Where there is an issue of who pays legal costs in family law matters then the general principle is that each party pays their own costs. Further and unlike other legal matters, costs do not follow the event in family law proceedings.
Indeed the Court has broad and wide discretionary powers as to determining cost disputes between parties. In other words there is no guarantee that you will get costs , even if you are successful and you believe you should receive your legal costs.
Section 117 of the Family Law Act provides the legislative framework for legal costs in family law proceedings and provides that:
(1) Subject to subsection (2), and sections 117AA, 117AC and 118, each party to proceedings under this Act shall bear his or her own costs.
(2) If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4), (4A) and (5) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.
(2A) In considering what order (if any) should be made under subsection (2), the court shall have regard to:
(a) the financial circumstances of each of the parties to the proceedings;
(b) whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;
(c) the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;
(d) whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
(e) whether any party to the proceedings has been wholly unsuccessful in the proceedings;
(f) whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and
(g) such other matters as the court considers relevant.
(3) To avoid doubt, in proceedings in which an independent children’s lawyer for a child has been appointed, the court may make an order under subsection (2) as to costs or security for costs, whether by way of interlocutory order or otherwise, to the effect that each party to the proceedings bears, in such proportion as the court considers just, the costs of the independent children’s lawyer in respect of the proceedings.
(4) However, in proceedings in which an independent children’s lawyer for a child has been appointed, if:
(a) a party to the proceedings has received legal aid in respect of the proceedings; or
(b) the court considers that a party to the proceedings would suffer financial hardship if the party had to bear a proportion of the costs of the independent children’s lawyer;
the court must not make an order under subsection (2) against that party in relation to the costs of the independent children’s lawyer.
(4A) If:
(a) under section 91B, an officer intervenes in proceedings; and
(b) the officer acts in good faith in relation to the proceedings;
the court must not, because of the intervention, make an order under subsection (2) of this section against the officer, or against an entity (including the Commonwealth or a State or Territory) by or on behalf of whom the officer was engaged or employed.
(5) In considering what order (if any) should be made under subsection (2) in proceedings in which an independent children’s lawyer has been appointed, the court must disregard the fact that the independent children’s lawyer is funded under a legal aid scheme or service established under a Commonwealth, State or Territory law or approved by the Attorney-General.
Some of the broad categories where legal costs are achievable is as follows:
Wholly Unsuccessful
Where one party has been wholly unsuccessful in their application. This is a case where costs can be awarded in circumstances where the applicant has sought Orders that have no merit and have been rejected by the court.
Setting Aside Transactions, section 106(B) (4) of the Family Law Act
This is the situation where a fraudulent transaction has occurred, such as the transference of property belonging to the joint assets of the party to a third person. In that case the third party who has colluded with a party to effectively defeat the interests of the other person, may be liable for costs, and these costs can include that of a genuine buyer.
Pre-action procedure
Each party to a family law matter is expected to make a committed and genuine effort to resolve their disputes before seeking the assistance of the Court. In parenting matters the parties cannot make an application at court unless they have been issued with a section 60I certificate which indicates that the parties have either attempted or failed mediation or their matter is not suitable for mediation. There are of course urgent matters which permit people to go to Court without a section 60I certificate.
Where parties end up at Court without participating in the pre-action procedure, then the responding party can make an application for costs against the applicant. The award of costs, in these instances is rare and not common practic
Frivolous of Vexatious Proceedings
Where a party brings an application to court which is baseless and its only objective is to make frivolous or vexatious claims, then the court has the discretion to not only Order costs against that party but to also prevent and block them from making any further applications, without fulfilling specific requirements.
Failing to comply with Orders or Directions
In circumstances where orders or directions have been made by the Court such as the filing of specific documents or the production of documents, then an application can be made for costs against the non-compliant party.
Discontinuing Proceedings
If a party at the 11th hour decides to discontinue proceedings, when the other party has gone to the trouble and expense of preparing their case, then costs will be an issue for the party discontinuing and it is not uncommon to receive costs in those circumstances.
Making formal offers to settle matters
Where a party has made an open offer under the Family Law Rules and this offer has been rejected and where at trial the party making the offer is successful, then in this circumstances it is open to the party who made the offer to settle to rely on this document as the basis upon which legal costs be awarded in their favour.
The information provided here is of a general legal nature and should not be relied upon for your individual family law matter.
Contact us for specialised advice on legal costs.
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Sydney CBD , the Eastern Suburbs and Double Bay