Theobald and Delancy (No.4)
[2012] FMCAfam 1140
•13 November 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| THEOBALD & DELANCY (NO.4) | [2012] FMCAfam 1140 |
| FAMILY LAW – Costs sought against parties by Independent Children’s Lawyer – mother previously represented by Legal Aid for a period of time – father not ‘wholly unsuccessful’. |
| Family Law Act 1975, s.117 Family Law Amendment Act 2003 (Cth) Federal Magistrates Court Rules 2001, reg.21.02 Family Law Rules 2004, Chapter 19 |
| Kest & Olsson [2012] FamCA 148 Lyris & Hatziantoniou[1998] FamCA 1311; (1998) 24 Fam LR 391; (1999) FLC 92-840 Re David (No.2) (Costs) (1998) 23 Fam LR 139; (1998) FLC 92-809 Separate Representative v JHE and GAW (1993) 16 Fam LR 485; (1993) FLC 92-376 Theobald & Delancy [2010] FMCAfam 1140 Telfer & Telfer (1996) 20 Fam LR 619; (1996) FLC 92-376 |
| Applicant: | MR THEOBALD |
| Respondent: | MS DELANCY |
| File Number: | SYC 4104 of 2009 |
| Judgment of: | Monahan FM |
| Hearing date: | 13 June 2012 |
| Date of Last Submission: | 27 June 2012 |
| Delivered at: | Sydney |
| Delivered on: | 13 November 2012 |
REPRESENTATION
| Counsel for the Applicant: | Mr Campton |
| Solicitors for the Applicant: | Meehans Solicitors |
| Counsel for the Respondent: | Mr Levy |
| Solicitors for the Respondent: | Kerrisons - The Law Firm |
| Counsel for the Independent Children’s Lawyer: | Ms Leis |
| Independent Children’s Lawyer: | Mark Whelan, Lawyer |
ORDERS
Subject to any full or partial waiver granted to him by Legal Aid NSW, within three (3) months of the date of these Orders the Applicant pay the sum of $4,544.73 to Legal Aid NSW.
All extant applications before this Court be otherwise dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Theobald & Delancy (No.4) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYC 4104 of 2009
| MR THEOBALD |
Applicant
And
| MS DELANCY |
Respondent
REASONS FOR JUDGMENT
Introduction
This is an application by the appointed Independent Children’s Lawyer in this matter, MARK WHELAN (“the ICL”), in relation to his application for costs against the Applicant Father, MR THEOBALD (“the father”) and the Respondent Mother, MS DELANCY (“the mother”).
The ICL’s application for costs is opposed by both the father and the mother.
Background
The factual background to these proceedings has been previously canvassed by me in the first of three interim decisions in this matter.[1]
[1] Theobald & Delancy [2010] FMCAfam 1140, in particular, at [6] – [15].
The parties entered into final parenting and property orders by consent on 13 June 2012 (“the final orders”). All issues were resolved by the final orders except for that of the ICL’s costs.
On 13 June 2012, in addition to approving the proposed consent minutes, I made directions for the parties and the ICL to forward written submissions in relation to the outstanding costs issue.
I duly received written submissions from Mr Levy of counsel, on behalf the mother, on 13 June 2012, from Mr Campton of counsel, on behalf of the father, on 15 June 2012 and from Ms Leis of counsel, on behalf of the ICL, on 27 June 2012.
Issues
The only issue for the Court to consider in this decision is the issue of the ICL’s costs.
The ICL seeks the following order:
“Subject to any waiver granted by Legal Aid NSW, within 42 days each party pay to Legal Aid NSW the sum of $5,249.73, representing their contribution to the costs of the Independent Children’s Lawyer.”
Both the father and the mother oppose this order and seek that the ICL’s application for costs be dismissed.
Law
Power of the Court to make a costs order
Pursuant to reg.21.02 of the Federal Magistrates Court Rules 2001 (“the FMC Rules”), this Court has the power to make an order for costs at any stage in a proceeding.
In family law matters, the Court also needs to consider s.117(1) of the Family Law Act 1975 (“the Act”), which states the principle that each party shall pay their own costs. The exception to that rule is contained in s.117(2) of the Act, which relates to circumstances where the Court finds there is justification for departing from the principle. This exception is subject to the matters referred to in s.117(2A) of the Act.
Section 117(2A) of the Act states:
“In considering what order, if any, should be made under subsection (2), the Court will 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 the pleadings, particulars, discovery, inspection, directions to answer questions, admission of the facts, production of documents and similar matters;
(d) Whether the proceedings were necessitated by a failure of a party to the proceedings to comply with the 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) Any such other matters as the Court considers relevant.”
Costs and the ICL
Pursuant to s.117(2) of the Act, the Court has the power to make a costs order in favour, or against, an ICL. That said, s.117(3), (4) and (5) of the Act are of particular relevance to the issue of costs involving an ICL. The provisions state:
“(3) To avoid doubt, in proceedings in which an independent children's lawyer for a child has been appointed, the court may make an order under subsection (2) as to costs or security for costs, whether by way of interlocutory order or otherwise, to the effect that each party to the proceedings bears, in such proportion as the court considers just, the costs of the independent children's lawyer in respect of the proceedings.
(4) However, in proceedings in which an independent children's lawyer for a child has been appointed, if:
(a) a party to the proceedings has received legal aid in respect of the proceedings; or
(b) the court considers that a party to the proceedings would suffer financial hardship if the party had to bear a proportion of the costs of the independent children's lawyer;
the court must not make an order under subsection (2) against that party in relation to the costs of the independent children's lawyer.
(4A) [omitted][2]
(5) In considering what order (if any) should be made under subsection (2) in proceedings in which an independent children's lawyer has been appointed, the court must disregard the fact that the independent children's lawyer is funded under a legal aid scheme or service established under a Commonwealth, State or Territory law or approved by the Attorney-General.”
[2] Section 117(4A) is not germane to this dispute as it relates to a situation where a relevant officer intervenes in proceedings pursuant to s.91B of the Act.
The exercise of the Court’s power has been considered in a number of cases.
In Separate Representative v JHE and GAW (1993) 16 Fam LR 485; (1993) FLC 92-376,[3] the Full Court of the Family Court (“the Full Court”) held that a person appointed to separately represent a child in proceedings under the Act is empowered to seek orders in proceedings under the Act and, if necessary, to appeal.[4] In respect of the issue of costs, the Full Court stated, by way of obiter, that the ICL (formerly called the ‘separate representative’) should be treated as, or as analogous to, a ‘party’ for the purpose of s.117 of the Act.[5]
[3] Reported by CCH Australia Ltd as Re P (a child); Separate Representative (1993) FLC 92-376.
[4] (1993) 16 Fam LR 485 at 497 (per Nicholson CJ and Fogarty J).
[5] Ibid, at 508.
In Telfer & Telfer (1996) 20 Fam LR 619; (1996) FLC 92-376 (“Telfer”), an ICL sought a costs order against the parties after the matter settled on the first day of the final hearing. The trial judge, Lindenmayer J, in awarding costs to the ‘child representative’, found that the financial resources of the relevant Legal Aid Office can be taken into account pursuant to s.117(2A)(a). His Honour stated:
“As indicated, the funds of the Legal Aid Office are finite; they are subject to very heavy demands in all areas, not the least of which is the area of legal aid for separate representatives for children in proceedings before this court. I think it is relevant for the court to consider, in the exercise of discretion as to costs, that the funds of such a body ought not to be exhausted in proceedings where there are other available means of providing the funds for the representation of the relevant children, and particularly where the necessity for that representation arises essentially out of conflict between the parties, rather than out of any deep-seated issues relating to the welfare of the children.”[6]
[6] (1996) 20 Fam LR 619 at 623-624; (1996) FLC 92-376 at 83,141.
Telfer was applied and approved by the Full Court in Re David (No.2) (Costs) (1998) 23 Fam LR 139; (1998) FLC 92-809. It was also considered and applied by Steele J in Lyris & Hatziantoniou[1998] FamCA 1311; (1998) 24 Fam LR 391; (1998) FLC 92-840; (“Lyris”). In Lyris, the Court stated that the quantum of the costs reflecting the relevant Legal Aid provider’s services should be calculated by allowing costs on the professional scale.[7]
[7] (1998) 24 Fam LR 391 at 395.
While the applicable wording of s.117(3), quoted above, now makes it clear that an ICL’s costs can be the subject of a costs order, s.117(5) stipulates the Court is required to disregard the fact that the ICL is funded under a Legal Aid scheme. This revised provision was considered by Dawe J in Kest & Olsson [2012] FamCA 148 (“Kest”). The consequence is that, the reasoning discussed in Telfer and subsequent cases no longer appears to be appropriate.
In addition, in NSW, the Legal Aid ICL guidelines oblige ICLs to seek an order for costs unless Legal Aid has waived a party’s liability to contribute to the ICL’s costs.[8]
[8] NSW Legal Aid, ‘Information for Independent Children’s Lawyers’, available at accessed on 22 October 2012.
Therefore, the question for the Court to decide is, using the words of Dawe J in Kest:
“… in relation to both the mother and the father in these proceedings, whether, considering the provisions of subs (2A), an order for the Independent Children’s Lawyer’s costs to be paid by the father or the mother or both the father and the mother should be considered just.”[9]
[9] Kest & Olsson [2012] FamCA 148 at [7].
Quantum of costs
In the event that the Court decides that the making of a costs order is just, then, unless the Court specifies otherwise, such costs are to be paid on a “party/party” basis.
“Party/party” costs are costs necessarily incurred, paid at a reasonable rate. The FMC Rules incorporates a schedule of costs as a guide to party/party costs in family law proceedings. Party/party costs would not ordinarily cover all the legal costs incurred by a party.
“Solicitor/client” costs or “indemnity” costs are ordered when the Court intends the costs order to cover all the legal costs reasonably incurred by that party. When a costs agreement is involved, the charges to be imposed on the other party are subject to the requirement of reasonableness.
Regulation 21.02 of the FMC Rules allows the Court to refer the costs for assessment via Chapter 19 of the Family Law Rules 2004 (“the Family Law Rules”). Regulation 21.02 of the FMC Rules states:
“(1) An application for an order for costs may be made:
(a) at any stage in a proceeding; or
(b) within 28 days after a final decree or order is made; or
(c) within any further time allowed by the Court.
(2) In making an order for costs in a proceeding, the Court may:
(a) set the amount of the costs; or
(b) set the method by which the costs are to be calculated; or
(c) refer the costs for taxation under Order 62 of the Federal Court Rules or under Chapter 19 of the Family Law Rules; or
(d) set a time for payment of the costs, which may be before the proceeding is concluded.”
Submissions
As stated, each of the parties and the ICL provided written submissions in support of their respective applications.
ICL’s submissions
The ICL’s written submissions, prepared by Ms Leis of counsel, state as follows:
“ORDER SOUGHT
1. The Independent Children’s Lawyer (‘ICL’) seeks the following order:
‘Subject to any waiver granted by Legal Aid NSW, within 42 days each party pay to Legal Aid NSW the sum of $5,249.73, representing their contribution to the costs of the Independent Children’s Lawyer.’
2. The quantum of the costs sought by the ICL is itemised in the application for costs filed with the Court. No claim is made for the former ICL’s costs, who withdrew due to a conflict. The quantum sought relates only to the current ICL.
3. The calculation is based upon a total claim amount of $10,499.45, split between the parties at 50%. A calculation based upon a different apportionment is not sought by the ICL. It is conceded that (given that each party makes submission that any costs order should be apportioned in their favour) it is a matter for the court’s discretion as to how any such apportionment might be applied, if a costs order is made.
4. However, in the event that the court finds that section 117(4) applies to the effect that an order for the ICL’s costs cannot be made against the Respondent Mother then the ICL seeks costs against the Applicant Father to the extent the court considers just.
LEGLISLATIVE SCHEME
5. This application is to be determined in accordance with section 117 of the Family Law Act 1975 (the ‘Act’), which provides that, subject to specified matters, that each party shall bear his or her own costs: section 117(1).
6. Where the court considers that there are circumstances that justify it in doing so, it is at the court’s discretion (subject to subsections (2A), (4), (4A) and (5) and the Rules of Court) to make such costs order as the court considers just: section 117(2). In determining whether there are justifying circumstances or that a costs order is just the court is required to have regard to the matters in section 117(2A): Kest & Olsson [2012] FamCA 148 [7] and [8].
7. Section 117(3) makes clear that an ICL’s costs can be costs that are the subject of a costs order, but in any such determination the Court is required to disregard the fact that the ICL is funded under a Legal Aid scheme: Section 117(3). Section 117(3) is a more recently inserted section (refer Kest & Olsson [5]). Prior to this section the reasoning of the Full Court in Re David (No.2) Costs [1998] FamCA 40 (30 April 1998) (approving the reasoning in Telfer and Telfer (1996) FLC 92-688) was relevant to this case: namely, that in considering cost applications it is relevant to take account of the fact that, absent such an order, the costs of the child representative will be met from the finite resources of legal aid funds. In light of section 117(3), this reasoning does not appear now to be appropriate.
8. It is accepted that an order for payment of the ICL’s costs is discretionary. The ICL asks the Court to exercise its discretion in favour of such an order, upon weighing matters for consideration in section 117(2A) as follows.
RELEVANT SECTION 117(2A) FACTORS
(a) the financial circumstances of each of the parties to the proceedings
9. Whilst both the Applicant and Respondent point to matters of financial concern for them, neither deposes to the fact that they have no capacity to pay the ICL costs. Contrary to any such inference are the following matters: the fact that both parties are represented by solicitors and counsel from which there is a an inference of some financial capability; the fact that there is a property settlement that- on the face of its terms- suggests a capacity on the part of both parties to contribute to the ICL’s costs; and the fact that the ICL’s costs are comparatively modest.
10. Whilst there are submissions to the effect that financial hardship may be caused by an order for the parties to pay the ICL’s costs, such submission should be weighed against those matters that lead to the conclusion that there is financial capacity.
11. The Respondent Mother refers the Court to her statement of financial circumstances, but this statement predates the property settlement under which she obtains a benefit. Similarly the evidence to which the Respondent Mother refers in order to establish financial hardship does not take into account the funds to be received under the property settlement.
12. The Applicant Father does not refer the Court to his statement of financial circumstances. In the event that the Court is of the view that such material should be taken into account then the ICL would rely upon that evidence — when taken in conjunction with the terms of the property settlement provided to the court on 13 June 2012— that he has the capacity to pay the ICL costs. In the event that the Court is not of a view that it should take into account the Father’s statement of financial circumstances then a Jones v Dunkel inference might be taken to arise from the fact that he has not referred the Court to his evidenced financial circumstances in response to this costs application.
(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;
13. The Respondent Mother has been in receipt of a Legal Aid grant but longer holds such a grant. The details of that grant and the reason for the grant being determined have not been identified. In these circumstances, Section 117(4) may be relevant subject to the court’s construction of that section.
(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.
14. The fact that the parties have been able to resolve the dispute without proceeding to judgment is a factor that weighs against the ICL’s application, on this factor. However, the proceedings have been long standing and the possibility of an earlier settlement is something that was a matter for the parties. Had such a course been taken then subsequent costs would not have been incurred.
(g) such other matters as the court considers relevant.
15. The ICL was appointed upon the proper exercise of the court’s discretion. Presumably, this occurred because the court, at the time, perceived that the ICL could offer some benefit to the proceedings. The dispute, however, remained one between the parties and the ICL - having little available role in bringing the proceedings to an end - may properly be compensated for the modest costs sought.
16. It is noted that the Applicant Father submits that the ICL’s costs quantification is absent foundation. The costs are quantified according to work types. On their face they are reasonable. The Applicant Father could have disclosed the costs incurred by him in these proceedings to show by comparison that the ICL’s costs were not reasonable, The fact that this was not done is open to a Jones v Dunkel inference to the effect that such evidence would not have assisted the Father.
17. Finally, if either parent has compelling financial hardship reasons for not contributing to the costs of the ICL then Legal Aid NSW permits them to submit a waiver. The order sought contemplates that flexibility.”
In addition, Mr Whelan forwarded, by email, a case outline document of sorts on the evening of 12 June 2012 which itemised the quantum of costs sought by the ICL.
Item Amount Lump sum from commencement of appointment until matter set down for hearing $1560.00 Lump sum from matter set down to eve of trial $1040.00 Interim hearing 2010
Preparation$780.00 Interim hearing 2010
Court attendance$630.00 Counsel Final Hearing
8/11/2010$1040.00 Instructing solicitor Final Hearing
8/11/2010$630.00 Legal Aid
FDR Attendance$560.00 Application in a case 31/1/2012
Preparation$780.00 Application in a case 31/1/2012
Court Attendance$630.00 Counsel Final Hearing
2/4/2012$1040.00 Instructing solicitor Final Hearing
2/4/2012$630.00 General Un-itemised Disbursements $225.00 Sub Total $9,545.00 GST $954.45 TOTAL $10,499.45
Father’s submissions
The father’s written submissions, prepared by Mr Campton of counsel, state as follows:
“General
1. The making of a costs order is governed by s.117 of the Family Law Act.
2. S. 117 (1) sets out the ‘starting or prima facie’ position that ‘each party to the proceedings’ - the Section is just as applicable to an Independent Children’s Lawyer as any other participant - shall bear their own costs. An order for costs must be ‘justified’ in the circumstances - s.117(2). The checklist contained within s.l17(2A) sets out some, but not exclusively all, relevant considerations to ‘justify’ an order for costs.
3. S.l17(4) contains a mandate that any costs sought by an Independent Children’s Lawyer must not be made if a party ‘has received Legal Aid’ or if the order would cause ‘financial hardship’. S.117(5) mandates that any costs of an Independent Children’s originating by way of Legal Aid Scheme funding is to be disregarded.
Application of relevant principles
4. Notwithstanding the broad discretion to order costs, an onus rests with the Independent Children’s Lawyer to establish a ‘justifying circumstance - that is an essential pre-requisite - prior to making any costs order under s.117(2)’. No such circumstance has been the subject of submission or notice to either the Mother or the Father by the Independent Children’s Lawyer. The Application for Costs by the Independent Children’s Lawyer should be dismissed at this point without any further consideration. It is an affront to both the parties and the Court that the ICL assumes some pre-emptive right or entitlement to a costs order in his favour ‘without a scintilla of foundation’
Further submissions made without concession and in the alternative
5. S.117(4)(a) may, as the Mother had previously received grant of Legal Aid in respect of the parenting matter, mandate against any costs order as sought against her by the Independent Children’s Lawyer being made.
6. The Costs Application as framed by the Independent Children’s Lawyer as against the Father is restricted to 50% of a quantified sum of $10,499.45 - as against the Father $5,249.73. The Father opposes any Application by the Independent Children’s Lawyer (should it be made) to amend the terms of the order as sought against the Father.
7. The Independent Children’s Lawyer: -
a. Was appointed on the Court’s own motion - not arising from the Father’s Application - by way of orders made by FM Altobelli on 3 December 2009 after the mother unsuccessfully attempted to dispute paternity; and
b. Had a role enlivened during the litigation responding to the conduct of the Mother — dispute as to paternity, inconsistent versions of drug history, refusal to increment time spent Father with child [X] until release of Expert’s report, refusal to execute FOI authority.
8. The original Independent Children’s Lawyer withdrew in proceedings before the Court on 23 July 2010 because of a possible conflict of interest. That cost was occasioned on the Father absent any fault or conduct on his part, including appearing for the aborted interim hearing.
9. The Independent Children’s Lawyer’s Application to support some changes to the regime of current orders on an interim basis as determined by the Court on 30 August 2010 was unsuccessful. The Father’s Application to maintain the interim orders that existed at that time was wholly successful.
10. The Independent Children’s Lawyer in conjunction with the Mother unsuccessfully opposed the Father’s Application for a further Single Parenting Expert report to be prepared by a differing Family Consultant - hearing 8 August 2011 Judgment delivered 30 August 2011. Again this cost impost lay only at the Father’s feet without respite notwithstanding his complete success in relation to that Application.
11. Should any part or portion of the Independent Children’s Lawyers Costs Application find solace with the Court, that liability in the circumstances of this litigation should lay solely with the Mother without contribution at all by the Father. Any contribution by the Father to those costs of the Independent Children’s Lawyer would be an affront to fundamental notions of justice and fairness.
12. The Father is precluded from obtaining a Centrelink benefit until 27 October 2030 - a further eighteen (18) years. His capital fund administered by the New South Wales Trustee in meeting his modest periodic needs is diminishing at an expediential rate.
13. Any contribution by the Father to the Independent Children’s Lawyer’s costs must occasion financial hardship to the Father, and will directly impact upon his support for [X] — the mandate by way of S.117(4) applies.
14. The compromise entered into by the Father included the New South Wales Trustee relinquishing claims for costs that had been reserved (identified in the Father’s Outline of Case Document) and the various Costs Applications that would have been made at the conclusion of the trial for the issues identified on which the Mother was wholly unsuccessful - paternity etc.
15. The quantification of costs as totalled by the Independent Children’s Lawyer are absent foundation and are not accepted.
16. In all the circumstances the Independent Children’s Lawyer’s claim for costs as against the Father should be dismissed.
17. Should the mandate in s.117(4)(a) apply in respect of the claim for costs against the Mother, it is submitted that an atrocity would be occasioned by the Mother’s conduct throughout the litigation being effectively endorsed, and the Father would then be assuming a financial penalty for that conduct by being hoisted with an order to pay 50% or some lesser portion of the Independent Children’s Lawyer’s costs as sought against him.”
Mother’s submissions
The mother’s written submissions, prepared by Mr Levy of Counsel, state as follows:
“The respondent opposes the Independent Child’s Lawyer’s application for costs and seeks that such application be dismissed.
In support thereof the respondent relies upon the following documents to be read in conjunction with these submissions:
1. Respondent’s Financial Statement sworn 23rd March 2012;
2. Paragraphs 33 (e) and (f), 34, 40, 41, 42, 43, 104, 105, 106 and 107 (including annexures) of the respondent’s affidavit sworn 23rd March 2012;
3. Section 117 of the Family Law Act 1975;
4. The decision of the Honourable Justice Dawe in Kest & Olsson [2012] FamCA 148 (12 March 2012).
The statutory starting point is that each party in proceedings under the Act shall bear their own costs (section 117 (1)).
Section 117(3) specifically allows an order to be made for the ICL’s costs and for the parties to pay those costs in such proportions as are just but does not rebut the abovementioned starting point.
Arguably that subsection does no more in terms of the court’s powers than was already available under the earlier provisions of section 117.
Critically in this case section 117(4) provides that the court must not make an order for the ICL’s costs if a party would suffer financial hardship (117(4)(b)).
The parenting orders made 13th June 2012 provide for the parties’ child to live with the respondent for 9 days of each fortnight during term time and half of all school holidays.
The evidence establishes that:
·The respondent has no income other than that received from an income tested pension of $315 per week and child support of $9 per week;
·The respondent owns no property of any value and has no savings of any significance;
·The respondent pays rent of $75 per week for the home in which she and the child live;
·The respondent has a debt of $22,890 owing to Centrelink and her legal fees in these proceedings all of which are currently unpaid and will be paid from the orders made under section 79.
·The respondent does, and has always, met the whole of the costs of the child’s attendance at pre-school currently amounting to $86.00 per week without contribution from the father;
·The respondent organizes and pays for the child’s other activities while he is in her care;
·The current child support assessment of $9 per week ($38.92 per month) is in force until 31 May 2013.
·The father has been asked to increase his child support but has declined;
·The child will commence school in 2013 with a consequent cost which will no doubt be borne, at least in part, by her.
·The mother was previously in receipt of a grant of legal aid at a time when the proceedings only involved parenting issues.
A submission (if it is made) that a costs order should be made to protect the public purse is not available because of the provisions of section 117(5) and relevantly see paragraph 20 of Kest & Olsson.
The appointment of the ICL was not made on the respondent’s application. The respondent is uncertain as to whether the appointment was made on the application of the father or of the court’s own motion.
It is submitted that the court would find in light of the above that:
(a) This is not a matter where the court would depart from the statutory starting point and thus the ICL should bear its own costs;
(b) Any costs order against the respondent will inevitably cause her financial hardship and therefore the court may not make such an order;
(c) A costs order will impact adversely upon the respondent’s already difficult financial circumstances and therefore indirectly impact upon the child who spends the majority of his time in her care;
(d) If the court decides that the respondent should bear a proportion of the ICL’s costs (which is not a concession made by her) then it is the father who should bear the preponderance of those costs.
The Independent Child’s Lawyer’s application for costs should therefore be dismissed.”
Discussion
The Court will now consider the submissions in light of the relevant legislative provisions.
Section 117(2A)(a): the financial circumstances of the parties
It is necessary for the Court to look at the final financial position of the parties after the other orders have been made in order to properly determine this issue.[10]
[10] See In the Marriage ofWhite (1982) FLC 91-246; (1982) 8 Fam LR 512 and In the Marriage ofMarinko (1983) FLC 91-307; (1983) 8 Fam LR 849.
In this case, both parties have filed a number of financial statements in these proceedings in relation to their now settled property dispute. I have read and considered these documents.
As stated, the parties entered into final consent orders on 13 June 2012 which resolved their financial dispute (in addition to their parenting dispute). I note that the effect of those orders is that that mother will receive $150,000.00 from the father and that each party otherwise retain all other property in their name and/or possession thereafter. I would also note that the mother’s application for spousal maintenance was dismissed.
The father relies on a Financial Statement sworn on his behalf by Ms C of the NSW Trustee and Guardian and filed on 12 March 2012. The father’s Financial Statement indicates that he is not in employment, but is a “disabled person”. It lists his estimated weekly income as $33.00 and his estimated weekly expenditure as $1,096.00. The Financial Statement also discloses that the father:
·is the owner and occupier of an unencumbered property with an estimated value of $360,000.00;
·is the beneficiary of a sum held in trust by the NSW Trustee and Guardian estimated at $231,182.00;
·has the benefit of other investments estimated at $742,233.00; and
·has superannuation entitlements estimated at $59,811.00.
That said, I note the evidence of Mr K, chartered accountant, that asserts the father is precluded from Centrelink benefits until 27 October 2030.[11]
[11] See the affidavit of Mr K, chartered accountant, sworn and filed 12 March 2012.
In her Financial Statement sworn and filed on 23 March 2012, the mother asserts that she is a ‘student’ and only in receipt of Centrelink (parenting payment) benefits ($167.00 per week) and Family Tax A and B payments ($148.00 per week). She also asserts to receiving $9.00 per week from the father for child support. The mother also asserts that her partner, Mr B, earns an average weekly income of $493.00 although it is not clear if this amount is nett or pre-tax.
In addition to the submissions made by the mother in relation to her financial circumstances, I have also noted that from this sum the mother will need to pay her debt to Centrelink in the sum of $22,890.00 and also her legal fees for these proceedings which are still outstanding. That said, I note again that the mother will receive $150.000.00 from the father by way of property settlement.
The ICL argues, of course, that despite the submissions by the parties as to their financial circumstances, neither actually submits that they do not have the capacity to pay the ICL’s costs. Furthermore, the ICL suggests that both parties are represented by solicitors and counsel – from which fact the Court may infer some financial capacity.
Moreover, I note the ICL submission that, should a costs order be made and there are circumstances that either party has compelling reasons of financial hardship for not paying the ICL’s costs, then Legal Aid NSW allows parties to request consideration of this by way of a full or partial waiver in appropriate circumstances.
Overall, I am satisfied that there is evidence before the Court that both parties have the capacity to meet the respective costs orders sought by the ICL, certainly in terms of each meeting their half share of the costs sought.
Section 117(2A)(b): whether parties are in receipt of legal aid
This matter is complicated by the fact that the mother was previously represented by Legal Aid NSW and presumably in receipt of a grant of legal aid during the period of their representation. The Court is unaware of the reasons for the withdrawal of the mother’s grant of legal aid, or when such occurred, although Legal Aid filed a Notice of Withdrawal with respect to the mother on 1 April 2011.
The father has not been in receipt of legal aid during these proceedings.
The legislative intent of s.117(4) of the Act is clear. The provision, as amended by the Family Law Amendment Act 2003 (Cth), clearly prevents the Court from making a costs order in favour of the ICL and against “a party to the proceedings [who] has received legal aid in respect of the proceedings”.[12] I discuss this issue further below.
[12] See s.117(4)(a) of the Act.
Section 117(2A)(c): conduct of parties in relation to the proceedings
The type of conduct that is usually considered relevant under this sub-paragraph includes actions or issues of:
·delay;
·the raising of extraneous issues;
·failure to comply with the requirements of the Court’s rules; and
·failure to disclose (and so on).
This was not the subject of any particular submissions by the parties apart from the father’s criticism of the mother’s conduct in the proceedings in relation to disputing paternity, allegations of drug use, refusal to agree to incremental time between the father and the child and refusal to execute a Freedom of Information authority.
Section 117(2A)(d): whether proceedings necessitated by failure of party to comply with previous Court orders
This sub-section is not relevant to the circumstances of this case.
Section 117(2A)(e): whether any party to the proceedings has been wholly unsuccessful in these proceedings
As stated, these proceedings were finalised by way of final orders made by consent on 13 June 2012.
That said, I note that the father refers to the following matters in his written submissions:
·the ICL’s application to support changes to the regime of current orders as determined by the Court on 30 August 2010 was unsuccessful with the father’s application for the status quo to be maintained being wholly successful; and
·the ICL and the mother were unsuccessful in opposing the father’s application for a further family report to be prepared by a family consultant other than Ms M as determined by the Court’s decision delivered on 30 August 2011.
It is difficult for the Court to see why the father should be required to pay one half of, or indeed any, of the ICL’s costs directly relevant to the disputes resolved by my interim decision on the 30 August 2010. In this respect I note the specific costs claimed by the ICL were $1,410.00 on account of solicitor’s costs and counsel’s fees.
Section 117(2A)(f): whether either party has made an offer in writing
There is no evidence before the Court that would suggest that this consideration is relevant to this case.
Section 117(2A)(g): any other relevant matter
There are several matters which I find to be relevant to the application for costs before me.
Firstly, the original ICL appointed in these proceedings had to withdraw in mid-2010 due to a conflict of interest. In relation to this I would only note that the current ICL has not made any claim for costs in relation to the former ICL’s costs.
Secondly, both parties make submissions in relation to the ICL being appointed on the Court’s own motion rather than on their own application. It appears that Altobelli FM made orders for the appointment of the ICL on 3 December 2009. In light of the continued involvement of the ICL and, no doubt, his assistance in bringing these proceedings to a final resolution, I do not find that the fact that his Honour felt that this matter would be assisted by an ICL and made orders to that effect carries any weight in favour of the parties in respect of this costs application. Indeed, I am of the view that the circumstances of this case, including the issues raised by each party, more than justified the appointment of the ICL. I would further note that neither party sought to agitate for the ICL to be discharged during the time that the matter has been in my docket nor is there any information before the Court indicating that either party opposed the appointment, or sought the discharge, of the ICL while the matter was before Altobelli FM.
Thirdly, each party seeks the dismissal of the ICL’s application for costs or seeks orders in the alternative that the mother pay the entirety of the total costs (as sought by the father) or that the father pay more than half of the total costs (as sought by the mother). In this respect, I note that s.117(3) of the Act does allow for the Court to determine the proportion of the ICL’s costs that each party should bear “as the court considers just”. That said, I must also (again) consider s.117(4) of the Act which prevents the Court from making a costs order in favour of the ICL if “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”.[13] In addition, pursuant to s.117(5) of the Act, 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”.
[13] See s.117(4)(b) of the Act.
In this matter, while I am satisfied there is merit in making an order against the mother that she pay one-half of the costs as sought by the ICL, I am also satisfied that I am prevented by s.117(4) from doing so because she is “a party to the proceedings [who] has received legal aid in respect of the proceedings”. Whether this was the policy intent of the Parliament when it amended this provision in 2003 is a moot point and not one upon which this Court proposes to comment further. That said, I am satisfied that had the costs order sought against the mother been legally possible, she would not suffer financial hardship given the agreement with the father (and the NSW Trustee and Guardian) for her to receive the sum of $150,000.00 by way of property settlement.
While I am similarly satisfied that the father would not suffer financial hardship if the costs order sought by the ICL for him to pay one half of the ICL’s costs was made, given the facts and in the exercise of the Court’s discretion, I am not satisfied that he should shoulder all the costs sought by the ICL simply because the law prevents this Court from making any costs order favouring the ICL against the mother.
Section 117(3): an order under s.117(2) 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.
I refer to my previous comments.
Section 117(4): if a party to the proceedings has received legal aid in respect of the proceedings; or 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; then the court must not make an order under subsection (2) against that party in relation to the costs of the independent children's lawyer.
I again refer to my previous comments.
Section 117(5)
I note again that the Court must disregard the fact that the ICL is funded under a legal aid scheme or service established under a Commonwealth, State or Territory law or approved by the Attorney-General.
I otherwise refer to my previous comments.
Conclusion
Having regard to the relevant paragraphs of s.117 of the Act and in light of the submissions and available evidence, the Court finds it appropriate in the circumstances to make an order for costs in favour of the ICL and against the father. The Court also finds that it is unable to make the costs order sought against the mother because of the application of s.117(4)(a) of the Act.
As to quantum, the Court finds that the father should only bear one half of the costs sought against the parties by the ICL, less $705.00 being half of the costs with respect to the interim application in which the ICL was unsuccessful. Accordingly, the father will be required to pay Legal Aid NSW the sum of $4,544.73. The father will be granted three months to pay this sum, subject to any full or partial waiver of the amount that may be granted by Legal Aid NSW.
There will be Orders of the Court to reflect this decision.
I certify that the preceding sixty-three (63) paragraphs are a true copy of the reasons for judgment of Monahan FM
Date: 13 November 2012
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