Stapleton and Hayes (No. 2)

[2009] FamCA 612

FAMILY COURT OF AUSTRALIA

STAPLETON & HAYES (NO. 2) [2009] FamCA 612

FAMILY LAW – COSTS

1ST APPLICANT:	Legal Aid Commission NSW
2ND APPLICANT	Mr Hayes
RESPONDENT:	Ms Stapleton

FILE NUMBER: SYC 2750 of 2007

DATE DELIVERED: 13 July 2009

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Moore J

HEARING DATE: 9 July 2009

REPRESENTATION

SOLICITOR FOR THE 1^ST APPLICANT: Mr O’Dowd

THE 2^ND APPLICANT: Mr Hayes appeared on his own behalf

SOLICITOR FOR THE RESPONDENT: Ms Munk by telephone

Orders

1. On or before six (6) months from the date of these orders or such further time as may be allowed by the Legal Aid Commission Ms Stapleton pay to the Legal Aid Commission costs fixed in the sum of $14,250. 

2. Subject to order 1 hereof, all costs applications arising from the proceedings concluded by judgment on 25 May 2009 are dismissed. 

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 2750 of 2007

LEGAL AID COMMISSION NSW

1^st Applicant

And

MR HAYES

2^nd Applicant

And

MS STAPLETON

Respondent

REASONS FOR JUDGMENT

Applications

1. There are applications for costs from the Independent Children’s Lawyer and from the father, Mr Hayes, following delivery of judgment and orders made in parenting proceedings on 25 May 2009.  The mother has lodged an appeal against those orders and that remains pending. 

2. The orders sought by the ICL, Mr O’Dowd, are to be found in the application filed 19 June 2009.  He seeks payment of $11,938 by the mother, Ms Stapleton, and $10,288 from the father – the difference represents the payment the father made earlier of a contribution of $1,650.  That noted, Mr O’Dowd properly conceded that since there was another party - the Department of Community Services – the proportion to be borne by each parent could be reduced to one-third of the costs claimed. 

3. The orders sought by the father are to be found in the application filed 19 June 2009.  He seeks payment of $24,194 by the mother within one calendar month.  The particulars are set out in his accompanying affidavit.  His application also sought orders that he not be subject to any costs claim by any other party and a further order in these terms:

   ‘Nothing in this Application restricts the Father’s rights to make further claims for costs, or seek sureties, or make application for adjustment of property orders or setting of further property orders in the case of an appeal in this matter.’

4. As I explained to the father, his rights related to anything other than the application now being determined will be judged according to the context and circumstances presenting at whatever time the question may arise in the future and I could not or would not make an order in those terms.  He withdrew the application for that particular order. 

5. The mother responds to the claims by seeking their dismissal. 

Section 117

1. Costs fall to be determined according to the provisions of s 117 of the Family Law Act 1975. The general rule under s 117(1) is that each party bears his/her own costs; however, s 117(2) permits the Court to make such order as it considers just if it is of the opinion there are circumstances to justify it doing so. In considering what order [if any] should be made, regard is to be had to the matters referred to in s 117(2A). They are:

   ‘(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.’

Submissions

1. The submissions of the ICL are brief and straightforward.  The appointment of the ICL in May 2007 was appropriate to the circumstances of the case, neither party is in receipt of legal aid, and neither parent has had their contributions to costs waived by the Legal Aid Commission.  As for their financial circumstances, both are qualified school teachers and were in employment at the time of the hearing and both had an interest in property, the contention being that they have the capacity to meet a costs order as sought. 

2. The submissions of the father are also brief and relatively straightforward and while he did not specifically nominate any of the ss (2A) factors, they fall within one or another.  He points out that in giving particulars of the amount claimed he does not include the costs he incurred for travel or accommodation.  He was the respondent to the proceedings which were initiated by the mother, he had done all he could to try to avoid litigation and resolve the matter, and their continuation was the result of the failure of the mother to comply with Court orders.  He points out the mother did not file a Notice of Abuse in the proceedings.  He had sought a residence order in September 2007, he maintained that position consistently throughout, and he has been successful in that endeavour.  He says he has been carrying for some time the costs he paid for legal representation earlier on and later expenses he incurred. 

3. Asked about his financial circumstances, the father confirms he is in full time employment as a teacher and his income – for child support purposes – is $80,000 per annum.  He owns the home in which he lives at H and he has a residential investment property which he bought in 2007 for $400,000 and is subject to a mortgage of $60,000.  He has sold shares to pay costs and expenses of the litigation and he retains shares he estimates to be worth $120,000 from which he derives further income by way of dividends.  He has debts of $11,000. 

4. The father asks that the claim by the ICL against him be dismissed but that if he is required to make a payment then his claim against the mother be increased accordingly. 

5. In submissions for the mother, Ms Munk responded briefly to some of these points.  As she lives at L she too had incurred the costs of travel and accommodation; her failure to file a Notice of Abuse made no difference since the effect would have been to notify the Department which she had done independently; and the father had paid a modest amount of child support while the children were in her care.  Further, the particulars of the costs claimed by the father include costs related to other Court proceedings – for example the AVO proceedings against B – and there was a property component to the application the father initially brought.  Added to that, the claim includes $13,000 paid to lawyers representing him earlier and an order taking up that figure would amount to an order for payment of costs on an indemnity basis which is only apt in exceptional circumstances not applicable here.  The mother has incurred significant legal costs in the proceedings, far more than the father, and that has included meeting contravention applications he brought, one of which was not successful. 

6. In her outline of the mother’s financial circumstances Ms Munk says she used her long service leave during the course of the proceedings.  She is on leave without pay until the end of the next school term.  The father, on the other hand, is a ‘two income family’.  Her income presently is said to be from the capital remaining from the sale of her home at H for $565,000 and subject to a mortgage of $120,000.  She had received a bill from her former solicitor, Mr Miller, amounting to $235,000 which she had paid in part from the sale proceeds and she has paid $135,000 into Court, apparently pending the outcome in the Supreme Court of a dispute with Mr Miller over his costs.  Having paid legal costs, including costs rendered by her present solicitors, and met her costs of travel and accommodation and living expenses, $5,000 remains.  She has a couple of thousand dollars worth of shares.  As for her debts, it is said there is a claim against her by the Department of Education for overpayment of salary.  Also, she lives alone in rented accommodation, although she spends some time with her father, and she owes $6,000 in rent which she is hoping to negotiate. 

7. In his reply Mr O’Dowd accurately observed that the children were in the mother’s care until June and she was then said to be living with her father on his property, so it was difficult to see how this level of rent debt had been incurred.  Ms Munk met this with the information that the mother was at her father’s home but she has another residence for locating animals because there is a problem with them being at her father’s and she also has the other residence for storage of household goods.  In his response to information about the mother’s financial circumstances, the father says she has put money towards an appeal from the orders and that has involved the payment of $10,000 for transcript of the proceedings, he maintains they both have identical professional qualifications as teachers, he had paid a proper level of child support when the children were with their mother, and he has not received any child support since they have been in his care. 

8. In conclusion, Ms Munk submits that each parent should pay their own costs.  As for the costs claimed by the ICL, while there was assistance to the Court from the ICL through public funding, the mother’s financial circumstances are modest and an order for payment of costs either to the father or to the Legal Aid Commission would cause her hardship.  Finally, it is said the mother had always been motivated to protect the children and her application for residence had been supported by the Department; however, she was bound to accept that the support of the Department for the mother’s application for residence at the end of the hearing was conditional, as noted in the judgment. 

Discussion

1. This case saw a number of interlocutory applications and appearances before the final hearing which occupied many days. In the course of the proceedings a vast bulk of document were produced to the Court on subpoena and inspected, evidence was sought from and given by a Court appointed expert, not only was there an ICL appointed but the Department of Community Services intervened, and evidence was forthcoming from many witnesses to supplement the evidence from the parents. There can be no doubting the gravity of the issues that required adjudication. At the end of the day the father was successful in his quest for residence of the children and he was successful on the key issues underpinning that determination. He was successful in the face of the case mounted by the mother, which is fully discussed in the judgment delivered 25 May and since it forms part of the record it needs no elaboration here. Suffice to say there were opportunities along the way for the merit of the mother’s case to be assessed and re-evaluated, not just as a result of the information to be found in the documents brought to Court under subpoena from various directions but also from the time Dr R’s report became available. It was a case she maintained through to the final submissions of her counsel and it was a case the father remained obligated to meet at all times. His obligation to meet it right to the end, along with his eventual success, all lead to the view – prima facie at least - that here are circumstances justifying an order departing from the general position expressed in s 117(1) that each party is to bear their own costs.

2. Having said that, it is accurate to observe that the claim by the father does include amounts that could legitimately be questioned – such as the inclusion of the full amount paid to his former solicitors and costs apparently related to proceedings in another Court to which the father was not a party.  Even so, if a costs order were to be made in his favour no doubt these matters could be dealt with by an order for payment of an amount either agreed or assessed or alternatively by an order for payment of a fixed amount so as to avoid any further costs of being bound up in a costs dispute.  Yet while this presents as a solidly attractive outcome, the stronger financial position of the father and the disparity in their current financial circumstances cannot be ignored and the question of responsibility for costs has to be approached with that in the frame.  By the same token, in whatever way the mother has disposed of her capital to this point, there remains an unresolved question mark over considerable funds she has paid into Court in the dispute with Mr Miller and quite apart from that she does have an income earning capacity as a teacher. 

3. I have concluded ultimately that she ought to bear some of the costs incurred by the ICL and by the father. 

4. The total costs claimed by the ICL are $23,876.  Taking up Mr O’Dowd’s concession of distributing that between three parties to the proceedings, the claim against each parent would amount to $7,958 with the father’s proportion being reduced to $6,308 by reason of his earlier payment of $1,650.  In my opinion the mother ought to pay the proportion sought against her and she ought to pay also the proportion sought against the father which will at least give him some relief from having to pay further costs associated with the proceedings, at least at first instance.  No order will therefore be made against the father.  That makes a total of $14,266 to be paid to the Legal Aid Commission by the mother [rounded to $14,250].  The question of time to pay was not canvassed when submissions were taken but six months or such further time allowed by the Legal Aid Commission is appropriate to the circumstances.  I consider this to be a just outcome to the costs claims. 

I certify that the preceding eighteen (18) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Moore

Associate: 

Date: