WILBURN & WILBURN (No.3)

This matter concerned an application by the wife for an order that the husband pay her legal costs of proceedings in the Family Court of Australia. The parties, Mr and Mrs Wilburn, were engaged in proceedings concerning the division of their matrimonial property. The wife sought an order that the husband pay her legal costs on an indemnity basis, or alternatively, on a party and party basis.

The central legal issue before McNab J was whether the husband's conduct during the proceedings warranted an order for indemnity costs. Specifically, the court had to consider whether the husband had acted unreasonably, vexatiously, or otherwise in a manner that justified departing from the usual rule that each party bears their own costs. The wife contended that the husband's conduct had unnecessarily prolonged the litigation and increased her legal expenses.

McNab J considered the principles governing costs orders in family law proceedings, noting that while the general rule is that parties bear their own costs, indemnity costs may be awarded in exceptional circumstances. These circumstances typically involve misconduct such as vexatious litigation, abuse of process, or unreasonable refusal of settlement offers. After reviewing the evidence of the husband's conduct throughout the proceedings, McNab J found that while some of his actions may have been ill-advised, they did not reach the threshold of unreasonableness or vexation required to justify an order for indemnity costs. The court determined that the husband's conduct, while not ideal, did not warrant penalising him with an order for indemnity costs.

Consequently, McNab J ordered that the husband pay the wife's costs of the proceedings on a party and party basis, rather than the indemnity basis sought by the wife.