Will I have to pay my ex’s legal costs?
Your ex-partner has threatened to take you to Court and tells you that if they do, you will have to pay their legal costs. Is this true? This tends to be a common ‘threat’ made by people following a relationship breakdown. The likelihood of this happening, however, may not be as realistic as your former partner would like you to believe.
The general rule in relation to costs in family law matters is outlined in section 117(1) of the Family Law Act 1975, which states that each party to a proceeding shall pay their own legal costs. This is the starting point for all applications that come before the Court.
There are however some exceptions to this general rule and it is possible for the Court to make orders requiring one party to pay the other party’s legal costs. Subsection 117(2) of the Family Law Act 1975 states that if the Court is of the opinion that there are circumstances justifying it doing so, the Court may make an order as to costs and security for costs. The Court’s ability to make such an order is subject to subsections 2A, 4, 4A, 5 and 6 (of Section 117 of the Act) and the applicable rules of the Court.
In considering whether or not an order for costs should be made under section 117(2), the Court shall have regard to the matters set out in paragraphs (a) to (g) of subsection 117(2A), including the following:
(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 the 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.
It is important to note that there is no requirement for there to be more than one of the above factors to be present, before an order for costs is made. In these circumstances, it is entirely possible for only one factor to be present and for that factor to be the “sole foundation for an order for costs” (Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish and Another [2005] 33 Fam LR 123).
Is there a difference between costs orders in parenting and property matters?
Neither the legislation, nor family law case law provide any distinction between costs orders being made in parenting or property matters. There is a common misconception within the area of family law that costs orders cannot be made (or are not made) in parenting matters, however lawyers and litigants alike should be careful in this respect.
In Wrenstead & Eades [2016] FamCAFC 46, the Full Court of the Family Court reiterated that there is no legislative basis to fetter the exercise of discretion when determining whether to make an order for costs, stating “There is no distinction between parenting and property cases. There is no requirement on a trial judge to find that there are any certain or particular features of a parenting case nor do parenting cases fall into any special category when considering whether to make a costs order in a parenting case.”
The decision in Wrenstead & Eades was adopted in the recent Federal Circuit Court Case Secco & Reid (No. 2) [2019] FCCA 2594, a parenting case in which Judge Tonkin made an order that the father pay to the mother the sum of $32,498.75. In that case, when making the costs order, Judge Tonkin had regard to:
The parties’ differing financial circumstances;
The fact the father was wholly unsuccessful in the proceedings; and
The fact that the father failed to properly consider an offer made by the mother and made no reasonable attempt to compromise and respond to the mother’s offer.
Finally, it is important to remember that costs orders are not punitive in nature. They are not a penalty or damages. It is simply an order made to compensate a party for costs incurred in litigation (Stephens & Stephens & Ors 2010 FamCAFC 172).
If you have any questions or require advice about your family law matter, call us to make an appointment on (02) 6225 7040, send us an email at admin@rmfamilylaw.com.au, or get started online now.