Novakovic and Novakovic

In *Novakovic & Novakovic* [2013] FamCA 448, the Family Court of Australia considered an application by the wife for costs against the husband. The dispute arose from an application made by the husband on 12 July 2012, seeking the release of monies from a controlled money account to cover his legal fees. This application was heard on 6 November 2012 and ultimately dismissed by the Court. The wife sought an order for her costs in relation to this dismissed application, specifically requesting that these costs be awarded on an indemnity basis.

The primary legal issues before the Court were whether any costs order should be made against the husband, and if so, whether that order should be on an indemnity basis. The Court was required to consider the provisions of section 117 of the *Family Law Act 1975* (Cth), which governs costs in family law proceedings, and the factors outlined in section 117(2A) that justify making a costs order. The Court also had to determine whether the circumstances warranted departing from the usual party-and-party costs basis and ordering costs on an indemnity basis, as sought by the wife.

Collier J reasoned that an order for costs was justified under section 117(2) of the *Family Law Act 1975* (Cth) by reference to several factors under section 117(2A). Specifically, the Court found that the husband had been wholly unsuccessful in his application (s 117(2A)(e)), that there was an offer of settlement made in writing by the wife which was not responded to by the husband (s 117(2A)(f)), and that the conduct of the parties warranted consideration (s 117(2A)(c)). The Court noted that while the precise financial circumstances of the parties were not fully known, impecuniosity was not a bar to a costs order, and it was satisfied that both parties were in a financial position to meet an order for costs with appropriate time for payment. In relation to the indemnity basis, the Court referred to *Munday & Bowman* and *Colgate-Palmolive Company & Anor v Cussons Pty Limited*, finding that the husband's application had little prospect of success and that he had disregarded a reasonable offer of settlement. These factors, particularly the imprudent refusal of the offer of compromise and the husband's lack of success, justified departing from the ordinary practice and ordering costs on an indemnity basis.

The Court ordered that the husband pay the wife's costs of and incidental to his application filed on 12 July 2012 on an indemnity basis. The Court also certified for junior counsel for the wife, pursuant to Rule 19.50 of the *Family Law Rules 2004* (Cth). The payment of these costs was to be made either within three months of the final judgment in the substantive proceedings or within six weeks of the issue of a certificate of assessment, whichever date was later.