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The general rule is that in proceedings under the Family Law Act 1975 (Cth) each party bears his or her own costs (s 117(1) Family Law Act). The court may depart from this rule and make an order for costs if it is of the opinion that there are circumstances that justify it in doing so (s 117(2) Family Law Act). In deciding this, the court will have regard to:

• the financial circumstances of the parties
• whether either party has a grant for legal aid
• the conduct of the parties
• whether the proceedings were necessary because of the failure of one party to comply with previous orders
• whether either party has been wholly unsuccessful
• whether either party has made an offer to settle
• other matters that the court considers relevant (s 117(2A) Family Law Act)

In the recent decision of Anison & Anison (2019) FLC 93-908 the Full Court of the Family Court considered the meaning of “wholly unsuccessful” (s 117(2A)(e) Family Law Act).

The case concerned an appeal by the husband against an order for costs made in the Family Court.

The order for costs was made following property orders dividing the assets of the parties 77.5% in favour of the husband and 22.5% in favour of the wife. The wife had sought to join the corporate trustee of a trust controlled by the husband’s son to the proceedings. The husband successfully had the trustee removed as a party to the proceedings. The trial judge found that the husband was otherwise wholly unsuccessful and ordered him to pay the wife’s costs. The husband appealed.

The issue was whether or not the trial judge exercised the discretion to make an order for costs on wrong principle, that is, by incorrectly interpreting and applying s 117(2A)(e) in finding that the husband was wholly unsuccessful.

Kent J noted that it is well-settled that the Full Court of the Family Court should be reluctant to interfere with the exercise of discretion by a trial judge to make a costs order: [10]. His Honour cited the case of Robinson and Higginbotham (1991) FLC 92-209 in which it was said (at 78,417) by Nygh J: “… this Court should be very reluctant indeed to interfere with the exercise of discretion in respect of costs… but that does not mean that this Court should never interfere with the exercise of that discretion. The same principles hold true and if the result is plainly unjust or if the discretion was exercised on wrong principles then this Court must interfere…”:

Kent J considered the meaning of “wholly unsuccessful”. His Honour found that it is aimed at “a situation in which the proceedings as a whole have been unsuccessful. In other words, in which an application which was without merit has been dismissed” (see Robinson and Higginbotham (1991) FLC 92-209 at 78,417).

It was found that this interpretation of “wholly unsuccessful” did not apply to the husband’s case. Kent J stated at [43]: “In the substantive property and spousal maintenance proceedings the husband had to meet a claim by the wife for 50 percent of the property pool, plus capitalized maintenance, plus an order for weekly spousal maintenance of $500 for an indefinite period. In the result, the husband contained the wife’s claim to 22.5 percent division of property interests and the wife’s respective claims for spousal maintenance were dismissed. Given the husband’s relative success, and apparently greater success than the wife (comparing each party’s starting positions or aims with the ultimate outcome) the husband plainly has not been “wholly unsuccessful in the proceedings”.”

His Honour was satisfied that the trial judge incorrectly interpreted and applied s 117(2A)(e) and acted on wrong principle in making a costs order against the husband. His Honour allowed the appeal in part.

Written by the Corney & Lind Family Law Team