Re Felicity; FM v Secretary, Department of Family and Community Services (No 4)

[2015] NSWCA 19

Court of Appeal

Supreme Court

New South Wales

• Summary available
• Amendment notes

Medium Neutral Citation:

Re Felicity; FM v Secretary, Department of Family and Community Services (No 4) [2015] NSWCA 19

Hearing dates:

On the papers

Decision date:

18 February 2015

Before:

Basten JA at [1];
Ward JA at [45];
Emmett JA at [49]

Decision:

(1)Order that George Potkonyak, the solicitor for the applicant in the proceedings in this Court, pay to the Secretary and the father the amount of the costs which the applicant was ordered to pay to those parties, being costs incurred in this Court.

(2)Order that Mr Potkonyak pay the Secretary’s costs of this motion of 29 July 2014.

Catchwords:

COSTS – application for order against legal practitioner – whether costs incurred by the misconduct of applicant’s solicitor – obligation of legal practitioner in conducting litigation – Civil Procedure Act 2005 (NSW), ss 56 and 99

COSTS – application for order against legal practitioner – supervisory jurisdiction of Supreme Court over legal practitioners – scope of jurisdiction under Supreme Court Act 1970 (NSW), s 23 – whether limited by Civil Procedure Act 2005, s 99

STATUTORY INTERPRETATION – construing statutory language involving related concepts holistically – application of “overriding purpose” under Civil Procedure Act 2005, s 56 – power of court to award costs against practitioner

WORDS AND PHRASES – “serious misconduct”; incurring costs “without reasonable cause” – Civil Procedure Act 2005, s 99

Legislation Cited:

Civil Procedure Act 2005 (NSW), ss 4, 56, 58, 98, 99; Sch 1
Children and Young Persons (Care and Protection) Act 1998 (NSW), ss 79, 88, 90
Legal Profession Act 2004 (NSW), s 496
Supreme Court Act 1970 (NSW), s 23
Supreme Court Act 1981 (UK), s 51
Uniform Civil Procedure Rules 2005 (NSW), rr 36.16, 51.4

Cases Cited:

Attorney-General v Wylde (1947) 47 SR(NSW) 99
Baffico v YMCA of Great Lakes Inc (No 2) [2014] NSWCA 171
Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd [2013] HCA 46; 250 CLR 303
Ireland v Retallack (No 2) [2011] NSWSC 1096
Kelly v Jowett [2009] NSWCA 278; 76 NSWLR 405
Kendirjian v Ayoub [2008] NSWCA 194
Lemoto v Able Technical Pty Ltd [2005] NSWCA 153; 63 NSWLR 300
Myers v Elman [1940] AC 282
Owners of the Ship “Shin Kobe Maru” v Empire Shipping Company Inc [1994] HCA 5; 181 CLR 404
Re Felicity; FM v Secretary, Department of Family and Community Services (No 3) [2014] NSWCA 226
Ridehalgh v Horsefield [1994] Ch 205

Category:

Costs

Parties:

FM (Felicity’s Mother) (Applicant)
Secretary, Department of Family and Community Services (First Respondent)
Felicity’s Father (Third Respondent)

Representation:

Counsel:
Mr G Potkonyak, Solicitor (Applicant)
Mr M Anderson (First Respondent)
Third Respondent in person

Solicitors:
Capellia Legal (Applicant)
Crown Solicitor’s Office (First Respondent)
Third Respondent self-represented

File Number(s):

CA 2013/339776

 Decision under appeal 

Court or tribunal:

District Court

Date of Decision:

11 December 2013

Before:

Olsson SC DCJ

File Number(s):

2013/131697

Judgment

1. BASTEN JA: On 15 July 2014 the Court handed down the principal judgment in this matter, correcting what appears to have been a slip in the entry of orders in the District Court, but otherwise dismissing the summons by which proceedings were commenced in this Court seeking judicial review of the judgment of the District Court. The applicant mother was ordered to pay the costs of the father and of the Secretary, Department of Family and Community Services. (To maintain the anonymity of the child, a pseudonym has been used; for the same reason, her parents are referred to by reference to their relationship to her and not by name.)

2. The parties seeking costs foreshadowed applications for orders against the solicitor appearing for the applicant, Mr Potkonyak. The Court did not make such orders as it was necessary to await the outcome of the hearing of the summons and to give Mr Potkonyak an opportunity to be heard in opposition to such an order. [1] The Court also noted that such an order might require variation of the order made in that judgment and that a relevant application should be made within 14 days, in conformity with the Uniform Civil Procedure Rules 2005 (NSW), r 36.16(3A).

   1. Re Felicity; FM v Secretary, Department of Family and Community Services (No 3) [2014] NSWCA 226 at [62].

3. On 29 July 2014 the Secretary filed a motion seeking the following orders:

“1.   That:

a.   George Potkonyak, solicitor for the plaintiff in these proceedings, pay the whole of the costs of the first and third defendants, that his client (the plaintiff) has been ordered to pay to the first and third defendants in these proceedings; and

b.   That George Potkonyak indemnify the plaintiff for these costs;

OR, in the alternative:

c.   George Potkonyak, solicitor for the plaintiff in these proceedings pay to his client (the plaintiff) the whole of the costs that the plaintiff has been ordered to pay to the first and third defendants in these proceedings;

2.   That the costs orders made in Orders 1(a) or 1(c) above be payable forthwith.

3.   That the Court direct that notice of this application be given to the plaintiff, the client of George Potkonyak.

4. In their form, the orders sought referred to the “plaintiff” in these proceedings and the “defendants”, no doubt because the further amended summons used this terminology. In the terminology of the Uniform Civil Procedure Rules, the moving party is the applicant and the parties potentially affected by the orders sought are the respondents. [2]

   2. UCPR, r 51.4.

5. The motion was accompanied by an affidavit of the Manager, Casework, at the Blacktown Community Service Centre who said that she was “employed by” the Secretary and was a delegate of the Secretary, responsible for supervising arrangements for Felicity. The affidavit set out the chronology of relevant legal proceedings regarding Felicity. On 14 August 2014 the Secretary filed submissions in support of the orders sought.

6. On 4 September 2014, Mr Potkonyak, who continued to act for the mother, filed an affidavit sworn by himself and one sworn by the mother. The affidavits were as revealing in what they did not deal with as they were with regard to those which were addressed. On 1 October 2014, Mr Potkonyak filed a written summary of argument in response to the submissions for the Secretary.

Legal principles - general

7. The Secretary invoked the power conferred by s 99 of the Civil Procedure Act 2005 (NSW), which provides:

99   Liability of legal practitioner for unnecessary costs

(1)   This section applies if it appears to the court that costs have been incurred:

(a)   by the serious neglect, serious incompetence or serious misconduct of a legal practitioner, or

(b)   improperly, or without reasonable cause, in circumstances for which a legal practitioner is responsible.

(2)   After giving the legal practitioner a reasonable opportunity to be heard, the court may do any one or more of the following:

(a)   it may, by order, disallow the whole or any part of the costs in the proceedings…

(b)   it may, by order, direct the legal practitioner:

…

(ii)   in the case of a solicitor, to pay to the client the whole or any part of any costs that the client has been ordered to pay to any other person, whether or not the client has paid those costs,

(c)   it may, by order, direct the legal practitioner to indemnify any party (other than the client) against costs payable by that party.

8. In a case in which the client of the practitioner has been ordered to pay costs, the relevant order is one that directs the practitioner to pay to the client the whole or any part of any costs that the client has been ordered to pay to any other person, whether or not the client has paid those costs (s 99(2)(b)), or direct the legal practitioner to indemnify any party other than the client against costs payable by that party: s 99(2)(c).

9. The Secretary referred to the decision of this Court in Lemoto v Able Technical Pty Ltd. [3] That case, dealing with an application, not under s 99 of the Civil Procedure Act, but under s 198M of the Legal Profession Act 1987 (NSW), is of limited assistance. The only case relied on in this Court dealing with an application under s 99 was Baffico v YMCA of Great Lakes Inc (No 2),[4] which did not deal in terms relevant to the present case with the scope of s 99.

   3. [2005] NSWCA 153; 63 NSWLR 300.

   4. [2014] NSWCA 171.

10. There is a voluminous case law relating to the making of costs orders against the legal representatives of a party to litigation. To review it here would involve a misconception about the functions of the Court, for several interrelated reasons. One issue addressed in the cases concerns the power of the Court to make such orders and the limitations on an available power. The statutory power invoked in the present case is constrained by prescribed conditions of engagement, the terms of which vary from those in other statutes. However, to the extent that the power to make the orders sought depends on the supervisory jurisdiction of the Court over legal practitioners reference to the case law is appropriate.

11. A second issue addressed in the case law relates to the factors which should guide the exercise of a power which is, unsurprisingly, invariably discretionary. Because the power is often defined by imprecise and evaluative criteria, usually involving the touchstone of “reasonableness”, these issues are not clearly distinguished. However, because some of the relevant factors derived from principles which are extraneous to the power-defining criteria, the distinction may be important. (It is in this case.)

12. The last point identifies a third basis for placing limited weight on earlier cases. Principles extraneous to the power-defining criteria now include the “overriding purpose” identified and explained in ss 56-60 of the Civil Procedure Act. Few cases have given explicit consideration to these statutory obligations in relation to the power to award costs against a practitioner; nevertheless, it is appropriate for the court to take a “robust and proactive approach” to case management, in accordance with the terms of s 58: Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd. [5]

    5. [2013] HCA 46; 250 CLR 303 at [56]-[57].

13. Finally, common lawyers readily seek to derive guidance from how earlier cases involving similar factual circumstances have been decided. It is an approach justified by the importance attached to the fundamental value of equal treatment under the law. It underlies the principle of “parity” in the sentencing of co-offenders. Nevertheless, like all principles, it is not to be applied inflexibly or without regard to other values. Unless tempered by discretion it can involve unacceptable costs. It invites time consuming searches for comparable cases, time consuming for legal representatives and for the courts, which will inevitably increase costs and delay. It leads to longer judgments, with the same results, only affecting more broadly the legal profession and those involved in future litigation. It also distracts attention from the fact that different general law or statutory regimes may be involved. Finally, it may distract attention from a careful application of the applicable legal principles relied on to the circumstances of the case in hand.

14. What can be derived from the case law is important, but needs no anxious analysis of authority. It is that to order costs against a lawyer requires a careful balancing of the public interest in maintaining and nurturing a legal profession which provides vigorous representation for litigants in court, uncompromised by a fear of personal sanctions for failure, against the need to maintain and nurture the obligation to provide independent advice to litigants and to give proper weight to the public interest in the efficient administration of justice. It is this latter element of the public interest which finds express recognition, in mandatory terms, in the overriding purpose provisions of the Civil Procedure Act.

15. The power invoked in the present case is that contained in s 99 of the Civil Procedure Act. It is a basic principle of statutory construction that that power must be read contextually, with explicit regard to ss 56-60 of the same Act and must be applied with explicit regard to those provisions in a specific factual context. Indeed, s 56(5) expressly empowers the court in exercising a discretion with respect to costs to take into account any failure to comply with the duty of a party or legal representative to assist the court to further the overriding purpose.

16. In one respect the power in s 99 is curiously worded. Although the logic underlying the statutory provision is somewhat obscure, the section does not justify an order that the practitioner indemnify his own client (the applicant) for costs payable by her to the respondents: cf s 99(2)(c). Nor does the section permit, in terms, an order that the practitioner pay to the party entitled to costs, the costs ordered against the client. The available order is limited to one that the practitioner pay to the client the costs the client has been ordered to pay to the other parties: s 99(2)(b)(ii).

17. The primary order sought by the Secretary in the present proceedings is that the solicitor pay the costs awarded against his client. It is apparent that s 99, in its terms, does not provide a basis for such an order. Further, although there is no evidence that she was independently advised, the mother has filed an affidavit opposing an order that her solicitor pay the costs to her.

18. The absence of a basis in s 99 for an order that the solicitor pay the opposing parties directly, is not an end of the matter. There is a general power in this Court to make such orders in the supervisory jurisdiction with respect to legal practitioners admitted by the Court. An authoritative basis for that jurisdiction to order costs against a practitioner is to be found in Myers v Elman [6] where Lord Wright explained the basis on which the jurisdiction could be involved in the following terms:[7]

“It would perhaps be more accurate to describe it as conduct which involves a failure on the part of a solicitor to fulfil his duty to the Court and to realize his duty to aid in promoting in his own sphere the cause of justice. … The order is for payment of costs thrown away or lost because of the conduct complained of. It is frequently, as in this case, exercised in order to compensate the opposite party in the action.”

6. [1940] AC 282.

7. Ibid at 319.

19. The operation of that principle in this State was acknowledged in the Attorney- General v Wylde, [8] and in Lemoto. [9]

    8. (1947) 47 SR(NSW) 99 at 113-114 (Davidson J, Street J agreeing) and 119 (Nicholas CJ in Eq).

    9. (2005) 63 NSWLR 300 at [84]-[85] (McColl JA, Hodgson and Ipp JJA agreeing). (At [88] it is said that the Court exercised the inherent jurisdiction to order the solicitors to pay the costs of the proceeding in Wylde; in fact no order was made as to payment of costs by any party.)

20. There may be an issue as to whether the supervisory jurisdiction of the Court is limited, with respect to costs orders against legal practitioners, by the test found in s 99(1); there is, however, no basis for supposing that s 99 was otherwise intended to remove or restrict the powers of the Court. Such a construction would require imposing a limit on the jurisdiction of the Court conferred by s 23 of the Supreme Court Act 1970 (NSW) which extends to “all jurisdiction which may be necessary for the administration of justice in New South Wales.” Such a provision is not to be read down, absent express words or, perhaps, some necessary implication. [10] There is no such implication to be derived from the terms, or indeed the purpose, of s 99.

    10. Owners of the Ship “Shin Kobe Maru” v Empire Shipping Company Inc [1994] HCA 5; 181 CLR 404 at 421.

Operation of s 99

21. Two aspects of s 99 provide a structure to the consideration of its operation. First, the elements identified in s 99(1) provide a gateway or condition precedent to the engagement of the power conferred by subs (2). The power itself is discretionary: the matters which constitute relevant preconditions to its engagement may also be relevant to the decision whether to make an available order against a legal practitioner, or to decline to do so.

22. Secondly, it is convenient to consider both the conditions precedent and the discretionary factors by reference to the circumstances of the individual case. For example, different factors will be relevant where the absence of reasonable support for a proceeding derives from a misunderstanding of the law and a case where the absence of reasonable support derives from a lack of evidence. The kind of case may also be characterised by the stage at which it is contended that the proceedings reveal misconduct. This may well affect the extent of the order. For example, a proceeding commenced (or a defence proffered) on the basis of a misconception as to a basic element of law, may be misconceived from the outset so as to warrant an order that the practitioner responsible pay all of the costs of the successful party. By way of contrast, a case which was constructed around a viable legal premise, may be revealed to be hopeless when the evidence of a key witness fails to provide support. A failure to abandon the case at that stage may warrant an order against the practitioner for the wasted costs incurred from that point in time, but not from any earlier point.

23. The relevance of the obligations imposed on practitioners by s 56(4) of the Civil Procedure Act, and their place in the exercise of the discretion as to costs conferred by s 99 was identified in Kendirjian v Ayoub [11] and in Kelly v Jowett. [12] As explained by Pembroke J in Ireland v Retallack (No 2), [13] what constitutes conduct of proceedings “without reasonable cause”, in circumstances for which the practitioner is responsible, is to be understood in the context of the obligations imposed on a solicitor under s 56(4), failure to comply with which may be taken into account in exercising a discretion with respect to costs, pursuant to s 56(5).

    11. [2008] NSWCA 194 at [209] (McColl JA, Beazley JA agreeing).

    12. [2009] NSWCA 278; 76 NSWLR 405 at [87] (McColl JA, Beazley JA and Barrett J agreeing).

    13. [2011] NSWSC 1096.

24. The various phrases used in s 99(1)(a) and (b) do not constitute discrete and independent concepts; nor are they to be treated as terms of art. There is no call to construe “serious misconduct” by reference to the term “unsatisfactory professional conduct”, as defined in the Legal Profession Act 2004 (NSW), s 496. The preferable course is that adopted in Ridehalgh v Horsefield,[14] addressing the power of the court to order costs against a solicitor personally where such costs had been incurred by a party “as a result of any improper, unreasonable or negligent act or omission on the part of any legal or other representative”: Supreme Court Act 1981 (UK), s 51(7). Bingham MR (delivering the judgment of the Court including Rose and Waite LJJ) stated :[15]

“‘Improper’ means what it has been understood to mean in this context for at least half a century. The adjective … covers any significant breach of a substantial duty imposed by a relevant code of professional conduct. But it is not in our judgment limited to that. Conduct which would be regarded as improper according to the consensus of professional (including judicial) opinion can be fairly stigmatised as such whether or not it violates the letter of a professional code.

‘Unreasonable’ … aptly describes conduct which is vexatious, designed to harass the other side rather than advance the resolution of the case, and it makes no difference that the conduct is the product of excessive zeal and not improper motive. But conduct cannot be described as unreasonable simply because it leads in the event to an unsuccessful result or because other more cautious legal representatives would have acted differently. The acid test is whether the conduct permits of a reasonable explanation. If so, the course adopted may be regarded as optimistic and as reflecting on a practitioner's judgment, but it is not unreasonable.

The term ‘negligent’ was the most controversial of the three. It was argued that the Act of 1990, in this context as in others, used ‘negligent’ as a term of art involving the well known ingredients of duty, breach, causation and damage. Therefore, it was said, conduct cannot be regarded as negligent unless it involves an actionable breach of the legal representative's duty to his own client, to whom alone a duty is owed. We reject this approach: (1) As already noted, the predecessor of the present Order 62 rule 11 made reference to ‘reasonable competence’. That expression does not invoke technical concepts of the law of negligence. It seems to us inconceivable that by changing the language Parliament intended to make it harder, rather than easier, for courts to make orders. (2) Since the applicant's right to a wasted costs order against a legal representative depends on showing that the latter is in breach of his duty to the court it makes no sense to superimpose a requirement under this head (but not in the case of impropriety or unreasonableness) that he is also in breach of his duty to his client.

We cannot regard this as, in practical terms, a very live issue, since it requires some ingenuity to postulate a situation in which a legal representative causes the other side to incur unnecessary costs without at the same time running up unnecessary costs for his own side and so breaching the ordinary duty owed by a legal representative to his client. But for whatever importance it may have, we are clear that ‘negligent’ should be understood in an untechnical way to denote failure to act with the competence reasonably to be expected of ordinary members of the profession.

In adopting an untechnical approach to the meaning of negligence in this context, we would however wish firmly to discountenance any suggestion that an applicant for a wasted costs order under this head need prove anything less than he would have to prove in an action for negligence ….

We were invited to give the three adjectives (improper, unreasonable and negligent) specific, self-contained meanings, so as to avoid overlap between the three. We do not read these very familiar expressions in that way. Conduct which is unreasonable may also be improper, and conduct which is negligent will very frequently be (if it is not by definition) unreasonable. We do not think any sharp differentiation between these expressions is useful or necessary or intended.”

14. [1994] Ch 205.

15. Ibid at 232-233.

Application of principles

25. The costs in question in the present case are the costs of the proceedings in this Court seeking to set aside the judgment of the District Court. Such proceedings by way of judicial review in the supervisory jurisdiction of this Court provide relief in limited circumstances. It is necessary for an applicant to demonstrate error of law on the face of the record or jurisdictional error.

26. The primary relief sought was by way of declarations, expressed in the alternative. For example, the first declaration sought was that the Director General had no standing to commence proceedings in relation to Felicity after she attained eight years of age and, in the alternative, that the Director General had standing. Unless error was established in the judgment under review, such declarations served no purpose. The applicant was wholly unsuccessful in that regard.

27. The arguments put in respect of each ground of relief were addressed in the principal judgment of this Court and need not be repeated, despite the fact that Mr Potkonyak, in seeking to establish that the grounds were not without reasonable cause, repeated each in summary form in his submissions in resistance to the present application.

28. The solicitor’s submissions addressed each phrase in pars (a) and (b) of s 99(1) in order to reject the submission that his conduct fell within any particular phrase. He did not deny in his affidavit, nor seek to argue in his written submissions, that the proceedings were conducted otherwise than on the basis of his understanding of legal principle. Nor did the mother suggest in her affidavit that she had not given instructions for Mr Potkonyak to bring proceedings as he did on her behalf, in accordance with his understanding as to the law. Neither mother nor solicitor gave evidence that Mr Potkonyak had given advice, let alone as to the content of any advice given.

29. Before addressing the substantive bases upon which an application by the Secretary could properly succeed, it is convenient to dismiss what might be described as false bases. First, the Court was asked to deal with the costs of the proceedings before it: except to the extent that the underlying proceedings in the Children’s Court and in the District Court affect the merit of the proceedings in this Court, the conduct of those proceedings should be disregarded. By way of example, the affidavit filed for the Secretary referred to earlier proceedings, including judgments of Judge Marien SC, President of the Children’s Court, and Magistrate Murphy, both dealing with the costs of proceedings brought pursuant to s 90(1) of the Children and Young Persons (Care and Protection) Act 1998 (NSW) (“the Care Act”). Under s 88 of the Care Act, the Children’s Court cannot make an order for costs in care proceedings absent “exceptional circumstances” that justify it doing so. Judge Marien, in a judgment delivered on 10 February 2012, gave careful consideration to whether he should make an order for costs, not only in favour of the father, but against Mr Potkonyak personally. Although it would appear that he believed that, had he the power to do so, such an order should be made against Mr Potkonyak, he held, correctly, that s 99 did not apply to care proceedings in the Children’s Court, referring to the Civil Procedure Act, s 4(1) and Sch 1. Magistrate Murphy, in a decision delivered on 17 July 2013, decided there were exceptional circumstances warranting an order that the father’s costs be paid by the mother.

30. These decisions are relevant to the extent that they demonstrate the views expressed as to the lack of merit in the proceedings brought on behalf of the mother. This Court should not, nor is it asked to, make orders which could not be made in the Children’s Court in relation to the costs in that Court.

31. Secondly, reference has been made in the material (both in the affidavit of the case worker from the Department filed in this Court, and in decisions in the Children’s Court) to the fact that the mother has failed to pay any costs order made against her up to the present time. That may be so, but it has no direct relevance to the present application. A party’s delinquency in failing to comply with court orders with respect to costs is not to be visited on her solicitor by way of an order that he pay the costs in the present proceedings.

32. Thirdly, the purpose of a costs order is not to deter the solicitor from acting for the mother in further proceedings which have some reasonable basis in law and in fact. Rather, it is to ensure that the costs incurred in the present proceedings are not merely visited on the unsuccessful party, as would be the usual order in accordance with s 98 of the Civil Procedure Act, but are met by the person responsible for causing unnecessary costs to be incurred, in the circumstances where s 99 is engaged.

33. This was a case in which the reasonableness of the proceedings in this Court depended to a significant extent (though not wholly) on the reasonableness of the proceedings commenced in the Children’s Court for a variation of the care order to which Felicity was subject in 2011.

34. The factual underpinnings of this case date back to 16 October 2009 when a magistrate in the Children’s Court made orders allocating parental responsibility for Felicity to her father, with responsibility for contact with her mother and sister resting with the Minister. That order was made under s 79 of the Care Act. Such orders can be varied pursuant to an application under s 90 of the Care Act. The primary orders continued until Felicity attained eight years of age; in 2012 the Secretary (then the Director General) sought a variation of the orders to extend until Felicity turned 18.

35. The dispute between the parties has turned on the issue of supervision during contact visits. Since 2011 the mother has opposed supervised visits: indeed, since about October 2011, she had refused to participate in arrangements for supervised visits.

36. In the District Court, Judge Olsson SC gave careful consideration to the competing considerations relevant to the orders sought. Because of the need to identify legal error on her part, the submissions in this Court attacked the fact finding process as involving a failure to direct her mind to the merits of the arguments. This was formulated in one part as a complaint of procedural unfairness which was dismissed by this Court. [16] Further, the reasons noted:[17]

“The proposition that Olsson DCJ did not give adequate consideration to the submissions on behalf of the applicant was simply a misrepresentation of her reasons for judgment. … No specific passage in the judgment was relied upon, nor was there reference to specific submissions which were disregarded.”

16.    Principal judgment at [43]-[53].

17. Ibid at [50].

37. In other respects, attempts to identify legal error on the part of the District Court were either misconceived or otherwise lacking in substance. They were of the kind which a competent and responsible legal practitioner should have advised a client were untenable and would certainly lose.

38. If there were evidence that such advice had been given and that the client had nevertheless directed the practitioner to put forward such arguments, a different question would have arisen, as to whether the practitioner should be mulct in costs for having put the other party to expense unnecessarily and inappropriately, albeit in accordance with express instructions. Even if undertaken on instructions, such conduct would constitute a breach of the practitioner’s obligations under s 56 of the Civil Procedure Act, as it would the obligations of the litigant under the same provision. It may well be that, in such circumstances, both parties should be liable for the costs thus incurred. However, in the present case, there was no evidence that such advice was given, nor that instructions were given based on such advice, so the issue does not arise.

39. In written submissions in support of the motion, the Secretary made reference to particular findings in the principal judgment at [21], [22], [28], [40], [42], [46], [52], [55] and [56]. (These passages need not be restated here.) The practitioner’s submissions in response, so far as they addressed the present proceedings, relied upon two broad propositions. The first was that the Secretary had deemed it appropriate to brief experienced counsel in the matter, thereby implying acceptance of the proposition that there were arguments of substance to support the application. Such a submission is no substitute for a consideration of the actual merits of the case presented. So far as the substantive issues went, the practitioner repeated many of the submissions which had been rejected, in terms which were dismissive of any view to the contrary. Despite the rhetorical strength of some submissions, he accepted that it was only necessary to demonstrate that his arguments “were not hopeless and without merit”. [18] He also placed weight on what he described as the Court’s refusal to grant relief in terms of the declaration sought in paragraph 2 of the amended summons, which he described as “the pivotal issue in the whole matter”, as to which he was left “still wondering” about the Court’s conclusion in that regard.

    18.    Submissions, par 51.

40. Paragraph 2 of the relief claimed sought a declaration that “the matter involving the child [Felicity] ceased to be a care and protection matter on the day [she] attained eight years of age and falls outside of the care and protection jurisdiction”. (An alternative, contrary, declaration sought was that “until the orders is rescinded [sic] or the child attains 18 years of age” the matter may be dealt with “in the care protection jurisdiction only …”.)

41. It is true that declarations were not made in the terms sought in any of the paragraphs of the further amended summons. It was, however, noted in the principal judgment that one of the orders made in 2009 operated to confer parental responsibility on the father until the child attained 18 years. [19] If by seeking a declaration that “the matter … ceased to be a care and protection matter” the practitioner was contending that the child was no longer subject to a court order as to her care after she attained the age of eight years, that was factually wrong. If the declaration sought to identify a limitation on the jurisdiction of the Children’s Court, it was legally wrong. That contention, the basis of which was not clearly articulated, was dealt with in the principal judgment at [23]ff.

    19. Principal judgment at [9].

42. In short, the practitioner’s submissions raised no doubt as to the correctness of the conclusions reached in the principal judgment; rather, they support an assessment that the practitioner has a significantly flawed view of the scope of, and the legal principles applicable in, the care and protection jurisdiction.

43. The submissions for the Secretary should be accepted: Mr Potkonyak should bear the costs of the father and the Secretary in this Court. The Court has not been invited to fix the amount of those costs.

44. Accordingly, the Court should make the following orders:

1. Order that George Potkonyak, the solicitor for the applicant in the proceedings in this Court, pay to the Secretary and the father the amount of the costs which the applicant was ordered to pay to those parties, being costs incurred in this Court.

2. Order that Mr Potkonyak pay the Secretary’s costs of this motion of 29 July 2014.

45. WARD JA: I have had the advantage of reading in draft the reasons of Basten JA. I agree with the orders proposed by his Honour. As his Honour noted, the attempts by the mother to identify legal error on the part of the District Court decision subject of the application for judicial review were either misconceived or lacking in substance. The proposition that the primary judge did not give adequate consideration to the applicant's submissions was a misrepresentation of her Honour's reasons for judgment.

46. I agree with Basten JA that the submissions made on the application before this Court were of a kind which any competent and responsible legal practitioner should have advised a client were untenable.

47. I also agree that the submissions made by the mother's legal representative raised no doubt as to the correctness of her Honour's conclusions and supported the conclusion that the practitioner has a significantly flawed view of the scope of, and the legal principles applicable in, the care and protection jurisdiction.

48. In the absence of any evidence that the legal practitioner had advised against raising the untenable arguments that were raised on this application, it can only be concluded that the costs of the proceedings have been incurred by the serious incompetence of the legal practitioner and it is appropriate that the legal practitioner bear the costs of the father and the Secretary in this Court.

49. EMMETT JA: By notice of motion filed on 29 July 2014, the Secretary, Department of Family and Community Services (the Secretary), the respondent in these proceedings, applied for an order that Mr George Potkonyak (the Solicitor) pay the whole of the costs of the Secretary and the third respondent (the Father) that the Court has ordered the applicant in these proceedings (the Mother) to pay to the Secretary and the Father and that the Solicitor indemnify the Mother for those costs. In the alternative, the Secretary seeks an order that the Solicitor pay to the Mother the whole of the costs that the Mother has been ordered to pay to the Secretary and the Father in the proceedings. The Solicitor acted for the Mother in the proceedings.

50. The proceedings concern a child of the Father and the Mother (Felicity). The Secretary commenced proceedings under the Children and Young Persons (Care and Protection) Act 1998 (NSW) to vary orders made in relation to contact with Felicity. The Children’s Court made orders on 26 April 2013 providing for Felicity to continue to live with the Father and to have contact with the Mother as organised by the Secretary until she is 14 years of age. The Mother appealed from those orders to the District Court, where she was unsuccessful. The Mother then brought proceedings in this Court seeking judicial review of the decision of the District Court. This Court ordered that the proceedings be dismissed and ordered the Mother to pay the costs of the Secretary and the Father.

51. The present application relates to the costs so ordered and is made under s 99 of the Civil Procedure Act 2005 (NSW). That section applies if it appears to the Court that costs have been incurred by the serious neglect, serious incompetence or serious misconduct of a legal practitioner, or improperly, or without reasonable cause, in circumstances for which a legal practitioner is responsible. Section 99(2) relevantly provides that, where the section applies, the Court may:

• disallow the whole or any part of the costs in the proceedings;

• direct the legal practitioner, if a solicitor, to pay to the client the whole or any part of any costs that the client has been ordered to pay to any other person;

• direct the legal practitioner to indemnify any party, other than the client, against costs payable by that party.

52. I have had the advantage of reading in draft form the proposed reasons of Basten JA. I agree with Basten JA, for the reasons proposed by his Honour, that s 99 applies in the present circumstances, having regard to the conduct of the proceedings by the Solicitor, and that the Court has the power in its supervisory jurisdiction to make costs orders against legal practitioners. I also agree with the orders proposed by Basten JA for the reasons proposed by his Honour.

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Endnotes

Amendments

08 July 2016 - [18] - Inserting "the" between "explained" and "basis".

22 March 2016 - Amendment to second sentence of [12].

Decision last updated: 23 March 2018