RM v JB
[2022] NZHC 2605
•10 October 2022
NOTE: PURSUANT TO S 139 OF THE CARE OF CHILDREN ACT 2004, ANY REPORT OF THIS PROCEEDING MUST COMPLY WITH SS 11B, 11C AND 11D OF THE FAMILY COURT ACT 1980. FOR FURTHER INFORMATION,
PLEASE SEE https://www.justice.govt.nz/family/about/restriction-on-publishing- judgments/
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2021-488-000091
[2022] NZHC 2605
BETWEEN RM
Appellant
AND
JB
Respondent
Hearing: On the papers Counsel:
L J Kearns KC and K Cohen for Mr M C Muston for Mrs B
V A Crawshaw KC and M Davies for Ms K N J Dore and G Thompson for Mr B
D W Hart for the children (V and L)
Judgment:
10 October 2022
JUDGMENT OF KATZ J
[Costs]
This judgment was delivered by me on 10 October 2022 at 2:00 pm pursuant to Rule 11.5 High Court Rules
Registrar/Deputy Registrar
Solicitors: Thomson Wilson
Henderson Reeves Connell Rishworth Wills Westenra Ltd
C Muston D W Hart
Counsel: L J Kearns KC
V A Crawshaw KC
M v B [2022] NZHC 2605 [10 October 2022]
CIV-2021-488-000097 CIV-2021-488-000098
IN THE MATTER of an appeal against the decision of the
Family Court dated 4 August 2021
BETWEEN KV
Appellant in CIV-2021-488-000097 Respondent in CIV-2021-488-000098
AND CB
Appellant in CIV-2021-488-000098 Respondent in CIV-2021-488-000097
Introduction
[1] On 20 May 2022 I delivered a judgment (the appeal judgment) in respect of three inter-related appeals from a decision of the Family Court1 relating to the care arrangements and parenting orders for two step-siblings – a nine-year-old girl (V) and a five-year-old boy (L).2
[2] L is the child of Mr B and his former partner Ms K. V is the child of Mrs B and her former partner Mr M. Mr and Mrs B entered into a relationship in early 2018 and married in February 2019. V and L live with Mr and Mrs B some of the time.
[3] Following delivery of the appeal judgment, the following costs issues must now be determined:
(a)Should Mr M be ordered to pay costs to Mrs B, as sought by her?
(b)Should any or all of the parties be required to contribute to the costs of lawyer for the child?
Should Mr M be ordered to pay costs to Mrs B?
[4] In the Family Court, Judge King found that V had been psychologically abused in the care of Mr and Mrs B. Despite this, the Judge held that V was safe in her mother’s unsupervised care going forwards and ordered that V was to continue to be in the shared care of her parents on a week about basis. Mr M appealed that decision on the basis that serious risks were posed to V’s psychological safety by allowing her to remain in her mother’s care on a week about basis. He sought an order granting him day-to-day care of V, with Mrs B having only supervised contact under strict conditions.
[5] I dismissed Mr M’s appeal. Although I found that Judge King had erred in finding that V had been psychologically abused in Mrs B’s care, I upheld the Judge’s
1 Verwolde v Blake [2021] NZFC 7015.
2 M v B [2022] NZHC 1126.
key finding, which was that V was safe in her mother’s care, and that shared care was in her best interests.
[6] Mrs B now seeks costs of $13,145.00 from Mr M, calculated on a 2B scale basis. Mr M opposes any award of costs being made.
Principles relating to costs awards in Family Court proceedings
[7] Section 142 of the Care of Children Act 2004 (“COCA”) states that in any proceedings under COCA “the court may make any order as to costs as it thinks fit”.3 However, the paramountcy principle in s 4(1) COCA must be the overarching consideration of the court when considering making a costs award under COCA and as such is the starting point.4 The High Court Rules, as subordinate legislation, have to be interpreted in line with s 4(1).5
[8] In Family Court proceedings costs are not necessarily awarded to the successful party, as they are in other proceedings, but may be awarded on consideration of all relevant factors.6 Costs against a parent who advances a genuine and responsible argument in what they think to be the best interests of their child will generally not be appropriate.7 Arguments can be finely balanced and although an argument may ultimately be unsuccessful it is often important that such arguments be heard and considered. Of course, there may at times be arguments which lack merit.8 Generally, however, in cases which do not involve unnecessarily protracted litigation, finely balanced cases do not attract costs.9 An award should be reserved for cases where a parent pursues litigation unreasonably and without regard to their child’s interests.10
3 Care of Children Act 2004 (“COCA”), s 142(1).
4 G v Cox [2008] NZCA 146 at [26].
5 G v Cox [2008] NZCA 146 at [26].
6 G v Cox [2008] NZCA 146 at [17]–[18].
7 R v S [2004] NZFLR 207 (HC) at [63].
8 Wheeler v Pagetti [2016] NZFC 4436 at [6] citing AHM v EAD FC Christchurch FAM-2007-009- 001579, 16 March 2010 at [11].
9 PRH v CTB [2012] NZHC 674 at [16].
10 H v M [2015] NZHC 3244 at [9]–[10].
[9] Consideration must also be given to the impact that a costs award would have on a parent and by extension the child’s welfare.11 When deciding whether to make an award, and in what amount, it is necessary to assess the impact the award would have on the parent’s ability to care for the child and to work cooperatively with the other parent to achieve the child’s best interests.12 The impact of an award can be more than economic.13
[10]Factors to be considered when assessing costs in this context are generally:14
(a)the overriding need to ensure effect is given to the paramountcy principle in s 4 COCA if applicable;
(b)the object of the legislation;
(c)the disputes in question;
(d)the way the parties and their advisors conducted proceedings;
(e)the means of the parties;
(f)the actual costs incurred by the parties;
(g)the overall interests of justice; and
(h)a need to be mindful that a genuine and reasonable litigant ought not to fear an award of costs, particularly given the importance of all relevant arguments being heard.
Should a costs award be made in this case?
[11] Mrs B’s submissions supporting her application for costs are brief. Although they set out how the quantum of the costs sought has been calculated, the reasons why
11 PRH v CTB [2012] NZHC 674 at [16].
12 H v M [2015] NZHC 3244 at [9]–[10].
13 H v M [2015] NZHC 3244 at [9]–[10].
14 Wheeler v Pagetti [2016] NZFC 4436 at [6] citing AHM v EAD FC Christchurch FAM-2007-009- 001579, 16 March 2010 at [9].
a costs award is appropriate, with reference to the principles set out above, is not addressed.
[12] Ms Kearns KC, counsel for Mr M, submits that Mr M advanced a genuine and responsible argument which he considered was in V’s welfare and best interests. It was appropriate for the High Court to consider afresh the Family Court decision. Further, Mr M conducted his case in accordance with all timetabling directions and in a proper and appropriate manner.
[13] Mr M has also provided evidence that shows that he is of limited financial means and has significant financial obligations. In light of this, Ms Kearns submits that any costs award will have a significant impact on Mr M’s ability to provide financially for V during the week she is in his care.
[14] The welfare and best interests of V are the starting point and paramount consideration. Mrs B was the successful party in the appeal. However, as set out above, costs are not necessarily awarded to a successful party in Family Court proceedings.
[15] Mrs B and Mr M separated in 2016. V was in their shared care for most of the time from then until Mr M commenced care proceedings in March 2020. The care proceedings were initiated due to Mr M’s concerns about aspects of Mrs B’s lifestyle, including Mrs B’s involvement in polyamorous relationships and the perceived risks of V being exposed to adult sexual activity in the B household. There was evidence to support these concerns, as set out in both the Family Court judgment and the appeal judgment. Given this context, I accept that the appeal was responsibly brought and pursued, and that Mr M’s sole motivation was to protect his daughter and seek a parenting arrangement that he believed would be in her best interests.
[16] I also accept that awarding 2B scale costs against Mr M would likely have a serious impact on his household, including his ongoing support of V.
[17] Taking these factors into account it is my view that, in accordance with the principles I have outlined above, an award of costs is not appropriate in this case.
Should any or all of the parties be required to contribute to the costs of lawyer for the child?
[18] Mr Hart was appointed as lawyer for the children in the Family Court and took an active role in the Family Court proceedings.
[19] In a minute dated 7 October 2021, Brewer J appointed Mr Hart as lawyer for children for the purposes of the High Court appeal. Mr Hart’s invoice has been paid by the Crown. The issue is whether all or any of the parties should be required to reimburse the Crown for a portion of that expense.
Relevant law
[20] Under s 131 COCA, the fees and expenses of a lawyer for child appointed under s 7, which Mr Hart was, must be paid out of public money appropriated for that purpose.15 When this occurs, the court must then make an order under s 135A COCA requiring the parties to reimburse the Crown, unless the court declines to do so in accordance with that section.16
[21] The prescribed proportion of fees and expenses the parties are required to pay is set at two thirds.17 One third is paid by the Crown, and two thirds are to be apportioned between the parties in equal portions.18 However, the court may decline to make such an order against a party if satisfied that the order would cause serious hardship to the party or dependent child of the party.19
[22] Dependent child means a child whose day-to-day care is substantially the responsibility of the party.20 For the purposes of s 135A, serious hardship:21
(a)includes significant financial difficulties that arise because of—
15 COCA, s 131(1)(b).
16 COCA, ss 131(4) and 135A(1)(a).
17 Family Courts (Prescribed Proportion of Professionals’ Costs) Regulations 2014, r 4.
18 COCA, s 135A(3). See also Hodson v Ewart [2014] NZFC 9342 at [14]; and Clark v Alvey [2014] NZFC 9126 at [45].
19 COCA, s 135A(2).
20 COCA, s 135A(5).
21 COCA, s 135A(5).
(i)the party’s inability to meet minimum living expenses according to normal community standards; or
(ii)the cost of medical treatment for an illness or injury of the party or a dependent child of the party; or
(iii)a serious illness suffered by the party or by a dependent child of the party; or
(iv)the cost of education for a dependent child of the party:
(b)does not include significant financial difficulties that arise because—
(i)the social activities and entertainment of the party or those of a dependent child of the party may be limited; or
(ii)the party is unable to afford goods or services that are expensive or of a high quality or standard according to normal community standards.
[23] In relation to legally aided parties, the court can make an order under s 135A against a party who has been granted legal aid but any order for costs under s 135A is subject to the restrictions on orders for costs against legally aided persons set out in s 45 of the Legal Services Act 2011.22
[24] As with all proceedings under COCA, s 4 applies. Accordingly, the welfare and best interests of the children must be the first and paramount consideration.
[25] An important element in assessing serious hardship is the amount the party has been assessed to pay. In this case the two thirds prescribed portion equates to
$11,773.09.23 Split equally among the four parties this would be $2,943.27 each. However, Mrs B and Mr B live in the same household, meaning that the amount payable for the B household would be $5,886.54.
[26] Parliament has provided no definition of “normal community standards” or what evidence the court can obtain to assess what these standards are.24 Median or average household income has been used as an indicator.25 Judge Coyle in Hodson v
22 Re Karaka [2016] NZHC 183, [2016] NZFLR 64.
23 Total costs of lawyer for child being $17,659.63.
24 Hodson v Ewart [2014] NZFC 9342 at [25]. See also Family Law – Child Law (online looseleaf ed, Thomson Reuters) at [CC135A.04].
25 See for example Moore v Rayne [2014] NZFC 8876; and Mene v Dyson [2014] NZFC 8613.
Ewart thought that normal community standards must take into account housing costs (mortgage or rent payments), food, clothing, power, vehicle expenses and the cost of other basic necessities of life.26 Educational costs for dependent children can also be seen as a necessity.
Would a costs order cause serious hardship to Mr M and/or his dependent children?
[27] Mr M submits that any costs order will cause serious hardship, particularly to V, and therefore no costs order should be made.
[28] Mr M, who is the sole income earner in his household, has provided evidence of his financial situation. It is not necessary to traverse that evidence in detail. I am satisfied, however, based on the evidence provided, that Mr M lives a very modest lifestyle. His income is significantly below the average annual household income. He has significant debts, limited assets, no savings, and his monthly expenses exceed his income.
[29] I accept that Mr M is unable to meet minimum living expenses according to normal community standards. Further, if he is ordered to contribute to the costs of lawyer for the child, this will likely detrimentally impact V (and Mr M’s other child).
[30] I am satisfied that an order would cause serious hardship to Mr M, his partner and two children. I therefore decline to make an order that Mr M contribute to the costs of lawyer for the child.
Would a costs order cause serious hardship to Mr B and/or Mrs B and/or their dependent children?
[31] I will consider the position of Mr and Mrs B together, given that they live in the same household.
[32] The B household includes Mr and Mrs B, V, L and Mrs B’s two older sons. Mrs B’s two sons and V are in Mrs B’s care (and therefore the B household) every
26 Hodson v Ewart [2014] NZFC 9342 at [26].
second week. L is in the primary care of his mother, Ms K, and has weekly contact and fortnightly overnight stays with Mr B.
[33] Mr B has provided detailed information regarding the household finances. Again, I do not propose to traverse that in detail, but simply refer to the key points.
[34] Mr B is the primary income earner for the household. There was an additional, very modest, contribution from Mrs B in the last financial year. Their household income, however, is significantly below the average annual household income. Things are very tight financially.
[35] Mr B owns a home, although his net equity appears to be negative as the mortgage exceeds the value of the home. Mr B must meet significant mortgage payments, in addition to other household expenses. Mr and Mrs B have negligible savings and, in addition to the mortgage, some other (fairly modest) debts.
[36] I am satisfied that ordering either or both of Mrs and Mr B to pay their prescribed portion would cause serious hardship for them and their children. I therefore decline to order that they contribute to the costs of lawyer for the child.
Would a costs order cause serious hardship to Ms K and/or her dependent child?
[37] Ms K has been in receipt of legal aid for the purpose of these proceedings, which reflects her difficult financial circumstances. Her sole source of income is the sole parent benefit and a Working for Families payment. I am satisfied that Ms K’s financial situation is such that, if an order for a costs contribution was made against her, the order would cause serious hardship to her and/or her son L. I therefore decline to order that Ms K contribute to the costs of lawyer for the child.
Result
[38]Mrs B’s application for costs against Mr M is declined.
[39] I decline to order any of the parties to reimburse the Crown for the costs of lawyer for the child, on the basis that doing so would cause serious hardship to each of the parties and/or their dependent children.
Katz J