costs orders on 19 August 2014.
He further says:
6. In the draft notice of appeal I have outlined brief grounds of appeal which, on face value, may not show the full extent of the error made by the judge. The full argument, if allowed to be presented to an appeal judge, or judges, in my opinion must succeed.
The proposed appeal
The notice of appeal that would be filed by the solicitor if leave is given contains four grounds of appeal. A consideration of the grounds is relevant to the application.
1. In making cost order against the appellant his Honour the trial judge erred in relying on his finding in the substantive proceedings, which was wrong in law, as follows:
By refusing to allow the applicant’s initiating application in the substantive proceedings to be heard under Part VII of the Family Law Act 1975 (“the Act”) his Honour erred in the interpretation of
s 69ZK of the Act, by:(a) Declining to remove the question of the interpretation of
s 69ZK to the Full Court; and(b) Following the decision in a similar matter by the Supreme Court of New South Wales in absence of a decision of this Court any matter raising similar issues; and
(c) Failing to correctly interpret the combined provisions of the Commonwealth Powers (Family Law – Children) Act 1986 (NSW) (“the Referral Act”) and the Children and Young Persons (Care and Protection) Act 1998 (NSW) (“the Care Act”).
2. If the Costs orders and the decision in the substantive proceedings are not reviewed by this Court the appellant will suffer substantial injustice and the reputation of the Family Law courts might be brought into disrepute.
3. Public interest: there are hundreds, perhaps thousands of children who are subject to the orders of the Children's Court of New South Wales made pursuant to s 79(1)(a)(i) of the Care Act whose parents are precluded from seeking remedy in a court of competent jurisdiction under Part VII of the Act in spite of the provisions of
s 69B of the Act4. Provisions of s 69B of the Act have not been defeated by the subsequent introduction of rule 23.01A of the Family La (sic) Rules 2004 made pursuant to s 70C of the Act.
Consequent on a successful appeal, and, of course, subject to leave being granted, the solicitor seeks a declaration that the trial judge’s decision of
11 October 2013 is “wrong in law for the reason that, contrary to that decision, there is no need for a written consent pursuant to s 69ZK of the Family Law Act…”
Extension of time in which to file the appeal
The principles relating to applications for an extension of time to file an appeal are set out in Gallo v Dawson (1990) 93 ALR 479. The granting of leave is not automatic and involves the exercise of discretion. The discretion to extend time is given for the sole purpose of enabling the Court to do justice between the parties. In determining whether the rules will work an injustice, it is necessary to have regard to the history of the proceedings, the nature of the litigation and the consequences for parties of the grant or refusal of leave.
Delay
The extent of and the explanation for the delay in bringing the appeal is a relevant consideration. In this matter the appeal was sought to be filed some four weeks out of time.
In explanation for the delay in filing the appeal, the solicitor says that while he was notified that judgment was to be delivered, he was not available to attend court. It seems common ground between the parties that neither of them received copies of the orders or reasons from his Honour’s chambers. The solicitor said it was not until 18 August 2014 that he received a copy of the orders and reasons. He said that he made no enquiry of the trial judge’s chambers or Federal Circuit Court Registry about the orders because, he said, he thought no judge would make such an unreasonable order and so he saw no need to obtain an order that simply dismissed the costs application. Obviously his confidence that the application for costs would be dismissed was misplaced. To make no enquiry of the outcome of the application on that basis is in my view, entirely cavalier.
Both the delay and the explanation for it are insufficiently explained.
Merits of the proposed appeal
As part of a consideration of the application, it is necessary to consider whether the making of the order sought would be futile and thereby create an injustice to the respondent and cause needless expenditure of public funds if the appeal was otherwise to proceed. This involves consideration of whether the appeal is so devoid of merit that it would be futile to make the order sought.
This determination of the merit of the appeal requires a consideration of whether the appeal is “arguable”. It will be readily understood that the determination of merit of an appeal for this purpose must, of necessity, be confined by the documents available to the court on the application.
The solicitor contends that the appeal involves a question of significant public importance. He argues that the foundation of the trial judge’s costs order is flawed because, in concluding that the mother’s applications were incompetent because the Federal Circuit Court was without jurisdiction, his Honour was wrong in law.
The basis for the asserted error is redolent of that to which the trial judge referred in his reasons – the solicitor continues to argue that White J’s decision in Re Felicity is wrongly decided and, further, that the NSW Court of Appeal’s assessment of the merits of his appeal from White J is of no or perhaps passing relevance to the argument.
The solicitor had unsuccessfully attempted to persuade the Supreme Court of the force of his argument about the effect of s 69ZK and the Court of Appeal readily dismissed the application for leave to appeal White J’s determination out of time, finding that the contended argument had no merit. The argument run again before the trial judge in the Federal Circuit Court failed.
Thus the success of his appeal against the costs order depends on acceptance of the argument.
Even on the limited material before the court on this application, there is no doubt but that the solicitor’s appeal has no merit and is doomed to failure. On this basis alone, the application must be dismissed.
Prejudice
The solicitor argued that there would be no prejudice to the father if leave be granted, saying that the Full Court would certainly grant a costs certificate when the appeal was successful. This argument does somewhat contract the necessary steps – that is, a grant of leave to bring the appeal out of time; a successful outcome of the appeal; a finding by the Full Court that the matter was not one in which there should be an order for costs inter partes and, finally, the order of a costs certificate.
There is prejudice to the solicitor if an extension of time to file the appeal is not granted. He will lose the ability to challenge the costs order. Although the thrust of his submissions challenged the underlying findings of the trial judge on which he relied to make the costs order, the solicitor did say that, in any event, he would wish to challenge the making of an indemnity costs order.
There is undoubted prejudice to the father if leave be granted, not the least of which is the prolongation of the litigation and he will be unable to have the benefit of the costs ordered in his favour.
The prejudice to the solicitor is not such as to outweigh the other matters to which I have referred and I conclude that he has not demonstrated that the leave sought should be given.
The application will thus be dismissed.
Costs
At the conclusion of the hearing, I sought submissions from both parties on the costs of the application to save the time, trouble and expense of making those submissions after judgment is delivered. The father sought an order for costs of the application if it failed. It has failed and the solicitor should pay the father’s costs of the application.
I certify that the preceding fifty four (54) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Ainslie-Wallace, delivered on
15 September 2014.
Associate:
Date: 15 September 2014.
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