District Court New South Wales Medium Neutral Citation: Secretary, Department of Communities and Justice v JK [2023] NSWDC 561 Hearing dates: 27-29 November 2023 Date of orders: 13 December 2023 Decision date: 13 December 2023 Jurisdiction: Civil Before: Dicker SC DCJ Decision: (1) The appeal is allowed. (2) The orders as to costs of the Children's Court of New South Wales made on 2 May 2023 are set aside. (3) There be no order as to the costs of the proceedings before the Children's Court. (4) There be no order as to the costs of the appeal before this Court. (5) The Notice of Motion filed 1 June 2023 is dismissed. (6) There be no order as to the costs of the Notice of Motion. Catchwords: CHILD WELFARE – care and protection of children – appeal to District Court – application by father and mother for costs orders – whether "exceptional circumstances" have been established to justify costs orders made by Children's Court – allegation of sexual interference with step-daughter – relevance to risk to biological younger son Legislation Cited: Children and Young Persons (Care and Protection) Act 1998 (NSW) Court Suppression and Non-Publication Orders Act 2010 (NSW) Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: CXZ v Children's Guardian [2020] NSWCA 338 D v C; Re B (No 2) [2018] NSWCA 310 Department of Communities and Justice and Bloom [2021] NSWChC 2 Department of Community Services v SM and MM [2008] NSWDC 68 Douglass v Lawton Pty Ltd (No 2) [2007] NSWCA 90 Isles & Nellisen [2022] FedCFamC1A 97 JH v Secretary, Department of Communities & Justice & Ors (No 3) [2023] NSWDC 517 M v M [1988] HCA 68; (1988) 166 CLR 69 NU v New South Wales Secretary of Family and Community Services [2017] NSWCA 221 Re Kerry (No 2) [2012] NSWCA 127 Re: A Foster Carer v Department of Family and Community Services (No 2) [2018] NSWDC 71 S v Department of Community Services [2002] NSWCA 151 Secretary, Department of Family and Community Services v Hayward [2018] NSWCA 209 SP v Department of Community Services [2006] NSWDC 168 The Secretary, Department of Family and Community Services (NSW) and the Knoll Children (Costs) [2015] NSWChC 2 Yacoub v Pilkington (Australia) Ltd [2007] NSWCA 290 Category: Principal judgment Parties: Secretary, Department of Communities and Justice (Plaintiff) JK (First Defendant) NOV (Second Defendant) Representation: Counsel: M Anderson (Plaintiff) V Willoughby (Solicitor) (First Defendant) In Person (Second Defendant) Solicitors: Crown Solicitors (Plaintiff) Willoughby Law (First Defendant) In Person (Second Defendant) File Number(s): 2023/00172585 Publication restriction: (1) Pursuant to s 7 of the Court Suppression and Non-Publication Orders Act 2010 (NSW) and s 105 of the Children and Young Persons (Care and Protection) Act 1998 (NSW), order that information tending to reveal the identity of or otherwise concerning any party to the proceedings or any person who is related to or otherwise associated with any party to the proceedings (except any professional witness) before the court is suppressed, except for the purposes of the court. The order is made as it is in the public interest for the order to be made and that public interest significantly outweighs the public interest in open justice. (2) The matter is in future to be described in court lists as "Secretary, Department of Communities and Justice v JK". (3) Order 1 is to remain in effect until 29 May 2043 and is to have effect throughout the Commonwealth of Australia. Decision under appeal Court or tribunal: Children's Court of New South Wales Jurisdiction: Children's Court Citation: Unreported Date of Decision: 02 May 2023 Before: Children's Magistrate Hayes File Number(s): 2021/00175275 JUDGMENT 1. In these proceedings, the appellant/plaintiff, the Secretary of the Department of Communities and Justice, by Summons filed on 30 May 2023 appeals against costs orders made by a Children's Magistrate in the Children's Court of New South Wales at Parramatta on 2 May 2023. Orders are sought by the plaintiff that the costs orders made by the Children's Court be set aside and that there be no order as to costs. 2. The grounds of appeal include that the plaintiff is dissatisfied with the orders of the Children's Court made on 2 May 2023 and that the Magistrate erred in finding that there were exceptional circumstances as required by section 88 of the Children and Young Persons (Care and Protection) Act 1998 (NSW) ("Care Act") to permit the court to make orders for costs against the plaintiff in favour of the first defendant and the second defendant. 3. No appeal is brought by the plaintiff against the final orders made by the Children's Court Magistrate on 18 November 2022. The reasons for decision handed down in relation to those orders were relied upon by all parties to the appeal: see [2022] NSWChC 7. 4. The case below involved two children: 1. PQ, born XX June 2010 ("PQ"), a female child; and 2. RS, born XX May 2019 ("RS"), a male child. The parties 1. The various persons and parties and their relationship to each other is set out in the following table. Person Relationship Father of RS JK, the first defendant, born December 1961 Step-father of PQ Husband of the second defendant, NOV (now separated) Mother of RS and PQ NOV, the second defendant, born July 1981. Former wife of LM The second defendant refers to herself by the name "NOV" Wife of JK (now separated) In the People's Republic of China ("China") during the course of the final hearing and attending by audio visual link Father of PQ LM Resides in China Did not participate in the proceedings before the Children's Court or in the appeal Looked after PQ until she came to Australia in 2019 to reside with JK and NOV and RS Daughter of LM and NOV PQ Step-daughter of JK Half-sister of RS RS Child of NOV and JK Half-brother of PQ 1. On 27 November 2023, the Court made suppression orders in relation to the proceedings under the Care Act and section 7 of the Court Suppression and Non-Publication Orders Act 2010 (NSW) until RS reached the age of 25 years. The order applies throughout the Commonwealth of Australia. The Court also ordered that the letters "JK" be used for all listings in relation to JK. Background facts 1. The background facts are set out in the evidence before the Court in Exhibit A, Exhibit 1D1, in the Judgment handed down on 29 November 2022 and in the written submissions that are relied upon by the parties to the appeal. Reference is also made to court documents in the Children's Court file. I will attempt to summarise these background facts. These should be regarded as the Court's findings in relation to the facts for the purposes of the appeal. 2. PQ was born on XX June 2010 to NOV and LM. At the time, all of these persons resided in China. In due course, the relationship between LM and NOV broke down. LM subsequently remarried and has a child from his new relationship. For a period, PQ lived with her father or her paternal extended family. In 2019, PQ came to Australia to live with her mother and JK. She remained at all times on good terms with LM. 3. JK was resident in Australia. He met and formed a relationship with NOV who then moved to Australia to marry and live with him. There is an approximate 20 year age difference between JK and NOV, JK being born in December 1961 and NOV being born in July 1981. At all relevant times, LM remained living in China and, as indicated above, did not participate in the proceedings before the Children's Court or in the appeal to the District Court. RS and PQ were represented by legal representatives before the Children's Court. However, they were not represented on the appeal as the costs issues did not relate to them. On 27 November 2023, the Court made a confirming order removing PQ as a party to the appeal. 4. As at June 2021, PQ was about 11 years of age. RS was a bit over two years of age. PQ attended primary school at TU Public School. PQ was not a native English speaker. However, the materials before the Court indicate that she had a reasonable grasp of English at all relevant times and was able to understand and speak basic English. 5. On 4 June 2021, after a primary school lesson given to pupils relating to safe and unsafe contact, PQ came to speak to her teacher alone and disclosed potential sexual abuse being perpetrated on her by her stepfather, the first defendant, JK. On 4 June 2021, after this disclosure, the Department of Communities and Justice ("DCJ") received a risk of significant harm ("ROSH") report indicating that PQ had disclosed sexual abuse to her teacher allegedly perpetrated by JK. 6. On the afternoon of 4 June 2021, PQ participated in a recorded audio-visual interview with two New South Wales police officers at TU, where she made a number of disclosures relating to alleged sexual abuse of her by JK. A community welfare officer was also present. During the interview, some detail was given by PQ in relation to the alleged sexual abuse. This included that JK had touched her on the breast and in the groin area with his hands on a number of occasions and on one occasion had touched her inner thigh with his penis. It was also alleged by PQ that JK had revealed his penis to her and had pushed her by the shoulders onto a bed. 7. The transcript has been carefully reviewed. It is fair to say that there was a degree of vagueness in the entirety of PQ's interview, but the allegations were reasonably clear and provided some specific details but were unclear as to timing. 8. On 4 June 2021, New South Wales police charged the first defendant with intentionally touching a child aged between 10 and 16 years of age and issued a provisional Apprehended Violence Order with an exclusionary condition against the first defendant for the protection of PQ. At some stage, JK was taken into custody and, initially, bale was refused. 9. The two police officers at the recorded interview with PQ met with NOV at TU Public School on 4 June 2021 to advise her of the disclosures made to them by PQ. A Mandarin interpreter was used to do this. 10. On the afternoon of 4 January 2021, TU Public School staff and welfare officers witnessed, after the police had spoken to NOV, NOV speaking with PQ in Mandarin. Following this conversation, PQ appeared to become distressed and tearful and was heard to say words that she did not wish to "wreck" her family and did not wish to "separate" her brother from his father. She said that her stepfather was "good" to her sometimes to the Joint Child Protection Response Program ("JCPRP") caseworker, Ms Celeste Luisi and TU Public School staff. 11. Ms Luisi had for a short period in June 2021 primary caseworker care responsibility in relation to the welfare of PQ and RS. 12. DCJ staff formed the view that PQ's statements, which were observed to have occurred immediately after speaking to her mother on 4 June 2021, reflected pressure from her mother for PQ to retract the allegations made against JK because of the effect it would have on the family. When cross-examined about this matter at the final hearing, NOV disputed hearing PQ saying those statements and indicated that PQ was upset because her mother could not pick her up on time and she was cold and hungry. 13. The appellant suggested on the appeal that the responses by PQ and heard by the caseworkers identified reasons for PQ's later retraction of her complaints after spending the whole weekend with her mother. 14. DCJ caseworkers met with NOV and undertook a safety assessment interview and a safety plan stipulating that JK would not have contact with the children or attend the family home. 15. On 7 June 2021, it was reported by staff at TU Public School to caseworkers that PQ had stated at school that her disclosures of alleged sexual abuse by JK were only "a joke" and were not accurate. This was despite the disclosures to her teacher and to the two police in the interview on 4 June 2021. 16. Contact was made between caseworkers and NOV on 8 June 2021 where NOV confirmed that PQ had told her that she "made up" the stories partly based on the lesson the teacher had given on 4 June 2021. It was also emphasised by NOV that PQ had only been in Australia for a short period and her English was not good so she may not have understood the teacher and the police properly. 17. There were further meetings between caseworkers and PQ and with NOV, using a Mandarin interpreter, in the days after 7 June 2021. See the notes which were part of the 18 June 2021 Application to the Children's Court. It was repeated that the disclosures were "a joke". NOV stated that she initially believed JK in his denials, that he was a good man and that RS needed contact with his father. 18. On 15 June 2021, PQ and RS were assumed into care by DCJ caseworkers due to an alleged unacceptable risk of harm. 19. On 22 June 2021, the Children's Court allocated, on an interim basis, parental responsibility for PQ and RS to the Minister for Families and Communities. This will be considered further below. 20. On 25 June 2021, PQ participated in a further formal interview with New South Wales police officers, during which she again retracted her previous allegations against JK. PQ claimed that she "made up" the complaints, which she described as making up "the story" about her stepfather's actions. She said that she made up the things because her stepfather was "always … joking about [her]". She said that she wished her biological parents would get back together and she indicated that she did not like her stepfather because he was too old for her mother. PQ indicated that she believed her stepfather was not suitable for her mother. 21. The criminal charges against JK were withdrawn by New South Wales Police in September 2021. JK had spent a considerable period in custody. 22. On 20 July 2021, the Central Metropolitan JCPRP caseworkers upheld PQ's initial allegations of sexual abuse by JK despite PQ's subsequent retractions of her complaints. 23. On 22 July 2021, there was a hearing in the Children's Court. Children's Magistrate Duncan found that PQ and RS were children in need of protection pursuant to section 71(1)(c), (d) and (e) of the Care Act. Section 71 (1)(c) of the Care Act indicates that the Children's Court may make a care order in relation to a child or young person if it is satisfied that the child or young person is in need of care and protection for any reason including that the child or young person has been, or is likely to be, physically or sexually abused or ill-treated. This finding is known as the "establishment" phase in the Children's Court. This finding was made notwithstanding PQ's retractions and at the time when the parties were all legally represented. Whilst this finding cannot be made by consent, JK conceded the "establishment" phase for RS on a without admissions basis. In other words, JK and NOV consented to the finding on a without admissions basis. This is discussed further below. 24. On 12 August 2021, the Children's Court made an order for the matter to be referred for an expert report involving a risk assessment of the first defendant and a parenting capacity assessment of the first and second defendants, JK and NOV. 25. The matter was referred to Ms Katie Martens, forensic psychologist. Ms Martens provided a detailed single joint expert report dated 8 October 2021. In summary, Ms Martens recommended in her report the restoration of PQ and RS to NOV and supervised contact for the first defendant, JK, with RS. 26. For the purposes of her report, Ms Martens undertook interviews with PQ, NOV and JK. 27. Significant aspects of Ms Martens' report are as follows: 1. As part of the report, Ms Martens was requested in relation to JK to comment on the risk of sexual harm, including any likely causal factors and factors that may increase or decrease risk and how the risk could be mitigated as well as the nature and quality of the relationship and bond between RS and JK (paragraph 1(a)(iii) and(iv)); 2. Whether JK would represent an unacceptable risk to RS if he was restored to his care, or if he was to have unsupervised contact (paragraph 1(a)(vi) 3. In Ms Martens' view, the interview notes with PQ on 4 June 2021 indicated that PQ had some difficulty understanding questions and the notes indicated some English limitations; 4. Although as a result of PQ's retractions, with her saying that she was "joking", the charges against JK had been withdrawn, it remained the position of DCJ that the initial disclosure of sexual abuse was believed. It was stated that DCJ were of the opinion that restoration to NOV might be possible but restoration to JK was "not deemed feasible due to concerns regarding risk of sexual harm, and JK having been reported not engaging in meetings with the Department" (paragraph 11); 5. There was a reference to PQ's school having informed DCJ that she had presented at school as "increasingly anxious and tearful" which was reported to be a long-standing concern (paragraph 14); 6. According to inquiries by DCJ with RS's childcare, they had raised no concerns about his well-being and had indicated that he had not demonstrated any decline in behaviour since being assumed into care (paragraph 18); 7. In Ms Martens' interview with PQ, she did not indicate any concerns about JK. She also denied any worries or concerns about her safety should she be returned to her mother's care (paragraphs 22-3); 8. PQ also indicated that ultimately she would prefer it if her mother and father resumed their relationship (paragraph 24); 9. NOV told Ms Martens that when she was informed by DCJ of the sexual abuse allegations made by PQ she had been shocked, and had been more protective of JK rather than supportive of PQ. She indicated that she understood why DCJ would be concerned about this and remove her children. NOV indicated that she understood her responsibility was to provide PQ and RS with a safe and supportive environment and that she would agree to work with DCJ. Although NOV indicated some difficulty in accepting the allegations made against JK, she said that she had chosen to believe her daughter's disclosure (paragraphs 51-52); 10. NOV denied having initiated any conversation about the disclosure with PQ and said she did not want to pressure PQ (paragraph 53). Overall, Ms Martens appeared to express a reasonably positive view in relation to NOV; 11. In relation to JK, JK indicated to Ms Martens that he moved out of the home due to pressure from DCJ and although he had at that time no immediate plan to return to the family home he would like to. He said that both he and NOV did not believe the allegations (paragraph 77); 12. JK maintained innocence with respect to the sexual abuse allegations and indicated that he believed that PQ fabricated the disclosure for a number of reasons, including "joking" and "a lack of belonging" (paragraph 83); 13. JK indicated a desire and intention to be active in RS's life and development (paragraphs 85-86); 14. JK informed Ms Martens that he had supported PQ with her education and meals. He said he did not have differences with NOV about parenting; 15. In relation to the assessment of "sexual recidivism risk", Ms Martens in paragraph 90 stated as follows: "The current matter is in relation to whether JK poses a risk of sexual harm to children. I note that this is dependent upon the disclosure of PQ, which she has subsequently retracted. JK maintains innocence with respect to the alleged sexual harm however DCJ maintain belief in PQ's initial disclosure. The current assessment cannot extend to determining truth with respect to whether the alleged sexual harm occurred, rather it is an assessment of risk based on the premise that the initial disclosure of PQ was reliable. Should it be determined that sexual abuse did not occur then this assessment would be invalid"; 1. Ms Martens discussed in paragraph 91 of her report the possibility that where a non-offending caregiver had reacted unsupportively to an allegation of sexual abuse, then this could result in a false recantation. She expressed the opinion that "it was important to be cautious in making judgments with respect to causality" whilst accepting that some caregivers struggle, initially, with accepting that their partner may have engaged in sexual harm. In paragraph 95, Ms Martens noted that it was possible that JK was indeed innocent in which case her assessment would be invalid; 2. In paragraph 97, Ms Martens states the following: "Overall … it is my opinion that JK presents with few factors that would serve to elevate his risk of sexual harm. Based on the disclosure of PQ, this risk would be most likely to be realised in the form of sexual harm toward a female child with whom he resides. Risk would not necessarily generalise towards children in general or towards a male child"; 1. In paragraph 101, Ms Martens stated: "Based on risk assessment, it is my opinion that JK presents with few factors that would serve to elevate risk and would be of low risk generally, however that, should the allegations be accurate, this risk would be most likely realised in a home setting, towards a female child. This could be mitigated by limits on unsupervised contact"; 1. In paragraph 102, Ms Martens indicated that whilst PQ had retracted her disclosure, it was "possible" that it was a false retraction; 2. JK appeared to Ms Martens to present with love and affection for RS although the majority of practical parenting tasks were completed by NOV; 3. In paragraph 105, in answering a question relating to whether JK would represent an unacceptable risk to RS if he was restored to his care, or if he was to have unsupervised contact, Ms Martens stated as follows: "If it is determined that JK indeed did engage in sexual harm towards PQ, there is some risk of sexual harm towards RS if he were restored to his care or having unsupervised contact. That being said, it is important to note that sexual risk does not necessarily generalise between risk towards a female prepubescent child to risk towards a young male child, and certainly JK does not appear to have a history of sexual actions toward males. It seems unlikely that this risk would generalise toward RS, however it is possible. I do recommend that contact continue between RS and his father on a regular basis and that this initially be supervised, particularly as PQ begins to engage with psychological intervention and may be in a position where she makes further disclosures"; 1. In paragraph 110, Ms Martens notes that in relation to the disclosures of PQ, NOV had made some "shifts in her opinion since" and expressed a commitment to supporting PQ and being compliant with requests of DCJ; and 2. In paragraph 112, Ms Martens expresses the opinion that there is a realistic possibility of restoration of both children to NOV's care over the next four months from the report, subject to certain conditions including that NOV was to agree to follow directions from DCJ with respect to contact between the children and JK. 1. On 27 January 2022, the Children's Court set down the matter for final hearing in August 2022. There was a finding by the Court that there was a realistic possibility of restoration of the children to NOV. The children were in due course returned to NOV in February 2022. 2. On 4 August 2022, the final hearing commenced before Children's Magistrate Hayes. 3. Following receiving submissions, on 18 November 2022 Children's Magistrate Hayes discharged the interim orders allocating parental responsibility to the Minister and reverted parental responsibility for PQ and RS to the common law position. The orders made by Magistrate Hayes were follows: "1. All existing orders in respect of [PQ and RS] are discharged. 2. There is now no longer an order of parental responsibility to the Minister. 3. There are no other orders. 4. The court, in making no orders intends that the common law position applies, whereby, the Mother and [LM] have parental responsibility for [PQ]; and the Mother and [JK] have parental responsibility for [RS]." 1. In due course, the first and second defendants made an application for costs. There was a hearing before Magistrate Hayes in relation to the costs issue. At the conclusion of the costs hearing, his Honour delivered an ex tempore judgment in which he accepted the first defendant's submissions in their entirety and he made costs orders against the appellant Secretary in favour of the first and second defendants in the following terms: "The Court grants costs against the Department of Communities and Justice and directs that the Department of Communities and Justice is to pay Mother (NOV) and Father (JK) costs as agreed or as assessed. The matter will be referred to the Supreme Court if parties cannot agree." 1. It was from this order that the plaintiff has appealed to the District Court. Legislative framework 1. The legislative provisions relevant to the appeal should be set out or referred to. 2. The objects of the Care Act are set out in section 8 of the Care Act which is as follows: "8 What are the objects of this Act? The objects of this Act are to provide— (a) that children and young persons receive such care and protection as is necessary for their safety, welfare and well-being, having regard to the capacity of their parents or other persons responsible for them, and (a1) recognition that the primary means of providing for the safety, welfare and well-being of children and young persons is by providing them with long-term, safe, nurturing, stable and secure environments through permanent placement in accordance with the permanent placement principles, and (b) that all institutions, services and facilities responsible for the care and protection of children and young persons provide an environment for them that is free of violence and exploitation and provide services that foster their health, developmental needs, spirituality, self-respect and dignity, and (c) that appropriate assistance is rendered to parents and other persons responsible for children and young persons in the performance of their child-rearing responsibilities in order to promote a safe and nurturing environment." 1. The principles to be applied in the administration of the Care Act are set out in section 9 of the Care Act which is as follows: "9 Principles for administration of Act (1) This Act is to be administered under the principle that, in any action or decision concerning a particular child or young person, the safety, welfare and well-being of the child or young person are paramount. (2) Subject to subsection (1), the other principles to be applied in the administration of this Act are as follows— (a) Wherever a child or young person is able to form his or her own views on a matter concerning his or her safety, welfare and well-being, he or she must be given an opportunity to express those views freely and those views are to be given due weight in accordance with the developmental capacity of the child or young person and the circumstances. (b) In all actions and decisions made under this Act (whether by legal or administrative process) that significantly affect a child or young person, account must be taken of the culture, disability, language, religion and sexuality of the child or young person and, if relevant, those with parental responsibility for the child or young person. (c) In deciding what action it is necessary to take (whether by legal or administrative process) in order to protect a child or young person from harm, the course to be followed must be the least intrusive intervention in the life of the child or young person and his or her family that is consistent with the paramount concern to protect the child or young person from harm and promote the child's or young person's development. (d) If a child or young person is temporarily or permanently deprived of his or her family environment, or cannot be allowed to remain in that environment in his or her own best interests, the child or young person is entitled to special protection and assistance from the State, and his or her name, identity, language, cultural and religious ties should, as far as possible, be preserved. (e) If a child or young person is placed in out-of-home care, arrangements should be made, in a timely manner, to ensure the provision of a safe, nurturing, stable and secure environment, recognising the child's or young person's circumstances and that, the younger the age of the child, the greater the need for early decisions to be made in relation to a permanent placement. (f) If a child or young person is placed in out-of-home care, the child or young person is entitled to a safe, nurturing, stable and secure environment. Unless it is contrary to his or her best interests, and taking into account the wishes of the child or young person, this will include the retention by the child or young person of relationships with people significant to the child or young person, including birth or adoptive parents, siblings, extended family, peers, family friends and community. (g) If a child or young person is placed in out-of-home care, the permanent placement principles are to guide all actions and decisions made under this Act (whether by legal or administrative process) regarding permanent placement of the child or young person. 1. Section 91 of the Care Act provides as follows: "91 Appeals (1) A party to proceedings who is dissatisfied with an order (other than an interim order) of the Children's Court may, in accordance with the rules of the District Court, appeal to the District Court against the order. (2) An appeal is to be by way of a new hearing and fresh evidence, or evidence in addition to or in substitution for the evidence on which the order was made, may be given on the appeal. (3) Without limiting subsection (2), the District Court may, instead of taking fresh evidence, decide to admit as evidence the transcript of proceedings before the Children's Court and any exhibit tendered during those proceedings. (4) In addition to any functions and discretions that the District Court has apart from this section, the District Court has, for the purposes of hearing and disposing of an appeal, all the functions and discretions that the Children's Court has under this Chapter or Chapter 6. (5) Without limiting the generality of subsection (4), the District Court may confirm, vary or set aside the decision of the Children's Court. (6) The decision of the District Court in respect of an appeal is taken to be the decision of the Children's Court and has effect accordingly. (7) Subject to any interlocutory order made by the District Court, an appeal does not affect the operation of the order appealed against or prevent the taking of action to implement that order. (8) The provisions of Chapter 6 apply to and in respect of the hearing of an appeal under this section in the same way as they apply to and in respect of the hearing of a care application under that Chapter." 1. Thus, it appears clear from section 91 that the following principles are applicable: 1. An appeal pursuant to section 91 of the Care Act is brought by a party who is dissatisfied with an order of the Children's Court. The Summons filed on 30 May 2023 by the appellant plaintiff states that it is dissatisfied with the orders of the Children's Court made on 2 May 2023 as to costs; 2. The dissatisfied party may appeal to the District Court against the order made in the Children's Court; 3. An appeal is to be by way of a new hearing and fresh evidence, or evidence in addition to or in substitution for the evidence on which the order was made, may be given on the appeal; 4. The District Court may decide to admit as evidence the transcript of the proceedings before the Children's Court and any exhibit tendered during those proceedings; 5. For the purposes of hearing and disposing of the appeal, the District Court has all the functions and discretions that the Children's Court has under the legislation as if it were a fresh application; 6. The District Court may confirm, vary or set aside the decision of the Children's Court; 7. The decision of the District Court in respect of an appeal is taken to be the decision of the Children's Court and has effect accordingly; 8. The provisions of Chapter 6 of the Care Act apply to and in respect of the hearing of an appeal under section 91 in the same way as they apply to in respect of a hearing of a care application under Chapter 6. In hearing the appeal, the District Court is not bound by the rules of evidence unless the Court determines that those rules are to apply. 1. Section 88 of the Care Act provides as follows: "88 Costs The Children's Court cannot make an order for costs in care proceedings unless there are exceptional circumstances that justify it in doing so." 1. Accordingly, the question for the Court is whether "exceptional circumstances" have been established justifying it to make an order for costs. Section 88 makes clear that the Court cannot make an order for costs in care proceedings unless there are exceptional circumstances justifying such an order. The plaintiff/ appellant seeks the costs orders made by the Children's Court in May 2023 to be set aside as it submits that exceptional circumstances have not been established. The first and second defendants submit that exceptional circumstances have been established. Principles of law applicable 1. There appears to be substantial agreement between the parties in relation to the principles of law to be applied on the appeal. 2. It should be noted that the court made its orders and findings in November 2022 without any cross-examination of the caseworkers who had provided affidavits. Children's Magistrate Hayes was critical of the plaintiff's investigation and conclusions in relation to the matter in his ex tempore costs judgment. In particular, the Magistrate was of the view that DCJ did not remain objective in its consideration of the truth of PQ's initial allegations of sexual abuse, having regard to her retractions of those allegations on a number of occasions. Even with the allegations made by PQ initially, his Honour did not believe that these could preclude JK from acting in a shared parenting role with the child RS. 3. As section 91(2) of the Care Act makes clear, the appeal is to be by way of a new hearing. Fresh evidence, or evidence in addition to or in substitution for the evidence on which the order was made, may be given on the appeal. The parties have tendered as exhibits, tender bundles which became Exhibit A and Exhibit 1D1 on the appeal. The transcript at first instance in relation to costs was tendered and became Exhibit B. As it is a new hearing, it is a hearing de novo. See Re Kerry (No 2) [2012] NSWCA 127 at [24]. As it is a hearing substantively conducted as a hearing de novo, it is unnecessary for the appellant to demonstrate actual error by the Magistrate in the Children's Court. However, this Court is entitled to have regard to the findings in the Children's Court: JH v Secretary, Department of Communities & Justice & Ors (No 3) [2023] NSWDC 517 at [41]-[45]. 4. No issue has been raised as to whether the costs order made in May 2023 is an order capable of appeal to the District Court for review under section 91 of the Care Act. In S v Department of Community Services [2002] NSWCA 151 at [52]-[53] the Court of Appeal gave a wide meaning to the term "order" in section 91(1) of the Care Act and decided that it also encompasses interlocutory orders. Here, the costs order was not an interlocutory order but a final order and thus an order which can be appealed to the District Court. 5. The issue initially before the Children's Court and which is relevant to this appeal was whether there was an unacceptable risk of harm in relation to the children. 6. The plaintiff submits that the fact that restoration was made to the care of the mother on the recommendations of Ms Martens and prior to the final hearing, contradicted the assertion by the defendants that there was some entrenched or immovable position on the part of the plaintiff: written submissions paragraph 62. It is submitted that the authorities established that the assessment of future risk in relation to a child is not dependent upon proving something on the balance of probabilities and to approach the assessment of risk otherwise is contrary to law: paragraph 62 of the written submissions. This submission appears to be correct on the authorities. 7. In M v M [1988] HCA 68; (1988) 166 CLR 69, the High Court considered an appeal relating to alleged sexual abuse of a female child by a father. The High Court stated as follows in paragraphs 20 to 25: "20. But it is a mistake to think that the Family Court is under the same duty to resolve in a definitive way the disputed allegation of sexual abuse as a court exercising criminal jurisdiction would be if it were trying the party for a criminal offence. Proceedings for custody or access are not disputes inter partes in the ordinary sense of that expression: Reynolds v. Reynolds (1973) 47 ALJR 499; 1 ALR 318; McKee v. McKee (1951) AC 352, at pp 364-365. In proceedings of that kind the court is not enforcing a parental right of custody or right to access. The court is concerned to make such an order for custody or access which will in the opinion of the court best promote and protect the interests of the child. In deciding what order it should make the court will give very great weight to the importance of maintaining parental ties, not so much because parents have a right to custody or access, but because it is prima facie in a child's interests to maintain the filial relationship with both parents: cf. J. v. Lieschke [1987] HCA 4; (1987) 162 CLR 447, at pp 450, 458, 462, 463-464. 21. Viewed in this setting, the resolution of an allegation of sexual abuse against a parent is subservient and ancillary to the court's determination of what is in the best interests of the child. The Family Court's consideration of the paramount issue which it is enjoined to decide cannot be diverted by the supposed need to arrive at a definitive conclusion on the allegation of sexual abuse. The Family Court's wide-ranging discretion to decide what is in the child's best interests cannot be qualified by requiring the court to try the case as if it were no more than a contest between the parents to be decided solely by reference to the acceptance or rejection of the allegation of sexual abuse on the balance of probabilities. 22. In considering an allegation of sexual abuse, the court should not make a positive finding that the allegation is true unless the court is so satisfied according to the civil standard of proof, with due regard to the factors mentioned in Briginshaw v. Briginshaw [1938] HCA 34; (1938) 60 CLR 336, at p 362. … His Honour's remarks [those of Dixon J] have a direct application to an allegation that a parent has sexually abused a child, an allegation which is often easy to make, but difficult to refute. It does not follow that if an allegation of sexual abuse has not been made out, according to the civil onus as stated in Briginshaw, that conclusion determines the wider issue which confronts the court when it is called upon to decide what is in the best interests of the child. 23. No doubt there will be some cases in which the court is able to come to a positive finding that the allegation is well-founded. In all but the most extraordinary cases, that finding will have a decisive impact on the order to be made respecting custody and access. There will be cases also in which the court has no hesitation in rejecting the allegation as groundless. Again, in the nature of things there will be very many cases, such as the present case, in which the court cannot confidently make a finding that sexual abuse has taken place. And there are strong practical family reasons why the court should refrain from making a positive finding that sexual abuse has actually taken place unless it is impelled by the particular circumstances of the case to do so. 24. In resolving the wider issue the court must determine whether on the evidence there is a risk of sexual abuse occurring if custody or access be granted and assessing the magnitude of that risk. After all, in deciding what is in the best interests of a child, the Family Court is frequently called upon to assess and evaluate the likelihood or possibility of events or occurrences which, if they come about, will have a detrimental impact on the child's welfare. The existence and magnitude of the risk of sexual abuse, as with other risks of harm to the welfare of a child, is a fundamental matter to be taken into account in deciding issues of custody and access. In access cases, the magnitude of the risk may be less if the order in contemplation is supervised access. Even in such a case, however, there may be a risk of disturbance to a child who is compulsorily brought into contact with a parent who has sexually abused her or whom the child believes to have sexually abused her. But that is not the issue in this case. 25. Efforts to define with greater precision the magnitude of the risk which will justify a court in denying a parent access to a child have resulted in a variety of formulations. The degree of risk has been described as a "risk of serious harm" (A v. A [1976] VicRp 24; (1976) VR 298, at p 300), "an element of risk" or "an appreciable risk" (Marriage of M (1987) 11 Fam LR 765, at p 770 and p 771 respectively), "a real possibility" (B. v. B. (Access) (1986) FLC 91-758, at p 75,545), a "real risk" (Leveque v. Leveque (1983) 54 B CLR 164, at p 167), and an "unacceptable risk" (In re G. (a minor) (1987) 1 WLR 1461, at p 1469). This imposing array indicates that the courts are striving for a greater degree of definition than the subject is capable of yielding. In devising these tests the courts have endeavoured, in their efforts to protect the child's paramount interests, to achieve a balance between the risk of detriment to the child from sexual abuse and the possibility of benefit to the child from parental access. To achieve a proper balance, the test is best expressed by saying that a court will not grant custody or access to a parent if that custody or access would expose the child to an unacceptable risk of sexual abuse." 1. In NU v New South Wales Secretary of Family and Community Services [2017] NSWCA 221 President Beazley (with whom McColl JA and Schmidt J agreed) stated as follows: "45. The parties accepted that, in determining whether a child was in need of care and protection, the court was required to determine whether the restoration of the child "would expose the child to an unacceptable risk of sexual abuse": see M v M at [25]. See also the Harper Children case. 46. M v M concerned the custody of, and access to, a child in respect of whom there was an allegation of sexual abuse by the father, in the context of a dispute under the Family Law Act (Cth) 1975. The paramount question under that Act was what is in the best interests of the child. In that context, the High Court observed, at [20], that the Family Court was not required to resolve the dispute as to whether there had been sexual abuse as a court exercising criminal jurisdiction would be required to do if a person was being tried for a criminal offence. Rather, the Family Court's concern was to make such order as would "best promote and protect the interests of the child". In making that determination, great weight was to be given to "the importance of maintaining parental ties". 47. The High Court, at [24], observed that in determining that question, the Family Court was required to determine "whether on the evidence there is a risk of sexual abuse occurring if custody or access be granted and assessing the magnitude of that risk". The High Court observed that many attempts had been made to define the magnitude of the risk necessary to be found to justify the denial of parental access to a child. 48. Against that background, the Court considered, at [25], that to "achieve a proper balance", the test was best described as above, namely, whether the grant of custody or access to a parent "would expose the child to an unacceptable risk of sexual abuse"." … 54. I accept that where there is an allegation such as of sexual abuse in circumstances such as arise in this case, it is appropriate and necessary to apply the Briginshaw standard, as properly understood. Indeed, it is generally accepted that there is no underlying conceptual difference in the application of the Briginshaw standard and the Evidence Act, s 140. 55. However, as the High Court pointed out in M v M at [22], an inability of the court to make a positive finding of abuse does not conclude the question of the appropriate order to be made, in that case involving custody or access to a child, where the paramount consideration is the "best interests of the child". The same position applies to the appropriate order to be made under the Care and Protection Act. Having regard to these principles, the primary judge was required to assess the evidence to determine whether K would be exposed to an unacceptable risk of sexual abuse if restored to the care of her parents including her father. … 83. This finding demonstrated that his Honour understood and applied the correct legal test in determining whether there was an unacceptable risk. Insofar as his Honour considered that the rule in Browne v Dunn did not apply to the case, that was because, as I understand the import of his Honour reasons, the resolution of the factual contest between NU and J, that is whether sexual abuse had or had not occurred, was not determinative of whether there was an unacceptable risk of harm. Not only was there was no error of law in that approach it is apparent how and why his Honour reached that conclusion." 1. These principles have not been questioned since in the New South Wales Court of Appeal. 2. In CXZ v Children's Guardian [2020] NSWCA 338 the Court of Appeal considered different legislation. However, Simpson AJA (with whom McCallum JA agreed) stated as follows in paragraphs 49-52: "49. Although, as will appear below, the primary judge accepted and acted on that construction of the judgment in M v M, it is not, in my opinion, correct. It represents a misunderstanding of what the High Court said. It should be rejected. 50. In considering the application of M v M to the Child Protection Act, it is necessary to bear some distinguishing features in mind. M v M was concerned with legislation that gave paramountcy to the "welfare of the child". Section 4 of the Child Protection Act makes comparable provision. But the issues that arise under the Family Law Act involve competing claims, usually of the two parents. Even so, the High Court rejected the proposition that the Family Court was required to try the case as though it were no more than a contest between the parents to be decided solely by reference to acceptance or rejection of (in that case) the allegations of sexual abuse. It was in that context that the High Court made the observations extracted above. 51. Those observations are recognition that, while some allegations can be determined as substantiated, and some can be found to be without foundation ("groundless") "very many cases" will not lend themselves to definitive factual determination. In those cases: "... The court must determine whether on the evidence there is a risk of sexual abuse occurring if custody or access be granted and assess the magnitude of that risk." (p 77) 52. Nowhere does the High Court say, or suggest, that every individual allegation is to be assessed as either "well founded" or "groundless". Nowhere does the High Court say, or suggest, that all allegations must be treated as falling into one or other of those categories. Indeed, it explicitly says the opposite. In those cases which do not fall into one or other of those categories the court or tribunal must decide whether the evidence is such as to justify a finding that there is a relevant risk." 1. In Isles & Nelissen [2022] FedCFamC1A 97, a Court of five judges in the Federal Circuit and Family Court of Australia in its appellate jurisdiction considered unacceptable risk to a child and stated at paragraph 53 that while conjecture about the future is based on historical facts and circumstances, it is only the relevant historical facts which need be proven on the balance of probabilities. At paragraph 55, the Full Court approved the comments made by the New South Wales Court of Appeal in CXZ. 2. Accordingly, the Court is required to assess the evidence to determine whether the two children in question as at the time they were taken into care and afterwards, would have been exposed to an unacceptable risk of sexual abuse if restored to the care of both NOV and JK with access being given by JK to PQ and RS. An inability of the Court to make a positive finding of abuse does not conclude the question of the appropriate order to be made because the paramount consideration is the best interests of the child. The Court must assess the evidence to determine whether the children would be exposed to an unacceptable risk of sexual abuse if the children were restored to the mother with full access given to JK. It has been held that an "unexcluded possibility of past harm to a child is capable of supporting a conclusion that the child will be exposed to an unacceptable risk in the future from the person concerned…Whether there is an "unacceptable risk" of harm to the child is to be assessed from the accumulation of factors proved…This is an exercise in foresight": Department of Communities and Justice and Bloom [2021] NSWChC 2 at [129]-[135] especially [131] and [133]. 3. It is then necessary to consider the principles relating to the concept of "exceptional circumstances" concerning the award of costs. 4. The Court accepts the general submission of the first defendant that the restriction on costs orders in care proceedings which is in section 88 arises because proceedings relating to the welfare of a child are not to be regarded as normal adversary litigation. In my view, the threat of a costs order also can have a "chilling" effect on parties by making them reluctant to become parties in care proceedings. For example, the Secretary may either decide not to bring proceedings or to delay proceedings until extensive further enquiries are made and evidence is obtained if there is the undue threat of a costs order. Parties may be reluctant to seek to be made defendants to proceedings or to bring the proceedings including on appeal if costs orders are more readily given as in normal litigation. As the safety, welfare and well-being of the child is paramount (section 9(1)), parties should not be constrained in becoming parties to care litigation. However, in my view sections 69-71 of the Care Act make clear that orders including interim orders should not be made unless they are in the interests of the child or young person and the young person is in need of care and protection (in the case of care orders under section 71). The Court has a role in ensuring that unreasonable or capricious applications are not made. 5. What are "exceptional circumstances" has been considered by courts in cases relating both to care proceedings and other proceedings. 6. In Yacoub v Pilkington (Australia) Ltd [2007] NSWCA 290 Campbell JA (with whom Tobias JA and Handley AJA agreed) stated as following in paragraph 66: "66. Another question of construction concerned "exceptional circumstances" in rule 31.18(4). In San v Rumble (No 2) (2007) NSWCA 259 at [59]-[69], I gave consideration to the expression "exceptional circumstances" in a different statutory context to the present. Without repeating that discussion in full, I shall state such of the conclusions as seem to me applicable in the construction of rule 31.18(4). (a) Exceptional circumstances are out of the ordinary course or unusual, or special, or uncommon. They need not be unique, or unprecedented, or very rare, but they cannot be circumstances that are regularly, routinely or normally encountered: R v Kelly (Edward) [1999] UK HL 4; [20 00] 1 QB 198 (at 208). (b) Exceptional circumstances can exist not only by reference to quantitative matters concerning relative frequency of occurrence, but also by reference to qualitative factors: R v Buckland [2000] EWCA Crim 1; [2000] 1 WLR 1262; [2000] 1 All ER 907 (at 1268; 912-913). (c) Exceptional circumstances can include a single exceptional matter, a combination of exceptional factors, or a combination of ordinary factors which, although individually of no particular significance, when taken together are seen as exceptional: Ho v Professional Services Review Committee No 295 [2007] FCA 388 (at [26]). (d) In deciding whether circumstances are exceptional within the meaning of a particular statutory provision, one must keep in mind the rationale of that particular statutory provision: R v Buckland (at 1268; 912-913). (e) Beyond these general guidelines, whether exceptional circumstances exist depends upon a careful consideration of the facts of the individual case: Awa v Independent News Auckland [1996] 2 NZLR 184 (at 186)." 1. That case concerned the use of the phrase "exceptional circumstances" under Part 31.18 of the Uniform Civil Procedure Rules 2005. 2. In The Secretary, Department of Family and Community Services (NSW) and the Knoll Children (Costs) [2015] NSWChC 2, Judge Johnstone, then President of the Children's Court, stated at [24] the policy basis behind s 88 which was the notion that parties involved in care proceedings should have as full an opportunity to be heard as is reasonably possible and should not be deterred from participating in such proceedings by adverse pecuniary consequences as the safety, welfare and well-being of the child are the paramount concern. 3. In Department of Community Services v SM and MM [2008] NSWDC 68 Garling DCJ approved the judgment of Rein DCJ in SP v Department of Community Services [2006] NSWDC 168. Garling DCJ expressly approved a number of statements of principle by Rein DCJ where his Honour said that cases where exceptional circumstances are found or not found all turn on their own facts and circumstances. Unusual circumstances do not make the circumstances exceptional. His Honour stated that in deciding whether exceptional circumstances are exceptional within the meaning of a particular statutory provision, one must keep in mind the rationale of the particular statutory provision. Qualitative factors are relevant. In SM and MM, Garling DCJ found that the exceptional circumstances present were that the appeal had no merit, the Magistrate made the only reasonable order available and that there were no grounds to seek an appeal from the order. See also the Knoll case, above at [25]-[26]. 4. In Re: A Foster Carer v Department of Family and Community Services (No 2) [2018] NSWDC 71, Levy DCJ cited the decision of Johnstone J in Knoll and stated as follows at paragraphs 12-25: "12. The legal principles to be considered and applied in this case have been identified in a decision of the President of the Children's Court of NSW, Judge Johnstone: The Secretary, Department of Family and Community Services (NSW) and the Knoll Children (Costs) [2015] NSWChC 2, at [20] – [26] ["Knoll"]. I gratefully draw upon that decision for guidance in this case. 13. A factual finding of the existence of exceptional circumstances must necessarily be case dependent. In Knoll, at [26], it was observed that the array of relevant factual situations that could comprise "exceptional circumstances" within the meaning of s 88 of the Act, were not exhaustively defined or limited. 14. In these proceedings, I recognise that the exercise of a discretion to award costs in exceptional circumstances must be exercised judicially, according to the rules of reason, fairness and justice, not arbitrarily, and not influenced by considerations of benevolence or sympathy. 15. As cited in Knoll, the relevant considerations include the evidence adduced in the proceedings, the conduct of the parties, and the ultimate result, following Knight & Clifton [1971] Ch 700, whilst also recognising that the purpose of an order for costs is to compensate the person in whose favour the order is made, and not to punish the unsuccessful party: Allplastics Engineering Pty Ltd v Dornoch Ltd [2006] NSWCA 33, at [34]; Douglas v Lewton Pty Ltd (No 2) [2007] NSWCA 90, at [22]. 16. Other cases where s 88 of the Act has been invoked and considered have been determined on the basis of the exercise of discretion according to the underlying intrinsic factual circumstances of those cases, for example: SP v Department of Community Services [2006] NSWDC 168; Department of Community Services v SM and MM [2006] NSWDC 68. 17. Since the outcome of the present application will be determined by whether or not a finding of exceptional circumstances is made, it is instructive to survey a range of other cases where the abstracted meaning of the term "exceptional circumstances" has been generally considered. 18. In situations where exceptional circumstances are not exhaustively defined in the legislative provision under consideration, that expression must be construed as: "an ordinary English adjective, and not a term of art. It describes a circumstance which is such as to form an exception, which is out of the ordinary course, as unusual, or special or uncommon. To be exceptional, a circumstance need not be unique or unexpected, or very rare; but it is not one that is regularly, or routinely, or normally encountered": R v Kelly [1999] UKHL 4; [1999] 2 AER 13, at 20 per Lord Bingham CJ. 19. In Awa v Independent News Auckland Ltd [1996] 2 NZLR 184, at 186, it was held that "the term 'exceptional circumstances' " when used in a statute, is never free from difficulty. As a matter of general approach, the term is usually construed as meaning something "quite out of the ordinary". 20. In Nikac v Minister for Immigration and Ethnic Affairs [1988] FCA 400; (1988) 20 FCR 65, at 81, Wilcox J held that: "the term 'exceptional circumstances' postulates a criterion which is both vague and subjective", and "[l]ike beauty, 'exceptional circumstances' lies in the eyes of the beholder". That interpretation was subsequently considered and approved in Hicks v ATSIC [2001] FCA 586; (2001) 110 FCR 582, at 586 – 587. 21. In R v Dunwoodie [1978] 1 AER 923, the term "exceptional circumstances" was construed to mean that "the circumstances must be exceptional to the particular case". 22. In R v Okinikan [1993] 1 WLR 173, it was determined that : "What are exceptional circumstances depends on the facts of each individual case". In another instance, "exceptional circumstances" were considered to be "sufficiently wide to allow the court to take into account all the relevant [surrounding] circumstances": R v Sanderson [1993] Crim LR 224; R v Lowery [1993] Crim LR 225. 23. In Re Michael Barbaro [2004] VSC 404, at [7], it was held that "exceptional circumstances should not be defined; but rather, one should exercise the facts and see if those facts show circumstances which are exceptional". 24. It follows from the above survey, that the term "exceptional circumstances" should not be construed narrowly, and in this context, it should be construed according to the particular circumstances of the case. 25. As observed in Knoll, at [27], it is not necessary to review the individual factual circumstances of the cases where s 88 has been considered and applied because the enabling statute in this instance has not sought to confine what might constitute "exceptional circumstances"." 1. It therefore appears from the above cases that the following general principles may be stated: 1. The policy basis behind the restriction in section 88 on the power to award costs is based on the notion that parties involved in care proceedings should have as full an opportunity to be heard as is reasonably possible, and should not be deterred from participating in such proceedings by adverse pecuniary consequences. The safety, welfare and well-being of the child are of paramount concern: s 9 of the Care Act; 2. A factual consideration of the existence of exceptional circumstances must necessarily be case dependent. Factual situations that could comprise exceptional circumstances within the meaning of section 88 of the Act have not been exhaustively defined or limited; 3. Any discretion to award costs must be exercised judicially and not influenced by considerations of benevolence or sympathy to a party; 4. An order for costs is to compensate the person in whose favour the order is made, and not to punish the unsuccessful party: see Douglass v Lawton Pty Ltd (No 2) [2007] NSWCA 90 at [22]; 5. The conduct of the parties is relevant as is the evidence adduced in the proceedings; 6. Exceptional circumstances can exist not only by reference to quantitative matters concerning relative frequency of occurrence but also by reference to qualitative factors; 7. Exceptional circumstances are out of the ordinary course or unusual, or special, or uncommon. They need not be unique or very rare; 8. The statutory purpose of the Act is important. Parties should not be made liable in costs for taking or taking part in care proceedings where there are not exceptional circumstances as it may have a negating effect on the bringing of complaints and cases. The object must be at all times the safety, welfare and well-being of a child which is facilitated by not unduly discouraging complaints or proceedings. Submissions of the parties 1. The Court was assisted by both written and oral submissions from the appellant and the first defendant, JK. In addition, NOV made oral submissions which were translated by an interpreter to the Court. At the time she made her oral submissions, NOV was located in the People's Republic of China. 2. In making their submissions, the parties made submissions on both the relevant factual matters and the legal principles to be applied. 3. In his written submissions dated 16 October 2023 and amended on 28 November 2023, counsel appearing for the plaintiff, in general summary, made the following submissions: 1. This is an appeal under section 91 of the Care Act. It is a hearing de novo and there is no necessity to establish an error in the court below. The costs order made by the Magistrate on 2 May 2023 in relation to costs is an order capable of appeal. Section 88 of the Care Act applies. The Children's Court cannot make an order for costs in care proceedings unless there are exceptional circumstances that justify it in doing so. Accordingly, the court cannot ordinarily make an order for costs; 2. Submissions were made about the meaning of "exceptional circumstances". Emphasis was placed on the policy behind the Care Act. The policy basis behind the restriction on the power to award costs is based on the notion that parties involved in care proceedings should have as full an opportunity to be heard as is reasonably possible and should not be deterred from participating in proceedings by adverse pecuniary consequences. The safety, welfare and well-being of the child is the paramount concern. This policy must be kept in mind for the purposes of determining whether exceptional circumstances have occurred in the litigation; 3. The care and protection jurisdiction is the subject of identified significant legal and policy considerations. Actions complained of falling within statutory discretion are not actionable at common law unless the decision is so unreasonable as to fall outside the proper exercise of the discretion; 4. A factual finding of the existence of exceptional circumstances must necessarily be case dependent. The Court should be careful not to discourage the due performance by authorities of their statutory duties. Otherwise, authorities may be cautious in bringing proceedings and increased workloads may result. This may increase the potential danger to children; 5. There are no exceptional circumstances in this matter to authorise the exercise of the discretion to award costs; 6. The submissions set out the background facts to the matter; 7. The submissions set out different comments by judicial officers as to what may constitute exceptional circumstances justifying an award of costs; 8. The current matter does not fit into any of the categories of exceptional circumstances mentioned in the authorities; 9. The Secretary commenced proceedings due to the urgency of the matter and in circumstances where JK was charged with criminal offences. The children were later restored to the care of their mother in accordance with the recommendations of Ms Martens. The fact that restoration was made to the care of the mother on the recommendations of the expert and prior to the final hearing contradicts the assertions that there was some entrenched or immovable attitude on the part of the Secretary; 10. The court was required to consider whether there was an unacceptable risk of harm to the children; 11. JK had every opportunity to call witnesses that he wanted to cross-examine through his legal representatives and to call any witnesses that were considered to be corroborative of his position but did not do so. The fact JK was not consulted in relation to the preparation of the Care Plan in relation to RS was not an exceptional circumstance given his previous disposition not to talk to Department officers; 12. Department officers carefully considered the risk to the children. The view in relation to the disclosures by PQ was an open and reasonable one. The assessment of risk does not have to be established on the balance of probabilities. The paramount consideration was the safety, welfare and well-being of the children; 13. The fact that there was an assessment of risk of harm in relation to the possible sexual abuse in the future was as relevant for RS as it was for PQ. The retraction by PQ was not dismissed by the Secretary. Different weight was given to it; 14. The Secretary was required to accept the assessment of the court that the matter was formally established; 15. A proper basis for the award of costs for exceptional circumstances has not been established. The matters relied upon by the applicants for costs are insufficient to displace the rule that costs orders cannot be made in this matter and to engage the Court's discretion. 1. Counsel for the plaintiff placed emphasis on the factual findings of the Children's Court Magistrate in his decision dated 29 November 2022 (Exhibit A pages 78 and following). It was submitted that there was nothing (including any finding) in the decision that would warrant an award of costs for exceptional circumstances. 2. Similarly, the conduct of the plaintiff's officers in the light of those factual findings did not warrant the costs order. 3. Additional oral submissions were made which will be referred to below. 4. The legal representative for the first defendant relied on written submissions dated 12 November 2023. Those submissions referred to, and relied upon by reference, the detailed written submissions of 50 pages as to costs before the Magistrate: Exhibit 1D1 pages 70-119. The submissions also referred to the lack of response by the Secretary to issues raised in correspondence. 5. It is unnecessary, for the purposes of these reasons, to set out in detail the extensive written submissions relied upon. A considerable part of the underlying submissions referred to the relevant authorities said to be applicable. 6. However, among other submissions, the following submissions were made: 1. Whilst the children's proceedings ran together, JK had no standing to concede to the finding that PQ was a child in need of care and protection and did not do so; 2. JK seeks no costs pursuant to section 88 of the Care Act in respect of PQ and does not wish to be heard in relation to NOV's costs; 3. JK opposes the setting aside of the costs order; 4. JK denies sexually abusing PQ. PQ's clear and multiple retractions ought to have been given some weight. Even if he did sexually abuse PQ, that did not automatically create an unacceptable risk of sexual harm to RS in the light of the particular circumstances, RS's gender, the fact RS is JK's biological child and the conclusions in Ms Martens' October 2021 expert report; 5. The plaintiff's officers maintained the belief unreasonably that JK sexually abused PQ up to and including the final hearing; 6. In spite of the Magistrate's decision, the plaintiff did not appeal the decision except as to costs. JK did not sexually abuse PQ; 7. There were no credit issues relating to JK concerning sexual risk; 8. The plaintiff has not filed a section 91 appeal against the care order for PQ or in relation to RS's protection. There was a lack of evidence of sexual risk to RS; 9. There was considerable correspondence from the solicitor for JK seeking contact with RS post-removal. This shows a willingness to engage with the plaintiff's officers. He was willing to give undertakings; 10. The original application in the Children's Court did not properly consider the position of RS. The fact that no final order was made is an exceptional and unusual circumstance but it is accepted that that alone would not necessarily ground a costs order; 11. JK was required to take a proactive approach to the proceedings including through legal representation at all times; 12. There was not a sufficient basis to establish a risk to either child let alone RS. JK demonstrated his willingness to co-operate at all times and showed insight into the seriousness of the intervention by the taking of the children in his private family life; 13. The plaintiff's officers had demonstrably entrenched assessments of the risk for RS and gave little weight to RS's circumstances and vulnerabilities as distinct to those of PQ. The Secretary failed to grapple with any sexual risk issues specific to RS as opposed to PQ. The plaintiff's officers should have considered a restoration of RS to JK; 14. Again and again the Secretary failed to grapple with any of the sexual risk issues specific to RS. This was the case even after Ms Martens' 8 October 2021 report; 15. Detailed submissions were made in relation to the law applicable to costs under the Care Act; 16. The Secretary had an entrenched and immovable view in relation to RS. The Secretary's assessments were neither thorough nor fair in the light of the gravity of the issues to be assessed relating to RS; 17. The history of the matter particularly the retraction by PQ of her allegations was highly relevant; 18. The potential risks specific to RS were not considered and the plaintiff's officers failed to properly outline the risk justifying the removal of RS who should have been considered separately; 19. The Care Plans were prepared without proper reference and conferencing with either LM or JK. The conduct of the plaintiff's officers did not align with the statutory duty in relation to exercising parental responsibility for RS. As to RS, the expert opinion of Ms Martens that JK was of low risk to children and particularly to RS was important; 20. Where PQ's retraction was repeatedly dismissed by the plaintiff, there was a significant failure by the plaintiff's officers to meet RS's needs particular to him and distinct from PQ. There was also no consideration of how to support RS if PQ was telling the truth in her initial allegation or in fact her retraction was truthful; 21. For these reasons the appeal should be dismissed with costs. 1. Further oral submissions were made by the solicitor for the First Defendant. 2. The mother, NOV made the following general submissions: 1. RS and PQ were doing well in Australia now and their situation should not be disturbed by the Court; 2. The removal of RS had a real effect on him; 3. There was a lack of communication between the DCJ and NOV which was highly regrettable, particularly as to the taking of the children into care; 4. NOV always complied with the directions of DCJ; 5. RS had been dropped by the carer to NOV's place due to a covid contamination risk; 6. A lack of communication had caused NOV to incur considerable costs; 7. Compensation by way of a costs order would be very welcome by NOV. Consideration 1. In the light of the factual findings set out above and the legal principles which have been stated, the Court turns to consider whether exceptional circumstances have been established by the defendants justifying the costs order made by the Children's Magistrate in May 2023. In undertaking this task, the Court has reviewed in some detail the various submissions in writing which have been provided by the parties and the oral submissions made in the course of the hearing. The submissions made were of a high standard and were helpful. 2. The question of whether exceptional circumstances have been established, with the onus resting on the party seeking costs orders, has to be considered in the context of the Care Act, including its objectives and stated principles. 3. The role which the plaintiff and caseworkers within DCJ perform is a very important one. See section 16 of the Care Act. DCJ caseworkers frequently deal with children at risk of significant and unacceptable harm. The circumstances of such harm and risks are very varied. Sometimes there are reports of children being at risk of being physically or sexually abused or ill-treated. There are cases of alleged neglect, assault, sexual abuse and risk to children through being in the presence of parents or care givers who have mental illnesses or are taking potentially dangerous drugs. The structure and contents of the Care Act emphasise the significant role of case officers. 4. The importance of protecting children is emphasised by statutory requirements for mandatory reporting in certain circumstances: see section 27 of the Care Act. The Secretary must keep a record of any report made to the Secretary and any action taken as a direct consequence of the report that has a significant effect on the child or young person to whom the report relates: section 28 of the Care Act. The Care Act provides statutory protection to persons who make reports or provide information: section 29 of the Care Act. In Secretary, Department of Family and Community Services v Hayward [2018] NSWCA 209, the Court of Appeal considered the policy behind the provisions of section 29 of the Care Act and stated at [58] that the legislative history of the Care Act indicates that the object of the legislation "was to protect persons making a report, either compulsorily or voluntarily, and to thereby facilitate the object of the protection of children and young people". 5. The Care Act requires the Secretary and caseworkers employed in the Department to investigate and assess whether the child or young person reported is at risk of significant harm: Section 30. If the Secretary forms the opinion, on reasonable grounds, that a child or young person is in need of care and protection, the Secretary is to take whatever action is necessary to safeguard or promote the safety, welfare and well–being of the child or young person: section 34(1). The Care Act sets out provisions relating to principles of intervention and in circumstances where the Secretary decides to take no action: sections 35 and 36. 6. Extraordinary powers are given to the Secretary if the Secretary is satisfied, on reasonable grounds, that a child or young person is at immediate risk of serious harm. In those circumstances, the Secretary may (without the need for any authority other than as conferred by the Care Act) remove the child or young person from the place at risk: section 43 of the Care Act. The Care Act provides that the Secretary must make a care application to the Children's Court for orders within three working days after the day on which the removal or assumption of care responsibility occurs. On the hearing of the application, the Secretary must explain to the Children's Court why the removal of the child or young person without a warrant was considered to be necessary: see section 45 of the Care Act. The legislation therefore contemplates that the Secretary may have to act urgently in relation to a child if the Secretary is satisfied, on reasonable grounds, that the child or young person is at immediate risk of serious harm. 7. The extraordinary powers given to the Secretary are significant. The statutory requirements and the need to approach the Children's Court promptly after the Secretary takes a child into care, shows the important role of the Children's Court. The statutory objective is clearly to prevent the Secretary and the Secretary's officers from acting capriciously, unreasonably and without cause. However, usually the Secretary and Department officers will not have clear evidence of actual abuse but act on forming the view, on reasonable grounds, that a child or young person is at immediate risk of serious harm on the basis of the reports made and inquiries made. 8. Always to be borne in mind is the principle stated in section 9(1) of the Care Act, that the Care Act is to be administered under the principle that, in any action or decision concerning a particular child or young person, the safety, welfare and well–being of the child or young person are paramount. 9. As stated by Judge Johnstone, then the President of the Children's Court, in Knoll, above, when discussing section 88 of the Care Act, the policy basis behind the restriction on the power to award costs under section 88 is based "in the notion that parties involved in care proceedings should have as full an opportunity to be heard as is reasonably possible, and should not be deterred from participating in such proceedings by adverse pecuniary consequences" as the safety, welfare and well-being of the child is the paramount concern under the Care Act. 10. Thus, the important powers given to the Secretary must be seen in the light of the provisions of the Care Act referred to above and the paramount principle in section 9(1). If a court finds too readily that exceptional circumstances are established, that may discourage DCJ officers or other persons from acting where action is reasonably warranted unless further and exhaustive enquiries are made. To impose such a requirement would, in my view, be contrary to section 9(1) of the Care Act while recognising the wide and extraordinary powers given to the Secretary which must be considered in the light of the provisions of the Care Act as a whole. 11. With the above principles in mind, I turn to consider the events which unfolded in relation to PQ and RS. 12. The family history and relationship is set out above in these reasons. Although PQ and RS had different biological fathers and PQ had, on the findings in the Children's Court, a close relationship with her biological father, there is nothing to suggest that the two children did not get on well and were not close. PQ had come to Australia in 2019 from China and had a close relationship with her mother, the second defendant. It was not suggested by anyone, in the course of submissions, that it was desirable at any time to separate PQ and RS having regard to their close relationship and the age of RS. The solicitor for the first defendant did not submit to the contrary, whilst noting that the children had been separated for a period whilst PQ was in care. 13. In relation to the facts leading up to the final hearing, I have set out above the background and procedural history. This is also referred to in paragraphs 12-27 of the factual findings of the Children's Magistrate at first instance: Exhibit A pages 79-81. It was the Secretary's case at first instance, that PQ was telling the truth when she reported the alleged abuse to her teacher on 4 June 2021 and during the police interview held on that day which is in Exhibit A. More detail is given in the police recorded interview transcript than in the simple complaint to the teacher. That is understandable in the context. The Children's Magistrate found that it was "overstepping" to submit that the disclosure to the teacher and to the police was "consistent". Having looked at the transcript, the disclosure to police was far more detailed albeit containing some degree of vagueness. However, in the interview with police PQ does refer to having told her teacher in relation to the alleged actions of her stepfather, JK. Ms Martens was asked questions about PQ's language in the police interview. Given the fact that PQ was not a native English speaker, Ms Martens expressed the opinion in her oral evidence that the language PQ used was age-appropriate and the descriptions of the alleged sexualised activity was consistent with PQ's developmental stage. This may explain to some extent the degree of vagueness of PQ in the police interview. 14. It was not in issue that, following the police interview, in due course NOV attended the school on 4 June 2021, had what had occurred explained to her with an interpreter, and had a discussion with PQ. The Secretary relied on a discussion between PQ and her mother in which PQ became upset and said she did not want to "wreck" her family. The Children's Magistrate accepted that PQ's comment about not wanting to "wreck" her family arose immediately after PQ spoke to NOV and that PQ felt pressured from NOV to retract her statement at school: see paragraphs 109-112 at Exhibit A pages 91-92. Ms Martens discusses the possibility of the retraction occurring in those circumstances in her report and does not discount it. The interchange between NOV and PQ appeared to give rise to more concern in the DCJ relevant caseworkers and that is understandable in my view in the circumstances. 15. PQ and her mother spent the weekend together and on the following Monday, 7 June 2021, PQ indicated to her teacher that her disclosures were "just a joke". The Children's Magistrate found that this was plausible and that NOV was a credible witness. The Secretary submitted that this was a response to pressure from NOV and that the sexual assault alleged had occurred. 16. The various conferences between NOV and Department officers are referred to in detail in the Application which was filed by the Department on 18 June 2021. The view appears to have been formed that NOV expressed disbelief in relation to PQ's allegations, supported her husband and found the allegations not to be credible. 17. It also must be recalled that the police had decided to arrest JK, to charge him and to obtain a provisional Apprehended Violence Order with an exclusionary condition against JK for the protection of PQ. The Secretary submits that this was the decision taken by independent persons over which the Secretary had no control and was a relevant factor to be taken into account. To me that appears to be correct. 18. It was also not in issue that the Department officers believed that the sexual assault alleged by PQ had occurred and that she had been pressured into a retraction in circumstances where NOV favoured her husband's account over PQ's account. 19. The solicitor for the first defendant submitted that at no time after 4 June 2021 was any thought given by Department officers acting on behalf of the Secretary to the position of RS as opposed to the position of PQ. It was submitted that RS effectively became a "footnote" to the action taken by the Department. This was particularly the case when the children were assumed into care and put in foster placement on 15 June 2021. 20. There are potentially different views which may be held in relation to the decision of the Secretary to assume the children into care. In my view, the actions of the Secretary through the departmental officers were not unreasonable in all the circumstances at the time. I do not accept that the officers acted unreasonably in relation to RS. It is true that RS was the biological male child of JK and that he was of a young age. PQ was not his biological child and was aged about 12 at the time. 21. However, there was material in existence on which the departmental officers reasonably were entitled to act. First, PQ had made a complaint to her teacher specifically in relation to JK. Secondly, some detail of sexual abuse was given in the recorded interview with the police officers. Thirdly, a belief was held by the departmental officers, based on their observation of PQ talking to her mother, that PQ had been pressured by her mother in relation to the effect the allegations would have on the family. I accept the Children's Magistrate's finding that PQ felt pressured to retract her statement. There is no reason to doubt in my view that the discussion with the mother referred to in paragraph 83 of the Magistrate's reasons occurred even if NOV did not hear it all: see paragraphs 83-84 at Exhibit A page 89. Fourthly, the mother expressed some disbelief in relation to the allegations against JK which is not wholly unexpected in the circumstances. She initially appeared to support JK and favour him. Fifthly, PQ and RS were living in the same household being looked after by the same mother. Prior to being taken into custody, JK lived with them. The risks to RS may well have been less and different but there were still risks. The allegations against JK were serious ones. Sixthly, the police had charged JK. In my view, in those circumstances the action taken by the Department officers to assume the children into care because of a belief of immediate risk of serious harm was a reasonably open one to them. I accept that in the circumstances, the standard set out in M v M, above, NU, above and Isles and Nelissen, above, was reached on the evidence at the time. 22. The solicitor for the first defendant submitted that the decision taken was contrary to section 9(2)(c) of the Care Act as it was not a course to be followed which was the "least intrusive intervention in the life" of RS. The Secretary submits that in the circumstances set out that the action was appropriate. The JCPRP representatives had investigated the matter and believed PQ. The police had charged JK. There were concerns in relation to the actions of NOV in pressuring PQ and in believing JK and action was therefore warranted. In the circumstances, where decision making can never be perfect, in my view the actions of the Department officers were reasonable. 23. What occurred has to be seen in the light of the fact that having acted under section 43, the Secretary was then obliged to make an application to the Children's Court for a care order under section 45. As section 45(2) of the Care Act provides, on a hearing of the application, the Secretary must explain to the Children's Court why the removal of the child without a warrant was considered to be necessary. The matter came before the Children's Court following the Application being filed on 18 June 2021, on 22 June 2021. As counsel for the Secretary submitted, the jurisdiction is not a consent jurisdiction and a proper basis for the Court to exercise jurisdiction on an interim basis must be established. 24. I accept the submission of the solicitor for the first defendant that representation of JK occurred only in relation to RS. However, the Court had to make findings in relation to both children, albeit on an interim basis. The Court records note that on 22 June 2021 an interim care order was made in the following terms: "The Court orders on an interim basis: 1. Pursuant to section 69 of the Children and Young Persons (Care and Protection) Act 1998, all aspects of parental responsibility for [RS] … and [PQ] … are allocated to the Minister for Families, Communities and Disability Services until further order." 1. The records of the Court for 22 July 2021 indicate that a finding was made on the basis of section 71(1)(c), (d) and (e) of the Care Act. That, in my view, is significant. 2. In other words, orders were found to be appropriate on jurisdictional grounds by the Children's Court and were not opposed in relation to either PQ or RS. Of course, the orders were made by the Court after the children had been assumed into care and put in foster placement. 3. On 25 June 2021, PQ in a recorded interview retracted her complaint. The finding on 22 July 2021 that the children were in need of care and protection under section 72 was made after the retraction. 4. There were difficulties with the foster placement which was during the COVID-19 pandemic. At some stage, for a short period, RS was returned to his mother and then placed with a friend of NOV. 5. Arrangements were then made to obtain the psychologist expert report from Ms Martens. The expert report was obtained. Supervised access was given in relation to RS to JK both before and after the Martens report was finalised. 6. The Martens report is significant due to the opinions given in it. The report was prepared on the basis of interviewing the parties on the assumption that the complaint of PQ was justified. Ms Martens was aware that the charges against JK had been withdrawn but in the context where the position of the Secretary was that the initial disclosure of PQ was believed. The view was formed that restoration to JK was not deemed feasible due to concerns regarding risks of sexual harm where JK had been reportedly not engaging in meetings with the Department. 7. Ms Martens records that in her conference with NOV, NOV indicated an understanding of why DCJ had held concerns in relation to her support of JK and had removed her children: see paragraph 51. Ms Martens considered whether JK posed a risk of sexual harm to children which was dependent upon the disclosure of PQ which she had subsequently retracted. JK maintained his innocence: paragraph 90. Ms Martens noted that her risk assessment was based on the premise that the sexual harm did occur but noted that it was possible that JK was indeed innocent in which the assessment would be invalid. In paragraph 97, Ms Martens was of the view that based on the disclosure of PQ the risk would be most likely to be realised in the form of sexual harm towards a female child with whom he resides and that the risk would not "necessarily" generalise toward children in general or toward a male child: paragraph 97. She was of the view that the risk relating to JK "would be of low risk generally but should the allegations be accurate the risk would be most likely realised in a home setting, towards a female child. This could be mitigated by limits on unsupervised contact". In paragraph 105, Ms Martens makes a distinction between the risks concerning PQ compared to RS. She then stated: "It seems unlikely that this risk would generalise toward RS, however it is possible" (emphasis added). Ms Martens recommended that contact continue between RS and JK on a regular basis and that initially it be supervised as psychological intervention with PQ may give rise to further disclosures. 8. In relation to NOV, Ms Martens noted that she continued to struggle to accept that JK could have engaged in sexual harm while expressing a commitment to supporting PQ and to prioritising the safety of her children: paragraph 110. In paragraph 112, Ms Martens expresses the opinion that there was a realistic possibility of restoration of both children to NOV's care over the next four months with some conditions including NOV agreeing to follow directions from DCJ with respect to contact between the children and JK. 9. Following the receipt of the report, the Secretary did alter the position taken in relation to NOV. On 27 January 2022, the Children's Court made a finding that there was a realistic possibility of restoration of the two children to NOV and on 9 February 2022 the children were placed in the care of NOV. There was some criticism in relation to the delay taken for this to occur, but it has to be seen in the light of the initial findings made by the Court, the obtaining of the report from Ms Martens and the need for the Court to make a further finding in relation to restoration with NOV. 10. The Court records note a significant delay in obtaining a final hearing. A final hearing was necessary in relation to the findings made in July 2021 and establishment having occurred. The solicitor for the first defendant referred to the considerable delays as a result of the COVID-19 pandemic and that may well have been the reason for the delays. It is highly regrettable that such a delay occurred. It is also regrettable that there was a failure on occasions to promptly respond to the correspondence of the solicitor for the first defendant. 11. There was also criticism in relation to the access before the final hearing between RS and JK being supervised. Ms Martens of course had not expressed the view that there was no risk in relation to RS but that the risk was low (assuming PQ's complaint was accurate). Ms Martens herself had referred to supervised access. The Secretary, for the reasons set out above, still believed the veracity of PQ's initial complaints about sexual abuse concerning JK. In those circumstances, it was reasonable in my view to await the outcome of the court hearing. 12. Criticisms were made by the first defendant in relation to a failure to consult with JK and LM in relation to a care plan for the purposes of the final hearing. The Secretary concedes that there was no consultation with either LM or JK in relation to the plan. 13. In submissions, counsel for the Secretary relied on the decision of Basten JA (with whom McColl JA and Emmett AJA agreed) in D v C; Re B (No2) [2018] NSWCA 310 at [25]-[32]. In the present case, orders had been made for the restoration of the children to NOV. It was submitted by counsel for the Secretary that in those circumstances D v C; Re B, above, stood for the proposition that the preparation of a care plan was not required because it did not involve "the removal of a child or young person" within section 83 of the Care Act. Here, it was submitted, the children had been restored to NOV and were not in the care of either JK or LM. Thus, a removal was not sought. The solicitor for the first defendant submitted that the final orders sought by the Secretary asserted that JK posed an unacceptable risk of harm to the children and that there was no realistic possibility of parental responsibility of RS to JK. See generally paragraph 44 of the Magistrate's judgment at Exhibit A page 82. 14. There seems to be some force in the submission of the Secretary that the reasoning of Justice Basten means that the requirements under sections 80 and 83 of the Care Act only apply where a care order is sought for the removal of a child. Here no order was sought in relation to the removal from NOV, and JK by that time did not live in the family home and was then not entitled to unsupervised access. 15. Quite apart from this submission, I accept the further submission on behalf of the Secretary that following the Children's Court findings (whatever they may be) there would be the potential to prepare another care plan taking into account the findings. At that time, JK (and if, necessary, LM) could be consulted and cultural, language and other matters could properly be considered and addressed. I prefer the Secretary's submissions in relation to the failure to consult JK and LM in relation to a care plan that was prepared to those of the first defendant for the reasons set out above. 16. Another matter relied upon by counsel for the Secretary in oral submissions was the fact that the Independent Legal Representative, appointed for RS, agreed with the submissions made on behalf of the Secretary at the hearing: paragraph 53 of the judgment at Exhibit A page 87. While that is not determinative in itself, the lawyer representing the interests of RS had agreed with the submissions made by the Secretary. This shows that an independent party, having heard the evidence and with knowledge of the background to the matter, supported the Secretary's proposals. This adds some support to the conclusion that the approach taken by the Secretary was not unreasonable in all the circumstances. 17. Various matters were raised in the cross-examination of JK. In paragraph 73 of his judgment, the Children's Magistrate expressed the view that counsel for the Secretary had "surgically dismantled [JK's] claim of good character, his implied well-regarded business reputation and assertion of no offending." The Magistrate agreed with the Secretary's assessment of JK's evidence as in the main "unimpressive": paragraph 78 of the judgment at Exhibit A page 89. In the end, the Magistrate was impressed with portions of JK's evidence. He referred to JK spending "87 days bail refused and separated from his family". However, this was as a result of the actions of police and courts, not the Secretary. 18. The Children's Magistrate in the end found that he was satisfied "with certainty" that there was no sexual abuse following an analysis of the evidence while previously finding that the alleged sexual abuse "might still be possible": paragraphs 125 and 126-142 of the judgment at Exhibit A pages 93-94. That seems to be the reason for the view that there was no risk in the future and no unacceptable risk to the children: judgment paragraphs 185-188 at Exhibit A page 100. Although the Children's Magistrate in his judgment came to a different conclusion to that taken by the Secretary, there was no real criticism in the judgment handed down on 29 November 2022 (as opposed to the ex tempore reasons given in relation to the costs application) concerning the Secretary's conduct of the proceedings. In paragraph 31 of the judgment, the Magistrate noted that it was not in dispute that there was a finding that the children were found to be in need of care and protection. His Honour noted that he explored "revisiting this finding" but chose not to do so: paragraph 31 at Exhibit A page 81. 19. Casework issues were not explored during the hearing by the Children's Magistrate: paragraph 201 at Exhibit A page 101. In the end, the Secretary submitted that exceptional circumstances had not been shown. The conduct of the Secretary was submitted not such as to open the gate to a costs order. The Secretary was obliged to act in relation to the concerns reported and the approach of the Secretary was reasonable, including in relation to the preparation of a care plan, until the final hearing occurred and findings were made. That included circumstances where a care plan was usually prepared anyway before a final hearing as occurred in the present case. 20. As set out above, counsel for the first defendant submitted that the risks to RS were overlooked, his interests were not properly taken into account, and there was no unacceptable risk to him from his biological parent JK. 21. I accept, as found by the Children's Magistrate, that there were complex issues in the family sufficient to ground concerns about the position of PQ within her family. The solicitor for the first defendant did not dispute that: see paragraph (e) first appearing in Exhibit A page 83. However, it was submitted that this related to PQ not RS. JK always denied the conduct alleged and the need for care and protection was made on a consent and without admissions basis. It was said that the finding did not justify a removal order. It was said that safety plans prepared for the mother were never breached by her prior to the removal which was not justified. It was said that there was no unacceptable risk to RS. It was submitted that the Secretary had an entrenched view and an adversarial approach to the litigation which was inappropriate: see section 93 of the Care Act. 22. NOV in her submissions which were translated criticised the communication with the officers of the Department and believed that if there had been better communication that considerable legal costs could have been avoided. However, it is noted that the Application initiating care proceedings filed on 18 June 2021 refers to numerous consultations and interviews with NOV where a Mandarin interpreter was used. Counsel for the Secretary appeared to concede that communication could possibly have been better, but the Secretary formed the view that urgent action was needed. He accepted that the Department officers erred on the side of caution where allegations of sexual abuse were made which in his submission were appropriate. As set out above, I find that the actions of the Secretary were reasonable in all the circumstances. 23. In the light of the above matters, the Court turns to consider whether exceptional circumstances have been established by the defendants. The Court accepts that the Secretary and the Department officers acted at all times on the evidence having the belief that the initial complaints by PQ were true, that she had been pressured into a retraction by NOV, that NOV preferred to support her husband and that there was an unacceptable risk of harm to both children. Clearly the position of RS needed to be considered as well as that of PQ. However, both lived in the same household and except for a period, were placed in the same foster care. 24. In considering the application of section 88 of the Care Act I take into account the policy basis behind the restriction as set out by Judge Johnstone in Knoll, above. Parties, including the Secretary, should not be deterred from participating in proceedings and taking action by the ready threat of adverse pecuniary consequences. The safety, welfare and well-being of the child is the paramount consideration. 25. What are exceptional circumstances under section 88 has not been and cannot be exhaustively defined or limited. The aim of the order is to compensate not to punish the unsuccessful party. I particularly take into account paragraphs 25-26 of Knoll, above. In my view, none of the categories set out by Rein DCJ in SP v Department of Community Services, above, which was followed in Department of Community Services v SM and MM, above, are established. The allegations in the present case were not baseless. The Secretary could not be regarded as having no reasonable belief as to their existence. In my view, on the evidence, there was no acting capriciously or a blatant abuse of process. There was, in my view, no gross negligence on the evidence. 26. Of course, each case has to be determined on its own facts. Significant matters in my view in the present case were: 1. The police decided to have a recorded interview with PQ; 2. The police decided to charge JK; 3. A court initially decided to refuse bail to him; 4. Relevant officers believed PQ's initial complaints despite her retraction in the circumstances; 5. RS was not overlooked as the application was made in relation to him also when he was in the same household. The attitude towards JK of the mother as articulated was understandable but relevant; 6. The decision to take the children into care was, in all the circumstances, an open and reasonable one on the facts. See my analysis above; 7. The Court was satisfied to make the interim order made on 22 June 2021; 8. The Court was satisfied to make the establishment findings which it made on 22 July 2021. The Children's Court is not a consent jurisdiction and appropriate findings for jurisdiction were made. I accept that in relation to RS, there was consent to the orders on a without admissions basis; 9. Ms Martens' report, whilst referring to a low risk relating to JK with RS, did not indicate that there was no risk and recommended continued supervised access; 10. Following that report, the Secretary changed the view in relation to restoration to the mother and a finding was made on 27 January 2022 that restoration to NOV was possible and the children were restored to NOV; 11. The position taken by the Independent Legal Representative for RS at the hearing supported the Secretary's submissions which had been made. 1. Thereafter, the decision to be made was that of the Children's Court. 2. I have carefully considered the very detailed written submissions and the oral submissions made on behalf of the first defendant and the additional comments made by NOV. However, for the reasons indicated above, I am not satisfied that exceptional circumstances have been established after taking into account the statutory framework and the statutory purpose behind section 88 and the procedural and factual history in the matter. 3. I will also make orders dealing with the stay application filed on 1 June 2023. 4. The above reasons and result should not be seen by JK or NOV as questioning the orders made by the Children's Magistrate on 18 November 2022. There was no appeal against those orders by the Secretary. Determination 1. For these reasons I make the following orders: 1. The appeal is allowed. 2. The orders as to costs of the Children's Court of New South Wales made on 2 May 2023 are set aside. 3. There be no order as to the costs of the proceedings before the Children's Court. 4. There be no order as to the costs of the appeal before this Court. 5. The Notice of Motion filed 1 June 2023 is dismissed. 6. There be no order as to the costs of the Notice of Motion. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 14 December 2023