A and B v Director of Family Services [1997] ACTSC 17 (26 March 1997)

SUPREME COURT OF THE ACT

A and B v. DIRECTOR OF FAMILY SERVICES
Nos. SC77 and 78 of 1995
Number of pages - 10
Costs - Appeal

COURT

IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY HIGGINS J

CATCHWORDS

Costs - application for an order for costs - usual rule - costs follow the event - civil proceedings - criminal proceedings - proceeding in which costs do not necessarily follow the event - proceedings commenced by application pursuant to s22, Magistrates' Court (Civil Jurisdiction) Act 1982 (ACT) - the discretion to make an order for costs in respect of proceedings commenced pursuant to s22 of the Magistrates' Court (Civil Jurisdiction) Act 1982 (ACT) - the discretion to make an order for costs pursuant to s117 of the Family Law Act 1975 (Cth) - whether the court should make an order for costs in respect of care proceedings brought by a public authority or officer in the absence of unreasonable, improper or malicious behaviour - the distinction between proceedings commenced by application between individuals and between public officials or bodies and individuals.

Appeal - application for an order for costs by successful appellant against orders made in respect of care proceedings brought by the Director of Family Services pursuant to the Children's Services Act 1986 (ACT) - Director acting in good faith.

Children's Service Act 1986 (ACT) Magistrates' Court (Civil Jurisdiction) Act 1982 (ACT), ss22(2), 22(9), 246 Domestic Relationships Act 1994 (ACT) Marriage Act 1961 (Cth) Dividing Fences Act 1981 (ACT) Family Law Act 1975 (Cth), ss117(1), 117(2), 117(2A), 118

Blackman v Mylecharane (1865) 4 SCR (NSW) 233 Jelbarts Pty Ltd v McDonald [1919] VLR 478 McEwen v Seily (1972) 21 FLR 131 Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534 Federal Commissioner of Taxation v B & G Plant Hire Pty Ltd [1994] FCA 1257; (1994) 123 ALR 699 Quirk v Bawden [1992] ACTSC 118; (1992) 112 ACTR 1 (3/12/92) Gold Coast Bakeries (Qld) Pty Ltd v Heat & Control Pty Ltd (1990) 6 ANZ Insurance Cases para 61-036 (Qld SCFC) Redden v Chapman (1949) 50 SR (NSW) 24 Mangan v Mendum (1974) 4 ACTR 44 Kenny v Wilson (1911) 11 SR (NSW) 460 Re White [1975] 2 NSWLR 125 Verna Trading Pty Ltd v New India Assurance Co Ltd [1991] 1 VR 129 Sheehy v Mitchell Crane Hire Pty Ltd [1991] ACTSC 25; (1991) 102 ACTR 1 M & M v Minister of Community Welfare (1986) 43 SASR 593 In the matter of an application pursuant to the Recovery of Lands Act 1929 and Fullers Agencies (Aust) Pty Ltd, unreported, Supreme Court, Australian Capital Territory, Gallop J, 16 May 1986 Penfold v Penfold [1980] HCA 4; (1980) 144 CLR 311 Re P (a child): Separate Representative (1993) FLC para 92-376 M v D; Australian Capital Territory (1995) FLC para 92-584 Pagliarella, In Marriage of (No. 3) (1994) FLC para 92-460 Minister for Community Welfare v BY and LF (1988) FLC para 91-973 Knight v FP Special Assets Ltd [1992] HCA 28; (1992) 174 CLR 178 Gojkovic v Gojkovic (No. 2) [1992] 1 All ER 267 Calderbank v Calderbank [1976] Fam 93 Sutton London BC v Davis (No. 2) [1995] 1 All ER 65 Marriage of I & I (No. 2) (1995) FLC para 92-625 McDonald, In Marriage of (1994) FLC para 92-508

HEARING

CANBERRA, 10 February 1997 26:3:1997

Counsel for the Appellants: Ms A Tonkin Instructing solicitors: Higgins Solicitors

Counsel for the Respondent: Mr I W Nash Instructing solicitors: Australian Government Solicitor

ORDER

THE COURT ORDERS THAT:
The respondent pay the appellants' costs of this appeal and of proceedings in the Children's Court upon the Supreme Court scale, to be taxed by the taxing officer of this Court, if not agreed.

DECISION

HIGGINS J
The Application 1. On 31 May 1996, I delivered a decision in relation to this matter. I upheld the submissions of the appellants that the orders of which they complained should be set aside. I then substituted orders substantially according with the orders they sought. Costs were reserved.

2. The appellants now apply for a costs order in their favour.

Costs usually follow the event 3. In civil proceedings, the termination thereof favourably to one party will, ordinarily, create a legitimate expectation that the successful party will be given the benefit of an order for costs against the unsuccessful party, Blackman v Mylecharane (1865) 4 SCR (NSW) 233; Jelbarts Pty Ltd v McDonald [1919] VLR 478.

4. In criminal proceedings, a costs order, where a statutory power to do so is conferred in general terms, will be made on that same basis in favour of a successful defendant, see McEwen v Seily (1972) 21 FLR 131, Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534.

5. However, even where the power to award costs is expressed in general terms, justice does not always require such an expectation, see, for example, Federal Commissioner of Taxation v B & G Plant Hire Pty Ltd [1994] FCA 1257; (1994) 123 ALR 699. Usually the exception is predicated on some basis particular to the conduct of the litigation in question, see, for example, Quirk v Bawden [1992] ACTSC 118; (1992) 112 ACTR 1 (3/12/92), Gold Coast Bakeries (Qld) Pty Ltd v Heat & Control Pty Ltd (1990) 6 ANZ Insurance Cases para 61-036 (Qld SCFC), Redden v Chapman (1949) 50 SR (NSW) 24. That particular consideration may increase, reduce or deny costs to a successful party. In an extreme case, the expectation may even be reversed so that the unsuccessful party is awarded costs, see Mangan v Mendum (1974) 4 ACTR 44, Kenny v Wilson (1911) 11 SR (NSW) 460, Re White [1975] 2 NSWLR 125, Verna Trading Pty Ltd v New India Assurance Co Ltd [1991] 1 VR 129.

6. In Sheehy v Mitchell Crane Hire Pty Ltd [1991] ACTSC 25; (1991) 102 ACTR 1, 10-13, I referred to a number of categories of proceedings in which costs do not usually follow the event. I concluded that in cases where public funds or statutory premium pools are set up to effect a benefit for the community or some class of persons within the community, justice might well not demand that the success of the holder of such funds be visited with a favourable costs order merely because the holder or keeper of the funds had succeeded in relevant litigation. An unsuccessful worker might expect to pay costs only if unreasonably making or resisting an application. However, that same consideration might well not extend to an unsuccessful appellant, see Sheehy's case (supra), 13.

7. If the present case was one in respect of which the ordinary expectation was applicable, there is no doubt that the appellants should have an order for costs . It may be said that they failed to take objection to prima facie inadmissible material at first instance, but that failure was not such as would have required any departure from the usual rule.

The Submissions 8. The respondent, however contends that the usual rule has no application. She contends that her actions were taken in good faith, in pursuance of her statutory duties under the Children's Service Act 1986 (ACT) (CSA). She further contends that there is a general expectation that in cases involving the welfare of children, as this was, no order for costs will be made against her in the absence of unreasonable or improper conduct on her part. That policy, it was further submitted, can be inferred from the terms of the CSA itself.

9. The appellants in response submit that even if, contrary to their primary submission that costs should follow the event, the respondent had, in fact, acted unreasonably in continuing the care proceedings even if there had been some justification for preliminary concern.

10. The appellants were in receipt of legal aid. I refer to that fact only because it was raised by the appellant's counsel. The respondent did not suggest that a costs order should not be made on the basis that the appellants had been granted legal aid. Nevertheless, it may, in some cases, be a relevant consideration.

Public Duty or Interest 11. That a public official had taken action in good faith pursuant to a duty so to do used to be considered a valid reason for refusing to order costs against him or her. Latoudis v Casey (supra) clearly and definitively rejects that notion. That such rejection is not confined to the case of law enforcement officers is apparent from M & M v Minister of Community Welfare (1986) 43 SASR 593. In that case, Olsson J, relying on the line of authority subsequently approved by the High Court in Latoudis v Casey, found that where there was, by statute, a general power to order costs in a case involving a care application similar to the present case, that power should be exercised on the conventional basis approved in cases such as McEwen v Seily (supra).

12. Although, in M & M v Minister of Community Welfare (supra) it was accepted that the Minister had acted properly in bringing care proceedings, it was held to have been wrong for the Magistrate not to have awarded costs to the successful respondent. It was not a necessary precondition to find that the Minister had acted unreasonably, improperly or maliciously.

Does the CSA restrict the power to order costs? 13. The general power of the Magistrates' Court, sitting as the Children's Court, to order costs in care proceedings is to be found in s22(9) of the Magistrates' Court (Civil Jurisdiction) Act 1982.

14. Section 22 applies to, (1) ... a matter arising under a law in force in the Territory (other than this Act) subject to the provisions of that law. Proceedings in respect of such a matter are to be commenced by application, s22(2).

15. Section 22(9) then provides, Each party to proceedings on an application shall, unless the court otherwise orders, bear his or her own costs in the proceedings, and where the court makes an order for the payment of costs in such proceedings, the court shall direct the scale on which those costs are to be paid by any party. That contrasts with the general rule, prescribed by s246, that costs, unless otherwise ordered, follow the event.

16. There is a wide range of matters apart from care proceedings which may be litigated in the Magistrates Court pursuant to the procedure prescribed by s22, see, for example, In the matter of an application pursuant to the Recovery of Lands Act 1929 and Fullers Agencies (Aust) Pty Ltd, unreported, Supreme Court, Australian Capital Territory, Gallop J, 16 May 1986. Applications may also be made under the Domestic Relationships Act 1994 (ACT), Marriage Act 1961 (Cth) and the Dividing Fences Act 1981 (ACT) to name but a few.

17. There is a similarity between s22(9) and s117(1) of the Family Law Act 1975. That latter section provides, Subject to subsection (2) and section 118, each party to proceedings under this Act shall bear his or her own costs.

18. The Family Law Act is somewhat more explicit in specifying how the discretion to order otherwise, as permitted by subsection (2), should be exercised. Section 117 (2A) provides, (2A) In considering what order (if any) should be made under subsection (2), the court shall have regard to: (a) the financial circumstances of each of the parties to the proceedings; (b) whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party; (c) the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters; (d) whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court; (e) whether any party to the proceedings has been wholly unsuccessful in the proceedings; (f) whether either party to the proceedings has, in accordance with section 117C or otherwise, made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and (g) such other matters as the court considers relevant. Although wide ranging, those factors clearly are primarily directed towards a situation where private persons, not officials, are litigating a family dispute. Section 118 deals with frivolous and vexatious proceedings. It is not presently relevant.

19. The High Court considered s117(1) and (2) in Penfold v Penfold [1980] HCA 4; (1980) 144 CLR 311. It was a typical family law dispute. The husband had been ordered to pay costs. A Full Court of the Family Court reversed that order. The wife then appealed to the High Court. The High Court rejected the view that s117(2) required specific "justifying circumstances" to warrant the making of an order for costs. There was no need, as a matter of law, for a trial judge to specify the circumstances which seemed to her or him to justify an order for costs being made in a particular case. Nor was it necessary for the unsuccessful party to have been guilty of unreasonable, improper or malicious conduct before an order for costs was warranted.

20. In Penfold (supra), the substantial success of the wife's application and the false and misleading information provided by the husband in his statement of financial circumstances was regarded as providing "ample material" to justify the making of a costs order in favour of the wife. The original costs order was restored.

21. In other words, s117 may have abolished the "usual rule" concerning the award of costs in adversarial litigation, but the discretion to award costs is otherwise unfettered.

22. In this matter, it was submitted by the respondent that it would be unusual to order costs in a child welfare case and, in particular, against a public official charged with child protection duties.

23. Reference was made to two family law cases in Australia and two English family law or child protection cases.

24. In the case of Re P (a child): Separate Representative (1993) FLC para 92-376, the husband sought an order for costs following a successful appeal against certain interlocutory orders. The substantive issues related to allegations of child abuse on the part of the husband. There was a question as to whether the court could, or should, make an order for costs against the Separate Representative. The court concluded that s117(2) gave power to make such an order but that it should be done only if special circumstances justified that course. Nicholson CJ and Fogarty J considered that conclusion to follow, at 79,904, from the circumstances that, ... the Separate Representative is appointed by order of the Court to represent the interests of the child or children in question and thus has special responsibilities and duties and occupies a special position in the proceedings, ... Even so, the appointor or indemnifier of the Separate Representative would be the more appropriate respondent to a costs order, if it was considered appropriate to make one.

25. Strauss J also considered that the special position of the Separate Representative warranted that conclusion. However, his Honour also expressed the view that s117(2) provided to the Court, 79,910, ... the widest powers to order the payment of costs by any person involved in the proceedings, if the circumstances justify it. Whether there are such circumstances, has to be determined by reference to established principles. That decision does not assist in the present case. There is no question of the children's representative or the Legal Aid Commission (ACT) being ordered to pay costs though not parties. It does not assist to determine the approach to an application for costs against an unsuccessful party.

26. Reference was also made to M v D; Australian Capital Territory (1995) FLC para 92-584. It was a dispute between husband and wife concerning custody of a child. The wife alleged that the husband had been guilty of sexual abuse of the child. The Child at Risk Assessment Unit supported that allegation but that assessment was seriously flawed. It had, nevertheless, fanned the wife's suspicions and provoked or prolonged the litigation. Murray J found the allegations to be unfounded. His Honour referred to Pagliarella, In Marriage of (No. 3) (1994) FLC para 92-460 and Minister for Community Welfare v BY and LF (1988) FLC para 91-973 where costs orders had been made against the Minister who had been an intervener in the proceedings. In this case, there has not been any such intervention. It was an application for costs against a non-party. Such an order is not beyond power, see Knight v FP Special Assets Ltd [1992] HCA 28; (1992) 174 CLR 178, but it does require a finding of special circumstances before it should be made. That may embrace a situation where the relevant non-party was a "real party". Costs were not ordered against the Territory in the case of M v D (supra).

27. There is no analogy between the position of the respondent in this case and the Territory in that case. In this case, the respondent was, both in form and substance, the dux litus. She was not merely a representative of those witnesses upon whom she relied. Those witnesses may have been misguided and mistaken but no question arises in this case of making a costs order against any of them. To do that would require special circumstances. It does not require "special circumstances" to make a costs order against an unsuccessful party.

28. In Gojkovic v Gojkovic (No. 2) [1992] 1 All ER 267, the wife claimed, at the conclusion of divorce proceedings, that the normal rules as to costs applicable to civil proceedings should have been applied. That is, having achieved more than the husband had offered, she should have an order for costs following the date of his offer even if the husband had acted reasonably in making it. That claim was upheld. In other words, the usual expectation as to costs in adversarial litigation was fulfilled even though it was a family law matter. However, the litigation involved matters relating to property settlement rather than care or custody of children.

29. Butler-Sloss LJ made passing reference to matters which might alter the prima facie expectation as to orders for costs at 273, The concept expounded by the judge of no order for costs where both parties have been reasonable in their approach to the dispute is not, in my judgment, one of general application in the Family Division, save in children cases, and is certainly not one of general application in Calderbank [v Calderbank [1976] Fam 93] offers. In other words, other than in "children cases", the usual expectation that costs follow the event would prevail.

30. The reference to "children cases" was explained in Sutton London BC v Davis (No. 2) [1995] 1 All ER 65, the other case referred to by Mr Nash, counsel for the respondent. That was an appeal against a refusal by a local authority to register the respondent as a child- minder. Wilson J referred to Gojkovic (supra) at 67, saying, Where the debate surrounds the future of the child, the proceedings are partly inquisitorial and the aspiration is that in their outcome the child is the winner and indeed the only winner. The court does not wish the spectre of an order for costs to discourage those with a proper interest in the child from participating in the debate. Nor does it wish to reduce the chance of their co-operation around the future life of the child by casting one as the successful party entitled to his costs and another as the unsuccessful party obliged to pay them. The proposition applies in its fullest form to proceedings between parents and other relations; but it also applies to proceedings to which a local authority is a party. Thus, even when a local authority's application for a care order is dismissed, it is unusual to order them to pay the costs of the other parties. But the proposition is not applied where, for example, the conduct of a party has been reprehensible or the party's stance has been beyond the band of what is reasonable. I have to say that, whilst I can accept the reasoning which would support the view that there should ordinarily be no costs order as between parents in a case concerning the welfare of their child in the absence of unreasonable, improper or malicious behaviour, it is difficult to accept that the same policy reasons should inhibit the making of an order for costs against a person or body charged with a public duty. The assumption that otherwise such persons or bodies might be influenced by fear of a costs order from carrying out their public duty is not only contrary to public policy but also to authority, see Latoudis v Casey and M & M v Minister of Community Welfare.

31. Indeed, it is my view that the public interest is better served by creating an expectation that, if parents do take part in care proceedings brought by a public authority or officer, then, if they do so reasonably and responsibly, and have acted otherwise reasonably and responsibly, they will have the benefit of a costs order. Costs reasonably and responsibly incurred by parents should ordinarily be borne by the public as part of the cost of administering the child welfare system. That system should permit parents to participate without being discouraged either by fear of a costs order if unsuccessful or of being considerably out of pocket even if successful. In other words, the policy considerations which led this Court in McEwen v Seily to conclude that justice was better served if a successful criminal defendant was ordinarily given the benefit of a costs order are equally applicable to care proceedings brought by a public official such as the respondent.

32. The other authorities referred to by counsel seem to me either to support or, at least, to be consistent with that view.

33. In the Marriage of I & I (No. 2) (1995) FLC para 92-625, Nicholson CJ, Ellis and Buckley JJ considered a submission that, as between parents, it would be rare for an order for costs to be made. That view had been expressed by Mushin J in McDonald, In Marriage of (1994) FLC para 92-508.

34. It is clear from their Honour's observations at 82,277 that, even if there had not been unreasonable or reprehensible conduct by either party, a costs order might still be made under s117(2), Family Law Act. Mushin J's view was expressly rejected.

35. Their Honours commented, Section 117 confers upon the Court a broad discretion in relation to costs. That discretion is one which the Court should not seek to fetter. ... In deciding whether the circumstances justify the making of an order for costs, the discretion to which we have referred must be exercised having regard to the matters set out in s117(2A) so far as they are relevant. I can see no reason why the approach to s22(9) of the Magistrates' Court (Civil Jurisdiction) Act 1982 (ACT) would differ from that.

36. The proceedings which may be commenced by an application under s22 are varied. Some involve claims for relief between individuals and some involve claims between public officials or bodies and individuals.

37. In the present case, the respondent is publicly funded to carry out duties on behalf of the community to safeguard and promote the welfare of children. She therefore has not only greater means than most private litigants but will not be dissuaded from pursuing her public duty by mere consideration of cost. Insofar as cost is relevant, it would be expected merely to operate as a brake upon the pursuit of frivolous or baseless applications, a result which would accord with the public interest.

38. Although these appellants are, apparently, legally aided, that consideration would not, in this case, prevent a costs order in their favour. Legal aid funds are under pressure and recovery of costs in appropriate cases is, to my mind, very much in the public interest. It can readily be accepted that where all parties to an application are legally aided, it might be futile to order costs even if one party would otherwise be entitled to expect such an order. It might, also, be thought inappropriate to order a private litigant acting reasonably in a "children case" to pay into the legal aid fund. Hence, s117(b), Family Law Act refers to a legal aid grant as a relevant matter in deciding whether to make an order for costs.

39. In this case, whilst the respondent acted bona fide and in response to genuine matters for concern, her application was ultimately unsuccessful. None of those witnesses whose evidence was criticised as unpersuasive lacked bona fides. However, there is no basis in public policy or authority which now supports the view that it is necessary to find some reprehensible conduct on the part of the respondent or those for whom she is responsible or relied on as witnesses, to make a costs order in favour of litigants such as the appellants.

40. It is also relevant that there were serious flaws in the processes of assessment adopted by the respondent through her relevant officers and consultants. I have referred to those in detail in my judgment delivered 31 May 1996. There was, conversely, nothing of any substance done or omitted by the appellants which brought the care proceedings upon them or the children, at least at that time.

41. Indeed, the mother behaved quite responsibly once the initial suspicion of sexual abuse had been raised. The needless hardship suffered by the appellants as a result of the proceedings is also relevant. Justice should be seen to be done and that usually will be effected by an order for costs made in favour of a successful party to litigation.

42. Thus, it seems to me that, in all the circumstances of the case, it is just that the respondent should pay the appellants' costs of and incidental to the care proceedings, including the costs of this appeal.

43. Such costs are to be taxed upon the Supreme Court scale, if not agreed, by the taxing officer of this Court.