Graham and Graham and Ors

In *Graham & Graham and Ors* [2014] FamCA 270, the Family Court of Australia considered an application for costs by third parties, Mr C and B Pty Ltd, against the wife, Ms Graham. The dispute arose after the third parties were joined to proceedings concerning the division of property between Ms Graham and her husband. The third parties sought indemnity costs, arguing that their involvement was necessitated by the wife's unclear and confusing litigation strategy, which included concurrent proceedings in the Supreme Court of Victoria.

The primary legal issues before the Court were whether the wife should be ordered to pay the costs of the third parties, and if so, whether those costs should be awarded on an indemnity basis. The Court was required to consider the provisions of section 117 of the *Family Law Act 1975* (Cth), which generally dictates that parties bear their own costs unless circumstances justify a departure, and to take into account all matters set out in section 117(2A) of the Act when contemplating a costs order.

Justice Cronin found that the wife had unnecessarily joined the third parties to the proceedings, causing them inconvenience. He noted that while the *Family Law Rules* require the joinder of persons with an interest, this did not appear to be the case here. Consequently, the Court determined there was justification for departing from the usual rule that parties bear their own costs, and ordered that the wife pay the costs of the third parties. However, the application for indemnity costs was refused, as the Court found no "special or unusual" circumstances to warrant such an order, despite the wife's potentially inept conduct. The Court also ordered that counsel's fees, which totalled over $8000, be assessed according to the scale in the third schedule of the *Family Law Rules 2004*, rather than on an indemnity basis.