Children's Court New South Wales Medium Neutral Citation: Department of Family and Community Services (DFaCS) and the Mason Children (Costs) [2018] NSWChC 4 Hearing dates: 5 June 2018 Date of orders: 30 July 2018 Decision date: 30 July 2018 Jurisdiction: Care and protection Before: Children's Magistrate Sheedy Decision: The Secretary, Department of Family and Community Services to pay the costs of the father as agreed or assessed Catchwords: CHILDREN – Care and protection – application for costs under s 88 of the Care Act – whether there are exceptional circumstances Legislation Cited: Children and Young Persons (Care and Protection) Act 1998 Family Law Act 1975 Cases Cited: BS v Minister for Department of Community Services & Ors [2009] Children's Law News Briginshaw v Briginshaw [1938] HCA 34 Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 Department of Family and Community Services (DFaCS) and the Mason Children (Unreported) Department of Community Services v. SM and MM [2008] NSWDC 68 Oshlack v Richmond River Council (1998) 193 CLR 72 Re: A Foster Carer v Department of Family & Community Services [2017] NSWDC 360 Re: A Foster Carer v Department of Family & Community Services [No 2] [2018] NSWDC 71 Re Ellen [2013] NSWSC 1573 SP v Department of Community Services [2006] NSWDC 168 The Secretary, Department of Family and Community Services and the Knoll Children (costs) [2015] NSWChC 2 XX v Nationwide News Pty Ltd [2010] NSWSC 147 Re Ellen [2013] NSWSC 1573 Category: Principal judgment Parties: The Secretary The mother The father The children Representation: Mr Aich, solicitor, for the Secretary Ms Hardie, solicitor, for the mother Ms Raines, solicitor, for the father File Number(s): 2017/00210607 Publication restriction: Pseudonyms have been used in order to anonymise the children and parties Judgment Background to the Application 1. On 8 March 2017 the Secretary of the Department of Family and Community Services filed an Application for a Care order for Alice Mason born 2011 and Reece Mason born 2013. 2. The Final hearing was conducted in the Children's Court over nine days. 3. On 16 April 2018 judgement was delivered finding that there was a realistic possibility of restoration to the children's father, Mr Mason and that there was no realistic possibility of restoration of the children to their mother, Ms Richmond. The Secretary was directed to file fresh Care Plans to give effect to those findings. 4. On 16 April 2018 the father put the parties on notice that he would be making an Application for Costs. The matter was listed on 5 June 2018 when Final orders were made and the issue of costs was argued. 5. The mother's representative was not aware that there was an application for costs against the mother and directions were made for the mother's representative to file written submissions and the decision was reserved. The Application 1. The father seeks an order that within 28 days the Secretary of the Department of Family and Community Services and/or the mother pay his costs of these proceedings in the sum of $90,464.60 or alternatively that within 28 days the Secretary of the Department of Family and Community Services pay the costs of the father as assessed on a party/party basis or as agreed. 2. The Secretary opposes the Application on the basis that the Court could not be satisfied that there are exceptional circumstances as required by s 88 of the Children and Young Persons Care and Protection Act 1998 ('the Act') or alternatively if the Court finds that there are exceptional circumstances any costs orders should be made against the mother. 3. The mother argues that there should be no costs order made against her on the basis that it was the Secretary who brought the Application and failed to adequately investigate; because she has no means from which to satisfy any costs order and because her mental health would suffer if a costs order were made against her. Mr Mason's evidence regarding costs 1. The father swore an affidavit on 18 May 2018 in which he states that: * He has been invoiced for his legal fees by Osborne solicitors, which include both solicitors and counsel's fees in the sum of $90,464.60 to act in these proceedings. He states further that as at the date of this affidavit the proceedings are not finalised and the he expects he will have further invoices from Osborne Legal to pay. * The entirety of the funds paid with respect to these proceedings came from his personal savings which have been all but depleted. * The funds paid to his lawyers for the Family Law proceedings which are around $20,000, do not form part of the $90,464.60 claimed. * He is a working eight days a fortnight. He has a $221,000 mortgage over his home, a car and a caravan which are encumbered in an amount of approximately $37,000. 1. The affidavit of Ms Raines, solicitor, employed by Osborne Legal and sworn 18 May 2018 sets out the amounts paid by the father pursuant to the Costs Agreement entered into and the sums paid by the father for professional fees and disbursements. 2. The evidence was not subject to any challenge and I accept it. Ms Richmond's evidence regarding costs 1. The mother swore an affidavit on 12 July 2018 in which she deposed: * Her net earnings are derived from casual employment during school term time of up to $700 per week and her weekly living expenses are $550. * Her net asset position is approximately $4,700. * She has no formal qualifications. * One-third of the legal costs of the Care Proceedings was paid for by her from her property settlement (in the sum of $25,000) and the remaining two-thirds of the representation was provided on a pro-bono basis. * She has no capacity to pay the father's costs and if a costs order was made against her it is likely she will have to claim bankruptcy. * On 9 July 2018, the children transitioned into the full-time care of their father and she has had to seek psychological assistance to deal with this and does not know whether she will be able to continue to work full time given her current mental state. The psychological assistance is a cost she has to meet. * At the time the Application for a Care order was made she genuinely believed the children were at risk in the father's care. * The Application for costs has caused more stress and she does not believe she will be able to cope mentally with the stress of such a debt. Mr Mason's submissions 1. The Secretary's conduct amounts to exceptional circumstances sufficient to justify an order for costs: 1. The decision to initiate Children's Court proceedings was an abuse of process. The Secretary had refused to intervene in the proceedings brought by the father under the Family Law Act but subsequently initiated proceedings in the Children's Court though never removed the children from the day to day care of the mother. The father submits that the decision to initiate care proceedings was for the sole purpose of frustrating the Orders of the Federal Circuit Court. 2. The investigations and assessments undertaken by caseworkers were woefully inadequate. The Caseworkers had entrenched and immoveable views that Alice was a victim of sexual abuse; the Caseworkers had entrenched and immovable negative views about the father; the Caseworkers relied on inaccurate details and the investigation was not balanced or fair. 3. The manner in which the proceedings were conducted was unacceptable. The Secretary did not file and serve affidavits from all relevant witnesses; did not include material which the Secretary was aware that ran contrary to the conclusion that Alice had been sexually abused; did not obtain records of the mother (particularly when Ms Toms, the Caseworker, was aware that the mother had a history of mental health concerns and a diagnosis of histrionic personality disorder) and did not include the mother's presentation of the children for medical attention in circumstances whilst at the same time impugning the father's parenting capacity on the same basis. 1. The father is not in receipt of Legal Aid, he has incurred substantial expenses as a result of being required to defend the Application of the Secretary. It is significant that the orders sought by the Secretary at the conclusion of the hearing do not differ significantly to the father's Application in the Family Law proceedings. 2. The father continued to incur costs as the Secretary delayed implementing arrangements which give effect to the Court's decision. 3. The father has been entirely successful in the proceedings. 4. There are exceptional circumstances and accordingly the father seeks the Court make orders for costs as sought. 5. The mother's conduct amounts to exceptional circumstances sufficient to justify an order for costs. The Court made significant adverse findings about the mother and her course of conduct. These findings fall clearly within the categories of conduct identified by Rein DCJ in SP v Department of Community Services [2006] NSWDC 168 as being sufficient to establish exceptional circumstances that justify the making of a costs order. The Secretary's submissions 1. In summary the Secretary's submissions are that there are no exceptional circumstances in this case as contemplated by s 88 or if the Court finds that there are exceptional circumstances then a costs order should be made against the mother, not the Secretary. 2. I accept the Secretary's submissions regarding the legal principles to be applied as follows: 1. Costs do not follow the event and the Applicant for costs must demonstrate that exceptional circumstances exist such that would warrant the making of a costs order (s 88). 2. A factual finding of the existence of exceptional circumstances must necessarily be case dependent and an array of factual situations could comprise exceptional circumstances, a phrase which is not exhaustively defined or limited. 3. 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. 4. Relevant considerations include the evidence adduced in the proceedings, the conduct of the parties and the ultimate result 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. 5. The expression "exceptional circumstances" 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. 6. The term "exceptional circumstances" should not be construed narrowly; it should be construed according to the particular circumstances of the case. Facts of the present case 1. The Secretary submitted that the father does not identify any factors which either considered in isolation or cumulatively would meet the threshold of "exceptional circumstances". There is nothing on the face of the judgment which would warrant a departure from the general rule that each party is responsible for their own costs. An abuse of process 1. The Secretary submitted that the Secretary's Application could not be considered as an abuse of process as: * The Secretary has a statutory right to bring an application and the Care Act does not prevent an application in circumstances where there are proceedings under the Family Law Act and the Family Law Act contemplates such proceedings. * The Federal Circuit Court had made no findings and had not given any judgment and made no Final orders. * The circumstances and risks were different when the Secretary declined to intervene in the proceedings (at this time there were allegations against Uncle David and the father was judged to be protective) and the Care Application was brought months later (when the father was thought to be allowing the children to have contact with Uncle David). * If it was an abuse of process then the father should have made that submission when the proceedings in the Children's Court were first lodged, but he did not. * The Children's Court could have made any variety of orders, including dismissing the Application. * There are distinct advantages for proceedings in the Children's Court and that is that the Children's Court has expedition embedded in its processes and Family Court proceedings can take years to resolve. * In both jurisdictions the parties have to bear their own costs. * There is a high bar to make a finding of abuse of process and that has not been reached in this case. 1. It was in the context of the submission about the abuse of process that Counsel submitted that the father would have had to expend the money if the proceedings had have been brought in the Family Court. Entrenched view 1. The Secretary submitted that he did not have an entrenched view as is evidenced by the fact that after the evidence unfolded he re-evaluated his position and changed his view from there being no realistic possibility of restoration to the father to accepting that there was a realistic possibility of restoration to him. 2. This change in view was consistent with good casework. The Secretary's officers heard the evidence and adjusted their views appropriately in response. Failure to make a proper assessment 1. The Secretary denies that he failed to make a proper assessment. The Secretary: * Conducted five interviews of Alice. * All parties accept that Alice exhibited trauma responses. * Alice's sexual assault counsellor made Risk Of Serious Harm reports. * The mother made allegations of sexual abuse. * Ms Starkey, an eminent expert, and Children's Court Clinician, was of the view that the children were at risk of sexual abuse from the father. The evidence of Ms Richmond 1. The mother was successful in fooling many experienced professionals, including Ms Starkey. She was "a convincing performer." The Secretary was deliberately misled by the mother, who was skilled in getting professionals to believe her. 2. In support of this submission Counsel quoted from the Judgment Department of Family and Community Services (DFaCS) and the Mason Children (unreported): "The mother has lied to police. She has also lied to and misled the GP, the caseworkers, Ms Wykes and the Court. The mother has given inconsistent evidence many times during the course of these proceedings. I find her to be an unreliable witness. I can have no confidence in the truth of her evidence unless it is uncontroversial or it is corroborated by credible evidence. On more than one occasion and to more than one professional, and to the Court, the mother has deliberately misrepresented enuresis, sleep disturbance and blood on Alice's underpants as a sign or symptom of sexual abuse. I conclude that she fabricated the existence of anatomically correct drawings in order to promote a view amongst professionals that the children had been sexually abused. I find that she lied when she said that Alice told Dr Roth about the abuse when she did not. I conclude the mother has done so in order to corroborate the outcome she was pursuing, that is a finding that the children were sexually abused. The mother has repeatedly provided false and misleading information to position herself as the parent who was thinking of the children and putting their interests and welfare first, a parent who was co-operating with the child protection agencies in order to protect her children from the father whom she portrayed as an unreliable, unpredictable and dangerous man. In doing so the mother gained a lot of positive attention from professionals. Ms Toms, Ms Moore, Ms Wykes and Ms Starkey all commended the mother's parenting and efforts and condemned the father. Ms Wykes even refused to meet with the father, even before any allegations were made he had sexually abused Alice, because the mother had convinced her that he was a perpetrator of domestic violence. The mother has created the circumstances of anxiety and fear for the children and simultaneously has presented herself as the parent who will protect and save them from risk." Failure to call evidence from caseworkers 1. This submission was made in response to the father's submission that the Secretary failed to lead evidence by any caseworker who had significant involvement in the matter. 2. The Secretary argued that: * The practicalities of running an agency such as Community Services results in staff being on leave etc. and it is not able to have the direct evidence before the Court. * This is not a case which was determined on the opinions of caseworkers. * There was a preponderance of other evidence. The role of the Secretary 1. The Secretary accepts that there were mistakes made and the Secretary could and should have presented a better case. However, the Secretary submitted that he comes before the Court just as every other party, imperfect, but that does not mean a costs order should follow. 2. The document which the father complains of vehemently in his submissions, the note from the Joint Investigative Response Team ('JIRT') calling into question the veracity of the allegations of sexual abuse and the wisdom of sexual abuse counselling for Alice, was in the subpoena material filed with the Court and its essence in Ms Toms' Secondary Risk of Harm report. The Secretary argues that every party had the right to peruse the material, to seek to have it sent to the Clinician and to cross-examine on it. The father could and did test the evidence with Ms Starkey who did not change her position when shown it. 3. This case was proof that the system works. The material is taken out and tested in court and this is what happened in this case. Case of Re: A Foster Carer v Department of Family and Community Services [2017] NSWDC 360 & [No 2] [2018] NSWDC 71 1. It was conceded by the parties, and accepted by the Court, that this is not a case where there was any mala fides on behalf of the Caseworkers. It was submitted that in most of the cases that have been decided on this point have involved some form of bad faith. 2. Counsel conceded that the case of Re: A Foster Carer did not involve bad faith but involved an incompetent investigation. Counsel argued that this case was nowhere near the case of Re: A Foster Carer. In this current case she said a lot of the criticism centred on the failure to consider the JIRT record which raised concerns about the validity of the allegations. Quantum of Costs 1. It was submitted by the Secretary that costs would have been incurred in the Family Court. Costs Order against a party other than the Secretary 1. The Secretary submits that the Court is able to make a costs order against a party other than the Secretary as the terms of s 88 apply to any party to the proceedings. 2. Although there was no judgment found by the Secretary where a costs order had been made against a party other than the Secretary, in the Supreme Court case of Re Ellen [2013] NSWSC 1573 Lindsay J appears to make reference to an order made for costs against the mother and in favour of the father in proceedings before the Children's Court. Apportioning costs 1. Counsel agreed that I could exercise my discretion in any way I sought fit and this included apportioning costs between the Secretary and the mother. Indemnity Costs 1. This is certainly not a case, the Secretary submitted, where the Court would be awarding indemnity costs as there was no mala fides. Ms Richmond's submissions 1. The mother submitted that no order for costs be made against her. 2. In making that submission she argued that if the Care proceedings had not been instituted both parties would, in all likelihood, have incurred significant costs in the Federal Circuit Court. The strong possibility is that the matter would have gone to a final hearing and the parties would have had to meet legal fees whether in the Federal Circuit Court or the Children's Court. 3. The Secretary brought the proceedings and it is nonsensical for him to explain a flawed investigation as a result of being "tricked" by the mother. 4. The approach taken by the Secretary in seeking costs is using the mother as a scapegoat. 5. Although the mother concedes she had some responsibility the Department were clearly ill-prepared for the proceedings in that JIRT and the Community Service Centre did not communicate or follow up on crucial matters and failed to inform the Court and parties of evidence that only became known during the trial. If these enquiries were made and the evidence disclosed she may have been guided by her legal representatives in a different direction. 6. The Secretary took a polarised stance against the father and was stoic in their support of the mother and the condemnation of the father. This continued to the end of the trial and further, the Clinic Assessment appeared impaired by the Secretary's incomplete Brief. This matter evolved from the polar positions. As a consequence the Secretary did not prepare their case in accordance with the expectations of a model litigant. The same expectation cannot be applied to the mother. The Court must view the mother's actions in the context of her being psychologically compromised. The Court consequently must assess the Secretary's case in a different way, applying a greater standard of care and expectation to the preparation of their case to the Court. 7. The mother's actions were likely a result of unresolved mental health issues. There is some evidence of this, although no formal assessment. It would be unfair to impose a cost order upon a party in circumstances where their actions were impaired by matters beyond their control or understanding. 8. It is not unusual for parties in Care proceedings with mental health issues to expose their children to risk. It is also not usual for the Court to make costs orders against drug addicted parties when the proceedings are prolonged or protracted due to their inability to address their addictions. These cases are not exceptional and additionally, to take such an approach would be punitive. 9. The mother has no capacity to pay costs and an order would be punitive to the mother and not compensatory to the father. 10. Given the mother's compromised mental state, a costs order would be excessive and onerous. The Law 1. Costs in Care proceedings has most recently be considered by his Honour, Judge Levy SC in the case of Re: A Foster Carer v Department of Family and Community Services [2018] NSWDC 71. I adopt his Honour's statement of the legal principles to be those I must apply in this case. "[10] The jurisdiction to order costs in this case is governed by the terms of the Act, s 88 which 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." Legal principles to be applied [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". [26] In light of the guidance from those cited examples of how the meaning of the term exceptional circumstances should be construed, it becomes necessary to review the facts of this case insofar as those facts have a relevant impact on how the claimed costs came to have been incurred by the appellant." 1. In the case of Re: A Foster Carer v Department of Family and Community Services [2017] NSWDC 360 the long term foster carer had a child removed from her care after allegations made against her by the child's brothers. The Agency which had the Case Management of the child's care undertook an investigation of the allegations and prepared a final report, finding the allegations to be sustained. On the basis of this investigation the Agency decided to permanently remove the child. 2. His Honour said that the consequences for children in removal cases: "…demand a process of reasoned rigour in the investigation process leading to the expression of rational opinions on whether or not the allegations in question should be regarded as having been sustained. This must be so because of the serious and life-changing nature of the consequential actions which inexorably follow findings…" 1. His Honour also articulated the duty of the Secretary in carrying out investigations. "[20] Although the investigators were not making a judicial determination when preparing their report, nevertheless, where they had before them a complexity of arguably contradictory evidence, when it came to resolving those matters either in favour of the complaints being sustained, or not sustained, as in a trial setting, where there is necessity to resolve a critical issue, the fundamental duty or obligation of the investigators was to analyse, evaluate and carefully weigh up the evidence, before deciding the outcome of the issue in a reasoned manner in terms of whether an investigated complaint should be either sustained or not sustained: Dean v Stockland Property Management Pty Limited & Anor [2010] NSWCA 66, at [3]. That process required the laying out of cogent reasons, and not just stating a result either way, like a jury verdict. [21] I consider that the principle cited in the previous paragraph also applied to the task that was before the care agency investigators when they were preparing their final investigation report. [22] That must be particularly so in a case where a court was to be asked to accept the balance of probability findings of the investigation, and where at stake was the welfare of the subject child and the reputation of the carer for that child, where the allegations concerned matters of utmost gravity: Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336." 1. In that case his Honour found the Agency report to be fatally flawed and wholly unreliable. 2. When considering the issue of costs in Re: A Foster Carer (No 2) [2018] NSWDC 71; His Honour stated: "[110] Accepting that s 93(1) of the Act provides that the Children's Court, and therefore the appeal jurisdiction of this Court, are not to be exercised or conducted in an unduly adversarial manner, and accepting also that s 92(2) of the Act requires that the proceedings are to be conducted with as little formality, and legal technicality and form as the circumstances of the case permit, the construction of those provisions must nevertheless have regard to some fundamental and rational qualifications to those stated principles. [111] Such qualifications include the requirement of ensuring procedural fairness, and the need for acceptable evidence to exist to form a reasonable basis for decisions to be made on the balance of probabilities on important questions. [112] In that latter regard, a further important qualification is that where findings are sought or purported to be made against an individual based on allegations over the conduct of that individual concerning alleged ill-treatment of children, the standard of satisfaction to be applied is that of proof on the balance of probabilities but weighted according to the gravity of the conduct alleged against the individual: Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336. [113] The allegations against the appellant concerning claims of ill-treatment of a child or children in her care are sufficiently grave to require an assiduously thorough but fair investigation. In his evidence, the care agency investigator acknowledged that proposition. [114] The investigation undertaken by the care agency and its investigators, where exculpatory witnesses identified by the appellant were not approached or interviewed by the investigators, cannot be reasonably considered to be either assiduously thorough, or fair. [115] In such circumstances, the untested and unexplored state in which the care agency investigators left the evidence that they had gathered in their investigation, which was left as being weighted against the appellant, cannot in this context be properly or reasonably described as "good evidence", as was submitted by FaCS. [116] Whilst the "evidence" gathered by the care agency investigators might pass a threshold test for deciding there was a prima facie justification for further investigation, it did not meet the requirements justifying the description of "good evidence" supporting the investigation findings, which at the closure of the investigation, resulted in "sustained" findings, which remained fundamentally flawed by the conscious decision of the care agency investigators and manager to truncate that investigation on grounds of cost… [125] The investigation was unbalanced and unfair because where the investigators did not take the required steps to fairly assess the potentially exculpatory evidence identified by the appellant, and which had the real potential to rebut the allegations made against her. [126] The Office of the NSW Ombudsman, in its supervisory role, recognised this problem and drew the attention of the care agency investigators to that fact. It was an extraordinary circumstance that the care agency investigators did not follow the Ombudsman's supervisory recommendations. [127] It was equally extraordinary that FaCS, when seized of those facts, chose to support the flawed investigation, not only in the Children's Court, but also in the way in which it did so in the appeal. I consider that latter circumstance satisfactorily amounts to exceptional circumstances within the meaning of s 88 of the Act." 1. In the case of Department of Community Services v. SM and MM [2008] NSWDC 68, Garling DCJ ordered costs against the Department after making a finding of exceptional circumstances. He considered the fact that the parents were not legally aided was relevant to a consideration of exceptional circumstances. "[10] For some reason of which I am not aware they were not entitled to Legal Aid. The Department, of course, fund their appeal. The child is represented and those costs are funded. However, the parents, who really had to appear in Court and be legally represented, were not funded and had to meet their legal expenses. In the majority of these appeals all parties appear to be funded. I do not agree that the fact that these parents had to pay their legal costs as a result of the Department's appeal is not relevant to the consideration of exceptional circumstances. I believe it is very relevant." 1. In SP v Department of Community Services [2006] NSWDC 168, Rein DCJ set out the following matters which he considered would or at least arguably might fall within the description of exceptional circumstances for the purposes of s 88 of the Act: (1) Deliberate misleading of the court or opponents (2) Other misconduct or wrongful conduct (3) Contumelious disregard of orders of the court for the principles set out in s 93 of the Act (4) The raising of baseless allegations for which the party had no reasonable belief as to their existence (5) The raising of false issues that bear no relation to the facts or are contrary to the clearly established case law (6) Maintenance of proceedings solely for an ulterior motive or the undue prolongation of a case by groundless contentions (7) Gross negligence in the conduct of a case at least where that has led to an extensive waste of the court's time and that of other parties (8) Where the proceedings involve a blatant abuse of process and/or are both mischievous and misconceived 1. In BS v Minister for Department of Community Services & Ors [2009] Children's Law News (March) ('BS'), his Honour Judge Robison concluded that the list in SP is not an exhaustive list and all relevant circumstances should be considered. 2. His Honour concluded that much of the relevant evidence was provided by the mother but the Department should have taken a greater role in obtaining this relevant material. He found that given the clear statutory obligations on the part of the Director General there is direct responsibility on the part of the Director General to ensure that all relevant evidence is presented to the Court even if it does not assist the Director General's case. In this case it was the mother that had to bring that evidence and this was a legitimate matter taken into account in the costs application. "[19] The Director General has a duty to assist the court. There are clear statutory obligations on the part of the Director General given the objects of the Act of course to ensure that the interests of the child are protected and that the interests are paramount. Hand in hand with that obligation is a direct responsibility on the part of the Director General to ensure that all relevant evidence is presented to the court, even if it does not assist the Director General's case. But it was up to the plaintiff to present much of this and that, in my view, is a legitimate matter to take into account when considering the nature of the relief sought in this costs application. [40] I have come to the view that this is a case which warrants an order for costs under s 88. This case did not proceed expeditiously as it could have, given the entrenched view of the Department, an immovable view in the face of powerful evidence adduced by the plaintiff…" Consideration 1. In this case the Secretary applied for a Care order and was seeking the removal of the father's parental responsibility. As a result the Secretary was required to and did undertake an assessment and prepare a plan pursuant to s 83 of the Act. 2. Section 83 provides as follows: (1) If the Secretary applies to the Children's Court for a care order (not being an emergency care and protection order) for the removal of a child or young person, the Secretary must assess whether there is a realistic possibility of the child or young person being restored to his or her parents, having regard to: (a) the circumstances of the child or young person, and (b) the evidence, if any, that the child or young person's parents are likely to be able to satisfactorily address the issues that have led to the removal of the child or young person from their care. (2) If the Secretary assesses that there is a realistic possibility of restoration, the Secretary is to prepare a permanency plan involving restoration and submit it to the Children's Court for its consideration. (3) If the Secretary assesses that there is not a realistic possibility of restoration, the Secretary is to prepare a permanency plan for another suitable long-term placement for the child or young person and submit it to the Children's Court for its consideration. (6) If the Children's Court does not accept the Secretary's assessment, it may direct the Secretary to prepare a different permanency plan. (7) The Children's Court must not make a final care order unless it expressly finds: (a) that permanency planning for the child or young person has been appropriately and adequately addressed, and (b) that prior to approving a permanency plan involving restoration there is a realistic possibility of restoration having regard to: (i) the circumstances of the child or young person, and (ii) the evidence, if any, that the child or young person's parents are likely to be able to satisfactorily address the issues that have led to the removal of the child or young person from their care. 1. The Secretary undertook the assessment in this case and the conclusions were contained in the Care Plans filed with the Court and encapsulated in the opening position of the Secretary in the substantive proceedings. 2. The Secretary's opening position was that there was a realistic possibility of restoration to the mother but not the father and the Court should give the mother sole parental responsibility and order no contact to the father. 3. The Secretary stated his conclusion which was the result of his assessment was that he "has extreme concerns for the safety of Alice and Reece, whilst in the care of their father"; that the father was unable to protect the children from further harm and that he was also a perpetrator of sexual abuse against the children. 4. The Secretary considered contact to the father "could be reconsidered in the future" if the children's counsellors deem it appropriate and if the father receives treatment as a perpetrator of sexual harm against his children. 5. The Secretary's Assessment of the mother was contained in the Care Plans and the Assessment was reflected in their opening position to the Court which was that there were no concerns about the mother's care of the children; she was being appropriately protective of the children and co-operative with Community Services and that she should have parental responsibility for the children. 6. It was not until the closing submissions that the Secretary disclosed a material change in his position. The position of the Secretary at the conclusion of the hearing was that there was insufficient evidence to consider the father a risk in relation to sexual harm and further that there was a realistic possibility of restoration to him and indeed he should have ongoing unsupervised contact and joint parental responsibility in all aspects, save residence. 7. The Secretary in his closing submissions maintained there was a realistic possibility of restoration to the mother but he made no submissions to support this position. 8. The Assessment pursuant to s 83 has, in my view, parallels with the investigation in Re: A Foster Carer. In undertaking the Assessment the Secretary is considering the most serious of issues and that assessment is of crucial importance in the Children's Court when the Court is deciding whether the long term future of a child lies with the child's parent(s) or in out-of-home care. In my view, given the importance of the Assessment, the Secretary is required in undertaking that assessment, to take an unbiased approach, to collect all relevant and reasonably available evidence and to analyse, evaluate and weigh up that evidence, before coming to a conclusion. 9. In assessing that the father sexually abused his children, posed an ongoing risk to them and should have no contact and in assessing that there were no child protection issues in relation to the mother's care: * The Secretary had formed the view by 24 August 2016 that Alice had been subjected to sexual abuse as is evident from the referral to sexual assault counselling and such a conclusion had been reached before any contact or inquiry had been made of the father, the children's uncle or his wife. * The Secretary's subsequent investigations and assessment appear to have been conducted through the filter that Alice had been sexually abused and there is no evidence that the Secretary considered any alternative. * The Secretary failed to obtain potentially exculpatory evidence including a statement from the father, his brother and sister-in-law without reasonable excuse. When Alice made the disclosure that she was led away to the bedroom by Mr David Mason from the lounge room where the father and Mr David Mason's partner were sitting, the Secretary did not interview them nor did the Secretary satisfy me that they made reasonable attempts to contact them. Mr David Mason and his partner would have also been able to give highly relevant evidence as to whether the father visited them after he and the children went to the circus. * The Secretary's Care Plans were replete with significant factual errors and it appears the Secretary relied on these significant factual errors when assessing the risk posed by the father. These errors include: * In the Care Plan it states that "No contact is proposed due to Reece's trauma history whilst in his father's care …he has made a further disclosure of sexual abuse perpetrated by his father." Reece however had not made any disclosures to anyone other than those which are alleged to have been made to his mother and maternal grandmother. * The Care Plan states that "Reece was interviewed by JIRT in relation to the disclosure and confirmed that he and Alice spent time with their Uncle David during a weekend visit with their father." However, in the JIRT interview on 17 February 2017 Reece was asked by police if they had been to Uncle David's place and he replied "no". Later in the interview he was asked whether they went to Uncle David's after the circus and he replied again "no". * In the Care Plan it states that Reece was unable to confirm or deny the reported concerns. The reported concern being that he had been touched on the penis by his Uncle David. However, when Reece was asked by police in his interview regarding being touched, Reece said "Nah" and then later on when police asked Reece if Uncle David ever touched him on the penis, he replied no. These of course are unequivocal denials. * The Care Plan states that; "The father presented to the police station with Alice where she told a Child Abuse Squad Officer that she had 'dreamt' that her uncle had sexually harmed her. There is no evidence that the father took Alice to the police station to report her retraction. The only evidence is that when the father went to the police station he did not take Alice with him. * The Care Plan states that; "The father is non-believing of the sexual abuse disclosures made by Alice." The Care Plan sought to create the impression that the father had formed this view because he believed his brother's character rather than accepted the word of his daughter. However, there is a Departmental file note in relation to this which states that the father expressed this view because he was with the children at the home of the alleged abuse and felt that there was no opportunity for the harm to occur. He also said he had never seen his brother be inappropriate with the children. In the Secondary Risk of Harm Assessment document the comment is made that "Alice's father, despite being non-believing, did appear to be genuinely concerned for her safety and stated that he would not allow the Person of Interest [i.e. Mr David Mason] to have access to Alice." * The Secretary did not make adequate inquiries of third parties, nor did he critically examine information from collateral sources. As a result of the failure to gather and critically examine information from medical practitioner's the Secretary wrongly accepted the mother's presentation of Alice's medical conditions as signs or symptoms of sexual abuse. Neither did the Secretary ascertain that Alice had denied she had been sexually abused when asked by her GP. * If appropriate inquiries had been made the Secretary would have ascertained that there were issues with the mother's care of the children, for example the appropriateness of the mother's speaking about the sexual abuse in the presence of the children and the mother's conduct in relation to medical neglect. As a result of a failure to critically examine the information from NSW Police the Secretary failed to consider that the mother was motivated to make complaints to injure the father's prospects in family law proceedings and the Secretary may have been alerted that some of the allegations made against the father were spurious. The Secretary may have also considered that the mother's actions in having the police examine Alice was relevant to the issue of whether there were child protection issues in relation to the mother's care of the children. * The Secretary obtained the father's records but did not obtain the mother's records until directed to do so by the Court during the hearing. A failure to obtain the mother's records resulted in the Secretary not appropriately considering the mother's history of abuse and her earlier diagnosis of histrionic personality disorder and how that might have impacted on the reliability of her assertions. * The Secretary appeared to accept the truth of each of the mother's assertions without checking independent sources or critically examining those assertions despite the serious nature of the assertions and/or the patent absurdity of the assertions. At no stage did the Secretary address the claims the mother made that her children drew anatomically correct genitalia even though she claimed that Reece drew his first anatomically correct penis when he was 19 months old. * The Secretary did not critically evaluate the JIRT interviews. A critical examination of the interviews would have raised concerns about the reliability of Alice's disclosures given her inability to provide detail or context. * In a document from JIRT the Officers themselves detailed why they had significant doubt about the reliability of Alice's "disclosures" and in the document they questioned the appropriateness of her receiving sexual assault counselling. There is no evidence that the Secretary considered those views or the reasons given for the views, in his assessment. * The Secretary did not appropriately consider research findings in making his assessment. The Secretary's witness accepted that the research by David Finkelhor was widely accepted and his research findings were accepted by her as correct. The Secretary selectively cited the research of David Finkelhor to support his assessment, however, when the complete research findings were considered, a conclusion contrary to the Secretary's was indicated. * There was a lack of impartiality on the part of the Secretary in relation to the Assessment and the case. The evidenced of this lack of impartiality includes: * The failure of the Secretary to issue subpoenas in relation to the mother although issuing subpoenas in relation to the father. * The failure to interview the father and his family. * Placing significant reliance in their case on medical neglect by the father yet ignoring an equally noteworthy event where the mother failed to seek immediate medical attention. * The mother's assertions were usually believed without question however, the father's assertion were never believed. * There was no proper assessment of the mother's parenting capacity when a critical examination of the facts and material, if it had been obtained, would have at least raised the issue of her exposing the children to inappropriate discussions. 1. The Secretary's assessments that the father posed an unacceptable risk to the children and the mother posed no risk were based on a flawed, inadequate and one-sided assessment that did not withstand reasoned scrutiny. The Secretary's assessments were neither thorough nor fair. The gravity of the issues to be assessed required an unbiased approach, a collection of material from a number of sources and a far more rigorous and comprehensive analysis of the evidence. A proper assessment of the evidence ought to have demonstrated the unreliability of the conclusions reached by the Secretary and it is this that demonstrates the existence of exceptional circumstances that supports the need for compensatory costs. 2. In reaching the conclusion that there are exceptional circumstances as contemplated by s 88 in this case, I have obviously rejected the Secretary's submissions that the Secretary did not have an entrenched view; that the Secretary did make a proper assessment and that this case was distinguishable from Re: A Foster Carer because any failings of the Secretary were not comparable. 3. The Secretary raised the fact that in his assessment he relied on the trauma symptoms displayed by Alice and the conclusions Ms Starkey recorded in her report. Ms Starkey was very clear in her evidence that her conclusion was based largely on the trauma symptoms Alice displayed. If however, the Secretary had obtained and critically examined information from third parties and had not provided incorrect or misleading information in the Care Plan there may well have been an exploration of an alternative explanation for the trauma symptons displayed by Alice and not a conclusion that they were caused by sexual abuse by the father. 4. I do however, accept the Secretary's submissions in relation to these proceedings not being an abuse of process. Which party/parties should pay Mr Mason's costs? 1. The Secretary asks me to make the costs order against the mother as she consistently and convincingly and skilfully lied in order to mislead the Secretary, and others. 2. The father's submission was only that a costs order should be made against either the Secretary or the mother. 3. Although I accept the submission that the mother consistently lied and misled the Secretary, the finding of exceptional circumstances was not made on that basis. 4. Unfortunately, it is not exceptional for parents to make false allegations or assertions to Community Services. What is exceptional is that the Secretary relied on the allegations and assertions as an integral part of a risk assessment without making reasonable inquiries to assist him in determining the truth or otherwise of the allegations or assertions and without carefully and critically examining that evidence before forming a view. 5. I accept the Secretary's submission that there could be no finding of 'exceptional circumstances' simply because the Court came to a different conclusion to the Secretary. However, this was not the circumstance in this case. The exceptional circumstances finding arises because the Secretary conducted and then relied on fundamentally flawed and wholly inadequate assessments. I find therefore that it is the Secretary against whom the costs order should be made. Indemnity Costs 1. The Court has a wide power to award indemnity costs. The discretion, although wide, must be exercised judicially and be the subject of careful reasoning. An award of indemnity costs should be compensatory and not punitive and the Court should exercise caution in awarding indemnity costs. 2. The test when considering indemnity costs is a different test to the "exceptional circumstances" test contained in s 88 of the Act. 3. There appears to be no fixed rule or rationale as to when the discretion might be exercised except that it requires a "sufficient or unusual feature" (Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 at [233] – [234]), or some "relevant delinquency": Oshlack v Richmond River Council (1998) 193 CLR 72. The categories are not closed: Colgate-Palmolive Pty Ltd v Cussons at [257]. 4. In XX v Nationwide News Pty Ltd [2010] NSWSC 147 it was stated that there did not appear to be any case where indemnity costs have been awarded in care proceedings and confirmed the principle that orders for indemnity costs should be made sparingly. 5. The assessment conducted by the Secretary was wholly inadequate, however, there is no evidence that the Secretary's Officers did not honestly believe that they were acting in accordance with the children's best interest nor was there any suggestion that there was any mala fides on their part. 6. Although I am comfortably satisfied that this is a case of 'exceptional circumstances' and the Secretary should pay the father's costs, the case has not been made out to the extent that it has reached the level of delinquency required for an award of costs on an indemnity basis. Costs Order 1. Relevant principles in relation to making a specific amount of costs to be paid are contained in Pt 42.90 of the NSW Civil Procedure Handbook 2015 as follows: * The Court may order that a specific amount of costs be paid. * The purpose of a power to make a costs order in a specific amount is to avoid the expense, delay and aggravation involved in the protracted litigation which might arise of out taxation or assessment. * The Court arrives at an estimate of the proper costs by examining, on the basis of the particulars provided, whether the quantification is logical, fair and reasonable. * The power is to be exercised judicially. * The Courts have tended to apply a discount having regard to the "broad-brush" approach. * Appropriate circumstances for a fixed costs order have included: * the impecuniosity of the party liable to pay the costs; * simple cases where there would be utility in avoiding a protracted fight about costs; * where the amount in issue is a very modest sum and it would not be appropriate to require the additional process of assessment or taxation; and * where the dictates of justice made it important that there be an urgent quantification of costs. * The Courts will generally be reluctant to order the payment of specified sums and in the vast majority of cases it is appropriate that the assessment process be utilised. * There must be proper factual foundation for an order fixing a gross sum for costs and for the calculation of a gross sum for costs. 1. I decline in this case to make a lump sum costs order as: * Although I accept that the father's evidence sets out the costs he has incurred in these proceedings, the parties made no detailed submissions in relation to the quantum of costs, the calculation of costs or indeed whether I should make a lump sum order. * The amount claimed in costs is a substantial amount, above $90,000 and the matter was clearly complex. * The fees paid came largely from the father's savings and there is no evidence to suggest he requires his costs be paid immediately to support himself or the children on a day to day basis. * There was no reason put to me to as to why this case should not be treated as the vast majority of cases and that is that, if not agreed, then costs should be assessed. ORDER 1. The Secretary, Department of Family and Community Services is to pay the costs in these proceedings to the father, as agreed or as assessed. 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: 20 June 2019