Romano and June (Costs)

In *Romano & June (Costs)*, the Family Court of Australia was asked to determine an application for costs made by the wife following substantive property adjustment proceedings. The proceedings were complex and lengthy, involving significant disputes over the parties' undisclosed property interests. The wife had asserted that the husband had failed to disclose millions of dollars in assets, and the Court found that both the husband and some of his witnesses had been dishonest in their evidence. Ultimately, the Court's orders in the substantive proceedings resulted in the wife retaining property of significantly greater value than the husband had contended she should receive. The Court was also required to determine an application by the wife's solicitor for costs incurred in defending an unsuccessful application by the husband to restrain the solicitor from acting for the wife.

The primary legal issues before the Court were whether circumstances justified an order for costs against the husband, and if so, on what basis and to what extent. Specifically, the Court considered the application of sections 117(1), 117(2), and 117(2A) of the *Family Law Act 1975* (Cth) and Rule 19.08 of the *Family Law Rules 2004* (Cth) regarding the Court's discretion to award costs. The wife sought indemnity costs, or alternatively, a fixed sum representing her total incurred costs, while the husband argued for deferral of the costs application pending an appeal, and later, that certain findings against the wife's credit mitigated against a substantial costs order.

The Court reasoned that while the general principle under section 117(1) of the *Family Law Act* is that parties bear their own costs, section 117(2) allows for orders where circumstances justify it, having regard to the factors in section 117(2A). The Court found that the husband's dishonesty and combative approach had significantly increased the complexity, difficulty, and expense of the proceedings for the wife. Although neither party was wholly successful, the wife was found to be more successful in the outcome. However, the Court declined to award indemnity costs or the wife's full claimed costs, noting that the wife had also failed to be entirely truthful before the Court. Instead, the Court ordered the husband to pay 50% of the wife's costs of the property adjustment proceedings on a party and party basis, to be determined by agreement or assessment. Regarding the wife's solicitor's application, the Court found the husband's application to restrain the solicitor was wholly unsuccessful and thus justified a costs order. However, it did not award the full amount claimed, instead fixing the amount payable by the husband to the wife's solicitor at $4,942.38, calculated according to the Itemised Scale of Costs in Schedule 3 of the *Family Law Rules 2004*.