Children's Court New South Wales Medium Neutral Citation: The Secretary, Department of Family and Community Services (NSW) and the Knoll Children (Costs) [2015] NSWChC 2 Hearing dates: On written submissions, in chambers Decision date: 19 February 2015 Jurisdiction: Care and protection Before: Judge Peter Johnstone, President of the Children's Court of New South Wales Decision: Application for costs to be paid to the Carers by the paternal grandmother dismissed; Application for costs to be paid to the Carers by the Secretary allowed Catchwords: CHILDREN - Care and Protection - application for costs under s 88 of the Care Act - whether there are exceptional circumstances to justify a costs order Cases Cited: Children and Young Persons (Care and Protection Act) 1998 Civil Procedure Act 2005 DFaCS re the Knoll Children [2014] NSWChC 6 Ohn v Walton (1995) 36 NSWLR 77 Oshlack v Richmond River Council (1998) 193 CLR 72 Currabubula Holdings Pty Ltd v State Bank of NSW [2002] NSWSC 232 Latoudis v Casey (1990) 170 CLR 334 SP v Department of Community Services [2006] NSWDC 168 Department of Community Services v SM and MN [2008] NSWDC 68 XX v Nationwide News Pty Ltd [2010] NSWDC 147 Director-General of the Department of Family and Community Services v Amy Robinson-Peters [2012] NSWChC 2 Williams v Lewer [1974] 2 NSWLR 91 Commonwealth of Australia v Gretton [2008] NSWCA 117 Knight v Clifton [1971] Ch 700 Allplastics Engineering Pty Ltd v Dornoch Ltd [2006] NSWCA 33 Dr Douglass v Lawton Pty Ltd (No 2) [2007] NSWCA 90 Sherborne Estate (No 2); Vanvalen v Neaves 65 NSWLR 268; [2005] NSWSC 1003 at [38] Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd (2006) 236 ALR 665; [2008] ASAL 55-176; [2007] ATPR 42-138; [2006] FCA 1427 at [121] Keen v Telstra Corp (No 2) [2006] FCA 930 at [4] Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWSC 23 at [8] - [10] Roberts v Rodier [2006] NSWSC 1084 at [40] - [44] Ventouris Enterprises Pty Ltd v DIB Group Pty Ltd (No 4) [2011] NSWSC 720 Lo Surdo v Public Trustee [2005] NSWSC 1290 at [7] Ginos Engineers Pty Ltd v Autodesk Australia Pty Ltd (2008) 249 ALR 371; [2008] FCA 1051 at [23] Category: Principal judgment Parties: The Secretary, Department of Family and Community Services (DFaCS) The Children The Paternal Grandmother The Carers Representation: Ms C Delaney, solicitor, for the Secretary Ms S Ryder, solicitor, for the Children Mr G Donaghy, solicitor, for the Paternal Grandmother Mr M Anderson of counsel for the Carers File Number(s): 2014/34 - 35 Publication restriction: Pseudonyms have been used in order to anonymise the children and parties REASONS FOR DECISION Background to the present application for costs 1. These Reasons concern an application for costs made under s 88 of the Children and Young Persons (Care and Protection) Act 1998 (the Care Act) in Care proceedings commenced under s 90 by the paternal grandmother of two young children, who were taken into care by the Secretary of the Department of Family and Community Services (DFaCS) on 14 October 2009 (the substantive proceedings). 2. The paternal grandmother was seeking express contact orders under s 86 of the Care Act on the basis of her assertion that the contact she had been experiencing with the boys was inadequate and insufficient. 3. The original parties to the substantive proceedings were the paternal grandmother as the Applicant, the Secretary of DFaCS, and the children (represented by an independent children's lawyer appointed by the Court). The Carers were subsequently joined as parties pursuant to an order made by the Court on 10 July 2014. 4. Following a hearing over 3 days, I dismissed the application made by the paternal grandmother. I reserved costs. 5. Subsequently, the Carers made an application for costs to be awarded in their favour against both the paternal grandmother and the Secretary. The application for costs was opposed. 6. The costs application has proceeded on the papers, with each party providing written submissions, and on Thursday 19 February 2015 I reserved my decision. I now publish my written Reasons for my decision on costs. The substantive proceedings 1. After the children were taken into care, the Secretary made an application to the Children's Court for Care orders. The Court found that the children were in need of care and protection and directed the filing of Care Plans. 2. The Children's Court approved permanency planning pursuant to which the children were placed permanently in out-of-home care with the Carers. The children have been in the continuous care of these carers since December 2009. 3. Final Care orders were made by the Children's Court on 29 July 2010, pursuant to which parental responsibility for the children was allocated to the Minister till they turned 18. There were no specific orders made by the Court in respect of contact. The approved permanency planning, however, made provision for contact with the birth parents and with the paternal grandmother. 4. The paternal grandmother subsequently found herself dissatisfied with the nature and frequency of contact with her grandchildren. In particular, she was distressed by the relocation in late 2013 of the Carers from the northern rivers area, where she resided, to Sydney, with the children. The paternal grandmother contended that the relocation was attended by deception and secrecy, and that the birth family was not consulted about the proposed move, which was only communicated subsequent to the move, as a fait accompli. 5. Shortly thereafter, on 18 March 2014, the paternal grandmother filed the application under s 90 of the Care Act seeking leave to apply for rescission of the final Care orders made on 29 July 2010, with a view to the Children's Court making express orders in her favour under s 86 of the Care Act for contact, including that contact should occur in the Lismore area, as before the children were relocated, on an unsupervised basis. 6. The Carers were subsequently joined as parties to the s 90 application, on their application. 7. The dispute then came before me for hearing at Ballina on Tuesday 5 August 2014, it having been estimated that one day would be sufficient to hear and dispose of the matter. Unfortunately, that was not to be and it was necessary to adjourn the matter for further hearing. The hearing then continued at Parramatta Children's Court on Tuesday 16 September 2014 (Day 2) and Wednesday 17 September (Day 3), when I reserved my decision. 8. I delivered a written judgment on 1 October 2014 in the substantive proceedings: DFaCS re the Knoll Children [2014] NSWChC 6, in which I refused to rescind or vary the final Care orders made by the Children's Court on 29 July 2010 and I dismissed the application made under s 90 by the paternal grandmother. Reference might be made to those reasons for the detail in respect of the issues and my findings and conclusions. 9. The Carers made the present application for costs and filed submissions in support of their application dated 28 October 2014. Submissions on behalf of the Secretary were provided on 17 December 2014 and submissions on behalf of the paternal grandmother were provided on 3 February 2015. Only the Carers made any submissions in reply, on 18 February 2015. Nothing in those submissions alters anything that follows. The applicable legal framework 1. I now proceed to briefly outline the legal framework within which the application for costs is to be addressed and determined. 2. The Care Act governs all aspects of care and protection in New South Wales, both administrative and legal, including proceedings before the Children's Court. 3. I set out in the principal judgment a summary of the principles pursuant to which the Care Act is to be administered and the relevance of the United Nations Convention on the Rights of the Child 1989 (CROC). 4. It is important to note, however, that the Care Act specifically mandates that care and protection proceedings are not to be conducted in an adversarial manner, and are to be conducted with as little formality and legal technicality and form as the circumstances permit: s 93. The Court is not bound by the rules of evidence, unless it so determines, and in this matter it did not make such a determination. The standard of proof is on the balance of probabilities: s 93(4) of the Care Act. 5. The present costs application is brought pursuant to s 88 of the Care Act, which provides: "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. Under the common law a successful party has a "reasonable expectation" of being awarded costs against the unsuccessful party: Oshlack v Richmond River Council (1998) 193 CLR 72 at 120; [1998] HCA 11 at [134]. Fairness dictates that the unsuccessful party typically bears the liability for costs: Oshlack at [67]. 2. This means that the successful party in litigation is generally awarded costs, unless it appears to the Court that some other order is appropriate, either as to the whole or some part of the costs: Currabubula Holdings Pty Ltd v State Bank of NSW [2002] NSWSC 232. 3. The common law position is, however, displaced by the Care Act, which provides for a comprehensive statutory scheme for care proceedings in which the power of the Court to award costs is circumscribed by s 88, so that costs may only be awarded where exceptional circumstances exist. 4. The policy basis behind the restriction on the power to award costs is self-evidently 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, the safety, welfare and well-being of the child being the paramount concern. 5. The meaning of "exceptional circumstances" in the context of s 88 of the Care Act, and when they might exist, has been considered and discussed in various decisions, most notably in the judgments in SP v Department of Community Services [2006] NSWDC 168, Department of Community Services v SM and MN [2008] NSWDC 68, XX v Nationwide News Pty Ltd [2010] NSWDC 147 and Director-General of the Department of Family and Community Services v Amy Robinson-Peters [2012] NSWChC 2. 6. It is not necessary to review those decisions here, but it may be said that the situations in which "exceptional circumstances" might be found are not exhaustively defined or limited by them. Some general propositions are nevertheless apt: The discretion to award costs must be exercised judicially and "according to rules of reason and justice, not according to private opinion … or even benevolence … or sympathy": Williams v Lewer [1974] 2 NSWLR 91 at 95, and is not to be exercised arbitrarily or capriciously, or on no grounds at all: Oshlack, above, at [22]. The underlying idea is of fairness, having regard to what the Court considers to be the responsibility of each party for the costs incurred: Commonwealth of Australia v Gretton [2008] NSWCA 117 at [121]. The Court may have regard to the particular circumstances of the case, including the evidence adduced, the conduct of the parties and the ultimate result: Knight v Clifton [1971] Ch 700. The purpose of an order for costs is to compensate the person in whose favour it is made and not to punish the person against whom the order is made: Allplastics Engineering Pty Ltd v Dornoch Ltd [2006] NSWCA 33 at [34]; Dr Douglass v Lawton Pty Ltd (No 2) [2007] NSWCA 90 at [22]. The submissions made on behalf of the Carers 1. My distillation of the Carers submissions is that they advance the following main propositions: 2. As against the paternal grandmother, first, the proceedings were improperly commenced by her, because they were predicated on erroneous assumptions of fact, baseless allegations, and false issues, or were brought solely for the ulterior motive of frustrating or delaying the proposed adoption of the children by the Carers; and secondly, the conduct of the proceedings on behalf of the paternal grandmother was grossly negligent, leading to extensive waste of the Court's time, and the unnecessary prolongation of the hearing by reason of groundless contentions, a lack of candour and mischievous and misconceived assertions. 3. As against the Secretary, his requirement, ultimately abandoned, that the Carers should pay for transportation in connection with the contact orders sought by the paternal grandmother, forced them to apply to be joined as parties and participate in the hearing, thus incurring costs. The Court found the attempt by the Department to place retrospective conditions requiring the Carers to contribute to the costs of contact with the birth family were "inappropriate and unseemly": see the substantive judgment at [122]. 4. The specifics need to be examined. 5. There is no doubt that the paternal grandmother's application was instituted at a time when adoption of the children by the Carers was being considered. The Court did not, however, make a finding that the institution of proceedings was motivated solely by that consideration. It did, however, find that the paternal grandmother was lacking in candour and dissembled on a number of important matters: see the substantive judgment at [107] – [113]. 6. In particular, the Court found that the paternal grandmother's expressions surrounding her desire to have greater contact with the children were less than genuine: see the substantive judgment at [69], [72] and [97] - [98]. Nor were the submissions that there had been a history of obstruction and miscommunication made out. 7. The paternal grandmother submitted that the relocation of the Carers to Sydney was carried out deceptively and secretly, and that the Carers misled the Department about the proposed duration of the relocation. She also submitted that it was designed to remove the children from the lives of the birth family. 8. The Court did not find that the Carers conducted themselves deceptively, either in connection with the purpose of the relocation or its duration: see the substantive judgment at [123]. The Court further found that the relocation was not designed to remove the children from the lives of the birth family: see the substantive judgment at [110]. But there was an unfortunate lack of transparency surrounding the relocation, compounded by the failure of the caseworker to inform the birth family in a timely way about the relocation as she had promised she would: see the substantive judgment at [89] - [91] and [121]. 9. It was the paternal grandmother's contention that contact between her and the children did not require supervision. The Court found otherwise. The application for costs against the paternal grandmother fails 1. In my view, the Carers have not demonstrated any "exceptional circumstances" that justify an order for costs in their favour against the paternal grandmother. It is true that her credit was impugned, and that there were aspects of her evidence demonstrated a lack of sincerity and candour. But these are considerations that attend all proceedings in which there are contentious circumstances and factual disputes. 2. I am unable to conclude that the commencement and maintenance of the proceedings was characterised as an abuse of process, attended by hopelessness, or otherwise fraudulent. I do not consider a costs order is justified on the basis that the proceedings by the paternal grandmother were improperly commenced. 3. I turn to the contention that the proceedings were inappropriately prolonged, by erroneous assumptions of fact, baseless and false allegations, and or misconceived assertions, such as would justify the making of a costs order. 4. I was critical of some aspects of the presentation of the case on behalf of the paternal grandmother. Some of these were evident in the course of the hearing, and others are apparent with the benefit of hindsight. I do not think this was a case, objectively viewed, that should have proceeded over 3 hearing days. Many of the contentious issues, however, arose as a result of the historical conduct of the paternal grandmother, or her conduct other than in connection with the hearing, for example, her failure to have contact with the children on her trip to Sydney for the second tranche of the hearing. These were all factual issues that needed to be aired and fully examined. Other contentious issues were not solely attributable to the conduct of the paternal grandmother, such as the failure to inform the birth family of the proposed relocation to Sydney. Many of these issues were inextricably woven into the wider factual matrix, and it would be an invidious task to seek to separate out issues with a view to justifying a costs order. Ultimately, I have formed the view that I am unable to comfortably point to any particular unnecessary leading of evidence or cross-examination that could be characterised as so egregious as to constitute exceptional circumstance justifying an order, either as to the whole of the Carers' costs or some part thereof. On balance, it seems to me, I should be careful not to make an order that might be seen as inappropriately discouraging litigants in the position of this paternal grandmother from prosecuting proceedings that they perceive to be in the best interests of the children involved. 5. The application for costs as against the paternal grandmother is, therefore, dismissed. The application for costs made by the paternal grandmother 1. In the written submissions made on behalf of the paternal grandmother, she makes an application for her costs incurred in resisting the Carer's application for costs against her. 2. Apart from the submission that the Carers have unlimited financial resources, and the paternal grandmother has limited resources, the submissions appear to dwell upon propositions and contentions that were rejected in the substantive judgment, with which the paternal grandmother appears to cavil. She continues, for example, to dispute clear findings made by the Court about her, such as those in the substantive judgment at [110] - [111]. 3. In my view, the Carers' application for costs was appropriately and legitimately made and there are no exceptional circumstances to justify an order for costs against them merely because it has failed. Should there be an order for costs against the Secretary 1. The issue of costs, so far as the Secretary is concerned, requires separate consideration. 2. I turn therefore to consider the Secretary's submissions, in which he seeks to resist an order for costs against him in favour of the Carers. Might I commence by saying that the submissions are well-researched, careful, comprehensive and lucid, and I am grateful to Ms Delaney for the care and attention she has paid to their preparation. 3. The basic submission is that there are no exceptional circumstances arising from the conduct of the Secretary or his departmental officers that would justify the making of a costs order against him. 4. I should say, at the outset, that there was nothing in the way the Secretary conducted the hearing about which I could be critical, and nothing on the part of the Secretary that could be said to have inappropriately prolonged the proceedings, or the hearing. 5. My concerns arise from the conduct of the Department in some of its dealings with the Carers. 6. The Secretary's submissions concede, rightly, that there was a disconnect in the communication between the Carers and the Department, and there was disagreement as to what had been agreed between them, and that the Carers needed an opportunity to place their views and position before the Court through their own legal representative. 7. The issue is, why did it come to this. Why was there a need for separate representation of the Carers? Specifically, what was it that dictated a need for the Carers to incur that cost? Given that parental responsibility for the children had been allocated to the Minister, what was it that required the Carers to become directly involved in the proceedings? Did they in fact need separate representation? Why was it not appropriate for the Department to present their views to the Court? It seems to me that the answer to these questions informs the question of costs. 8. I was critical of the handling of the proposed relocation of the Carers and children to Sydney, the lack of transparency surrounding that proposal, the failure to inform the birth family in a timely way, and the attempt to impose retrospective conditions on the Carers, including a requirement that they contribute to the cost of contact with the birth family: see the substantive judgment at [121] - [122]. 9. I have concluded that there was indeed a real need, brought about by these considerations, which demanded that the Carers have separate representation. In my view, that conclusion gives rise to exceptional circumstances that justify an order for costs in their favour. 10. Putting the proposition another way, if the Department handled these matters more appropriately, the disconnect in the communication between the Carers and the Department would not have arisen, and the Carers' position could have been appropriately presented as part of the Secretary's case, rather than create a level of disputation that not only fed the anxiety experienced by the birth family, including the paternal grandmother, but also created the need for the Court to address those issues. I am also persuaded that if the birth family had been informed in a timely way of the proposed relocation by the Carers with the children to Sydney, the stated motivation for the paternal grandmother for bringing the substantive proceedings would have been so diminished that the justification for doing so would have been substantially diminished. On the probabilities, the substantive proceedings would not have eventuated. 11. It is on this basis that I propose to make a costs order against the Secretary in favour of the Carers. Quantification of the costs to be paid 1. For the reasons already articulated, it is my view that the Carers should recover costs in respect of the totality of the proceedings. I am not persuaded however, that those costs should be awarded on an indemnity basis; rather it is sufficient that the costs be quantified on the ordinary basis, as defined in s 3 of the Civil Procedure Act 2005. 2. The Secretary, in his submissions, contended that the quantum of the costs claimed ought, for various reasons, be reduced. 3. I agree with the general thrust of the Secretary's submissions on this issue, and I note that the Carers did not make any submissions by way of opposition refuting those submissions. 4. Nor has it been suggested that the Children's Court does not have the power to award a fixed sum of costs. For the sake of completeness, it is my view that the various provisions of the Care Act, including s 93(2), are sufficient to give the Children's Court the power to do so. 5. Judicial officers will generally be reluctant to order the payment of specified sums of costs. Nevertheless the cases suggest a number of circumstances in which it might be appropriate to make such an order, such as the avoidance of the expense, delay and aggravation involved in protracted litigation which might arise out of taxation (or assessment): Sherborne Estate (No 2); Vanvalen v Neaves 65 NSWLR 268; [2005] NSWSC 1003 at [38]; Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd (2006) 236 ALR 665; [2008] ASAL 55-176; [2007] ATPR 42-138; [2006] FCA 1427 at [121]; Keen v Telstra Corp (No 2) [2006] FCA 930 at [4]. 6. In my view, it is appropriate that I should fix a gross sum for the costs to be paid in the present case. 7. The power is to be exercised judicially: Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWSC 23 at [8] - [10]; and there must be proper factual foundation for the order: Roberts v Rodier [2006] NSWSC 1084 at [40] - [44], Ventouris Enterprises Pty Ltd v DIB Group Pty Ltd (No 4) [2011] NSWSC 720. 8. The Court arrives at an estimate of the proper costs by examining, on the basis of particulars provided, whether the quantification is logical, fair and reasonable: Lo Surdo v Public Trustee [2005] NSWSC 1290 at [7]; Roberts v Rodier [2006] NSWSC 1084 at [40] - [44]. 9. The courts have, however, tended to apply a discount, having regard to the "broad-brush" approach involved: Idoport at [13]; Ginos Engineers Pty Ltd v Autodesk Australia Pty Ltd (2008) 249 ALR 371; [2008] FCA 1051 at [23]. 10. What I have before me is the various tax invoices rendered to the Carers by their counsel. They total $25,708.31, made up of professional fees (plus GST) of $24,750.00 and disbursements of $958.31. 11. Taking all the considerations discussed above into account, I will proceed to arrive at an estimate of the proper costs to be paid. 12. The disbursements relate mostly to travel and appear to be unexceptional, apart from claims for meals and a parking fine, which I have disallowed, leaving the proper amount for disbursements at $782.76. 13. The professional fees include items for a brief on hearing for each of 4 days (the first being the joinder application) at $3,000.00, plus items for preparation, conferences, reading, correspondence, and settling affidavits, all of which appear fair and reasonable to me. 14. In applying a discount, as required by the authorities, I take into account that the practitioner was briefed on direct instructions, avoiding double handling by an instructing solicitor, and did not charge travel time, particularly in respect of the regional hearings. I am aware that the difference between solicitor/client costs and party/party costs can be in the order of 40%, but for the reasons indicated, and having regard to the seniority and experience of counsel involved in the present case, in my view, a discount of only 15% is warranted. I therefore allow the professional costs at $21,037.50. 15. The total amount of costs to be allowed (professional fees, GST and disbursements), is therefore, $21,820.26. Disposition 1. For all the reasons indicated, I dismiss the Carers' application for costs as against the paternal grandmother, but allow their application against the Secretary. There will be no order as to costs in respect of either application. 2. I therefore order that the Secretary of the Department of Family and Community Services pay costs in the sum of $21,820.26 to the Carers. ********** 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: 25 August 2015