Theodore & Theodore (No. 3)
[2021] FamCA 452
•2 July 2021
FAMILY COURT OF AUSTRALIA
Theodore & Theodore (No. 3) [2021] FamCA 452
File number(s): PAC 5789 of 2014 Judgment of: FOSTER J Date of judgment: 2 July 2021 Catchwords: FAMILY LAW – COSTS – where application for costs made by the Independent Children’s Lawyer – where consideration of applicable principles – where proper for an order that the father pay the whole of the Independent Children’s Lawyer’s costs. Legislation: Family Law Act 1975 (Cth) ss 117, 117(2), 117(2A), 117(3), 117(4), 117(5)
Family Law Rules 2004 (Cth) r 19.18(1)
Cases cited: Beach Petroleum NL v Johnson (No. 2) (1995) 135 ALR 160
De Roma & De Roma [2013] FamCA 566
Gahen & Gahen (No. 2) [2013] FamCA 936
Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWSC 23
Parke & the Estate of the Late A Parke (2016) FLC 93-748
Theodore & Theodore [2021] FamCA 321
Number of paragraphs: 32 Date of last submission/s: 4 June 2021 Date of hearing: 22, 23, 24 and 25 June 2020 and 27, 28 and 29 January 2021 Place: Parramatta Counsel for the Applicant: Mr Schroder Solicitor for the Applicant: Chapman & Smyth Family Law Pty Ltd Counsel for the Respondent: Mr Batey Solicitor for the Respondent: Madison Marcus Law Firm Counsel for the Independent Children's Lawyer: Mr Braine Solicitor for the Independent Children's Lawyer: Ms Rutkowska of Ark Law Lawyers ORDERS
PAC 5789 of 2014 BETWEEN: MS THEODORE
ApplicantAND: MR THEODORE
RespondentMS RUTKOWSKA
Independent Children’s Lawyer
ORDER MADE BY:
FOSTER J
DATE OF ORDER:
2 JULY 2021
THE COURT ORDERS THAT:
1.That the father Mr Theodore pay the costs of the Independent Children’s Lawyer in the sum of $21,087 within three months.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to 17.02 Family Law Rules 2004 (Cth).
IT IS NOTED that publication of this judgment by this Court under the pseudonym Theodore & Theodore has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
FOSTER J:
On 21 May 2021 reasons for judgment were delivered and final orders made in final parenting proceedings. The final trial was conducted on 22, 23, 24 and 25 June 2020 and 27, 28 and 29 January 2021.
Ultimately, a final order was relevantly made that provided for the father to have time with the subject children, until each of them reach the age of 14 years, on the first Saturday of each calendar month, supervised by a commercial supervisor.
These reasons for judgment in relation to an application for costs by the Independent Children’s Lawyer in the sum of $21,087 assumes familiarity with that final judgment: Theodore & Theodore [2021] FamCA 321.
Directions were made for each of the parties to file and serve short submissions in response to the Independent Children’s Lawyer’s application for costs.
The law as to costs is well settled. Section 117 of the Family Law Act 1975 (Cth) (“the Act”) provides that, subject to certain qualifications, each party to proceedings shall bear his or her own costs.
Section 117(2) provides that if the Court is of the opinion that there are circumstances justifying it in doing so, the Court may make such order as to costs as the Court considers just.
The relevant considerations in relation to an order for costs are set out in s 117(2A).
The matters relevant to determining what order, if any, should be made for costs are set out in subsection (2A) of that section. They are the following:
(a) The financial circumstances of each of the parties to the proceedings;
(b) Whether any party has legal aid and the terms of any grant of aid;
(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 answers, 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.
Section 117(3) provides:
(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.
Section 117(4) provides:
(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.
Section 117(5) provides:
(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.
A question arises as to the actual meaning of the legislative intent for the Court to “disregard the legal aid funding” of the Independent Children’s Lawyer, because that terminology is susceptible to ambiguity.
As opined by Austin J in Gahen & Gahen (No 2) [2013] FamCA 936, it could conceivably mean either:
(a)The Independent Children's Lawyer should be presumed to be unfunded, so as to generally incline the Court to order the parties’ contribution to the Independent Children's Lawyer’s costs; or
(b)The Court should not be swayed by either the presumed ampleness or scarcity of the Independent Children's Lawyer’s legal aid funding when determining whether to order the parties’ contribution to the Independent Children’s Lawyer’s costs.
In De Roma & De Roma [2013] FamCA 566 Watts J explained why the former is the preferred connotation, since the purposes of the legislative provision was to protect the public purse.
The threshold presumption as to each party bearing their own costs has no application to the Independent Children’s Lawyer, who is not a party.
The law is well settled, however, that there is power under the section, subject to other statutory provisions referred to below, to make orders for or against the Independent Children’s Lawyer and the Court may make such order as to costs of the Independent Children’s Lawyer and in such proportions in relation to each of the parties as the Court considers just: (De Roma & De Roma (supra)).
The provision relating to the calculation of costs is set out in r 19.18(1) of the Family Law Rules 2004 (Cth) (“the Rules”) which states:
Method of calculation of costs
(1) The court may order that a party is entitled to costs:
(a) of a specific amount;
(b)as assessed on a particular basis (e.g. lawyer and client, party/party or indemnity);
(c) to be calculated in accordance with the method stated in the order; or
(d)for part of the case, or part of an amount, assessed in accordance with Schedule 3.
It was said in Beach Petroleum NL v Johnson (No 2) (1995) 135 ALR 160 at 162 that the purpose of the rule enabling an order for costs in a specific amount, without formal assessment or taxation is, commonly with other courts, to “avoid the expense, delay and aggravation involved in protracted litigation arising out of taxation”.
In Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWSC 23 the Court said at [10] that the Court must act judicially, but that does not mean that it must exercise the power to award a lump sum in any “scientific or formulaic manner”.
Murphy J observed in Parke & the Estate of the Late A Parke (2016) FLC 93-748 at [130]:
If the court is to fix a sum it should be “fixed broadly having regard to the information before the Court”… The process does not “by its very nature … envisage that a process similar to that involved in a traditional taxation or assessment of costs should take place”…
The father contends for an order that the parties bear equally the reasonable costs of the Independent Children’s Lawyer. The mother contends that the application of the Independent Children’s Lawyer, to the extent that it seeks an order that she pay a contribution to the Independent Children’s Lawyer’s costs, be dismissed.
As to the relevant considerations, the father properly concedes that he is not impecunious, notwithstanding that he remains in arrears of his child support obligation. Final property orders were made on 17 January 2017. The husband retained the property at Suburb F subject to payment to the wife of $400,000. It is not contended by the father that any order for costs would cause hardship.
The mother is self-employed as a personal fitness trainer, working flexible hours so as to provide for the care of the two children the subject of the primary proceedings. Those children are presently aged 12 and 10. By reason of her limited circumstances, the mother has had access to some $20,000 of her superannuation to meet the needs of herself and the children. Both children suffer from mental health issues and anxiety. Both children have intellectual difficulties requiring the intervention of mental health practitioners and education intervention specialists. Both children are on significant medication regimes in an endeavour to address the needs. The children’s needs represent a significant financial burden of the mother.
As at 12 January 2021 the father was in arrears of child support of just over $34,000. Subsequent to garnishment of funds in his bank account in the sum of just over $20,000, those reasonably reduced to about $12,000. The father has not filed tax returns since 2017 and at present is assessed for a child support rate of $1,062 per annum. The father asserts that the outstanding child support is subject to some application for review.
Neither party in these proceedings is in receipt of a grant of legal aid.
The primary proceedings as to parenting have been ongoing for some years. At all times the proceedings have been overshadowed by the father’s mental health issues that were well documented in a judgment of this Court: Theodore & Theodore [2021] FamCA 321. Notwithstanding significant history of mental health issues and ongoing issues arising therefrom, the father persisted in seeking expansive orders for his time with the children. Final reasons for judgment clearly reveal that he had little capacity to reflect on his own circumstances and the impact of those circumstances on the children and on the mother. As a consequence, the final hearing as to parenting was protracted over seven days.
The orders sought by the mother were not significantly dissimilar to orders sought by the Independent Children’s Lawyer and final orders at trial were made substantially in terms of orders sought by the Independent Children’s Lawyer.
Neither party has been wholly unsuccessful in the proceedings but ultimately orders were made, as said, substantially as sought by the Independent Children’s Lawyer.
Otherwise, it is noted that on 4 May 2018 the father was ordered to pay the wife’s costs of and incidental to an Application in a Case filed by him. On 24 June 2019 those costs were assessed in the sum of $13,737 and as at 12 January 2021 the amount owing increased with interest to $14,652. These costs remain unpaid. Further, on 28 May 2021 the father was ordered to pay costs in relation to a subpoena objection in the sum of $5,000. The father contends that his failure to pay those costs orders are as a consequence of his own costs incurred in these protracted proceedings.
In all the circumstances, it is not appropriate or proper when considering the mother’s present position and in considering the reasons for judgment in the primary matter to impose upon the mother what would be a significant financial liability, in circumstances where she sought to protect the children in the proceedings from the impact of the father’s mental health circumstances. Ultimately, the father is only able to see the children once a month on a commercially supervised basis, such order being made for the protection of the children.
Accordingly, it is proper that that there be an order that the father pay the Independent Children’s Lawyer’s costs in the sum as sought.
Orders will be made accordingly. It is, otherwise, noted that the order for costs does not in any way hinder the right of the father to seek a waiver sum from Legal Aid NSW in relation to the costs order.
I certify that the preceding thirty-two (32) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Foster. Associate:
Dated: 2 July 2021
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