McMurphy and G and G (A Law Firm)

In the Family Court of Australia, Ms McMurphy (the applicant) and G & G (A Law Firm) (the respondent) each sought costs orders following substantive proceedings. The applicant had successfully applied to set aside a costs agreement with the respondent and a subsequent costs assessment order. The respondent, a law firm, was unsuccessful in defending these applications.

The court was required to determine whether to depart from the general rule that each party bears their own costs, as stipulated by section 117 of the Family Law Act 1975 (Cth). This involved considering various factors under section 117(2A), including the financial circumstances of both parties, the conduct of the parties during the proceedings, whether any party was wholly unsuccessful, and any offers to settle made by the parties.

Cleary J found that the applicant had been entirely successful in the substantive proceedings, while the respondent had been entirely unsuccessful. The court noted that the respondent had unnecessarily prolonged the proceedings and had acted improperly by refusing to release the applicant's file to her new solicitors, despite the applicant having paid all costs and disbursements. While the applicant was not in paid employment, her financial position was not clearly established, whereas the respondent was inferred to be solvent and able to meet a costs order. The court also considered the respondent's conduct in obtaining a costs assessment order for the purpose of making it difficult for the applicant to challenge the costs agreement.

The court ordered that the respondent pay the applicant's costs of and incidental to the proceedings in a fixed amount of $80,000, to be paid within 28 days. Failing payment within this period, the respondent was to pay the applicant's costs on an indemnity basis, either as agreed or assessed.