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Costs Orders in Family Law - Case Study



a female judge is captured in the midst of delivering a speech

Obtaining a costs order in family law proceedings is quite uncommon and can often be challenging due to various factors. The general principle in family law is that parties bear their own costs, as stated in section 117(1) of the Family Law Act 1975. This means that each party is responsible for their legal fees and expenses, unless there are exceptional circumstances.


The court has a wide discretionary power under section 117(2) to make costs orders. The unique circumstances of your case must warrant such exercise of power. Factors considered include the financial positions of the parties, their conduct during the proceedings, offers of settlement, and the overall success or failure of each party's case. Therefore, unless there are exceptional and strong grounds for a costs order, it is not common to obtain a costs order in family law matters.


Let us examine one of the recent cases related to a Costs Order application to illustrate the above.


Marvis & Marvis [2023] FedCFamC1A 34


In Marvis & Marvis [2023] FedCFamC1A 34 the appellant challenged the costs orders made by a judge of the Federal Circuit and Family Court of Australia in the first instance. The appellant husband successfully argued that he had not been "wholly unsuccessful" in the underlying property settlement proceedings, contrary to the primary judge's finding.


Background


The background of the case involved property settlement orders made by the primary judge on August 2, 2022. The respondent wife filed a costs application against the husband, claiming that he had been "wholly unsuccessful" in the proceedings.


The primary judge accepted the Wife’s argument and ruled that the husband should pay the wife’s costs in relation to the family law property proceedings excluding the caveat (injunction) which he had registered over his property.


According to the primary judge, the Husband was wholly unsuccessful due to the fact that in his application he had sought no adjustment to be made to the parties’ current financial positions – i.e. each party was to retain his or her respective assets. As the final outcome provided for an adjustment, the primary judge concluded that this was sufficient to find that the husband was wholly unsuccessful.


Appeal


On appeal, the appellant husband argued that the primary judge erred in finding him "wholly unsuccessful" because he had not just sought a complete dismissal of the respondent's property settlement application. Instead, he successfully limited the relief granted to her. The appellant contended that the interpretation of section 117(2A)(e) of the Family Law Act supported his position, which required considering whether a party has been wholly unsuccessful in the proceedings as a whole, not just in their specific application.


Justice Austin evaluated the prescribed considerations under section 117(2A) of the Family Law Act in relation to costs and found that neither party's financial circumstances or conduct strongly favoured a costs order.


The Court accepted the proposition that the husband was not ‘wholly unsuccessful’ due to the fact that he was somewhat successful in the proceedings. He was seeking no adjustment, the wife sought a sum of $129,000 and he was ultimately ordered to pay slightly more than one half of this amount - $77,650. Therefore, it could not be said that he was wholly unsuccessful in the proceedings.


Considering all the factors, the court determined that none of the prescribed considerations justified a costs order in the respondent's favour. The respondent's application for costs was dismissed, and the primary judge's orders regarding costs were set aside. The appellant's application for costs was also dismissed. Thus, the court allowed the appeal, re-exercised discretion, and dismissed both parties' costs applications at first instance. The costs of the appeal were to be determined later based on the evidence and written submissions provided by the parties.


Takeaway


The above case demonstrates the importance of the term "wholly unsuccessful" when it comes to Cost Order applications and that obtaining a costs order in a family law matter is an exception rather than a norm.


If you intend to seek a costs order in your favour you need to ensure that you have a competent family lawyer by your side to not only enhance the likelihood of achieving a successful outcome, but also to help navigate the many complexities and nuances of family law proceedings, such as obtaining a costs order, if applicable.


Contact Surge Legal now for a free consultation about your Family Law matter.

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