Marello and Marello (Costs)

In Marello and Marello (Costs), the husband sought an order that the wife pay his costs of the property component of the proceedings on an indemnity basis. The wife resisted this application. The dispute arose after a trial concerning property settlement and parenting orders, where the husband contended that he had made three offers to settle the property matters, all of which would have provided the wife with a better financial outcome than she ultimately received. The wife argued that her refusal of these offers was legitimate. The matter was heard in the Family Court of Australia before Murphy J.

The primary legal issues before the court were whether the presumption that each party bears their own costs under section 117(1) of the Family Law Act 1975 (Cth) ought to be displaced, and if so, whether the wife's conduct in refusing the husband's settlement offers warranted an order for costs against her. A further issue was whether any such costs order should be made on an indemnity basis, and if so, whether it should be confined to the property component of the proceedings. The court also considered the wife's assertion that any costs order would lead to her bankruptcy.

Murphy J reasoned that while applications for costs should not become "mini-trials," the husband's three settlement offers were significant factors. These offers, made prior to substantial trial preparation and costs being incurred, demonstrated a genuine desire by the husband to avoid litigation and its associated expenses. The court found that the wife's contentions regarding lack of disclosure by the husband, while familiar in high-conflict cases, were not ultimately pressed at trial in a way that affected the outcome. Consequently, the court determined that the husband's offers warranted an order for costs against the wife.

The court ordered that the wife pay two-thirds of the husband's costs on a party and party basis, confined to the property component of the proceedings. The court also made orders regarding other applications and a discrete issue concerning paragraph 51A of the minutes of order, providing a further opportunity for the parties to resolve that matter before it would be listed for hearing.