hands of wife and husband signing divorce documents or premarital agreement

Indemnity Cost Orders in Family Law Matters- What does it mean, and how do you get one?

Family law is a unique area of law, because of the amount of people that have access to the family law system in Australia at any given time. Disputes usually arise from families being unable to resolve their circumstances privately, and it is the intention of the Family Law Act 1975 (Cth) for all people – subject to jurisdiction and limitation periods – to have access to the Court for that assistance.

Another unique aspect of family law is the general rule that each party is responsible for their own legal costs (see S 117 of the Family Law Act 1975). In matters where litigation can stretch for months and years, this is a very significant factor. Each time a party applies for the other party to pay some or all of their legal costs, they are required to establish to the Court that the circumstances of their case warrants a departure from that general rule. When considering this, the Court will take into account:

  • the parties’ financial circumstances, and any legal aid grants;
  • the position of the parties, and their conduct before the Court;
  • if the proceedings were due to a breach of existing Court Orders; and,
  • attempts made to settle the matter, and anything else the Judge considers relevant.

Even when a costs order is made, the Judge dealing with the matter has to decide whether to make a cost order on a limited basis (scaled, or party/party costs), or indemnity costs (meaning that every dollar paid by the successful party will be reimbursed by the other side).

In the matter of Jaros & Calden, a case heard in the Federal Circuit Court in Adelaide in August 2019, the issue of indemnity costs were explored by Judge Heffernan:

“Such an order involves a very significant departure from the ordinary course and should only be made in exceptional circumstances. […] Some categories of matter in which it has been held appropriate to make an order for indemnity costs have been: where a party makes allegations of fraud knowing them to be false; or a party makes irrelevant allegations of fraud; evidence of particular misconduct that causes loss of time to the Court and to other parties; the fact that proceedings had been instituted and maintained for an ulterior motive; where proceedings have been commenced in disregard of known facts, or clearly established law; and, the making of allegations which ought never to have been made or a case based on groundless contentions. (at paragraphs 7-8)

I am satisfied by virtue of […]the conduct of the father in the proceedings, his making of allegations which were not reasonably capable of belief, his deliberate non-compliance with orders of the Court; and what he must have well known to be the hardship caused to the wife in having to make the Application by reason of her difficult financial circumstances, that an order for costs on an indemnity basis is justified in this case with respect to the Application in a Case. Parties must be dissuaded from making baseless allegations, disobeying Court orders for tactical reasons, using children as weapons in a litigious war of attrition and wasting Court time. When all of those features are present, as they are here, they are matters which can tip the balance in favour of an exercise of the Court’s discretion to make an exceptional order for indemnity costs. They have done so on this occasion.” (at paragraph 27).”

Conclusion

The matter of Jaros & Calden highlights that whilst indemnity cost Orders are uncommon and should not be expected by parties in family law litigation, a party who has been forced to incur legal costs in an unreasonable situation, may be able to seek costs from the other side.

An Application for Costs is a complex argument in family law that arises at various points throughout the course of a matter. If you have questions about the implications of costs orders in the family law system, please don’t hesitate to contact a member of Coleman Greig’s Family Law team, who would be more than happy to assist you today.

Share:

Send an enquiry

Any personal information you provide is collected pursuant to our Privacy Policy.

Categories
Archives
Author

More posts

Understanding roles in the strata scheme

A strata scheme is a building or group of buildings that have been divided into lots which can be apartments, villas, offices, units or townhouses. This will be articulated in the strata plan.

Can i put my home on Airbnb?

Airbnb is a form of short-term rental accommodation. To add your property to Airbnb in NSW, you are required to meet several laws and regulations governing short-term rentals.

When are liquidators required to seek approval to retain legal counsel?

When does a liquidator (or the company he or she is appointed to) need court, creditor, or committee approval to validly retain a solicitor to act in a liquidation matter which is likely to extend for longer than three months?  The answer to this question has only recently been settled.

Proposed changes to building and construction law in NSW

The Building Bill 2022 (the Bill) is the key avenue through which the NSW Government has proposed to reshape the culture of the building and construction industry by eliminating poor performance and improving the quality of building statewide.

Can you dismiss an employee who fails to return to the office?

Slowly but surely, most employers are requiring employees to return to the office for at least a portion of their working week. Some employers continue to struggle with employees resistant to returning to the office or those who have an expectation that they can continue to work from home whenever it suits them.

New powers to combat phoenixing in construction

The rise of phoenixing in the building and construction industry in Australia in recent years has proved a significant challenge to regulators. Mismanagement of time or cashflow can quickly propel businesses into insolvency.

The NSW Building Commission’s extraordinary powers

In late 2023, the NSW Government passed the Building Legislation Amendment Bill 2023 (Amendment Bill). The Amendment Bill established the NSW Building Commission and granted it extraordinary powers to enter construction sites, inspect work and take away information and materials.

© 2024 Coleman Greig Lawyers   |  Liability limited by a scheme approved under Professional Standards Legislation. ABN 73 125 176 230