Kelleher and Anderson (No. 2)

This case concerned an application for costs in proceedings for the alteration of interests in property between Mr Kelleher (the husband) and Ms Anderson (the wife), heard in the Family Court of Australia at Melbourne before Carter J. The dispute arose from various interlocutory applications and responses filed by both parties throughout the proceedings.

The primary legal issue before the Court was whether there were circumstances justifying an order for costs against the wife in favour of the husband, and if so, the nature and extent of those costs. The Court was required to consider the provisions of section 117 of the *Family Law Act 1975* (Cth), including the financial circumstances of the parties, the conduct of the parties in relation to the proceedings, whether any party was wholly unsuccessful, and other relevant matters. The husband also sought indemnity costs, which required consideration of whether exceptional circumstances justified such an order.

Carter J determined that the husband had established circumstances justifying an award of costs against the wife. His Honour found that while the wife's weaker financial position favoured her, it did not outweigh the wife's unjustifiable conduct during the proceedings. This conduct included the issuance and prosecution of a contravention application without prior notice of discontinuance, the refusal to consent to a reasonable extension of time for the husband to file documents, and the pursuit of claims, particularly regarding injunctive relief and the removal of a caveat, without a sufficient evidentiary foundation. The Court also considered the wife's lack of success in significant areas, such as her claims for injunctive relief and opposition to the husband's application for the removal of a caveat. However, the Court declined to make an order for indemnity costs, finding no exceptional circumstances to warrant such an order.

The Court ordered that the wife pay the husband's costs of and incidental to specific parts of his applications and her response, and two-thirds of the husband's costs for certain hearings. The wife was also ordered to pay the husband's costs for the preparation of written submissions on costs. Enforcement of these costs was stayed until the determination of the parties' substantive applications, with provision for the husband to deduct the costs from any payment to the wife or otherwise secure payment.