Children's Court New South Wales

• Medium Neutral Citation: Director General of the Department of Human Services v Ellis - Simmons [2011] NSWChC 5
• Decision date: 25 March 2011
• Jurisdiction: Care and protection
• Before: Judge Mark Marien SC, President

Decision

No exceptional circumstances warranting an order for costs and application refused.

• Catchwords: CHILDREN - costs - order for costs as a result of an application which was refused - conduct of legal representative - "exceptional circumstances"
• Legislation Cited: Children and Young Persons (Care and Protection) Act 1998; Revised Professional Conduct and Practice Rules 1995 (Solicitors' Rules)
• Cases Cited: S v Minister for Youth and Community Services (Supreme Court of NSW, Powell J, 3 April 1986); In the Matter of Jackson [2007] CLN 2; SP v Department of Community Services (DoCS) [2006] NSWDC 168; DoCS v SM and MM [2008] NSWDC 68; BS v DoCS & Ors (District Court of NSW, Robison DCJ, 26 August 2009); Joy Alleyne as Independent Legal Representative for LC v Director General Dept of Community Services (District Court of NSW, Goldring DCJ, 22 July 2009); XX v Nationwide News Pty Ltd (District Court of NSW, Gibson DCJ, 11 June 2010); Murray Publishers Pty Ltd v Valuer-General (1994) 84 LGERA 13; Australian Recyclers Pty Ltd v v Environment Protection Authority of NSW (2000) 110 LGERA 171; Yacoub v Pilkington (Australia) Ltd [2007] NSWCA 290; San v Rumble (No. 2) [2007] NSWCA 259; R v Kelly (Edward) 2000 1 QB 198; R v Buckland [2000] 1 WLR 1262; Ho v Professional Services Review Committee No. 295 [2007] FCA 288; AWA v Independent News Auckland (1996) 2 NZLR 184; Vero Insurance Scriven [2010] FMCA 352; Wentworth v Rogers [1999] NSWCA 403
• Category: Costs
• Parties: Ms Nicole Ellis (mother); Mr Craig Simmons (father); Ms Peta Ellis (maternal great aunt); The children; Mr Mitchell Young (father)
• Representation: Ms De Re on behalf of Mr Young; Ms Orr on behalf of Mr Simmons; Ms Coady as independent legal representative for the children N/A
• File Number(s): 207-210/09 & 249/09
• Publication restriction: Any information that names or is likely to lead to the identification of a child or young person who is reasonably likely to involved or mentioned in Children's Court or non-Court proceedings in any capacity must not be published or broadcast in any form that may be accessible by a person in New South Wales whether the publication or broadcast occurs before any proceedings have commenced, during the proceedings or after they are disposed of. This prohibition applies until the child or young person turns 25 years of age or dies.

Judgment

1 This is an application for costs under s 88 of the Children and Young Persons (Care and Protection) Act 1998 (the Act) by a number of parties in the proceedings, namely, the mother, Ms Nicole Ellis, the father, Mr Craig Simmons, the maternal great aunt, Ms Peta Ellis and by the independent legal representative for the children, Ms Coady. The application is brought in the course of a part heard care hearing before me. Each of these parties seeks a costs order against the father, Mr Mitchell Young, for costs thrown away as a result of an application made on his behalf on 8 March 2011, which application was refused by me. The application was that the court make an order restraining the firm Gonzalez & Co from continuing to act for Mr Simmons. The hearing of Mr Young's unsuccessful application occupied a substantial part of the hearing day on 8 March 2011 which had been allocated to the continued hearing of the substantive proceedings.

BACKROUND

2 The father, Mr Young, was between 7 October 2009 and 15 November 2010 represented in the proceedings by Ms Samar Shuwayahat, a solicitor employed by the Aboriginal Legal Service (the ALS). On 15 November 2010, Ms Shuwayahat formally resigned from the ALS and Ms Zoe De Re, a solicitor employed by the ALS, took over carriage of the matter on behalf of Mr Young.

3 On 7 February 2011, Ms Shuwayahat commenced employment as a solicitor with Gonzalez & Co, the solicitors acting on behalf of the father, Mr Simmons. Ms Cheryl Orr of that firm has carriage of the proceedings on behalf of Mr Simmons.

4 On 7 February 2010 the ALS made contact with the Law Society of NSW Ethics Advice Line. Advice was sought concerning the ethical position of Ms Shuwayahat having previously acted on behalf of Mr Young, now being employed by the firm which acts on behalf of Mr Simmons. The ALS was advised to raise the issue with Gonzalez & Co and the court as soon as possible. By letter dated 10 February 2011 Ms De Re wrote to Gonzalez & Co. It was noted in the letter that Ms Shuwayahat who formerly acted for Mr Young was now employed by Gonzalez & Co. It was also noted that Mr Young and Mr Simmons have contrasting applications and positions in the substantive hearing which is part heard before me.

5 The letter states as follows (in bold and underlined);

"Please confirm in writing what information barriers are in place within your firm in order to protect our client's confidential information."

6 Reference was then made in the letter to Rule 3 of the Solicitors' Rules.

Article 3 of the Law Society of NSW Professional Conduct and Practice Rules, Legal Profession Act 1987 provides as follows:

"Acting against a former client

Consistently with the duty which a practitioner has to preserve the confidentiality of a client's affairs, a practitioner must not accept a retainer to act for another person in any action or proceedings against, or in opposition to, the interest of a person -

(a) for whom the practitioner or the firm, of which the practitioner was a partner, has acted previously;

(b) for whom the practitioner or practitioner's firm has there by acquired information confidential to that person and material to the action or proceedings;

and that person might reasonably conclude that there is a real possibility the information will be used to the person's detriment."

7 After referring to the above Rule, the letter states,

"The potential conflict of interest in this matter is an issue that we will be bringing to the attention of the Court and we would appreciate a prompt response to our request."

8 By letter dated 10 February 2011, Ms Orr replied to Ms Dr Re's letter. In her letter, Ms Orr confirmed that Ms Shuwayahat was employed by her firm and had been so since 7 February 2011. The letter states that the firm contacted the Law Society's Ethics Department and discussed matters raised in the ALS's letter prior to Ms Shuwayahat's employment with her firm. The letter goes on to state:

"We note that you intend to raise your concern before the court and remind you that any conflict real or perceived by your office and/or your client is not a matter for the Children's Court.

In the event that you are of the view that there remains a difficulty for our firm appearing for Mr Simmons we seek that you forthwith particularise those concerns so they can be responded to.

I confirm that Ms Shuwayahat does not have access to the Simmons file nor does Ms Shuwayahat assist in any preparation relating to the Simmons/Ellis matter."

The ALS did not reply to this letter.

9 In opposing the costs applications, Ms De Re, on behalf of Mr Young, submitted that the letter of reply from Ms Orr did not satisfactorily deal with the concerns raised in her letter. However, in my view, Ms Orr had adequately responded to the request to confirm in writing "what information barriers are in place within your firm in order to protect out client's information", when she replied in her letter that "Ms Shuwayahat does not have access to the Simmons file nor does Ms Shuwayahat assist in any preparation relating to the Simmons/Ellis matter."

10 As at the time of the exchange of this correspondence, that is, on 10 February 2011, the substantive proceedings were next listed before me on 25 February 2011 for return of subpoenas and a compliance check with respect to the further continued hearing of the matter on 7 and 8 March 2011. When the matter was before me on 25 February 2011 no application was made on behalf of Mr Young.

11 When the proceedings came before me for continued hearing on 7 March 2011, they were adjourned to the following day due to the illness of the legal representative for the Department. On the following day, at the commencement of the hearing, Ms De Re raised her concerns with me relating to the potential conflict of interest issue. After being asked by me as to whether any application was to be made, Ms De Re made an oral application that the Court make an order restraining the firm of Gonzalez & Co from continuing to act for Mr Simmons. That application was opposed by all parties, including the Department, on the threshold ground that the Court lacked jurisdiction to make the order sought. Following the hearing of submissions I refused the application on the ground that the court had no power to make the order and I delivered an ex tempore judgment giving my reasons for refusing the application.

12 When the proceedings next came before me on 11 March 2011 for mention, Ms De Re informed me that she had received further instructions from Mr Young not to commence proceedings in the Supreme Court to seek a restraining order against Gonzalez & Co.

The Application for Costs

13 Pursuant to s 88 of the Act the Children's Court cannot make an order for costs in care proceedings unless there are exceptional circumstances that justify it in doing so. Ms Orr, on behalf of Mr Simmons, submitted that exceptional circumstances existed justifying an order for costs against Mr Young. She identified the following matters as together constituting exceptional circumstances:

(1) Mr Young's application was without merit and had no prospect of success because of the court's lack of jurisdiction.

(2) The application should have been brought sooner, for example, when the matter was before the court on 25 February 2011.

(3) The application should have been properly brought in the Supreme Court.

(4) Ms De Re did not notify the other parties that the application was to be brought until the morning upon which she made the application.

14 Ms McDonald, on behalf of the mother, together with the other parties seeking a costs order, adopted Ms Orr's submissions in relation to the existence of exceptional circumstances. Ms McDonald submitted that exceptional circumstances existed because of the following further reasons:

(1) The ALS failed to reply to Ms Orr's letter of 10 February 2011 in which Ms Orr sought particulars of concerns by the ALS for her firm continuing to act for Mr Simmons.

(2) Related proceedings were listed before the Supreme Court on 11 March 2011 and that the application by Mr Young should have been brought in the Supreme Court on that day in conjunction with those related proceedings.

(3) That Ms De Re failed to obtain proper instructions as to whether any further application should be brought in the event that the Children's Court refused her application.

(4) That the court should impose, by way of a costs order against Mr Young, a sanction against Ms De Re in conducting the unmeritorious application, as that conduct resulted in the unnecessary loss of a hearing day in the substantive proceedings.

15 In her submissions Ms De Re informed me, and I accept, that she had only received instructions from Mr Young to bring the application the previous day. She informed me, and again I accept, that during the course of the proceedings she had had on occasion's difficulty in contacting Mr Young because from time to time he had gone into police custody. She submitted that the ALS took appropriate action by seeking advice from the Law Society's Ethics Advice Line. She submitted that she could not bring the application until she had instructions from Mr Young to do so.

16 I accept that having only received those instructions from Mr Young on 7 March 2011, Ms De Re had to make urgent decisions as to how the potential conflict issue should be raised before the court on the following day and whether an application should be made to the court and, if so, the nature of the application.

The Applicable Law

17 With respect to normal adversary litigation the general rule is that costs "follow the event" subject to any contrary statutory provisions, rules or orders. The requirement in care proceedings that a costs order will only be made if exceptional circumstances exist justifying the making of the order, arise from the nature of care proceedings which relate to the welfare of a child. Such proceedings are sui generis. Care proceedings are not to be regarded - at least not to be regarded for all purposes - as normal adversary litigation inter partes; S v Minister for Youth and Community Services (Supreme Court of NSW, Powell J, 3 April 1986).

18 What constitutes exceptional circumstances for the purposes of s 88 has been considered in a number of Children's Court and District Court decisions including In the Matter of Jackson [2007] CLN (Children's Law News) 2; SP v Department of Community Services (DoCS) [2006] NSWDC 168 (Rein DCJ); DoCS v SM and MM [2008] NSWDC 68 (Garling DCJ), BS v DoCS & Ors (District Court of NSW, Robison DCJ, 26 August 2009); Joy Alleyne as Independent Legal Representative for LC v Director General Dept of Community Services (District Court of NSW, Goldring DCJ, 22 July 2009) and XX v Nationwide News Pty Ltd (District Court of NSW, Gibson DCJ, 11 June 2010).

19 In SP v Department of Community Services Rein DCJ (as his Honour then was), after referring to a number of authorities, stated that some guidance can be gained from the cases as to the meaning of exceptional circumstances. His Honour summarised the points as follows:

(1) Cases where circumstances are found or not found to be exceptional all turn on their own facts and circumstances (see Murray Publishers Pty Ltd v Valuer-General (1994) 84 LGERA 13).

(2) Unusual circumstances do not make the circumstances exceptional. A council's error, for example, in its dealings with the applicant are insufficient.

(3) Even circumstances out of the ordinary or even appalling breakdowns or misunderstandings in communication do not, of themselves, amount to exceptional circumstances (see Australian Recyclers Pty Ltd v v Environment Protection Authority of NSW (2000) 110 LGERA 171).

(4) Refusal of counsel to act on recommendations of officers or advice of experts is not sufficient.

(5) Acting upon a serious or fundamental error of fact, acting capriciously or deliberately attempting to frustrate or cause delay or expense to the applicant would be sufficient.

20 His Honour goes on at [36] to identify the following types of matters which would, or at least arguably might, fall within the description of exceptional circumstances for the purposes of s 88:

(1) Deliberate misleading of the court or opponents

(2) Other misconduct or wrongful conduct

(3) Contumelious disregard of orders of the court or the principles set out in s93 of the Act ("General nature of proceedings")

(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 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.

21 Having identified these matters as the types of matters which may constitute exceptional circumstances, his Honour said that whilst the categories of conduct are not closed, "there is a theme or flavour about these categories that I have already outlined as falling within the ambit, in my view, of s 88".

22 The "theme or flavour" of the categories of exceptional circumstances identified by his Honour clearly relates to the conduct of the parties and requires either deliberate improper or wrongful conduct (verging on abuse of process) or gross negligence or incompetence.

23 In Department of Community Services v SM and MM Garling DCJ expressly approved the matters which might arguably fall within the description of exceptional circumstances as identified by Rein DCJ in SP v Department of Community Services. Garling DCJ also referred to the decision of Campbell J in Yacoub v Pilkington (Australia) Ltd [2007] NSWCA 290 concerning the meaning of "exceptional circumstances" in Rule 31.18 of the UCP Rules.

24 In Yacoub Campbell J referred to San v Rumble (No. 2) [2007] NSWCA 259 and said:

I shall state such of the conclusions as seem to me to be applicable in the construction of Rule 31.18 (which relates to exceptional circumstances).

(a) Exceptional circumstances are out of the ordinary course or unusual or special or uncommon. They need not be unique or unprecedented, or very rare, but they cannot be circumstances that are regularly, routinely or normally encountered (R v Kelly (Edward) 2000 1 QB 198).

(b) Exceptional circumstances can exist, not only be reference to quantitative matters concerning relative frequency of occurrence, but also by reference to qualitative factors (R v Buckland [2000] 1 WLR 1262).

(c) Exceptional circumstances can include a single exceptional matter, a combination of exceptional factors or a combination of ordinary factors which, although individually of no particular significance, when taken together are seen as exceptional (Ho v Professional Services Review Committee No. 295 [2007] FCA 288).

(d) In deciding whether exceptional circumstances are exceptional within the meaning of a particular statutory provision one must keep in mind the rationale of that particular statutory provision (R v Buckland).

(e) Beyond these general guidelines whether exceptional circumstances exist depends upon a careful consideration of the facts of the individual case (AWA v Independent News Auckland (1996) 2 NZLR 184).

25 Campbell J then said:

"Any decision about whether there are exceptional circumstances would need to bear in mind the explicit statement of objectives of a Court in the management of litigation".

26 In DoCS v SM and MM, in awarding costs against the Department, Garling DCJ identified the following as exceptional circumstances;

• The appeal had no merit
• The Magistrate made the only reasonable order available
• There were no grounds to seek an appeal from that order nor was there additional evidence which may have caused the District Court to reach a different decision from the Magistrate.

27 It appears from a reading of his Honour's entire judgment that Judge Garling did not find exceptional circumstances existed simply because the appeal was unmeritorious. His Honour found that the Department's case was not based upon the available expert evidence. Further, his Honour found that as the parents were not legally aided they had to pay their own legal costs.

28 In BS v Minister for Community Services & Ors Robison DCJ, after referring to DoCS v SM and MM and SP v DoCS, said at [4]:

"Exceptional circumstances can and, indeed, in many cases include a broad variety of factors. There can be a difference of view as to what amounts to an exceptional circumstance. The judges of this court in those two decisions had indicated certain views about what are considered to be exceptional circumstances. At the end of the day each case needs to be determined in the context of the proceedings and the matters which were brought to the attention of the court during the course of the proceedings. Certainly a relevant matter is the conduct of the parties to proceedings of this nature".

29 His Honour stated at [5] that any order for costs under s 88 could only be made with respect to the appeal proceedings before the District Court (not to the proceedings in the Children's Court). In finding that exceptional circumstances existed and ordering the Department to pay the mother's legal costs, his Honour found that the Department had an "entrenched immovable view" from an early stage and rejected expert opinion which supported the mother's case even though it had no expert evidence to contradict that expert opinion. His Honour noted that while s 94 of the Act requires that proceedings should proceed as expeditiously as possible, the entrenched and immovable view of the Department resulted in the proceedings not proceeding expeditiously.

30 Again, as in DoCS v SM and MM, Judge Robison in BS v Minister of Community Services did not find exceptional circumstances simply because the appeal was unmeritorious. His Honour clearly found the Department's position to be unreasonable as he found it to be "entrenched" and "immovable".

31 In Joy Alleyne as Independent Legal Representative for LC v DG Dept Community Services Goldring DCJ, in refusing to award costs against the Department, said at [11],

"I do not regard the matters set out by Rein J in SP as an exhaustive statement of what might constitute "exceptional circumstances" for the purposes of s 88, though they give a clear indication of some matters that may constitute such circumstances. BS also indicates matters of a different type, which may give rise to such circumstances. It may be that, some circumstances, the financial position of a party may give rise to a finding of "exceptional circumstances". It may be that the factual situation is so complex, or the Department had taken such an unreasonable position, as Robison J found in BS v Minister for Community Services, that either would make for exceptional circumstances. The facts of this case do not".

32 XX v Nationwide News Pty Ltd was an unusual case. The defendant, The Australian newspaper, had published a number of articles concerning certain care proceedings in the Children's Court. Although the articles did not directly name the child, the subject of the proceedings, there was evidence before the Children's Court that facts about the case referred to in the articles had identified the child. It was clear that the contents of the articles were likely to identify the child in breach of s105 of the Act.

33 In the Children's Court the plaintiff successfully obtained a non-publication order against the newspaper defendants. However, the court refused the plaintiff's application for costs with respect to their successful application. The Children's Court found that the conduct of the newspaper did not fall within the categorises of exceptional circumstances referred to by Rein DCJ in SP v DoCS.

34 The plaintiff appealed to the District Court against the order refusing costs. Gibson DCJ held at [47] that the requirement that exceptional circumstances be established placed "a heavy burden" upon a party seeking costs in care proceedings. Her honour re-affirmed that the list set out by Rein DCJ in SP v DoCS is not exhaustive. In overturning the Magistrate's decision and awarding costs against the newspaper, her Honour found that its conduct did fall within the kinds of conduct referred to in SP v DoCS as its breach of implied undertakings as to documents obtained in the litigation process was capable of amounting to wrongful conduct, amounted to contumelious disregard to the principles of the Act and that it had been guilty of gross negligence in not removing articles from its website.

35 Her Honour declined to award indemnity costs although she stated at [59] that while there is no provision in the Act for awarding indemnity costs, "that does not necessarily mean that indemnity costs cannot be awarded: see, by analogy, Vero Insurance Scriven [2010] FMCA 352 at [45]".

Resolution of the Issue

36 As was stated by Judge Gibson in XX v Nationwide News Pty Ltd, each of the applicants before me carries a "heavy burden" to establish exceptional circumstances justifying the making of an order for costs.

37 I have carefully considered the authorities to which I have referred as to the meaning of exceptional circumstances for the purposes of s 88 of the Act. The judgment of Rein DCJ in SP v DoCS on the issue has received wide acceptance by judges of the District Court and it should be given considerable weight. It is acknowledged of course that the list of matters referred to by Judge Rein which might fall within the description of exceptional circumstances for the purposes of s 88, are not exhaustive. However, as I previously stated, the "theme or flavour" of the kinds of matters referred to by Judge Rein clearly relates to the conduct of the parties and requires either deliberate improper or wrongful conduct (verging on abuse of process) or gross negligence or incompetence.

38 In my view Ms De Re's conduct in bringing the application cannot be said to fall within any of those categories of conduct. The fact that Ms De Re took an erroneous view of the applicable law (including the powers of the Children's Court) does not mean that her conduct was deliberately improper or wrongful. Nor does it necessarily mean that her conduct was grossly negligent or incompetent. In some cases a legal practitioner's erroneous view of the law may amount to gross incompetence or gross negligence. This is not such a case. However, clearly Ms De Re should have responded to Ms Orr's letter requesting that in the event Ms De Re remained of the view that a difficulty remained for Gonzalez & Co to continue appearing for Mr Simmons, Ms De Re should forthwith particularise those concerns so they could be responded to. Ms De Re put no adequate explanation to me as to why she failed to respond to Ms Orr's letter. However, her failure to respond to the letter cannot, in my view, be regarded as amounting to gross negligence or incompetence.

39 However, having finally received instructions from Mr Young to bring the application, Ms De Re acted quickly. The extent of the powers of the Children's Court was a matter that Ms De Re clearly raised in good faith. By raising the matter with the court she properly acted on the advice of the Law Society's Ethics Advice Line.

40 I should raise another issue. All the applicants for a costs order raise, as the basis for making the order, the conduct of Ms De Re in bringing the application. No complaint is made about the conduct of Ms De Re's client, Mr Young. Mr Young, in giving instructions to bring the application, was no doubt acting on the advice of Ms De Re in relation to a complex legal issue, namely, the extent of the powers of the Children's Court. Yet, what is sought is an order for costs against Mr Young. Even assuming the court had the power, of its own motion, to make a costs order against Ms De Re personally, the conduct of a legal practitioner to warrant an order for costs against the legal practitioner must amount to serious misconduct: see Wentworth v Rogers [1999] NSWCA 403 and the cases there referred to. As I have clearly indicated, I do not find that Ms De Re's conduct in bringing the application can be so characterised.

41 For these reasons I find there are no exceptional circumstances warranting an order for costs against Mr Young (or Ms De Re).

42 Accordingly, I refuse the applications.

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Decision last updated: 12 June 2012