Dudley and Dudley (No 2)

In the matter of *Dudley and Dudley (No 2)*, Barry J considered an application for costs following property settlement proceedings between the Husband and the Wife. The dispute centred on whether the Husband should be ordered to pay the Wife's costs on an indemnity basis, rather than the usual party and party basis, due to his conduct during the litigation.

The primary legal issue before the court was whether the Husband's conduct warranted an award of indemnity costs. This involved assessing whether his refusal of the Wife's settlement offers, which were ultimately more favourable to her than the final judgment, constituted unreasonable behaviour justifying a departure from the general rule of awarding party and party costs.

Barry J reasoned that indemnity costs are exceptional and that the Husband's conduct did not reach the threshold for such an order. While the Wife's offer represented 56% of the property and she ultimately received 60%, the dollar difference was not so significant as to deem the Husband's stance unreasonable. The court acknowledged the Husband had legitimate concerns regarding the Wife's proposed expenditure on certain premises and that communication between the parties was poor, with shared responsibility. The Husband's position was not found to be vexatious, and his allegations had a factual basis, even if ultimately rejected by the court. Despite the Husband having a superior income stream, he faced a significant tax assessment and his own costs. The court noted that the Husband would have been better off accepting the Wife's reasonable offers made from October 2007.

Consequently, Barry J ordered that the Husband pay the Wife's costs incurred from 12 October 2007 on a party and party basis, to be agreed between the parties or, failing agreement, as assessed. The court declined to fix the costs as a sum certain due to insufficient information to do so with accuracy, although it noted the Wife's total costs were approximately $144,000. The parties were encouraged to agree on a mutually selected costs assessor.