Sladin and Scabel

FAMILY COURT OF AUSTRALIA

SLADIN & SCABEL

[2008] FamCA 72

FAMILY LAW – COSTS

Reserved Judgment - Costs

Family Law Act 1975 (Cth)

Applicant:

Ms Sladin

Respondent:

Mr Scabel

Independent children’s lawyer:

Timothy Mulvany

File Number:

DGF

1196

2005

Date Delivered:

12 February 2008

Place Delivered:

Melbourne

Place Heard:

Melbourne

Judgment of:

Carter J

Hearing Date:

By written submissions

Representation

Solicitor for the Applicant:

Richard Calley Pty

Respondent in Person:

Mr Scabel

Solicitor for the Independent Children’s Lawyer:

Mr T J Mulvany

Orders

That within 90 days of this order the wife pay to Victoria Legal Aid the sum of $2,165 by way of contribution towards the costs of the Independent Children’s Lawyer.
That within 90 days of this order the husband pay to Victoria Legal Aid the sum of $4,330 by way of contribution towards the costs of the Independent Children’s Lawyer.
That within 90 days of this order the husband pay to the wife’s solicitor the sum of $6,000 by way of contribution towards the wife’s costs.

IT IS NOTED that publication of this judgment under the pseudonym Sladin and Scabel is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER:

MS SLADIN

Applicant

and

MR SCABEL

Respondent

and

Independent Children’s Lawyer

REASONS FOR JUDGMENT

Reserved (Costs)

For convenience I will refer to Ms Sladin as “the wife” and Mr Scabel as the “the husband”.
On 12 September 2007 I delivered a reserved judgment following contested proceedings relating to parenting and financial issues. That Judgment should be read in conjunction with these Reasons. On 11 July 2007 I had made certain parenting orders and I made additional parenting orders on 12 September 2007. On the same day I made separate orders which determined the financial interests of the parties. The proceedings were heard over a period of some eight (8) days in July 2007. During those proceedings Counsel appeared on behalf of the wife, and the Independent Children’s’ Lawyer (“I C L”). The husband appeared in person.
Paragraph 4 of the children’s’ orders made on 12 September 2007 provided as follows:
“4. That the Independent Children’s’ Lawyer be at liberty to make an application for costs by filing and serving written submissions within 14 days of this day. The respondent to any such application have a further 14 days to reply. The cover sheet of all submissions is to be annotated with the date of service.”
The I C L has filed such an application and submits that the husband and the wife should make a contribution to the costs of the trial, which would have the effect of reimbursing Victoria Legal Aid for the costs incurred in three hearing days.
The wife’s response is to the effect that the husband should bear the entirety of the costs sought by the I C L, however if the Court does not agree to that submission, the wife does not make any further submissions in relation to the I C L’s submission for costs.
The husband’s response is that the application by the I C L should be dismissed for reasons to which I shall return, however if the Court disagrees with that submission the husband submits that the wife should be responsible for any costs awarded to the I C L.
In pars 25 and 26 of the property orders I made on 12 September 2007 I also made provision for the parties to apply for costs and set out a timetable to achieve this.
The wife seeks an order that the husband pay her costs of and incidental to the property proceedings as and from 6 April 2006. She does not seek a costs order against the husband for the parenting proceedings. The husband opposes that application.
The husband seeks that each party bears his or her own costs in relation to the property proceedings. He also seeks an order that the wife be responsible for all of his costs in relation to the parenting proceedings. The wife opposes the husband’s application.
This is the determination of the competing applications.

Relevant Legal Principles

The power to award costs is largely to be found in ss 117(1), (2) and (2A) of the Family Law Act 1975 (“the Act”). However there are a number of other provisions in the Act and the Family Law Rules 2004 (“the Rules”) which relate to costs. I will refer to those where relevant.
It is the general rule under s 117(1) that each party shall bear his or her own costs. However, pursuant to sub-s (2) the Court may make such orders as to costs as it considers just, if it is of the opinion that there are circumstances to justify doing so. In considering what order (if any) should be made the Court is required (inter alia) to have regard to the matters referred to in s 117(2A). They are:
“117(2A) [Matters relevant to costs order]
In considering what order (if any) should be made under sub-section (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 Act also makes provision for payment of the costs of an I C L and the relevant statutory provision is as follows:
“117(3) [Court may order payment of independent children's lawyer's costs]
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.
117(4) [When court must not order payment of independent children's lawyer's costs]
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.
117(5) [Funding of independent children's lawyer must be disregarded]
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.”
Sub-sections (3), (4) and (5) to s 117 were introduced by the Family Law Amendment Act 2003 and they apply to “proceedings instituted in the Court” after the commencement date of the Family Law Amendment Act. This was 14 January 2004. These sections are applicable to the present case, given that the proceedings commenced in November 2005.
In Penfold (1980) FLC ¶ 90-800 the Full Court of the High Court of Australia held that the general rule expressed by s 117(1) must yield to s 117(2) whenever a Judge finds in a particular case that there are circumstances justifying the making of an order for costs. Sub-section (2) requires a finding of justifying circumstances as an essential preliminary to the making of an order. Apart from that however, there is nothing in the subject matter or in the inter-relationship of the provisions which imposes any additional or special onus on the Applicant for an order for costs. The members of the High Court did not agree with the suggestion made by the Full Court of this Court in the judgment under appeal that an order could only be made under s 117(2) in “a clear case”.
The Full Court of this Court made it clear in I&I (No. 2) (1995) FLC ¶ 92-625 that the approach that should be taken by the Court was the same in all cases, including cases involving children.
In Fitzgerald (as Child Representative for A, (Legal Aid Commission of Tasmania)) v Fish (2005) 33 FamLR 123 the Full Court wrote in par 41 that there was no prescription in s 117(2A) or elsewhere in s 117 that more than one factor must be present before an order for costs is made, nor any suggestion as to the comparative weight of the factors themselves. As a consequence their Honours held that there was nothing to prevent any factor being the sole foundation for an order for costs.
In CDJ v VAJ (No. 2) (1998-1999) 24 FamLR 1 Kirby J made observations to the effect that generally one would expect that parents should be equally responsible for costs incurred by a child representative. However, I am nonetheless still required to take into account the relevant statutory matters set out in the Act.

Background

The husband was born in November 1961 and is currently 46 years of age. The wife was born in August 1962 and is currently 45 years of age. They cohabitated from 1983 and married in March 1987. Separation took place on 24 October 2005 and they were divorced on 3 June 2007.
At separation the wife left the matrimonial home at E. The husband at trial gave his occupation as being “home duties” saying that he was then not working a great deal, however did work where possible as a tradesman. He anticipated being able to increase his work after the trial had been completed during periods of time when the children were not living with him.
At the time of the trial the wife was in part-time employment at the B Bakery and from time to time she gave assistance on a voluntary basis at the B General Store.
As earlier recorded the proceedings between the parties commenced in November 2005. The wife was the applicant and she sought both parenting and financial orders. The wife was legally represented at all times during the proceedings. The husband had legal representation at times but for most of the proceedings appeared on his own behalf. He did not have legal representation at the trial.
There were three children born of the marriage. Those children are V born in May 1992 and currently aged 15 years; M born in November 1994 and currently aged 13 years; and R born in May 1997 and currently aged 10 years.
On 8 May 2006 orders were made with the consent of both the husband and the wife. They were both legally represented. Pursuant to par 4 of those orders the children were ordered to be separately represented by Mr Tim Mulvany (a solicitor) whose reasonable costs were to be paid equally by the parties. A request was made to Victoria Legal Aid that consideration be given to appointing Mr Mulvany on a private basis and that request was granted. I have been advised in the submissions filed on behalf of the I C L that it is sometimes the case, and was in these proceedings, that lawyers for each of the parents jointly approach a member of the Accredited Panel to seek that person’s consent to act as separate representative for the children. The remuneration of the person is agreed upon and Victoria Legal Aid sanctions that agreement. I accept that this is so.
Accordingly, and in accordance with the order of 8 May 2006 the husband and the wife accepted responsibility for the payment of the fees of the I C L (as such persons are now known).
On 18 June 2007 the I C L filed an application seeking that the appointment of the I C L which had been made on 8 May 2006 be discharged. It was further sought that the children be separately represented and it was requested that Victoria Legal Aid arrange such representation, and additionally that consideration be given to appointing Mr Mulvany in that capacity given his previous involvement in the matter.
In support of that application Mr Mulvany swore an affidavit on 1 June 2007 which was also filed on 18 June 2007. He deposed in that affidavit that the husband and the wife had each paid his firm the sum of $2,475.00 pursuant to an account sent on 31 August 2006 for professional services which had been rendered. He noted that the husband and the wife currently owed him the sum of $3,300.00 inclusive of GST for professional services rendered after 31 August 2006. He noted that both the husband and the wife had indicated in writing that they were incapable of continuing to pay for the services of an I C L. It was Mr Mulvany’s professional opinion that the three children’s best interests required them to continue to be separately represented and he also deposed that this representation would assist the Court. He wished to continue to advocate in the interests of the children, however if funding were not available, and in the absence of funds from the husband and the wife, he was not in a position to continue to act in the proceedings.
That application was granted on 28 June 2007. The husband and the wife consented to it. Mr Mulvany was re-appointed and I accept that the effect of the order was that the funding for the I C L changed from a private appointment to an appointment funded by Victoria Legal Aid. Accordingly, Victoria Legal Aid funded the I C L from 28 June 2007 until the conclusion of the hearing.
It is convenient to note here that when I made the children’s orders on 12 September 2007 I did not discharge the appointment of the I C L and requested Victoria Legal Aid to continue to fund him.
Victoria Legal Aid has its own ‘scale’ relating to payments that it will make for solicitors and Counsel. I accept the I C L’s submission that on that scale the fees payable to Counsel for the eight (8) sitting days of the trial together with a conference amounted to $10,405.00, comprising a conference fee of $525.00 and a brief fee of $1,235.00 per day. I also accept that the remuneration made to the I C L on the applicable scale for the purposes of the trial amounted to $10,395.00. On my calculations the total payment would therefore have been $20,800.00, not the amount of $20,080 as specified in par 5 of the I C L’s submissions.
I have been told by the I C L by way of background, and accept, that the I C L was not funded for his appearances before Dessau J on 13 August 2007 (one-half day) and before myself on 12 September 2007 (one-half day). I note that the I C L did appear on each of those occasions, his appearance being accordingly pro bono.
For the sake of completeness I should record that the proceedings before Dessau J on 13 August 2007 concerned allegations of contravention by the husband of orders which I had made on 11 July 2007. The wife was granted leave to withdraw one of those allegations and the other five allegations were found proven. Her Honour determined not to impose a specific penalty on the husband but required him to pay the wife’s reasonable legal costs of her application, such sum to be agreed within twenty-one (21) days of the order, and failing agreement to be taxed. Given that I had not at that stage delivered Reasons for Judgment her Honour also directed that a transcript of her Reasons for Judgment was to be prepared and placed on the Court file in a sealed envelope until after I had published my Judgment.
Again, for completeness I should record that further information in respect to R was necessary following the earlier orders made on 11 July 2007. As part of the hearing on 12 September 2007 that information (amongst other things) was provided. The background to this can be seen commencing at par 531 of my earlier Reasons for Judgment.
Commencing at par 547 of my earlier Reasons for Judgment I set out the financial background relevant to the property proceedings and in the course of that also made reference to a number of interlocutory proceedings between the husband and the wife dealing with financial issues.
When the trial commenced the orders relating to the children were those which had been made by consent on 12 May 2006. Pursuant to those orders, and by way of final orders, the husband and the wife were to retain and exercise joint parental responsibility for long-term issues in relation to the children and each of them was to exercise day-to-day responsibility for the children when they were in the respective care of each parent. Interim orders were made which in broad terms provided for the children to reside with each parent on a week and week about basis.
As was noted in the Reasons for Judgment that had not been the case in practical terms. Notwithstanding the orders R had principally lived with his father and he had spent limited and irregular periods of time with his mother. Until October or November 2006 both V and M generally lived with each parent in accordance with the Court orders however after that date they principally lived with their mother, generally spending time with their father every second week from Thursday until Monday, except for school holidays which were largely shared between the parents.
For the purposes of the trial in July 2007 the I C L filed an outline of case document (Document 104) which had a convenient chronology listing the significant events, including Court events. This was largely, if not exclusively, referrable to children’s matters.
In my Reasons for Judgment commencing at par 461 I set out the final proposals as to the arrangements for the children which the parties have put forward following the conclusion of evidence at trial. The I C L’s proposals for R were different from those which were put forward in respect of his sisters. The proposals of the wife largely accorded with the proposals of the I C L, and in the event the orders I made in respect of V and M largely reflected those proposals. The orders made in respect of R again largely reflected the final proposals put forward by the wife and the I C L, particularly in respect to the need for an initial period of supervision for at least three (3) months of the time R was to spend with his father.
The husband had maintained his position that the children should spend equal periods of time with both their parents and on a week and week about basis.
At an early stage of the trial the wife, through Counsel, conceded that contributions to property until separation were equal. The husband however wished to persevere with his cross-examination of the wife which he was conducting at that stage, with an intent to show that his contributions were greater. Even though the husband professed a desire that the parties’ assets should be divided equally between them, he maintained in his Summary of Argument that his entitlement, based on contributions, was 66 per cent. It was his case that his financial contributions should be assessed as being 70 per cent; his non-financial contributions should be assessed as being 86 per cent; and his ‘welfare’ contributions should be assessed as being 44 per cent. It was based on those percentages that he came to an overall assessment of 66 per cent in his favour.
In the event, having weighed all contributions made by, or on behalf of both parties, I concluded that the result was that each party had contributed equally on an overall and global basis.

Having considered the matters set out in s 75(2) I concluded that an adjustment of 15 per cent in the wife’s favour should be made, making her entitlement 65 per cent of the net pool of assets. That pool of assets was set out in par 615 of my Reasons for Judgment and my reasons for determining the pool in that manner commenced at par 579 of the Judgment. I added back notional property including the distribution of property already made to both parties. Each party had received $105,000.00. I also added back as notional property two sums of money drawn down by the husband on the Viridian Account which totalled $24,185.00. After taking into account the property which both parties had received and which had been added back to the pool of assets, the wife’s entitlement was to assets of the value of $567,518.00 and the husband’s entitlement on the same basis was to assets of the value of $232,941.00.
The wife wished to retain a property at B in which she had been living and the husband did not oppose this. If she retained that property the husband would be obliged to pay her the sum of $94,518.00 (rounded). The husband wanted to retain the E property in which he had been living and at least one of three investment units that the parties owned. Pursuant to my Judgment the husband was also to pay to the wife the sum of $1,000.00 being refund of fees paid to Dr K.
I had some considerable doubts as to the husband’s capacity to arrange for necessary funding in order to satisfy his obligations under the orders. At one stage he had expressed interest in retaining all three units as well as the E property. When the matter was before me in July 2007 he did not have sufficient information as to the amount of repayments which would be required on any borrowings and accordingly, in reality, he did not know what he could afford to borrow.
When the matter came on for delivery of Judgment on 12 September 2007 I provided the husband with some worked examples of what his liabilities would be, depending upon which particular property he finally determined he wished to receive and in the event the husband determined that he would need to sell the E property and two of the investment units, retaining one of them for himself. Provision was made for some of the sale proceeds to be retained and applied towards any capital gains tax consequent upon the sale of any of the property, save for the house which the wife was to retain. The orders provided for the wife to indemnify the husband in respect of capital gains tax liability which might arise in connection with that property. The orders also provided for the wife to receive a percentage of the net balance of sale proceeds in order to give effect to my judgment, entitling her to 65 per cent of the parties net property.
The husband and the wife tendered aides-mémoire at the end of the trial which remain on the Court file. In the wife’s aide-mémoire it was noted that she had legal fees of $123,000. She also had other personal liabilities for credit cards and other loans from friends as well loans from her father. In all, she had personal liabilities of just over $179,000.
The husband also had personal liabilities for loans and a credit card liability; the total of his liabilities was $55,000. The parties’ personal liabilities were not deducted from the pool of assets available for distribution, given that they were incurred after separation. The husband had a share portfolio of some $52,000 which was not included as an asset available for distribution.
For the sake of completeness I note that the husband filed an Application in a Case (Form 2) on 29 August 2007. He sought orders relating to children’s matters, notwithstanding the orders which I had made on 11 July 2007 and also sought orders in relation to the parties’ Viridian line of credit. That application was made returnable on 12 September 2007. In so far as it was necessary to be dealt with it was done so on that day, which of course was the day I also published Reasons for Judgment and made final orders.

The Role of an I C L

When the Court forms a view that a child should be separately represented, the Court may make an order to that effect and may also make such other orders as it considers necessary to secure such representation. The appointment of an I C L is discretionary. Guidelines were provided by the Full Court in Re K (1994) FLC ¶ 92-461. In that case the Full Court said that the broad general rule was that the Court would make such appointments when it considered that the child’s best interests required independent representation. Subject to that broad general rule certain guidelines were provided. They were not intended to inhibit or fetter the discretion of the Court but to give assistance in the exercise of it.
One of the instances when an appointment should normally be made is in a case where there is an apparently intractable conflict between the parents. That was noted by the Registrar as being an appropriate reason for the appointment of an I C L in the present case and orders granting that application were made on 28 June 2007. A perusal of my Reasons for Judgment would indicate that the Registrar could also have thought it appropriate on the basis of one or more of the children being allegedly alienated from one or other of the parents.
In July 2003 the Chief Justice issued guidelines identifying and discussing major issues relating to the representation of children.
After the Family Law Amendment (Shared Parental Responsibility) Act 2006 came into effect on 1 July 2006 the role of the I C L has now been defined in s 68LA of the Act. There are specific duties imposed upon an I C L and they are set out in s 68LA(5).
The relevant part of Explanatory Memorandum (“EM”) relating to the Shared Parental Responsibility Act states:
“The amendments aim to strengthen the role of the child representative by providing further guidance to lawyers acting in the role. Along with the Guidelines for child representatives: Practice directions and guidelines (“the Guidelines”), released by the Family Court of Australia, the amendments also aim to provide clarity and understanding to those parties participating in proceedings where a child representative is involved …
In accordance with the recommendations of the (Family Law) Council, the intention of such a provision is to clarify that the independent children’s lawyer should act as an independent advocate for the best interests of the child, rather than act on the instructions of the child. The Government considers that this is appropriate, given the legislative requirement for a court to make a decision in the best interests of the child …
The Council considered the basic elements of the role of the child representative as set down by the Full Court of the Family Court in the case of P and P (1995) FLC ¶ 92-615 should be incorporated into the Act. This provision acknowledges that an important part of the role of the independent children’s lawyer is the function played outside of the courtroom. The independent children’s lawyer may be working with all the parties to the proceedings to find creative solutions to the issues in dispute.
It is appropriate that the independent children’s lawyer has flexibility to sensitively manage the views of children and presentation of evidence. In the circumstances of a particular case, it may be most appropriate for the independent children’s lawyers to work with court mediators and experts to get evidence about the best arrangements for the child before the court, rather than inform the court directly of the views of a child. … ”
The circumstances of the present case were such as to make it completely appropriate for the appointment of an I C L, both to protect the children’s interests and also to assist the Court. The I C L performed his role with distinction. Those observations apply equally to counsel who appeared on behalf of the I C L. In par 6 of the I C L’s written submissions reference is made to “the husband’s lack of confidence” in the I C L. Be that as it may, that is not shared by the Court, indeed the reverse is the case.

The Application by the I C L

It should be noted that the application which I am called upon to determine relates only to the costs incurred by the I C L after 28 June 2007. The significant aspects of those costs relate to the costs of the trial. The husband and wife, of course, still remain liable for the balance of the costs of the I C L incurred prior to that time (see the consent orders made 8 May 2006).
The thrust of the submissions made on behalf of the I C L is that in light of the fact that the parties spent a considerable sum in funding separate representation of their children on a private basis and in further recognition of the fact that there is a comparatively modest pool available to be divided between them, a contribution to the costs of the I C L ought be considered as appropriate in the circumstances. In other words, it is not sought that the total costs of the I C L should be paid, rather is it submitted that the Court might consider the possibility of the “community” represented through Victoria Legal Aid bearing the responsibility for five hearing days of the final hearing. This is on the basis that Victoria Legal Aid sets as a recommended guideline a general hearing time of that period in allocating its general budget for final hearing. The effect of this would be that Victoria Legal Aid ought to be reimbursed for the costs incurred in the balance of the trial, namely, three hearing days. It was further submitted that the Court might consider it appropriate to make an order that the wife should bear the costs of one of those days and the husband should bear the costs of the other two days. If I accepted those submissions, the effect would be that the wife would be ordered to pay to Victoria Legal Aid the sum of $2,165 and the husband would be ordered to pay to Victoria Legal Aid the sum of $4,330.
It was the wife’s response to the I C L’s submission that the husband should bear the totality of the costs sought by the I C L on the basis of “the matters raised in the wife’s submissions for costs dated 26 September 2007 and the parenting proceedings.”
So far as the wife’s submissions are concerned the relevant matters would be pars (13) and (14). It was contended:
“13.The wife has incurred very significant legal expenses in these proceedings, a large proportion of which relates to parenting issues. The wife does not seek costs in relation to the parenting proceedings, however, it is submitted that the husband’s conduct and demeanour in relation to the totality of these proceedings is relevant in a determination of this costs application.
14.The wife has modest means and earning capacity. She will have the ongoing financial responsibility for the care of the children. It is unlikely that the husband will make any significant financial contribution, by way of child support or otherwise, to the children’s welfare.”
It is by no means clear to me what the wife means in the reference to “the parenting proceedings”.
The wife did not otherwise wish to make submissions in relation to the I C L’s application.
The husband appeared to have a number of reasons for his opposition to the costs order sought by the I C L. As far as I can see they were:
62.1 Prior to the final trial the I C L ‘adopted an equal shared view’.
I suspect that the husband’s reference here is to the proposal in respect of R and it is the case that the I C L’s proposal changed. The I C L’s final position was reached after hearing the evidence and observing the cross-examination of the parties, their witnesses and in particular by the end of the case the I C L had also had the considerable benefit of hearing and seeing the cross-examination of the family consultant. It is perfectly proper in my view for the initial view of an I C L to change and indeed it should change should the circumstances which develop through the trial warrant it. This was one such occasion.
62.2The second ground raised by the husband appears to be that the I C L was ‘responsible for taking longer than their (sic) estimate of five days …’.
This would be a possible ground under s 117(2A)(c). However, I note from the Pre-Trial Conference bench sheet that the I C L did not estimate the probable length of the trial. On behalf of the wife it was estimated that the trial would last for five days and the father himself estimated that the trial would last for 10 days. The Registrar fixed the case for trial for five days taking into account her own assessment of the likely duration, but having regard to the estimates given by or on behalf of the husband and the wife.
62.3The final ground raised by the husband is that ‘neither party is in a financial position to bare (sic) costs, the husband even less so. …’
This is a relevant matter to take into account under s 117(2A)(a).
The alternative submission which the husband makes in the event that the first submission does not prove successful is that the wife should be responsible for the totality of the costs of the I C L. This was on the basis that ‘given that the wife’s counsel required all the witnesses brought into Trial except for (the Family Consultant) that the lengthy trial was her pursuit alone …’. This again is a matter which could be relied upon pursuant to s 117(2A).

Statutory Considerations

Section 117(4)

In certain instances the Court must not order payment of the costs of an I C L. Those circumstances are:
“(a)(where) a party to the proceedings has received legal aid in respect of the proceedings;
(b)(where) 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 …”
In the present proceedings neither party was in receipt of legal aid.
When any order is made as to costs, a party’s financial situation must diminish. However, in the present case neither the husband nor the wife is impecunious. They both had assets as at the trial and as a result of the orders that I made, and both parties are either working or capable of employment. In those circumstances I do not believe that either would suffer financial hardship.
No one made any submissions to the contrary.

Section 117(5)

The Court is required to disregard the fact that an I C L is funded under a legal aid scheme when it comes to consider what order (if any) should be made under s 117(2A). I take note of the requirements of this section.

Section 117(2A)

(a) Financial Circumstances

In Browne v Green (2002) FLC ¶ 93-115 the Full Court drew attention to the difference in the wording of this sub-paragraph from for example, s 75(2), where the requirement is to take into account the income, property and financial resources of each of the parties. In the context of an application for costs this sub-paragraph requires an overview of the parties’ financial circumstances, sufficient to enable a broad comparison to be made.
I have earlier set out the effect of the orders which I made in determining the parties’ respective applications for alterations of interests in property and need not repeat that here. It is sufficient to observe that the outcome favoured the wife. It is also relevant to take into account her liability for legal costs which substantially exceeded any costs which the husband may have incurred. Further, the wife has the ongoing financial responsibility for the care of the children. This places an additional demand upon her income and resources.
As earlier noted the husband and the wife remain liable for the I C L’s costs incurred at a time when he was privately retained and I take that into account.

(b) Legal Aid

Neither party was in receipt of assistance by way of legal aid, save for the Independent Children’s Lawyer. As seen, I am required to disregard that pursuant to s 117(5).

(c) Conduct

This sub-section relates to conduct of the parties in relation to the proceedings. The matters which are normally relevant under this sub-paragraph include the parties’ conduct in relation to pleadings, particulars, discovery, inspection of documents and the like. If the proceedings have been unduly prolonged or made unduly expensive, or if a party has failed to make proper disclosure, the Court would normally regard such matters as conduct within this sub-paragraph.
In par (33) of my Reasons for Judgment I noted with approval that counsel for the wife and the I C L assisted the husband, within the bounds of their obligations to the Court and their respective clients, by for example, assisting him with documents and the like.
I also pointed out in the preceding paragraph that I had had regard to the guidelines in Re F: Litigants in Person Guidelines (2001) FLC ¶ 93-072, and in accordance with those guidelines explained to the husband his rights and entitlements and also provided him with copies of the relevant sections of the legislation relating to children which were applicable in this case.
It is convenient to set out certain findings I made in the course of my Reasons for Judgment in the earlier proceedings.
“[60]The husband was grudging in any concessions he made and clearly found difficulty in making them. He was basically unable to acknowledge that his actions had contributed to the difficulties experienced by all these children, and in particular, [R]. Whilst he did say on regrettably few occasions that in hindsight he regretted certain of his actions, he almost invariably proceeded to incorporate the wife as being partly to blame, if not completely so.
[61]In his own evidence the husband was non-responsive, discursive and tangential. It was necessary for questions to be repeated, and sometimes more than once before a meaningful answer was given. He was intent on giving the answer that he wanted to give with scant regard to objections or rulings. This was echoed in his cross-examination of some witnesses in the sense that he was intent on asking the questions that he wanted to ask, and at times without any regard to, or desire to hear, the answers.
[62]The husband pointed frequently to his lack of forensic experience and skill and as a litigant in person he was given many indulgences. To my mind, he abused his situation. I explained to him on a number of occasions relevant procedure, and indeed repeated those explanations at times. I fully understand and have taken into account that he was at times under pressure, or perceived this to be the case, but it is also appropriate to record that the cross-examination he underwent, while extensive, was eminently fair.”
It appears to me that the husband seeks to bring attention to the comparatively high number of witnesses who filed affidavits on behalf of the wife. It is the case that there were a significant number of witnesses. There were, in my mind, not too many witnesses and all the witnesses who were called or who filed affidavits played a part in setting out the background to, and the continuing history of, the parties.
The husband made his own decision as to which of the witnesses he wanted to cross-examine.
The husband and the wife as well as the I C L are to be commended for their agreement that Dr D’s reports would be relied upon and that he would not be called for cross-examination (see pars 110 – 113 Reasons for Judgment).
The husband was thoroughly cross-examined by counsel for the Independent Children’s Lawyer as well as counsel for the wife. It could not be said in my view, that cross-examination by either counsel exceeded proper bounds or time limits.
In the I C L’s written submissions it was submitted that:
“9.… whilst the Court was critical of the conduct of both the husband and the wife far greater criticism was made by the Court of the conduct of the husband generally. Specific reference was made to the contents of pars 50, 51, 60, 61, 62, 63, 64 and 65 of my Reasons for Judgment.”

I have already noted some of those paragraphs myself as being relevant under this sub-section. They were all matters which related to the husband’s conduct in the course of the proceedings.
Whilst I was critical of the wife’s conduct at times, my criticism was not as to the way in which the proceedings were conducted on her behalf, or the way in which she conducted herself during the course of the hearing. As I said in my Reasons for Judgment counsel for the I C L described the wife in her final submissions as “an impressive witness”, a description with which I agreed.
I also take into account that the husband maintained his position as to a shared care regime for all three children against professional opinion. He was entitled to do so of course, but in doing this he put himself at risk as to costs given that it led to the prolongation of the proceedings.
In conclusion, it should be noted that the I C L was appointed to protect the children’s interest and he did so admirably in my view. In the proper exercise of his role he called evidence from the Family Consultant. The witnesses who filed affidavits on behalf of the wife provided evidence which was of assistance to the Court. All of the evidence put forward by the I C L and on behalf of the wife was necessary for the purposes of determination of the children’s welfare.
It was also appropriate in my view, for counsel to be briefed to appear on behalf of the I C L and the wife.

(d) Failure to Comply with Previous Orders

This is not relevant.

(e) Whether any Party has been Wholly Unsuccessful

The husband was totally unsuccessful in so far as his application sought a shared care regime for all three children.

(f) Offers in Writing

This is not relevant to the issue of costs as between the I C L and the husband and the wife.

(g) Such Other Matters as the Court Considers Relevant

There are no further matters which in my view require discussion, save that if no order is made that one or other or both of the parents contribute then the costs of the I C L effectively fall to be paid from the public purse.

Determination

The overall effect and structure of s 117(1), s 117(2) and s 117(2A) is to provide the Court with a broad discretion, the exercise of which starts with the general rule in s 117(1). Given that I am dealing with costs of an I C L I am also required to have regard to s 117(4) and (5). As I have said there is no distinction in principle between a case involving children and a financial case. In my view there are justifying circumstances for a costs order to be made in favour of the I C L. Those circumstances are apparent from the earlier discussion. Matters which have weighed most heavily with me are the husband’s conduct and the fact that he was wholly unsuccessful in the orders that he sought for all three children to spend time on a week and week about basis with their parents. As I have said this was a proper case for the appointment of an Independent Children’s Lawyer and indeed both the husband and the wife consented to it.
I earlier referred to CDJ v VAJ(No. 2). Kirby J noted that a children’s representative had a duty to “act in an independent and unfettered way in the best interests of the child.” (Bennett (1991) FLC ¶ 92-191.) He went on to observe that the interests of the children and their welfare is a matter of public concern and those interests extend beyond, and are separate from, the interests of the parents. As his Honour pointed out the children are the children of both parties. It was his Honour’s view that both parents should share equally the costs of their children being separately represented.
As I have also earlier recorded, and as can be seen, I am required to take into account relevant matters pursuant to s 117(2A) of the Act.
In so doing I have considered the respective financial situations of the husband and the wife. The wife is in a better financial situation than is the husband. That said, she does have the ongoing requirement for the children and her income is modest and her asset base is not infinite by any means.
As between the husband and the wife therefore I am not satisfied that the husband should bear the whole of the costs sought by the I C L, modest though they are. In my assessment, given that the fundamental matter in these proceedings was the best interests of the children of the husband and the wife, it is appropriate that they both should contribute to the Independent Children’s Lawyer’s costs. That should not however be an equal contribution, given the manner in which this case was conducted by the husband.
To my mind it would be a proper outcome for the husband and the wife to contribute towards the costs of the Independent Children’s Lawyer in the manner suggested by the Independent Children’s Lawyer.
Had the husband’s financial circumstances been stronger I might well have made the orders as sought by the wife.
I have taken into account the possibility of making an order for assessment in the absence of agreement as to quantum, however, I have little doubt that the husband would not be a willing participant in any negotiations necessary to reach such agreement. The procedure of assessment is complex (especially for a litigant in person); expensive and time consuming. This has also played a part in my decision to accede to the structure of the order as suggested by the Independent Children’s Lawyer.
The orders which I propose to make will also mean that Victoria Legal Aid will only be reimbursed for some of the Independent Children’s Lawyer’s costs, however, there will be some, albeit modest, reimbursement.
For those reasons there will be an order that the wife pay to Victoria Legal Aid the sum of $2,165 by way of contribution towards the costs of the Independent Children’s Lawyer and further, that the husband pay to Victoria Legal Aid the sum of $4,330 as a contribution towards such costs.
It is proper to give both parties some time to pay and I agree with the submissions by the I C L that the payment should be made within 90 days of the Court’s order.

Applications as Between the Husband and the Wife

The Husband’s Application

The husband seeks that each party bears his or her own costs in relation to the property proceedings. He also seeks an order that the wife be responsible for the totality of his costs in relation to the parenting proceedings.
As I have already recorded the husband’s legal representation was limited in the extreme. For the vast majority of the time in which these proceedings have been before the Court, he appeared on his own behalf.
The authorities make it clear that an order for costs is compensatory in the sense that it is awarded to indemnify the successful party against expense to which he or she has been put by reason of the legal proceedings (see Latoudis v Casey (1990) 170 CLR 534; Cassidy v Murray (1995) FLC ¶ 92-633).
A costs order is not normally intended to reimburse a litigant for expenses actually incurred or to compensate him or her for some other disadvantage or inconvenience, and accordingly it is well settled that a self-represented litigant cannot obtain an order for professional costs in his or her favour (see Cachia v Hanes (1994) 179 CLR 403).
The husband’s application in respect of the parenting costs appeared to be based on the fact that the financial outcome (presumably in the property proceedings) is more favourable to the wife than she originally offered. He appears to be linking the property proceedings with the children’s issues, even though his submission is that each party should bear their own costs. In as much as this ground is relevant it would fall for consideration under s 75(2A)(a).
The husband has made it clear that the costs for the parenting proceedings for which he seeks a costs order do not relate to the final hearing, but to earlier proceedings. He has submitted that in the earlier proceedings “the outcomes were consistent with the 50/50 shared care which I originally sought.”
It is correct that the husband did seek a week and week about shared care arrangement in his Responses by way of Forms 1A and 2 filed in November 2005. That was not the result which was achieved by him until 12 May 2006. The Court record shows that the husband was represented by legal practitioners when those orders were made. Costs were not reserved.
As I have already recorded and as is plain from a reading of my Reasons for Judgment published 12 September 2007 those orders were not complied with by either party. R generally lived with his father following those orders and spent limited and irregular periods of time with his mother. Until October or November 2006 both V and M generally lived with each parent in accordance with the Court orders, however since that time they principally lived with the mother, generally spending time with their father every second week from Thursday until Monday, save for school holidays, which have largely been shared between the parents.
The husband would be entitled to rely on this ground under s 117(2A)(e) which deals with lack of success in the proceedings.
Against that however I would take into account and balance both parties’ conduct under s 117(2A)(g). This is on the basis that the actual order which was made was effectively not complied with by either the husband or the wife. In the husband’s case in particular I would take into account my findings at the trial that the husband was (and remained) either unwilling or unable to encourage, or indeed to permit R’s relationship with his mother to be sustained. As I said, he had no commitment to this. At best he abdicated responsibility, leaving the choice to R. Whilst he espoused a belief that R should have the benefit of both parents in his life, his actions spoke to the contrary.
In the earlier Reasons for Judgment I noted and accepted the Family Consultant’s evidence that R wanted to maintain a primary relationship with both his parents, however his relationship with his mother was affected by his close and unhealthy alignment with his father. I expressed my concerns about the husband’s relationship with all three children, but in particular with R, and I noted that he was unable or unwilling to shield the children from his bitterness towards the wife. He denigrated her directly to the children, but more so in R’s case than in relation to V and M.
I have already discussed the parties’ respective financial situations as I am required to do pursuant to s 117(2A)(a). It is the case that the wife is in a better situation than is the husband, however, as I have already recorded she has the ongoing responsibility for the care of all three children and her means and assets are modest. Both parties will, as seen, be required to contribute to the costs of the I C L, with a larger contribution being required by the husband.
When all those matters are weighed together and particularly noting the husband’s very limited periods of legal representation, I would not feel it appropriate to grant the husband’s application.
The husband’s application for contribution by the wife to his costs will be dismissed.

The Wife’s Application

The wife seeks that the husband pay her costs of and incidental to the property proceedings as and from 6 April 2006. It is clear she relies in particular upon s 117(2A)(f).
The husband’s response to that application is as follows:
“1.In respect of the submissions of costs made by the wife it is submitted that I am unable to respond to the costs argument as it does not provide quantification or allow for argument and in any case I object to the reliance on a time limited offer during a time when the issue of the children was still in flux and as the children’s living arrangements impact property division it would not have been prudent in April 2006 to agree to such a settlement.
2.Further the Husband opposes the Wife’s submission for property costs given that final trial was devoted largely to children’s matters and any time given to property issues could not be considered elongated, complex or drawn out and respectably (sic) that each party in property issues bare (sic) their own cost (sic).”

Statutory Considerations

(a) Financial Circumstances

I have already set out the parties’ respective financial circumstances and compared them. At this stage I also take into account that each party will be required to make a contribution towards the costs of the I C L, and that the husband’s contribution will be higher than that of the wife.

(b) Legal Aid

This is not relevant.

(c) Conduct

The wife has submitted that the husband’s conduct and demeanour in relation to the totality of the proceedings is relevant in a determination of her costs application. However, I have already taken into account the husband’s conduct in the proceedings relating to the children in determining that he should pay a higher proportion of the I C L than will be required of the wife. Accordingly I limit my consideration to the husband’s conduct in respect of the property issues.
Again, I refer to and adopt pars 50, 51, 60, 61, 62, 63, 64 and 65 of my earlier Reasons for Judgment.
I also take into account that the wife, through her counsel, conceded that contributions to property until separation were equal. I repeat that the husband, however wished to persevere with his cross-examination of the wife which he was conducting at that stage, with an intent to show that his contributions were greater. Even though the husband professed a desire that the parties’ assets should be divided equally between them he maintained in his Summary of Argument that his entitlement, based on contributions, was 66 per cent. I have earlier set out the manner in which he came to that assessment.
I take into account that the husband and the wife reached agreement as to the valuations of all items of real estate as well as the amounts owing on the various mortgages and the amount of the liability arising from the Viridian Line of Credit. I note there was a dispute as to the treatment of this Line of Credit.
I have earlier made reference to how I determined the pool of assets and the manner in which I added back certain notional property.
The husband relied on alleged losses resulting from firstly, the restraint placed by the wife on the share trading account; other alleged losses incurred when the wife “sold shares without agreement”; and losses incurred when the auction of the B property was cancelled. Whilst there was cross-examination about the alleged loss resulting from the cancellation of the auction, the husband said in the course of cross-examination that he would probably abandon this part of his claim, and he did not pursue it in his final submissions. He did, however, pursue his contention that the wife should be solely responsible for the $5,000 which remained owing to the real estate agent. For reasons which I gave in par 591 I did not agree that the wife should be responsible solely for the costs owing to the real estate agent.
Commencing at par 592 I dealt with the husband’s claim in respect of the alleged loss caused by the restraint placed by the wife on the CommSec share account. My discussion of this matter continues until par 601 of the Reasons for Judgment. In the event I did not agree with the husband’s submissions for the reasons which are set out in those paragraphs. The point needs to be made that all of this took up considerable time of the Court. The husband’s “evidence” was not in acceptable form and his “analysis” was seriously flawed. In my view, and notwithstanding the husband’s submissions, his conduct did indeed lead to a prolongation of the hearing.

(d) Failure to Comply with Previous Orders of the Court

This is not a relevant matter in the circumstances of this case.

(e) Whether a Party has been Wholly Unsuccessful

It would not be correct to say that either party was “wholly unsuccessful in the proceedings” given that they each obtained an order altering their interests in property. However, whilst neither party succeeded in his or her application in the sense that the orders I made reflected the orders which had been sought, the outcome was closer to the position adopted by the wife than it was to the position adopted by the husband.

(f) Offers in Writing to Settle the Proceedings and the Terms of any such Offer

This is the ground upon which the wife places most emphasis.
It is relevant to take into account in this respect the husband’s own submissions. In par (6)(b), albeit in support of his application in relation to the parenting costs, he submitted that the financial outcome was more favourable to the wife than she originally offered. However, given that the husband was without legal representation and seemingly prepared his own submissions, I do not regard that as an absolute concession to what was submitted on behalf of the wife.
On 6 April 2006 the wife served an offer upon the husband following the Conciliation Conference which had taken place on 9 March 2006 (“the Offer”). The Offer is annexed to the wife’s written submissions.
I accept that a fair reading of that Offer in summary was that it provided a property distribution between the parties on the basis that there would be a distribution of real property, nett of mortgage and Viridian Line of Credit in the proportions of 65 per cent to the wife and 35 per cent to the husband; further, that the share sales were to be notionally added-back in the pool of assets available for distribution between the parties; and that otherwise each party was to retain assets in their possession save for a division of chattels by agreement.
The Offer was said to be open for acceptance for a period of 30 days after which it would lapse.
I note that the file sheet for the Conciliation Conference on 9 March 2006 provided that both parties were to comply with r 10.06 within 28 days of the Conciliation Conference, which took place on 9 March 2006.
The wife contends that the husband did not file such an Offer and the husband has not disputed this. I further note that the letter in which the Offer was set out requested the husband (amongst other things) to provide his offer in accordance with the orders which had been made at the Conciliation Conference.
I disagree with the husband’s contention that he was unable to respond to the submissions made on behalf of the wife because “it did not provide quantification or allow for argument”. There is some merit to his contention that, because the issue of the children’s living arrangements had not been determined, it would not have been prudent in April 2006 to agree to such a settlement. However, I should record that in my view a period of 30 days was a perfectly adequate period of time for the Offer to remain open.
Even though the children’s issues had not been finalised, the authorities make it clear that a party cannot reject or ignore a reasonable offer seriously made except at his or her peril as to costs.
The Full Court has emphasised the importance of offers. In Browne v Green the Full Court said:
“[57]We think that whilst s 117(2A) does not provide any direct guidance to where weight should be given in any one particular case, it is very important for the Court to give proper consideration to written offers of settlement that have been made. The insertion of s 117C into the legislation is a clear indication of the desire of Parliament to enable parties to avoid unnecessary litigation by indicating to the other party an appropriate basis upon which litigation can be settled. The failure to heed a reasonable offer in circumstances where there is adequate knowledge of the parties at the time the offer is made to give it a proper consideration, is something to which very significant weight indeed ought normally be given. It is clearly a circumstance that would justify the making of an order for costs in favour of the husband.”

As I have already noted r 10.06 requires the parties in a property case to make a genuine offer to settle to all other parties within 28 days after a Conciliation Conference or such further time as may be ordered by the Court. The Offer to Settle is required to state that it is make under Div 10.1.2.
The Explanatory Statement says in conjunction with this rule:
“Parties must be encouraged to make offers ‘with teeth’. It is an important way of promoting settlement if a party can see that there are adverse financial consequences for them if they unreasonably refuse to settle. The Court will use its power in relation to costs to discourage unreasonable behaviour.”
The Offer was expressed to be made pursuant to r 10.06 of the Rules and I regard this as sufficient compliance with r 10.06(3).
The Offer was more favourable to the husband than the result that he achieved at trial on the basis that the Offer only contemplated a division of real property and did not seek to add back the value of motor vehicles, the latter forming part of the orders which I made; the Offer did not contemplate a refund of Dr K’s fees, which again was one of the orders which I made; and the Offer did not contemplate an add back of moneys retained by the husband at separation.
The husband, as seen, agrees that the wife achieved more at trial than had been previously offered.
In Pennisi (1997) FLC ¶ 92-774 the Full Court referred to s 117(2A)(f) and said:
“The plain words of the paragraph do not limit a Court’s attention to offers which are greater than the amount awarded. Nor does the paragraph state what consequences flow from whether the Offer is greater or lesser than the amount awarded or how much that is the case. …
We do, however consider that the closer the offer is to the award when the offer is under the amount awarded by the Court, the more weight that should be given to this factor in considering the question of costs. …”

(g) Other Relevant Matters

There are no further matters requiring discussion.

Determination

In my view, the terms of the Offer were clear. The husband should have responded. I regard it as being significant that he failed to do so and also that he himself failed to make the compulsory offer referred to in the Rules.
However, I am of the view that it may well have been premature to accept the Offer, given that the situation in respect to the children’s issues was far from resolved. The husband is perfectly correct when he points out that the determination of the parenting arrangements would have had an impact on the property orders.
I am therefore not persuaded that the wife should receive costs of and incidental to the property aspects of her claim “as and from 6 April 2006”.
Nonetheless I am satisfied that the wife has established justifying circumstances and that an order for contribution towards her costs should be made. In particular, I am satisfied that this arises in particular because the wife was prepared to proceed on the basis of equality of contributions up until separation; on the basis that the husband refused to adopt this approach, which was, in my view, eminently sensible and practical; and the manner in which the husband insisted on pursuing matters which I have already discussed such as the alleged losses resulting from the restraint placed by the wife on the share trading account, and other alleged losses incurred when the wife “sold shares without agreement”.
I note from the husband’s written submissions in reply that he claimed he was unable to respond to the costs argument put forward by the wife because it did “not provide quantification or allow for argument”. I completely reject this latter contention. It is ironic that the husband raised the lack of “quantification” when one considers his own submissions in which no attempt whatsoever was made to even identify the events in earlier proceedings upon which his own claim was based let alone provide an estimate of what his costs would have been.
In any event, and unless parties agree as to quantum, the usual order is for costs to be taxed. As was pointed out in the wife’s written submissions the costs would have needed to be apportioned as between the property case and the parenting case, and that would have had particular relevance had I acceded to the claim for the costs to be calculated as from the expiry date of the period set out in the Offer.
I have already referred to the expense and difficulties attendant upon an assessment of costs. I have no doubt that the parties would not be able to agree as to quantum
In my view, the husband should contribute towards the wife’s costs and the best way of reaching a fair outcome in this regard is to fix those costs. In so doing, I have had regard to the matters referred to in r 19.19(2) and I have also considered the itemised scale of costs set out in Schedule 3 to the Rules.
Pursuant to r 19.19 I may order that r 19.18 does not apply and that a party is entitled to costs as assessed on a lawyer and client basis. Pursuant to this rule when making a costs order the Court may specify in the order a fixed amount of costs; a basis for calculation of the costs (on a lawyer and client basis or indemnity basis); a method for calculating the costs; or that costs be payable for part of the case or part of an amount assessed in accordance with Schedule 3. The rule goes on to set out circumstances which may be considered in determining that r 19.18 does not apply. These include the importance, complexity or difficulty of the issues and the reasonableness of each party’s behaviour in the case.
My findings as to the husband’s conduct in particular, lead me to conclude that his behaviour in this case has not been reasonable. I propose to specify a fixed amount of costs. In so doing I do not pretend that my approach is scientific but it is in my view, realistic. I refer in particular to the benefits which flow from obviating the need for an assessment of costs. The costs equate broadly to the costs of counsel and solicitor for two days based on the Scale. In my view, that is a reasonable period of time to look at in the overall context of an eight-day case. I have looked at the Scale and the period of two days simply by way of a cross-checking.
In my view the husband should contribute the sum of $6,000 towards the wife’s costs.

I certify that the preceding one hundred and fifty-four (154) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Carter.

Associate:

Date: 12 February 2008

[2008] FamCA 72

12 February 2008

Key Legal Topics

Areas of Law

Family Law

Civil Procedure

Legal Concepts

Costs

Appeal

Remedies