Connor & Oswald

The Family Court of Australia considered an application for costs by the respondent wife against the applicant husband and the second and third named respondents. The dispute arose after the husband, the second respondent (a company), and the third respondent (an individual) sought to set aside consent orders for property settlement previously made between the husband and wife. The wife subsequently sought her costs of the proceedings on an indemnity basis.

The court was required to determine whether to make an order for costs in favour of the wife, and if so, whether those costs should be assessed on an indemnity basis. In making this determination, the court had regard to the financial circumstances of the parties, the conduct of the parties in relation to the proceedings, and whether any offers to settle had been made. The court also considered the extent of the liability of each of the husband, the second respondent, and the third respondent for the wife's costs.

Macmillan J found that the husband, the second respondent, and the third respondent had been wholly unsuccessful in their applications to set aside the property settlement orders. The court was satisfied that the conduct of these parties, including the presentation of evidence that was found to be evasive and misleading, had led to the wife incurring unnecessary costs. The court also noted that the husband and the third respondent, who were brothers and had mutual business interests, had acted in concert, and that their litigation strategy was fundamentally flawed. Consequently, the court determined that exceptional circumstances existed to justify an order for indemnity costs in favour of the wife, citing the misleading nature of the evidence, the undue prolongation of the case, and the commencement of proceedings in circumstances where success was unlikely.

The court ordered that the applicant husband and the second and third named respondents jointly and severally pay the respondent wife’s costs of and incidental to the proceedings, including her applications concerning the enforcement of orders and seeking costs. These costs were to be assessed and paid on an indemnity basis from 27 January 2011. In default of agreement, the costs were to be assessed and paid on an indemnity basis.