Risk of a cost order being made against you on appeal

Risk of a cost order being made against you on appeal

Further to my earlier September newsletter which warns about the risk of an appeal failing, a potential appellant, or respondent to an appeal, should also be aware that there is a significant risk of a costs order being made against you, if you fail in court.

In the recent Full Court of the Family Court decision handed down in late August 2019, the Full Court ordered the respondent pay the appellant’s costs.

The issue of costs of an appeal is governed by Section 117 of the Family Law Act 1975 (Cth) which provides that each party to a proceeding bear his or her own costs, unless the Court is of the opinion that the circumstances justify the making of a costs order. So the starting point is that each party bear their own legal costs.

The Court must have regard to the relevant factors in section 117 (2A) of the Act. The list of factors includes:

  1. the financial circumstances of each of the parties;
  2. whether any party is in receipt of legal aid and if so, the terms of the grant of that assistance;
  3. the conduct of the parties in relation to the proceedings including, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admission of facts, production of documents and similar matters;
  4. whether the proceedings were necessitated by the failure of a party to comply with previous orders of the court;
  5. whether any party to the proceedings has been wholly unsuccessful in the proceedings;
  6. whether either party has made an offer in writing to the other party to settle the proceedings and the terms of such offer; and
  7. other matters the court considers relevant.

Appeal decision

On appeal, the Full Court reduced the amount of spousal maintenance payable by the appellant to the respondent, from $1,000 per week to $617 per week.

The appellant’s written offer

The appellant made an offer in writing, that they withdraw the appeal and the spousal maintenance payment payable to the respondent under the primary Judge’s order, be reduced from $1,000 per week to $600 per week until final orders, and they each bear their own costs.

The respondent’s submission on costs

In opposition to the applicant’s claim for costs, the respondent claimed she had a significantly inferior financial position and therefore no order for costs should be made against her.

The court’s finding on costs

The court found from when the respondent received the summary of argument, she can have been in no doubt that her opposition to the appeal was fraught with risk and she would be unsuccessful and vulnerable to an application for costs. Notwithstanding her modest circumstances, she elected to run the risk, and the appellant incurred unnecessary expenses. Thus the court made an order that the respondent pay the applicant’s legal costs.

"The starting point is each party bear their own costs. But there are exceptions."

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Jane Ekin-Smyth

Jane Ekin-Smyth

Consultant
Stephen White

Stephen White

Partner